TYPE: COMMITTEE HEARING

LENGTH: 32611 words

COMMITTEE: SENATE ARMED SERVICES COMMITTEE

HEADLINE: U.S. SENATOR CARL LEVIN (D-MI) HOLDS HEARING ON THE FY 2003 BUDGET

SPEAKER:
U.S. SENATOR CARL LEVIN (D-MI), CHAIRMAN

LOCATION: WASHINGTON, D.C.

WITNESSES:

THOMAS WHITE, SECRETARY OF THE ARMY
GORDON ENGLAND, SECRETARY OF THE NAVY
JAMES ROCHE, SECRETARY OF THE AIR FORCE

BODY:

 
U.S. SENATE ARMED SERVICES COMMITTEE HOLDS A HEARING ON THE FY
2003 BUDGET: NATIONAL SECURITY
 
FEBRUARY 12, 2002
 
SPEAKERS:
U.S. SENATOR CARL LEVIN (D-MI)
CHAIRMAN
U.S. SENATOR EDWARD M. KENNEDY (D-MA)
U.S. SENATOR ROBERT C. BYRD (D-WV)
U.S. SENATOR JOSEPH I. LIEBERMAN (D-CT)
U.S. SENATOR MAX CLELAND (D-GA)
U.S. SENATOR MARY LANDRIEU (D-LA)
U.S. SENATOR JACK REED (D-RI)
U.S. SENATOR DANIEL AKAKA (D-HI)
U.S. SENATOR BILL NELSON (D-FL)
U.S. SENATOR BEN NELSON (D-NE)
U.S. SENATOR JEAN CARNAHAN (D-MO)
U.S. SENATOR MARK DAYTON (D-OH)
U.S. SENATOR JEFF BINGAMAN (D-NM)
 
U.S. SENATOR JOHN WARNER (R-VA)
RANKING MEMBER
U.S. SENATOR STROM THURMOND (R-SC)
U.S. SENATOR JOHN MCCAIN (R-AZ)
U.S. SENATOR ROBERT C. SMITH (R-NH)
U.S. SENATOR JAMES M. INHOFE (R-OK)
U.S. SENATOR RICK SANTORUM (R-PA)
U.S. SENATOR PAT ROBERTS (R-KS)
U.S. SENATOR WAYNE ALLARD (R-CO)
U.S. SENATOR TIM HUTCHINSON (R-AR)
U.S. SENATOR JEFF SESSIONS (R-AL)
U.S. SENATOR SUSAN COLLINS (R-ME)
U.S. SENATOR JIM BUNNING (R-KY)
 


*


LEVIN: Good morning everybody.

The committee meets this morning to receive testimony from the secretary of the Army, the secretary of the Navy, and secretary of the Air Force on the fiscal year 2003 budget request and on management and organizational issues facing the military departments.

Secretary White, Secretary England, Secretary Roche, we welcome you back to the committee, look forward to your testimony. As we meet today, the new administration has been in office for just over a year and our three service secretaries have been in office for slightly less time than that. Much of their tenure in office has necessarily been taken up by the pressing issues of the war in Afghanistan and the effort to respond to terrorism here at home.

The performance of our men and women in uniform has been exemplary and is a tribute to the entire leadership of the Department of Defense, including our three witnesses here today.

The three service secretaries have played a central role in the formulation of the administration's budget request for fiscal year 2003, which includes the largest proposed increase in military spending in two decades. This increase comes without a comprehensive strategy or a detailed plan to guide that spending. A year into office, the administration has not yet issued a national security strategy, a national military strategy, or detailed plans for the size, structure, shape or transformation of our military.

And as Secretary Rumsfeld testified last week, few of the investments that this administration will ask the Congress for will benefit our national defense during this presidential term. These are long-term investments. The investments that we make today are needed to ensure that our military is as prepared for future wars as it has proven to be for Operation Enduring Freedom.

So we're going to be particularly interested in the trade-offs that our witnesses have made between investments in our legacy forces and investments in the military transformation, and the basis upon which they have made these trade-offs.

Last summer Secretary Rumsfeld designated the three service secretaries to serve on two new committees: a Senior Executive Council and a Business Initiative Council with broad responsibility for planning and implementing improved management practices across the entire Department of Defense. The secretary has set a goal of achieving savings of 5 percent or more by bringing improved management practices from the private sector to the Department of Defense.

Longstanding problems in areas such as financial management, acquisition management, management of information technology and personnel management have not disappeared just because we're fighting a war. If anything, heightened concerns about national security and increased levels of defense spending give us an even greater obligation to ensure that the taxpayers' money is well-spent. And for this reason, the committee will be interested in hearing what steps our three service secretaries have taken to improve the management of the Pentagon and how much progress they have made toward achieving the 5 percent savings goal.

America's armed forces are performing superbly in their fight against terrorism. This committee will do all in its power to ensure that our forces have the resources, tools and technologies to prevail in this fight. We are determined to reserve a high quality of life for our forces, for their families, to sustain their readiness and to transform the armed forces to meet the threats and challenges of tomorrow. And we will continue to work with our service secretaries in seeking to achieve those goals.

Senator Warner?

WARNER: Thank you, Mr. Chairman.

I welcome our witnesses this morning. I always look forward to this particular hearing with service secretaries. I think you got the best jobs that anybody can possibly have in this administration or any other.

As the chairman said, the president's budget request for fiscal 2003 represents the largest increase, $48 billion, for the Department of Defense in two decades. And in light of the attacks our nation suffered on September 11, this increase is urgently needed. These attacks were a defining moment for our nation. They engendered a new sense of unity and purpose in the country.

Speaking for myself, I cannot recall -- and I've had an opportunity to observe this nation -- I cannot recall a period in our history when the nation is more united behind the president and the men and women of the armed forces since World War II.

The president has brilliantly rallied this nation and indeed the world to fight this global war against terrorists and those who harbor them. It is a war unlike any we have ever fought before.

As Senator Levin and I visited our service men and women in the Afghan region in November, I was indeed struck by a recurring thought. They and we are writing a new chapter in military history with this operation, and we've got to learn from it and plan for the future.

The war has truly been a joint operation, all services operating together as one. Many coalition nations operating with our U.S. forces. Soldiers on horseback and afoot are directing 21st-century weapons with extraordinary precision. Maritime forces are operating hundreds of miles inland in a land-locked country. Old bombers are delivering new weapons with devastating accuracy. Decisions made in Washington, down at Tampa, the headquarters, are received and executed instantly 7,000 miles away. Agility, precision, lethality and interoperability are the measures of success for our systems and our organizations.

Last Tuesday Secretary Rumsfeld and General Myers appeared before this committee to outline the budget question in broad terms. The overriding themes of winning the war against terrorism, defending our homeland, improving quality of life for our service personnel and transforming our forces to better counter new threats are right on target. We now look to you to fill in the details about how you will prepare your respective departments, not only to defend America and win this war against terrorism, but also to be ready for what lies ahead.

I'm supportive of this budget request, but I do have some concerns. Although the operation in Afghanistan highlighted the critical role of Navy platforms and aircraft, the budget request before us cuts both shipbuilding and naval aircraft.

This is a matter you and I've discussed privately, extensively, here in the last 30 days, Mr. Secretary, and we will discuss it in open here today in some detail.

At the current rate of shipbuilding, we'll be well below a 300- ship Navy if we do not begin to take steps to reverse this decline.

WARNER: I wrote you to that effect about three weeks ago.

And Mr. Secretary of the Army, Army plans to transform to a lighter, more deployable, more lethal force, but complicated by the need to maintain costly and aging legacy force. That poses quite a challenge to you.

And the Air Force investment in new tactical aircraft is, I regret to say, somewhat overdue. But recent experiences demand increased investment in long-range, unmanned and space capabilities.

As we discuss and debate this budget request in the days and the weeks ahead, as is the duty of this committee and the Congress, on one thing we can all agree: The commitment, the dedication and the performance of the soldiers, sailors and airmen, and their families, and, of course, the Marines, in service to the nation has been remarkable. We are mindful of how well they have served, and the spirit of generations has rallied to their nation's call before them. We are forever grateful for their willingness and readiness to serve and to accept the risks and the sacrifices.

They exemplify the spirit of service that the president has called for. As he reminded us recently, the cost of freedom and security is high, but never too high.

The nation is united in purpose, united in determination as seldom before in our history. United behind our president and united behind these selfless men and women and their families who proudly serve our nation. We in the Congress will do everything we can to provide the resources and the capabilities they need to succeed. Thank you.

LEVIN: Thank you, Senator Warner, very much.

Senator Inhofe has requested that he be...

INHOFE: Thank you, Mr. Chairman. I do have a special introduction to make this morning.

Yesterday I had the honor of seeing someone I've gotten to know over the past three years quite well in my office. She's Puerto Rican state Senator Miriam Ramirez.

We've worked together for quite some time. She's always been a supporter of the Navy. And she brought two perspectives that I think that certainly Secretary England I hoped that you'd have a chance to visit with her and get directly from her.

One is that since September 11, the tide has changed in terms of the attitude toward our Navy on the island of Puerto Rico. And secondly, an awareness that if something should happen to the presence of the Navy on Puerto Rico it wouldn't happen in a vacuum; that things would happen that are written into the law: Roosevelt Roads will be closed, Fort Buchanan would be closed, other benefits enjoyed historically by Puerto Rico would cease to be.

And the other is a recognition that those people who are still anti-Navy on the island of Puerto Rico, many of those are terrorists. Here we are in a war on terrorism. One of the leaders that is respected in the anti-Navy movement that is left there, a minority movement, is Lolita Lebron, who is a terrorist who lead a group of terrorists into the House of Representatives here in the Capitol Hill and opened fire, wounding five of our congressmen.

So that's the type of changes that are taking place there, and I would like to ask that Senator Ramirez, who is here with us today, would stand and be recognized.

Thank you, Senator.

LEVIN: We welcome you, Senator.

(APPLAUSE)

OK. Secretary White, let's start with you.

WHITE: Thank you, Mr. Chairman, Senator Warner, members of the committee. There are moments in history when events suddenly allow us to see the challenges ahead with a degree of clarity previously unimaginable. Events of 11 September created one of those rare moments. Now we see clearly the challenges facing our nation, and we are confronting them. To succeed, the Army must accomplish three critical tasks at the same time: First, we must help win the global war on terrorism; second, we must transform to meet the challenges of future conflicts; and third, we must secure the resources needed to pursue both the war on terror and Army transformation.

Our first task is to help win the war on terrorism. We've seen remarkable progress in Afghanistan, where Army special forces have lead the way followed by elements of the 10th Mountain Division, 101st Airborne Division and other Army units.

WHITE: Today, more than 14,000 soldiers are deployed in the U.S. Central Command's area of responsibility supporting Operation Enduring Freedom, from Egypt to Pakistan, from Kenya to Kazakhstan. Together, with our joint and coalition partners, we have defeated the Taliban, significantly disrupted the Al Qaeda terrorist network, liberated the people of Afghanistan and installed an interim government in Kabul, all within a few short months, in lousy terrain, in the dead of winter, over 7,000 miles away in the graveyard of empires.

I know that Secretary Roche and Secretary England join me when I say our service men and women are nothing short of inspirational. They are accomplishing a complex and dangerous mission with extraordinary courage, skill and determination. Some have been injured. Others have given their lives. Our nation is forever indebted to them and their families for their sacrifice.

As the war evolves, requirements for Army forces are growing, from assuring regional stability in Central Asia, to stability and support operations in Afghanistan, to securing detainees at Guantanamo Bay, Cuba, to training counterterrorism forces in the Philippines. At the same time, the Army continues to deter potential adversaries in Southwest Asia, in Korea, while upholding U.S. security commitments in Bosnia, Kosovo, Macedonia, the Sinai and elsewhere. In fact, the Army, active, Reserve and National Guard, has over 179,000 soldiers and 38,000 civilians deployed or forward-stationed in 120 different countries.

At home, the Army continues its long tradition of support to homeland security. We've mobilized over 24,000 Army, National Guard and Reserve soldiers, the rough equivalent of two Army divisions, for federal service here and overseas. Another 11,000 Army National Guard soldiers are deployed on state-controlled missions securing critical infrastructure, such as airports, seaports, reservoirs and power plants. We've also deployed 5,000 soldiers to help ensure the security of the 2002 Winter Olympic Games in Salt Lake City, Utah.

Our soldiers are answering the call of duty, but we must ensure that the force remains appropriately manned for the challenges ahead. As Secretary Rumsfeld testified last week, it is clear now, in the midst of the war on terror, the final dimensions of which are unknown, that it's not the time to cut manpower.

Our second task is to transform to meet the challenges of the next conflict. Although Army transformation was well under way before the 11th of September, the attacks on our homeland and subsequent operations validated the Army's strategic direction and provided new urgency to our efforts.

Consequently, we are accelerating development of the objective force, the capabilities-based full spectrum force that will extend our advantage in dominant maneuver well into the future.

Next month, we will designate a league systems integrator for the Future Combat System, or FCS. FCS is designed to be a system of systems that harnesses a variety of technologies to produce a new ground combat system of unparalleled power and mobility. While the actual form of FCS is still being defined, it will undoubtedly combine the best elements of existing manned systems with the promise of a new generation of unmanned and robotic combat capabilities. We anticipate equipping our first objective force units with FCS in 2008, and intend to achieve an IOC by 2010.

We are presently fielding an interim force to close the capabilities gap between our heavy and light forces. Organized into interim brigade combat teams, it will train, alert, deploy as a self- contained combined arms force, optimized for combat upon arrival in- theater. The interim force will also provide a bridge to the objective force through leader development and experimentation.

For example, digital concepts tested and provided with a legacy force are being refined in the interim force, and will be applied to the objective force.

We are on schedule to fully equip the first interim brigade with the interim armored vehicle by February 2003. That brigade will achieve its initial operational capability by May 2003, and we intend to field five more interim brigades by '07.

As a hedge against near-term risk, we are selectively modernizing and recapitalizing the legacy force to guaranteed war-fighting readiness and to support the objective force as we transform.

WHITE: The challenge, of course, is to effectively manage risk without sacrificing readiness.

Our third task is to secure the resources needed to pursue both the war on terrorism and Army transformation. This requires the continued support of the Congress and the administration, the commitment to sustained investment over many years to offset the shortfalls of the past.

The Army's 2003 budget request is fully consistent with our 2002 budget. It goes a long way toward funding the Army vision: taking care of people, assuring war-fighting readiness, and sustaining the momentum of transformation to the objective force.

However, we are still assuming risk in the legacy force, and longstanding shortfalls remain in installation sustainment, restoration and modernization. As good stewards who are doing our part to free up resources for reinvestment in high-priority programs, we have made tough tradeoffs: terminated 29 programs in the last three years, restructured 12 more, reduced capitalization from 21 to 17 systems, and we will accelerate the retirement of a thousand Vietnam-era helicopters.

We've also expedited our efforts to manage the Army more efficiently, starting at the top by restructuring the Army secretariat and Army staff into a more integrated headquarters that will streamline the flow of information and speed decision-making. The next phase of our headquarters realignment includes our field operating agencies and major commands. These initiatives will allow us to exceed the congressionally mandated 15 percent reduction in headquarter staffs and reinvest manpower saved into other priorities. We'll need your support to achieve similar efficiencies in the future.

Let me conclude by assuring the members of this committee that the Army is trained and ready to serve in its indispensable role as the decisive land component of America's joint war-fighting team.

Thank you, Mr. Chairman. I look forward to the committee's questions.

LEVIN: Thank you very much, Secretary White.

Secretary England?

ENGLAND: Good morning, Mr. Chairman, Senator Warner, and other members of this distinguished committee.

Thank you for the opportunity to be with you today, and thank you especially for this committee's continued strong support for our sailors and Marines, and their families. Recognizing that you're all anxious to move on to the questions, I will keep my remarks brief. I ask that my written statement be entered into the record.

LEVIN: All the statements will be made part of the record.

ENGLAND: Thank you.

It is indeed a privilege to appear before this committee representing the finest Navy and Marine Corps the world has ever known. All of you have witnessed, either firsthand or in compelling news reports, the superb performance of America's naval forces in the global war on terrorism. Never in my adult life have I seen a time in which the combat capabilities and mobility of the Navy-Marine Corps team have been more important to our joint war-fighting effort. In my view, not since World War II, has the inherent mobility of combat power at sea been so central to our ability to take our fight to the enemy and sustain that effort over time.

Naval forces of the 21st century will continue to offer secure sea bases from which our sailors and Marines will be able to operate both in peacetime and wartime alike. Such bases will offset the restrictions caused by sovereignty issues, which increasingly limit or impede our national strategies, especially during crises.

Naval carrier battle groups were on station in the Arabian Sea when our nation was viciously attacked on September 11. These ships, manned by truly great sailors and Marines, who have volunteered to serve their country, were ready when the order was given to strike back at the terrorists and those that harbor them. And they remain on station today in support of our troops on the ground in Afghanistan, and elsewhere in the region and in the world.

This is not to say the Navy will do it alone; not by a long shot. All of us here before you today can be justifiably proud not only of how well our individual services have performed, but more importantly how seamlessly the operational capabilities of all the great branches of our military have been woven together to great effect on the battlefield.

We also know that this would not have been possible without the wisdom and the support of this committee over prior years. So, I thank you again, Mr. Chairman, and members of this committee for all your prior efforts in supporting our forces.

I can also say without hesitation that the president's budget for fiscal year 2003 accurately reflects the priorities set by the Navy leadership. The chief of naval operations, the commandant of the Marine Corps, and I all agree that we must continue to keep faith with our people by providing them the pay and benefits they so richly deserve, and must also assure that our forces remain trained and ready to carry out missions in the war on terrorism.

To this end, we have prioritized spending on critical readiness elements, such as adequate flying hours and steaming days, spare parts, preventative maintenance and replenishing our inadequate stockpiles of precision munitions.

ENGLAND: We've added more than $3 billion to our operations and maintenance account, and an additional $1 billion to buy munitions.

On the personnel side of the equation, we increased the military personnel account by a little over $4 billion. Now that is real money, and we've put the emphasis where we believe it will do the most good.

There have been many reports recently that the Navy is underfunding the shipbuilding and aviation procurement accounts. I'm here to tell you those reports are accurate. We do need to increase funding in these accounts, and we are increasing them across the FYDP.

The good news is that we did fund the conversion on the first two of four Trident submarines to cruise missile shooters, or SSGNs. That was about $1 billion. And we added another billion to pay off old debts in the prior year shipbuilding account, and to fund more realistic program cost estimates to reduce such bills in the future. And although we increase spending on aviation procurement by more than $300 million, we will actually build fewer new planes because of the types of aircraft being procured.

The bad news is, as this committee is well aware, we need to build eight to 10 ships every year on a long-term basis, and nearly 200 aircraft on a long-term basis, if we are to recapitalize the force and ensure my successors will inherit the ready Navy and Marine Corps that I am proud to lead.

Mr. Chairman, these have been difficult choices to make, but I firmly believe that the CNO and the commandant and myself made the right choices for FY '03. We cannot fix every problem in one year, so we prioritized our funding. We can never afford to break faith with our people on adequate pay and benefits, and frankly it makes no sense to shortchange current readiness and munitions at a time when the nation is at war. The CNO, commandant and I also agree that efficiency in our business practices is now more important than ever before, and we are dedicated to that objective.

I look forward to the opportunity to elaborate in response to your questions. Thank you very much.

LEVIN: Thank you, Secretary.

Secretary Roche?

ROCHE: Mr. Chairman, Senator Warner, members of this committee, it's an honor to come before you today representing the Air Force team, in the company of my esteemed colleagues from the Army and the Navy.

We are committed to succeed together in our task to provide for this nation's security now and in the foreseeable future. You have our full attention and we are ready to get down to the important business at hand. Like my colleagues, and with your permission, Mr. Chairman, I would like to make a short opening statement in request to my written statement. The Air Force 2002 posture statement will be included in the record.

LEVIN: (OFF-MIKE)

ROCHE: Thank you, sir.

Mr. Chairman, America's Air Force has recently been afforded numerous opportunities to implement and validate significant changes in the concepts of military operations and indeed the conduct of war. With the support of the secretary of defense, we have encouraged and exploited the rapid advancement and employment of innovative technologies. We have already begun to reorganize and find efficiencies throughout the Air Force, and we have taken significant action to implement the findings of the space commission on our new role as Department of Defense's executive agent for space.

And I'm especially grateful to have on board now Mr. Peter Teets, our undersecretary and director of the National Reconnaissance Office, whose experience, wisdom and leadership will be invaluable as we take this mission on.

ROCHE: We proceed, however, hungry rather than complacent, recognizing that much work and many opportunities to improve await us. Despite our dedication to demanding critical and global operations, we have not faltered in our steps to continue the task of transforming our force to match the demands of this new century.

Operations Northern Watch and Southern Watch, Mr. Chairman, have quietly amassed a total of almost 200,000 sorties in combat missions that have continued now for over a decade. Operation Enduring Freedom has demanded over 14,000 sorties, some of which have broken records in mission range, hours flown and combat reconnaissance. Tanker support to joint operations -- close to 6,000 tanker sorties to date, just in Operation Enduring Freedom plus another 4,200 in Operation Noble Eagle -- mobility demands and humanitarian tonnage delivered have all been unprecedented.

For the first time in the history of warfare, the entire ground operation in landlocked Afghanistan, infiltration, exfiltration, sustainment of supplies and support equipment, has been accomplished by air. In Operation Noble Eagle, over the skies of America, over 11,000 airmen, 265 aircraft and 350 crews in the Air National Guard, Air Force Reserve and active Air Force have flown over 13,000 tanker, fighter and airborne early warning sorties.

And as you know, Mr. Chairman, we have NATO AWACs over the United States at this time, five aircraft, and we expect possibly two more. And I'll be going down to Tinker Air Force Base to personally thank them in a week and a half.

As we work to complete our transformation, Mr. Chairman, support our people and inspire the military industrial base to become an even more efficient team, our vision remains a total air and space force providing global reconnaissance and strike, including troops and their support, across the full spectrum of operations.

Our more pressing and significant challenges include: providing persistent intelligence surveillance and reconnaissance across a critical section of a distant country in all weather scenarios, 24 hours a day, 7 days a week, for up to a year; developing the ability to provide near-instantaneous ground attack from the air, precisely, with a wide variety of strike systems including naval, Marine, as well as Air Force, by working closely with troops on the ground equipped with powerful sensors and communication links as well as with a portfolio of off-board sensors and platforms, including UAVs.

And Mr. Chairman, it was Secretary White and myself, in the company of Secretary Wolfowitz, who worked hard on the idea of linking sergeants on the ground, by virtue of GPS, computer and certain types of binoculars with laser-range finders to our aircraft in the air that has proven so dramatically successful. It is an example of our Air Force working with the Army as the Army develops an objective force to able to provide instant power to those troops on the ground.

We need to define and pursue the optimum space architectures to fully integrate space assets into global strike operations from the air, land and sea. And we are developing our role in homeland defense and trying to arrive at a steady state of roles and responsibilities among our active Air Force, Air National Guard and Air Force Reserve. Our question is, how long do we have to maintain the Operation Noble Eagle status as it is now, and what is the steady state in those circumstances?

We must complete and implement our long-term strategy for our air logistics centers, and we must modernize the tanker and intelligence, surveillance, reconnaissance capabilities we'll need in the years ahead. Here, I am particularly concerned that we have been demanding so much for so long of our aged of 707 airframes, that we are soon to find ourselves in the same predicament as the proverbial king of medieval England, for want of a horse (sic) lost a shoe, lost the horse, lost the king, lost the kingdom.

And I note, sir, that 55 percent of our tankings in the area of operations, the area of responsibility, have been for our Navy brethren. And the KC-10, which was purchased a number of years ago, has been just a stalwart of being able to support our Navy's brethren.

We are also developing concepts and strategies to seamlessly integrate our manned and unmanned systems, something brand new for us. And we remain particularly focused on retaining our people, especially those in mid-career who will benefit from the provisions of this budget for improved family housing, pay and facilities. And I wish to pass on the thanks of many of the troops I met overseas who wanted to say thank you to this committee for its leadership in their pay circumstances.

Mr. Chairman, America's Air Force is able to perform the extraordinary feats asked of us because we are blessed with the full support of the American people, the Congress and the president of the United States, all of whom have been graciously supportive of our efforts and missions. We sincerely appreciate the confidence in our commitment and capabilities as well as the wisdom, vigilance and patriotic sense of duty that join us in our journey to provide our great nation with superiority in air and space throughout the century.

As you go to the area of responsibility, as I have, you will be proud of the airmen you meet and the Air Force you and your colleagues in the Congress have raised and maintained.

Thank you very much, sir.

LEVIN: Thank you, Mr. Secretary.

We'll have six-minute round on an early-bird basis. I think we're going to be interrupted by perhaps a series of votes. We'll have to figure out what to do when that information comes to us.

Let me ask this of each of you. Eight months ago, there was an announcement made that two new committees were going to be formed, a Senior Executive Committee and a Business Initiative Council at the Department of Defense.

LEVIN: And both of those committees would have responsibility for planning and implementing improved management practices across the entire Department of Defense. This was an effort made to improve business practices of the department to roll those savings into the war-fighting end of the department.

Can you each tell us very briefly what specific reforms have been initiated through these two new entities? Secretary White, let me start with you.

WHITE: On the BIC side, we are accelerating and pushing hard utilities privatization, which was a program that actually started before this administration. And we are realigning headquarters to meet the goals that the secretary has established for us. And I've talked about the reductions that we've made as we've realigned the secretariat and the Army staff.

On the SEC side, we're looking at all the defense agencies and the roles that they play within the department and streamlining their operations, as well.

LEVIN: Are these department-wide, what you've just announced?

WHITE: Yes. They are generally being followed by all of the services.

LEVIN: Do you have anything to add to that, Secretary England?

ENGLAND: I was only going to comment, that both SEC an the BIC, the three of us serve together on those committees, along with the undersecretary, Paul Wolfowitz, occasionally with Secretary Rumsfeld. So we all work this jointly.

I was going to add in addition to the things that the secretary of the Army commented on, we're also looking at supply chain management throughout the whole department, because that's where a lot of the money is in this department is in the whole support infrastructure. So we're looking at that and how we might do that better.

We've also, with Pete Aldridge, who's responsible for AT&L, the undersecretary for procurement, there's also a wide range of initiatives in that area, and some of those have been implemented. So we have been implementing changes, some of those have already taken place, and there's a whole agenda of issues we're working on.

LEVIN: Will you identify for us the specific changes which have occurred and the savings which have resulted?

ENGLAND: Yes, sir. We have done a number of issues dealing with personnel. I guess, what I would call low-hanging fruit. We identified in the very first series of meetings we had, as I recall the number was like $250 million. We had 11 issues brought before the board, and we approved 10 of those; one's still being studied. And those 10 saved -- I believe the number was $250 million, Senator, but I have to get back with you on that.

LEVIN: Would each of you provide for the record the specific savings which have resulted from these initiatives and would you tell us where in the budget we can find those savings? Will you each do that for us?

ROCHE: Yes.

WHITE: We'll do that.

ENGLAND: Absolutely, sir.

LEVIN: Secretary Roche, do you have anything to add on that?

ROCHE: Yes, sir. I just wanted to make a point that a number of these are cost avoidance. In other words, it's not taking something that's now in place and doing away with it, but avoiding a cost in the future. So it's a combination of savings and cost avoidance.

The two groups are very different. In terms of the SEC with Secretary Aldridge -- and Secretary Aldridge is part of it -- we've been able to move very, very quickly over things. We've been able to support price-based acquisition instead of the more tortuous forms. We've been able to work with Mr. Aldridge in getting a lot of savings at DLA, DFAS, et cetera, conscious goals for those agencies to lower their costs to us.

With the BIC we've done such things as -- simple things, sir. Asking the Treasury to not charge us a tax on our vehicles that we use off-road that ever get on the highway, why are paying a highway tax? We are looking at how long it takes for something to happen, because so much money is involved than just people reviewing and reviewing and reviewing, and we're trying to streamline some processes.

Probably over the period of the FYDP, between what we have and done and what we'd like to do, we're looking at something like $1 billion so far, but they're very different. And the reason it's been working, Mr. Chairman, is that the secretary has allowed us to take any savings and plow it back into the services into personnel accounts or to other accounts.

LEVIN: All right. We'll expect then from each of you for the record the list of those savings and how much for each one and where in the budget we can find them.

LEVIN: Secretary Rumsfeld established a goal of investing 3 percent of the department's budget in the science and technology programs, which would help drive the transformation of our services. But the budget request contains no measurable increase in science and technology funding over last year's appropriated levels despite the large increase in the budget request.

Last week, the department's deputy director of defense research and engineering was quoted as saying the following: "Science and Technology makes up less than 2 percent of each of the military departments' budgets. They really didn't care about the technology; it's all about this budget. The only thing I can say to them is you can't solve your problems with that amount of money." Would you react to that quote? Start with you, Secretary Roche?

ROCHE: Yes, sir. I think the Air Force came out at around 2.6 to 2.7, and part of it is our denominator moved up on us gratefully. We also have to include the monies that are in DARPA associated with Air Force programs, and the number of programs we transferred over to what was BDMO now the Missile Defense Agency.

Science and technology's at the front end. You can throw money at it. We would rather work this up to 3 percent and take a year or two to get their so we can tailor what we're investing in. Clearly we are heavily dependent on science and technology investments for long- term results, and we're trying to make sure each of those investments has some prospect of paying off, although we're also interested in some wild catting.

LEVIN: Do either of the two of you have a reaction to that quote? Secretary White?

WHITE: Well, our principle investment in S&T is future combat system associated with the objective force. About 98 percent of it is focused on that, and I think we're spending about as much money as can be productively used in S&T at this stage of maturity of FCS, and DARPA is kicking in an extra $122 million on their own front.

So my opinion is the S&T of the Army's in good order, compared to the other priorities that we have.

LEVIN: What percentage are you at?

WHITE: We're probably a little over 2 percent.

LEVIN: Despite Secretary's Rumsfeld's statement that DOD had a goal of investing 3 percent?

WHITE: Right. We agonized over the 3 percent level and whether it was appropriate in each service.

LEVIN: Got you.

Secretary England, do you just want to finished this question?

ENGLAND: Yes. First of all the 3 percent I would suggest that absolute numbers are more meaningful, because as we increase pay and benefits et cetera, you know, the denominator gets very, very large. And yet, you know, so you would have to dramatically raise S&T as the whole budget grew, particularly in the personnel accounts.

Our S&T is down somewhat this year from last year, but...

LEVIN: In absolute or percentage?

ENGLAND: No, absolute it's down. We are down absolute. But our R&D is up about $1.1 billion. So we made the conscious decision that there were R&D accounts we needed to fund and we funded those accounts, because at some point you do need to bring the S&T to realization, otherwise you just have an interesting S&T program. So we decided that we would instead emphasize the R&D this year. Now if you go across the FYDP our S&T does definitely go up.

LEVIN: Thank you.

Senator Warner?

WARNER: Thank you.

Gentlemen, the '03 DOD budget includes a substantial increase in combating terrorism funding. Nearly all the proposed increase is for these purposes. Would each of you outline what your respective departments are doing to augment our effort to deter, first, if necessary to combat, terrorism?

Secretary White?

WHITE: Senator, we have, first of all, an enormous manpower commitment, as I talked about in my opening statement, supporting homeland security in a variety of ways; everything from the Salt Lake City games, to airport security with the National Guard, to enhanced force protection on our installations, both here in the United States and overseas. So we have a large chunk of our operating budget that right now is focusing on homeland security and enhanced force protection against counterterrorism.

WARNER: What's the status of the programs that were initiated some several years ago and received very strong support in this committee? We used to refer to them as the RAID teams. Those are the groups that went out to work with the local community should they be hit by a problem.

WARNER: This committee, repeatedly in the past three or four years, has authorized increases in the number of those teams because of our firm belief they would directly help the citizenry if they were faced with a problem of a weapon of mass destruction, be it chemical, biological or other.

WHITE: Senator, we push that hard. We call those weapons of mass destruction civil support teams. There are 22 of them fully up and certified. They are manned by National Guard full-time people. We will have 32 total by the end of '02, which is what's currently authorized, and those 32 will give us coverage of about 96 percent of the population of the United States in a three-hour period. So they are very impressive teams, and we've pushed it as a matter of great urgency.

WARNER: Secretary England, the question to you is to how you're redirecting portions of your budget to combat terrorism.

ENGLAND: Well, Senator, as you know, we have two carrier battle groups right now in the Arabian Sea actively engaged in the war against terrorism. As part of those battle groups, there's also our amphibious readiness groups with our Marines on-board, and, of course, they have just now left Afghanistan, some still in-country but back on their ARG.

We also, of course, have forward-deployed forces around the world.

WARNER: We're aware of those. That's pretty much standard operation. But, for example, the SEALs have had a remarkable role in this conflict. Are you looking to increase the size of the SEAL force; newer or more modern equipment?

ENGLAND: At this point, I don't believe we have active interest in increasing the size of the SEAL force. We're actually undermanned in our SEAL force, so we would very much like to increase the manning to its authorized level.

We do, by the way, have 12 PC boats that we are manning for the Coast Guard, for example, outside of our traditional role that we are providing to the Coast Guard for sea and harbor security. So we have taken a number of measures with the Coast Guard and, of course, with the military around the world, our intel et cetera, all being directed on the war on terrorism. I mean frankly, the entire force is directed against this war on terrorism around the world.

WARNER: Secretary Roche?

ROCHE: Senator Warner, obviously in Operation Noble Eagle, we've put a huge number of forces in place, as I described. Also to complement Secretary White's teams, we have 35 C-130s that are on alert every day and back-up airplanes to move emergency action teams so they can get where they are. And that's over and above all of the CAP and everything else we fly, and we have tankers ready for them as well.

Our force protection has been a major investment. We've called up all the Reserves, all the Guard folks in force protection, and we're still shy of people. We never plan to be able to defend our forces overseas, because we have do a lot of force protection there and our home bases at the same time. And that's been a heck of a strain on us, and we've had to invest more and part of our new recruits -- we're trying to direct more of them in that direction.

In Operation OEF, Enduring Freedom, the things that you'll see are the persistent ISR, looking at something for a period of up to a year. Also our use of -- which employs UAVs, and the fusing of intelligence from very many forces.

And then lastly this equipment that the young troopers have been using on the ground to work with aircraft, we now know what the next generation of those should look like, and we've started to design what -- to get those different pieces into something as a smaller package. When they break off to get on their horses, they have to take apart about four different things, get on the horses to go to the next spot.

WARNER: Thank you.

Secretary England, just looking through the morning traffic, here is nine pages of stories on the shipbuilding program. And it goes from the extreme that the yard example, Newport News Shipbuilding, which is a building a carrier, can't hire enough people to do the work they've got in place to some individuals saying, "We're going to be faced with imminent layoffs of large numbers."

Now this is all very unsettling, and it is clear from this conflict in the Afghan operating area that the Navy was integral, that those platforms to which you referred earlier were, sort of, the foundation from which so many of the strikes were launched. And I think that it is incumbent upon you and -- working with the Congress, to try and put to rest this problem.

I asked the secretary of defense the other day about specifically the carrier program, and he said that the slippage of one year was not in any way to be construed as a lessening of the importance of that program to our overall defense.

WARNER: Nevertheless, we've got a lot of instability. We've got a new contractor that's taken over the management of that shipyard down there; works on both the carriers, as well as the Virginia class submarines.

So I would hope this morning that you could refer to some of the conversations that we've had, in which you've given me the reassurance that you feel that this thing will be worked out, that the slippage of one year in the carrier program was predicated on clear justifications for technology.

One of the articles quotes a naval person in great detail how this slippage will help the new carrier get -- here it is. "Napp (ph) said last week that next-year funding added to the program will be delivered and so forth, will help the Navy develop systems such as a new launching gear more fully, before they are plugged into the massive ship. It also may enable the service to pull some systems being designed for the next ships, CVNX-2 and install them in CVNX-1."

This reads to me as substantial justification for your decision. And that this slippage was not just to create a cash bill-payer for other ship programs. Would you kindly clarify some of this this morning for us?

ENGLAND: Senator, I'd be pleased to. Thanks for the opportunity to discuss this.

First, we did move the carrier out. We actually have it moved out, I believe, to '07 and '08; that is half the funding in each year in '07 and '08. We did that partially to free up some dollars in '07, because you know when the ship is appropriated that is a very large amount in one year and it crowds out everything else. So it was more prudent from our point of view to spread this over two years.

But the other side of this is, as you know, we have had a continuing problem of prior-year shipbuilding bills. Last year in the '02 budget we had $800 million of prior-year bills. In the '03 budget we have $645 million. We still have $1.2 billion of prior-year shipbuilding bills that we still have to pay. So out of last year and this year that's $1.4 billion, $1.2 billion to go. I mean, we are basically spending a lot of money each year; we're not buying ships with that money, because of prior-year bills.

So we are trying very hard to bring this to a stop and have some better business practices applied. So this year we have increased the funding for our current shipbuilding -- our current ships -- by another $400 million. So we've increased the funding in our current ships in hopes that that is a meaningful step so we will not have this continual overrunning of prior-year shipbuilding.

Now, that also part of this is the maturity of that technology. It was certainly my concern, with all the technology going in that ship, that if we had more...

WARNER: You're talking about the CVNX-1 now...

ENGLAND: Yes, sir.

WARNER: ... the first new carrier.

ENGLAND: That's correct. We would certainly like to mature those technologies as much as possible, so we can predict the cost and know the cost and not have this problem on future ships when we do this the next time.

So this decision was based on partially financial, but in my mind more so the technology, so we would be able to bring to an end this practice of always having bills flowing into the out-years. And that's what's been happening for the last several years.

WARNER: Would you want the Congress to take it upon itself to try and reallocate the funding in these shipbuilding budgets, such as to restore the carrier to its previous schedule? Do you think that would be a prudent action?

ENGLAND: No, sir, I don't. Frankly, I believe we made the right decisions. I think we went through a lot of work on this and decided that was the best decision that we could make was to move this out one year, split the funding, mature the technologies.

I will also comment, while I have an opportunity, Senator, that in the past whenever in the FYDP we had shipbuilding in the future years, it never came to pass. That is, if we had a large number of ships in the out-years that didn't come to pass. It didn't come to pass because we had prior-year shipbuilding accounts to pay or we had other aspects of the Navy that had been underfunded and we used that money to fund other accounts.

ENGLAND: This year we took a very straightforward approach. That is, we funded all the accounts that were needed to be funded. We robustly funded everything we could across the Navy in terms of spares, flying hours, training, et cetera, so we have, quote, "filled those buckets."

So as we go forward, we now have a solid foundation. We have also fully funded our accounts, so therefore there is high confidence in the future that those monies that are allocated to shipbuilding and to aviation will indeed be spent for those purposes. So, I feel like we've put the foundation in place.

LEVIN: Senator Nelson?

NELSON: Thank you, Mr. Chairman.

Secretaries England, White and Roche, certainly I want to thank you for being here to address the concerns we have about the defense of our nation. Obviously, it's very important to critically focus on what these expenditures in the budget represent, both as to the present situation and as to the future.

The critics will do their work on the budget, already have, and they'll write the 10 stories that Senator Warner had reference to, and others will challenge whether it's on shipbuilding or will challenge that much of the expenditure request deals with current assets and replacing the assets that have been used. Obviously, replacement is part of what needs to be done.

The criticism of the military always seems to be that we're ready to fight the last war. The fact that we were able to react as quickly as we did to this operation, Enduring Freedom, is some indication that we were prepared to deal with the current situation far more than people might have suggested and some of the partisan attacks might have also suggested.

What I'd like to have you do is tell me in this budget not simply what we're replacing -- obviously, that's a part of it -- but what are the priorities in this budget for fighting phase two as the technology increase, knowledge increases, during our expansion of these activities of war, but also, what's in this budget for the next war? In other words, what are the preparations that are reflected in this budget for the future? Is it the Predator or are there other activities that you see, force development as well as assets, that really represent the future, not just simply the present or the past?

I guess I'd start with you, Secretary Roche, and move down the other way for a change. Change your luck just a little bit.

ROCHE: Thank you, Senator. I probably can't give you line item by line item, but if I...

NELSON: Just generally.

ROCHE: Overview would be that as we look to the future, we clearly need to keep our bomber force modernized and put in the equipment in place to do that, modernization of the B-2, et cetera. By reducing the B-1 fleet we're plowing the money back to make the B- 1s quite useful. And, in fact, by giving them standoff weapons, they can fly at an economic altitude and get much more range. So, the bomber force, we've worried about the weapons, and the weapons being so accurate and standoff that that force should be good over a period of time.

It's been years since we've introduced a new fighter-bomber. And in fact, we've been done two classes of bombers: the 117, the C-17, the C-130J Joint STARS a whole bunch of aircraft, and we still have the F-16s et cetera. Those wings are about as loaded as they're going to get.

And so the F-22 program, which is now fully funded, and the starting of the Joint Strike Fighter program will give us the fighter- bomber aircraft that we need, although we're reorienting part of the F-22 to be -- used to be more air-to-air than air-to-ground. Now it'll be roughly half air-to-ground -- developing special weapons for it. So, the fighter force is in good shape.

Lift, with the multi-year on C-17 in our request to you for multi-year on C-130Js, are taking and fixing up the old C-130s in avionics, and then taking the C-5s by which one of those can be overhauled and kept. But I see lift in good shape.

Where we still have a problem is a reliance on the old 707s, in the intelligence, surveillance, reconnaissance area. There we are trying to augment, besides moving forward potentially to a new platform with UAVs and also space-based things like space-based radar. But the UAVs are still experimental; there are still issues that we have to work through with those. So the ISR field, we're trying to do some new things, plus change the platforms.

In the case of things like helicopters for the special forces or for our combat search and rescue, they're old. When I find colleagues from Vietnam in helicopters still being used, they're old.

And in the case of tankers, we find ourselves just with tankers aging 43 years. And we have to worry about those.

NELSON: Secretary England?

ENGLAND: Senator, a few of the things we're doing investing in the future. First of all, we started work on an EA6B replacement. That is the only jamming airplane we have in the U.S. military. It's getting long in the tooth. We've started our replacement program.

We've started a multi-mission airplane. We've put monies in to start looking at that airplane.

ENGLAND: That's a replacement for our P-3 and also our EP-3, our electronic airplanes. We have new program, DD(X), which is a new family of ships for the Navy; Joint Strike Fighter, as Secretary Roche mentioned.

We're also now buying the advanced FLIRs that we do not have yet on our F-18Es and Fs, so we've invested more this year to bring those into inventory. We're investing in unmanned vehicles.

Networking, a lot of money in networking, because networking gives us the leverage to maximize the total forces that we have, rather than add just a platform, but to get real leverage. So we're investing more in that.

Our E-2 -- we're upgrading our electronics in our E-2 airplanes, our surveillance airplanes.

New munitions -- new dramatically upgraded. We have, as you know, some magnificent precision weapons, but there is a next generation now that's being developed that gives us better capability in terms of targeting, and we're investing in those.

So we are investing in a wide, wide area. In addition, by the way, we're doing things like SSGN, right to conversion of the two boomer subs. So we have a lot of investments going forward for our Navy and our Marines.

NELSON: What percentage would you estimate that this is of your budget? Is it 1 percent, 2 percent, is it some significant percent above that?

ENGLAND: Well, it's certainly all of our R&D is in these areas...

NELSON: Well, it's more than research and development. That's out there on the cutting edge. But you're also now applying some of that, I would assume, to new weaponry, new...

ENGLAND: Absolutely. Like SSGNs, this year we're putting $1 billion alone just in that account. So I don't know -- I'd be happy to get back with you, but we're way into the billions. I mean, these are a lot of programs we're funding, Senator.

ROCHE: I think, Senator, across the board, we had a goal of 2 percent to transformational things. We're well above that, plus supporting transformation is another 11 or 12 percent. It's much larger than people realize. In many cases, it's using some old things but in very new ways.

NELSON: Well, we don't have to be absolutely creative on new projects. We can take old material and make it better. And I commend you for doing that.

I think my time may have expired, but would it be OK for Secretary White to respond?

LEVIN: Oh, sure. Just finish the question, absolutely.

WHITE: Thank you. As I said in my opening statement, we are taking a near-term risk by limiting the degree of modernization and recapitalization we're doing on the existing legacy force in order to bring along what we consider to be transformational systems. And that includes Crusader; Comanche, which will revitalize our helicopter fleet; the information technology that we're working on at Fort Hood; the interim brigade combat teams, one of which is funded in the '03 budget; and then, finally, as I talked about earlier, the future combat system.

In the future combat system what we are looking for is something that's more lethal than Abrams, more survivable than Abrams, two-man crew, 10 percent of the logistic tail, fits in a C-130. That will truly be a transformational capability. And we have put our money very definitely in the mid- and long term to achieve this transformation. Thank you.

NELSON: Thank you.

Thank you, Mr. Chairman.

LEVIN: Thank you very much, Senator Nelson.

Senator Inhofe?

INHOFE: Thank you, Mr. Chairman.

Let me first comment to Secretary White and Secretary Roche. The comments you made about our troops over there are certainly appropriate. I had occasion to be at the hospital at Landstuhl last week and talking to some of the troops that have been injured. All of them that were there, as a matter of fact, were injured. And with that exception they said, number one, wanted to get back to their unit; number two, they wanted to make a career of it. You know, these were the ones that were hurt. So I just, you know, you can't say enough good things about these guys.

Secretary England, let me just take my entire six minutes to ask two questions that I hope will clear up the most misunderstood issue that's out there and will also provide for a dramatic increase in our readiness of our deployed troops.

First of all, I thank you for your letter of the 6th of February when you tried to clear up a couple of articles published in the newspaper that suggest you denied a request by the CNO, Admiral Clark, and the Marine commandant, General Jones, the use of Vieques for live- fire training. However, your letter did not address live-fire training. It merely said that that is a decision that the military would make. And that's a statement that you made in my office and that you've made several times.

INHOFE: Now what I'm really confused about that can be cleared up today once and for all is this. I, two weeks ago, went up to the ships that were involved in training for the East Coast deployment. That was the JFK, the USS Whitney, the USS Ross. And I talked with Admiral Natter, the Atlantic Fleet commander, Admiral Dawson, the 2nd Fleet commander. I also spoke to the commander of the Marine expeditionary unit, the commodore of the Ross, as well as the commander of the JFK battle group. And they echoed that your response that because of an accelerated deployment schedule, they did not use Vieques during their final exercise, but that it had been used before for naval gunfire qualification in the fall.

In other words, they got the naval qualification taken care of there, but they all said that it would have been better if they could have had this in the final exercises right before deploying. This is where the football team gets together in scrimmages and says, "This is how we work together."

And they believe that their orders were not to use a range for live fire. And they commented -- all of them commented about a presidential directive that would have forbidden them to do that.

Now, I looked up and I checked with the Navy, as well as in the accounts of the committee, and found that the presidential directive that they're talking about is one that was directed by President Clinton on January 31 of 2000. However, that particular directive was one that referred to the referendum that was going to be taken place, and when they canceled the referendum, that automatically canceled the presidential directive.

In addition to this, we actually put language in the law that is there today that says that it can't do that anyway because we would continue to use that range until a certification came from both the CNO and the commandant that it wasn't needed.

Well, I relearned three things on this trip: number one, that Vieques is the only range on the East Coast where a naval gun fire qualification could take place; number two, Vieques is the only location where the entire amphibious assault team can train together; and number three, that commanders believe that live-fire training is better than inert training, and as one commander put it -- and I asked him this question -- he said, "If live-fire training is a 10, my unit would be at a five."

Now, the president, in his State of the Union message, he talked about our military men and women. They deserve the best training. He wasn't talking about five out of 10. He was talking about the best. Secretary Rumsfeld said in his testimony before this committee just last week that our men and women should train as if they are going to fight. A recent conversation with both Admiral Jones and General Clarke, they find their desire to train at both Vieques both live and inert is not wavering.

So I have these two questions; they're yes or no questions. And the first one -- believe me, there's not a person up here at this table who hasn't been misquoted in the press. We've all -- this has happened to everyone at your table too, I'm sure. But I want to read something that was a press release from the Puerto Rican governor's office and ask you if this is accurate or inaccurate; is it true or is it not true?

"Secretary of Navy Gordon England ordered the cancellation of the exercises, and he overruled two high military officers, the chief of naval operations, Vernon Clark, and the commandant of the Marine Corps, James Jones, who had asked to train in the island with real ammunition." Is that true or false?

ENGLAND: False.

INHOFE: Thank you very much. I do appreciate that.

The second question: Last week, when we had last week both Myers and Secretary Rumsfeld at that table, I asked them a question about the training, and they were all very interested in the training. But they said, "This is a Navy decision. This is not a decision" -- so that's going to be you -- that's a Navy decision.

You have said in a letter that I have here as well as in my office that you will let the military make that decision. The military has made that decision. In a letter that came signed by both Clark and Jones -- I'll read this letter. "The shift of wartime operations following 11 September's tragic events has led uniformed leadership to review the current prohibition of live ordnance training at Vieques with an eye toward accomplishing vital naval training while continuing to limit our impact upon the island and the people of Vieques. We respectfully request support of a wartime modification of current practice to sanction the use of live ordnance during combined arms training exercises prior to deployment."

So the second question is, will you make Vieques available for live-fire training by making it clear to the commanders within the Navy that they may train there with live ordnance if they desire?

ENGLAND: Senator, the request was really overcome by events, because the fleet commander decided not do live fire. I understand, and I believe he discussed that with you, has also decided not to do it with the George Washington.

INHOFE: OK, let me interrupt your response, because I'm running out of time. And tell you, yes, I talked to the fleet commander, I talked to the 2nd Fleet commander. They said they were under the understanding that they could not have live-fire training. Now my question is this: Will you make Vieques available for live-fire training by making it clear to the commanders of the Navy that they may train there with live ordinance if they desire?

ENGLAND: Senator, I don't believe the decision's quite that simple, because there's other factors in this, in terms of our ability to do live-fire. We haven't had any live-fire training on Vieques for some time, as you know. The last time we did it was very traumatic. That's how we got into all the security issues and all the problems on Vieques. I mean, that's what led to the presidential directive.

So this is a situation that is not as clear is just deciding what I like to do. I mean, the people in Vieques actually have a say about this. And there are security issues associated with this. So I don't believe it's quite that easy to just decide. There are environmental issues. A lot of other issues that we have to deal with.

INHOFE: Well, we're aware of all those issue. We're also aware that the judiciary can get in there and start talking about restraining orders and all these things. Yes, we understand that can happen.

But the question is, the military wants to use live-fire and train these guys so that they're able to go into battle, the very best training that they have, which they cannot yet today. And the question is, would you allow your military to make that decision and to train with live-fire?

ENGLAND: Senator, the military has not made that decision. I told you before, I did not overrule and they decided not to do that for Kennedy and they decided not to do it for George Washington. So they've already made that decision.

INHOFE: Mr. Secretary, you know, I can't relinquish this line of questioning without rereading what they said. Now, you remember what they said? They said that, "We respectfully request support of a wartime modification of current practice to sanction the use of live ordnance in training." This is what they're asking for. These are the top guys. These are the bosses. They're they bosses of the fleet commanders, as you well know.

ENGLAND: Senator, the fleet commander makes that decision. The fleet commander made the decision not to do it. He makes the decision. Fleet commander makes that decision...

INHOFE: The fleet commander only made the decision not to do the live ordnance in the final analysis because of the rapid schedule that they're under, which I understood that. But they also said, the fleet commander, as well as the 2nd Fleet commander, that they would have had better training if they had been able to have in the final training a unified live-fire training, and they so requested this.

ENGLAND: Senator, we do live-fire in lots of venues; in lots of places we do live-fire. And we train our people very effectively as evidenced by the magnificent performance we've had over in the Gulf...

INHOFE: So is the answer to the question, no, then...

ENGLAND: ... he did not go by. He did not do live-fire.

INHOFE: Is the answer to the question no?

ENGLAND: I've lost track of the question.

LEVIN: I'm afraid...

INHOFE: No, he's lost track of it and I haven't lost track.

LEVIN: Excuse me, though. I'm afraid you're way over time on this. Just try it one more time.

INHOFE: All right. One more time.

LEVIN: Try to duck it more time, and then let's go on.

(LAUGHTER)

INHOFE: I think we need it. It's a very, very serious question.

LEVIN: I agree.

INHOFE: Well, let me just ask it one more time. Will you make Vieques available for live-fire training by making it clear to the commanders within the Navy that they may train there with live ordnance if they desire?

ENGLAND: Senator, I'm telling you again, Senator, that's not solely my decision. There's the events that you have to think about in this decision. I mean, if you do that without considering the people in Vieques and without considering the environmental issues, we could end up in a worse situation...

INHOFE: Thank you, Mr. Chairman.

ENGLAND: ... so we'll look at that when we get to it.

INHOFE: We have already considered all those things for two years now. It comes down to your decision. And I think you've answered the question.

Thank you, Mr. Chairman. I apologize for going over.

LEVIN: Thank you.

Senator Landrieu?

LANDRIEU: Thank you.

Moving on from Vieques...

ENGLAND: Thank you.

LANDRIEU: ... Mr. Secretaries.

I do have two specific questions, Mr. Chairman, but I'd first like to just read briefly from the president's State of the Union speech, because it leads me into the first point I'd like to make about the job before us.

He said in the State of the Union, "Our discoveries in Afghanistan confirm our worst fears and showed us the true scope of our task ahead. We have found diagrams of American nuclear power plants, public water facilities, detailed instructions for making chemical weapons, surveillance maps of American cities, and thorough descriptions of landmarks in America and throughout the world.

LANDRIEU: "Thousands of dangerous killers schooled in the methods of murder, often supported by outlaw regimes, are now spread throughout the world like ticking time bombs set to go off without warning.

"Thanks to the work of our law enforcement officials and coalition partners, hundreds of terrorists have been arrested. Yet, tens of thousands of trained terrorists are still at large. These enemies view the entire world as a battlefield. We must pursue them where they are."

He goes on to say, "First we will shut down terrorist camps, disrupt terrorist plans and bring terrorists to justice. Second, we must prevent the terrorists and regimes who seek chemical, biological or nuclear weapons from threatening the United States and the world.

"Yet, camps still exist in dozens of countries. A terrorist underworld, including groups like Hamas, Hezbollah, Islamic Jihad, operate in remote jungles and deserts and hide in the centers of very large cities.

"Our second goal," he says, "is to prevent regimes that sponsor terror from threatening America or our friends and allies with weapons of mass destruction.

"Finally, we will work closely with our coalition partners to deny terrorists and their state-sponsors," and I insert, when they have such sponsors, "the materials, technology and expertise to make and deliver weapons of mass destruction."

My point this morning would be, and my question will continue to be, what is it in this $375 billion budget for defense are we doing to answer our president and our country's call to focus on this exact threat, which is very different than the threats we've focused on in the past? Finding thousands of terrorists, not necessarily like the ones we've just destroyed identified in caves, but hiding in the center of jungles and cities, in large cities, in deserts scattered throughout the world.

And what in this budget is helping us to prevent an attack of a weapon of mass destruction? While I support missile defense, I would admit as a proponent of missile defense, it is unlikely that that weapon will be delivered by a missile launcher, but much more likely that that weapon will be delivered by a crop duster, a ship cruising into one of our hundreds of ports, a briefcase carried through any number of hundred entry points to the United States, or an aerosol can in one of the thousands of malls in the United States.

And I think it's very serious, as we talk about this budget, to keep focused on the president's words about what the new threat is and what is in this budget that is going to help protect Americans who are depending on us to do that kind of protection.

My question is this, more specifically, we are standing up these new interim brigades and, Mr. Secretary White, you said, and I agree with you, the urgency of doing this, and I couldn't agree with you. These new brigades that can move more quickly, better intelligence, move where the terrorists may be or where the conflicts may be, which is uncertain as to where they will be in the future. What have we invested in their training and preparation, particularly in the two premier training centers in the United States -- one in California, one in Louisiana? What have we invested in the standing up of these training facilities for these specific brigades?

WHITE: First of all, we have changed the scenarios in the way we run the training facilities to move away from what I would describe as Cold War scenarios; and two, the more complicated counterterrorist scenarios that you're talking about. So that the method of training in both of the national training centers is significantly different.

Second of all, as you point out, we're standing up the interim brigades as we go along. We'll have one finished by the end of this year, and there's one funded in every year out to its completion in 2007.

I think we also have to realize that the military contribution is a part of a broad national effort.

WHITE: As Secretary Rumsfeld and Tom Ridge have talked about, it includes intelligence, economic initiatives, political initiatives, and it's the sum total of that that will enhance the security of the country. And we're certainly making our contribution to it in the Army budget.

LANDRIEU: I would just like...

LEVIN: If you would yield just for ten seconds, Senator Landrieu, the beginning -- the first of three votes has begun. And this is going to be a little more complicated than usual. If a few of us will go vote early in this first vote, come back and then vote at the end of the second vote, we'll be able to continue here without interruption. The next four senators if they're here would be Allard, Dayton, Sessions, Lieberman.

Sorry for the interruption.

LANDRIEU: Just to follow up, and I'm sure there's excellent training that's conducted throughout the United States and perhaps because of these new battles that we're going to fight, more offensive than defensive, finding the terrorists before they find us and rooting them out, and finding them -- I know the training goes on in Louisiana because I participated in these exercises.

And the generals on the battlefield have called this training invaluable to carrying out the task that's before us, and my time is just about expired. But any investments that we can make in the training on these bases and creating additional training opportunities I think is crucial.

And finally I'm just going to ask for the record but not have you answer because my time is up, but on the ISR, the intelligence, surveillance and recognizance, the role of the JSTAR, the new platforms that are necessary, I want to say to Mr. Secretary, I will always remember your quote. "We lost the horse, we lost the king, and then we lost the kingdom." So let's not lose the horse when we're talking about our intelligence assets.

Thank you.

LEVIN: Thank you, Senator, for your support.

LANDRIEU: Senator Sessions?

SESSIONS: Thank you.

Secretary England, we have spent a lot of time in this committee on the Vieques live-fire question. It's not an itty-bitty matter. It's a matter that needs to be decided. I think the United States needs to be able to have a live-fire range. This, apparently, is the only appropriate one.

That issue -- I agree with Senator Inhofe -- needs to be decided by you, and needs to be decided in favor of the best possible training for the ships that we're deploying. We're already reducing the number of those ships, and need the very best training possible. And I don't think this issue's going to go away.

If you want to comment again -- I just want to share my view about it.

ENGLAND: Let me comment on this, Senator.

First of all, we do have a study. I mean, one reason last year we decided to leave Vieques in 2003 was to get the emotion out so we could stay there and do inert. I mean the whole objective last year was to be able to stay and do inert. And by the way we spent $11 million on security and all that last year to be able to use the island of Vieques even for inert type of activity.

So we authorized last year a study by CNA to see what the best kind of training we could do for our men and women in uniform. And in my mind, this is not an issue of Vieques. Never has been. The issue is how do we best train our men and women in uniform. And while Vieques has some attributes, it has a lot of attributes that are missing.

I mean, so we don't do a comprehensive training menu for Vieques. So we do have a study under way to look at that and that will be out in about the April time period. In the meantime however, again I will tell you, the fleet commanders have decided not to do this in Vieques, not the secretary of the Navy, but the fleet commanders have decided not to do the live-fire there for various reasons.

We're on the path that we set out to be on. We have the studies underway, and I'm convinced that we'll end up with the best answer to train our men and women in uniform. That's what this is all about.

SESSIONS: Well, that's been looked at for some time, and I wish you good luck if you find an alternative. We've had testimony here from the best minds on this subject. There are no alternatives available.

Secretary Roche, I know you and Secretary White were proud of the coordination between soldiers on the ground and pilots in the air.

Maybe Secretary White, would you tell us what it was like for the soldiers on the ground to have the kind of air power that became available during this Afghanistan war?

WHITE: Well, I think it made all the difference in the world. There have been well-documented cases of special operating force people on horseback who are tied in with space-age technology to air assets who could immediately bring precision munitions to bear in support of Northern Alliance forces that really swung the battle in favor of our allies.

It's something that all of us have been around in the business for a long time have always sought. We have the technology today to do it. We have the people that are capable of doing it, and it made all the difference in the world in Afghanistan.

SESSIONS: Secretary Roche, this was a ground positioning system. Tell me how that worked and precisely how your people were able to meet the needs of the soldiers on the ground.

ROCHE: Senator, we have had a goal, as we look at the future, to try to return to an era of General Arnold in the Army Air Corps supporting General Patton in the breakthrough after Normandy. This was one of the first things, in fact, inspired by Secretary Wolfowitz chiding both Secretary White and myself to do better in this area.

What we were able to do is these people will use various and sundry things and basically a GPS system -- commercial GPS system, a set of binoculars that will give them a laser beam that will give them a range. Some have had to use paper maps. Others have just been able to use a computer, convert these into the GPS coordinates of the target, and then relay those by voice to the airplane. Now you can see how we can make a bunch of improvements in that over time.

And we're quite proud that our pilots can work for sergeants. It's perfectly fine, and it's worked very, very well. And GPS has allowed this.

In other cases it's been a matter of putting a laser beam on a target. And then certain systems, both in the Navy, the ATFLIR, and in the Air Force the Litening II pods, have laser spot trackers can pick up those spots, convert them to their own lasers and bring down laser-guided weapons on them.

But it's this very close coordination and the dedication to doing that gives us a sense that we can transform how we work together.

SESSIONS: I think it is a cutting edge stuff. And I hope that you can keep that up and be able to broaden the capabilities there.

The main weapon that was called down on the enemy was the JDAM -- is that correct? -- the GPS weapons?

(CROSSTALK)

ROCHE: JDAMS were used extensively. There were also laser- guided weapons as well.

SESSIONS: Can you...

ROCHE: And I can tell you that, interesting enough, this was not just Air Force planes. They would also work with Naval aircraft that had JDAMS. We, for the first time, had Marine aircraft, Naval aircraft, Air Force coalition all being centrally coordinated. And so whoever had the weapon and was nearby was able to serve the sergeants.

SESSIONS: It strikes me that this is a major breakthrough in warfare, or at least a major transformation point in our warfare, and that if we're in a war that has more targets even than Afghanistan -- and most enemies would have more targets than Afghanistan -- we'll need large supplies of that, these kind of weaponry.

Can you tell us what this budget does in terms of increasing funding for JDAMS and whether it's sufficient.

ROCHE: Sir, I get a little confused between supplementals and other budgets. But the accumulation of what you have done for us will allow us to basically double the JDAM production. And we'll do it in stages. It's roughly 1500 a month now. We'll get up in the first stage to the early 2,000's. But we'll have the facilities in place that we're investing in that if we need to, we can move to the 3,000.

Plus we've been working on a thousand-pound weapon. We'll now move to a 500-pound weapon for the targets where that's more appropriate.

SESSIONS: You say you could move up even faster, providing (inaudible)...

(CROSSTALK)

ROCHE: Sir, I think for a while there I was tracking the number of JDAMS used per day as compared to the number we were producing per day. And we got a little worried. At this stage of this particular conflict we're not using very many. And in fact we're able to build inventories up again.

SESSIONS: It just strikes me that we ought not to have just a sufficiency of these weapons but a surplus of these weapons. Are you confident that the budget as outlined will provide us the sufficient surplus, extra numbers, that we need to provide potential military capability in other areas, other than the one just in conflict?

ROCHE: We believe that's correct, sir. Because the Navy is also investing money and increasing production. So it's both services are putting money in their budget to increase JDAM production.

SESSIONS: We'll be looking at that closely. I don't think we ought to make a mistake on this issue. I think if a mistake is made, it ought to be more rather than too few.

Senator McCain?

ENGLAND: Sir, we increased ours from 1400 in '02 budget to 9,880 in the '03 budget. So we had a dramatic increase in JDAMS in the Navy budget.

MCCAIN: I'd like to apologize. I've only got a few minutes because there's only a couple minutes left in the vote. I may have to come back and get in the queue again.

Mr. Secretary, I want to discuss the -- Secretary Roche, I want to discuss the 767 tankers issue with you.

When you wrote the letters to Congressman Dicks and Senator Murray and others, did you consult with the secretary of defense as your position on the lease purchase of these aircraft?

ROCHE: Sir, I did not consult with the secretary of defense personally but with members of his staff, sir.

MCCAIN: Which ones?

ROCHE: I believe we worked both with the controller and with the undersecretary for acquisition.

MCCAIN: So that was sufficient authority for you to proceed?

ROCHE: Well, it was sufficient authority, we believe, for us to ask for permission to go and negotiate, recognizing that if we ever had a financial lease we would bring it back to the secretary.

MCCAIN: Put in the words in legislation is what you were seeking, legislation through the appropriations process, which would authorize you; is that correct?

ROCHE: We were seeking permission to attempt to negotiate (inaudible)...

(CROSSTALK)

MCCAIN: Through the appropriations bill.

Did you consult with Senator Levin?

ROCHE: No, sir, I did not. MCCAIN: Or Senator Warner?

ROCHE: No, sir, I did not.

MCCAIN: No member of the authorizing committee?

ROCHE: No, sir, I did not.

MCCAIN: Why are you wasting your time here?

Mr. Secretary, do you believe in competition?

ROCHE: Yes, sir, I do.

MCCAIN: Are you discussing this lease with, say, Airbus?

ROCHE: Yes, sir. Back as far as October I made the point that if Airbus could come in and do something, we would be delighted to have that happen.

MCCAIN: Are you discussing this with Airbus?

ROCHE: Yes. I have met with Philippe Camus and have opened up the door for him if he wished to do something.

MCCAIN: But doesn't the legislation say the loan can only be Boeing 767's?

ROCHE: Yes, sir. But if Airbus did something that was particularly good, I would come back to the Congress, sir.

MCCAIN: Oh, you would come back to get the legislation changed again on an appropriations bill?

Mr. Secretary, you do believe in competition you said. In your letters both to Representative Dicks and to Senator Murray, which you didn't share with any of the members of the authorizing committee, both of them you said, "Beginning in FY... it would be in the best interest of the Air Force to implement this transition. We intend to work with USD, AT&L, and the OSD comptroller to amend the fiscal year '03 budget currently being vetted through the department."

In other words, for -- "This least approach will allow more rapid retirement and replacement. The Congress determines this approach is not advisable. Completing the upgrade through the purchase of new 767 aircraft beginning in fiscal year (inaudible) will be in the best interest of the Air Force."

Is there anything in the Air Force budget that calls for acquisition of 767's?

ROCHE: Yes, sir. They are for a new tanker. But it wouldn't show up until 2008.

MCCAIN: No, I'm talking about in fiscal '03 (inaudible) budget...

ROCHE: Yes, sir.

MCCAIN: ... which was just submitted to Congress, is there any (inaudible)...

(CROSSTALK)

ROCHE: In the palm (ph) we have it, not in the '03 budget because...

MCCAIN: But you said in your letter that you intend to work with the USD, AT&L, and the OSD comptroller to amend the fiscal '03 budget currently being vetted through the department.

ROCHE: Because if we could start the lease earlier, sir, we would need some O&M to go for the initial part of the lease.

MCCAIN: So you did not seek authorization or appropriation in the fiscal '03 budget?

ROCHE: So we did not seek authorization or appropriation for any moneys. For any moneys, sir.

MCCAIN: Yes, which is direct contribution to your letter to Congressman Dicks...

ROCHE: No, sir, if I may.

MCCAIN: ... and Senator Murray.

ROCHE: If I may, Senator. It was a matter that plan A right now is to have a stream of money that builds to a KC-10 that's -- excuse me, a KC-X that would be available 2008. If in fact the lease were available, we could do things sooner, we would not be spending money on certain of the old planes, and we would ask for reprogram or redirection of moneys. That's what that meant, sir.

MCCAIN: Well, you know, it's plain English. "We intend to work with USD, AT&L, and the OSD comptroller to amend the fiscal year '03 budget currently being vetted through the --" I mean words have meaning, different meaning, obviously to you and me.

But I think that the casual observer would say when you work to amend the '03 budget, when the money's not in the budget, then you didn't amend the '03 budget, which is what was stated in your letter. So you are now seeking some relief from regulations concerning leasing arrangements.

I just want to quote to you from Mr. Daniels, the head of OMB. "Daniels was so cool to the Boeing proposal that many Capitol Hill staffers believed the leasing deal would never be made. During last year's debate Daniels not only warned against scrapping the rules designed to curb leasing abuses but wrote to Senator Kent Conrad, quote, 'The Budget Enforcement Act scoring rules were specifically designed to encourage the use of financing mechanism that minimized taxpayers' costs by eliminating unfair advantage provided to lease purchases by the previous scoring rules. Prior to the BEA, agencies only needed budget authority for the first year's lease payment even though the agreement was a legally enforceable commitment.

"'In the late 1980s the GSA used this loophole to enter into 11 lease purchase agreements for total long-term costs of 1.7 --'" et cetera.

He's opposed to changes according to Mr. Daniels (inaudible)...

ROCHE: Yes, sir. And by the time the bill was finished, the changes we had asked for were denied and we have to -- if we can do a lease, it has to be on the conditions as specified in the bill.

And this happened in the past, sir, where we've been asked to try and lease 737's, were not able to come to a good deal and not bring something back to the Congress. It would be the same way in this case, Senator. If we could not get a lease that we could feel proud to show you, we will not do it.

MCCAIN: Well, I have to go and vote because I may miss it. And I intend to pursue this line of questioning.

But you never consulted the chairman of the authorizing committee or the ranking member or any member of the committee. You didn't get -- or consult directly with the secretary of defense over a $26 billion deal.

I've only been around here since 1983. This is one of the more remarkable things that I have seen in the time that I have been a member of this committee. And I intend to do everything I can to see that taxpayers of America are taken care of in this situation, which clearly is a serious, serious issue here.

I have to go. My time has expired.

LEVIN: Thank you.

ROCHE: May I answer that later, sir, when you come back?

MCCAIN: Sure. ROCHE: Thank you.

INHOFE: Thank you, Senator.

I want to go ahead and start a second round here. And I want to pursue just a couple more minutes on the previous subject, Secretary England.

Anticipating that there might be an effort -- this is some time ago -- to close this range --

Mr. Chairman? Is it all right if I go ahead and pursue my second round? There's no one else here.

LEVIN: Yes. I was going to go...

INHOFE: Oh, go ahead.

LEVIN: ... take my round first.

But have you voted yet?

INHOFE: No, that's fine.

LEVIN? No, have you voted yet?

INHOFE: I have.

LEVIN: You go ahead. You started. You go ahead.

INHOFE: All right.

Anticipating there could be a problem, Mr. Secretary, I'm going to just read the law that we passed, or a paragraph of it. It says, "The secretary" -- this is last year's Defense Authorization Bill. "The secretary of the Navy may close the Vieques Naval Training Range on the island of Vieques in Puerto Rico and discontinue training at that range only if the secretary certifies to the president and Congress that both of the following conditions --" you're very familiar with this law.

I guess what I'm saying here is you've brought up a lot of concerns that people there, what their reaction is going to be. These are things that are never brought up in consideration at other ranges. So it gets down to a very serious thing.

And I just only wanted to see if you have thought it over and might have a different answer to the last question.

I do appreciate your very straightforward first response. But on this, in that the law is very clear that they should be able to do it if the military wants to do it, if the military wants to continue to train, would you preclude them from doing so?

ENGLAND: Senator, I'm obviously going to obey the law. The law says that if I have an alternative, before I leave I have to identify that alternative and do that in consultation with the CNO and the commandant. And I'll certainly do that. So I'm definitely going to do what the law says that was passed last year.

I thought it was excellent. I have no issue with the law. And I'll proceed according to the law.

INHOFE: Would you preclude them from doing so if they wanted to continue live-fire training?

ENGLAND: The law doesn't address live-fire training, Senator. It addresses training on Vieques. And at the same time we're not doing live-fire training on Vieques. We're doing inert training. We've been doing that since, I believe, sometime in the year 2000.

INHOFE: And that's not the issue, though. The issue is live- fire training. I don't think we're going to get anyplace in this hearing...

ENGLAND: I don't think that is the issue, Senator.

INHOFE: ... but I have tried. I wanted to get everything in the record to give you the opportunity to tell us whether or not you are going to allow it, should the military request it.

The law is specific when it says that we will continue to train there until such time as the CNO and the commandant certify that there is no alternative that they are satisfied with.

ENGLAND: Senator, at this point I have not had a request in terms of a specific. The earlier request was overcome by events. We'll look at the situation at the time it occurs. It's hard to go put yourself in a situation you don't know what that environment is.

So I mean, I'm not going to answer that question, as you well know. I'm not going to answer that question because I'm not going to put myself in a hypothetical situation.

INHOFE: I realize you're not going to answer the question. You haven't answered the question.

ENGLAND: Right. And I'm not about to put myself in a hypothetical situation.

INHOFE: Secretary, thank you very much.

Secretary Roche and Secretary White, let me ask both of you a question.

In May of 2001 Sea Power Magazine interviewed Admiral Amerault, the deputy chief of naval operations, fleet readiness and logistics, whose statement suggests that this may not be an achievable goal and encroachment is a serious problem.

And they go on to talk about the problem and said, "There is a potential to lose the ranges in Vieques in Puerto Rico. And that could have a very serious readiness impact. It's the bell ringer for us."

And it concludes, "Vieques is just the beginning. We could lose any number of ranges based on encroachment."

Have you seen encroachment as an issue on the ranges in the Air Force and in the Army? Both secretaries.

WHITE: Yes, we have.

ROCHE: Yes, we have. And you've been very helpful in the case of one of them, sir, as have a number of your colleagues.

INHOFE: Yes, thank you very much. This is a serious problem. And I see -- I agree with Admiral Amerault that this could have that effect on all other ranges that are out there.

I'd like to just real quickly in the remainder of my time talk about two things that were left out of the budget. And I recognize that everything can't be in the budget. But in my opinion the two things that we needed the most that were left out are MILCON and force structure.

And on force structure I've been disturbed for quite some time with our force structure, with the new deployments that we've had over the last few years, places like the Balkans. I just got back from the Balkans last week. It seems like we're going to be there for a long period of time.

INHOFE: We're able to do some of these things because of the Guard and Reserve. But we have strained our Guard and Reserve -- as you and I talked about, Secretary Roche, when we were going down to Oklahoma at that time. And you and I also have talked about it, Secretary White -- to the point where a lot of the critical MOS's are not there.

What do you see? When are we going to have to try to address the force structure, if you agree that that's a problem.

Yes.

ROCHE: Yes, sir. We are -- among other things, I went down and met with the recruiters for the Guard and Reserve. And we are trying to do things like if someone leaves the active force and they can fit a Guard position, I'm giving a waiver allowing them to do it.

We're also, as you know, trying to expand the roles of the Guard in things like Joint STARS, which is going very, very successfully in Georgia. And we will try to do more of that, of bringing the Guard into more of the information technology sorts of things.

So we have seen a Guard that right now has performed magnificently, is carrying an awful lot of the burden. And that's part of why we need to have a sense of what are the long-term steady- state requirements of Operation Noble Eagle as well as Enduring Force in order to get some of these folks back to their jobs.

INHOFE: Do you see, though, in addition to that in the years out, two or three years out, we're going to have to relook at our force structure in terms of the regular services?

ROCHE: Our sense is that right now we have the services are working with the undersecretary for personnel, readiness, Dr. Chu to see what ought to be expanded in the Guard, Reserve or active force in order to maintain the capabilities we currently have deployed if we need to keep those deployed.

INHOFE: Good.

Secretary White?

WHITE: I think there's a general realization with 35,000 Guard and Reservists mobilized right now and the Guard picking up rotations in Bosnia, rotations in the Sinai and so forth, that if we stay at this level of mobilization for an extended period of time, we're all quite concerned about retention. Right now we're at full strength basically in the Guard and the Federal Reserve. That's one of the reasons why the secretary brought up in Homeland Security the business of making sure when we take these extra obligations on that there are end dates to those obligations, like the commitment of 6,000 Guardsmen in the airports of the country.

But it is a challenge, as Judge Amerault suggests, we're looking at very, very seriously. Because the current level of deployment is stressing the force clearly.

INHOFE: Thank you.

And thank you, Mr. Chairman.

LEVIN: Thank you, very much, Senator Inhofe.

Secretary White, National Guard personnel, while they are in a state status, as you know, are permitted under the law to perform domestic law enforcement functions, such as airport security, protecting the U.S. capitol. However, under the doctrine of posse comitatus they may not in a federal status perform such functions. Nor may active duty personnel perform such functions.

Last week Secretary Rumsfeld testified that the department opposes efforts to revise the posse comitatus law at this time. At the same time I understand that the department is preparing to detail National Guard troops to other federal agencies to perform law enforcement functions. And in the past the department has opposed such efforts to get around the posse comitatus law.

Do you believe that such change should be made and that our troops, active duty or reserve, should be assigned to federal agencies to perform domestic law enforcement functions?

WHITE: I think in general no, that the doctrine of posse comitatus has served the country very well and it's culturally a part of our heritage. We have, however, agreed on a short-term basis of limited duration, because of the significant challenge of border security to our overall homeland security posture, agreed to detail federalized National Guardsmen under Title 10 to the three border agencies, Customs, INS and the Border Patrol, for a limited duration.

And we were very, very careful in this process to ensure it was of limited duration. And only under that basis did we agree to do it.

LEVIN: There's been a great deal of concern and debate about the status of detainees that have been captured as to whether or not they were prisoners of war or not.

You are, as the secretary of the Army, the executive agent for the Department of Defense for administration of the Enemy Prisoners of War Detainees Program. As the executive agent you have a number of responsibilities, including providing appropriate reports to the office of secretary of defense, chairman of the joint chiefs and to the Congress relative to that program.

I don't believe we've gotten any reports from you, have we?

WHITE: No.

LEVIN: We should under the law. And I hope you'll attend to that.

But I want to specifically ask you about Army regulation numbered 190-8 which implements that directive. And I want to read it to you.

"If any doubt arises as to whether a person having committed a belligerent act who's been taken into custody by U.S. armed forces belongs to any of the categories enumerated in Article 4 of the Geneva Convention relative to the treatment of prisoners of war, such person shall enjoy the protection of the present convention until such time as their status has been determined by a competent tribunal."

And that competent tribunal under your Army regulation is a three-officer tribunal that is to determine the status of those people. I'm not talking here now about the tribunal that is going to look at war crimes (inaudible)...

WHITE: Right. It's not a commission. Right.

LEVIN: This is a three-officer tribunal, which under our law, under our regulations, is supposed to determine the status of persons who have been taken into custody by the armed forces who have committed belligerent acts against us.

And I'm wondering whether or not those tribunals have been appointed and if not why not.

WHITE: Well, I know that you have had a discussion with the secretary on this very subject the other day in his hearing. And the view is that the Geneva Convention applies to the Taliban detainees, not to the al Qaeda detainees. But in neither case do they enjoy POW status.

And we have not or it has not been directed of me to conduct the tribunals to be more definitive in terms of sorting out their status. So that's where it stands today.

LEVIN: Yes, but that doesn't quite answer the question.

The question is, since there obviously was doubt -- I think in any reasonable judgment there was doubt as to whether or not those persons should be treated as prisoners of war -- whether or not you were then not required as executive agency to appoint the tribunal to determine their status. Isn't that your obligation under your own regulation? It's not the president's determination. It's your determination under your regulations. It's not the White House counsel determination. It's your determination.

And I want to know why it was -- well, first of all, did you participate in the decision that was made?

WHITE: No, I did not.

LEVIN: I think that the Army regulation reading as clearly as it does that where there is any doubt -- any doubt -- about the status of a person who is taken into custody who's committed a belligerent act is a prisoner of war and should be treated that way. And since you are held responsible for that, I think that you should give the committee, at least for the record, an analysis with your own counsel -- and I would advise that the Army counsel be advised to this -- as to why your regulation was not implemented.

WHITE: I will do that.

LEVIN: Thank you.

Senator Dayton?

DAYTON: Thank you, Mr. Chairman. I'm sorry I had to depart to meet with a group of Minnesotans and then vote. So if I'm redundant, I apologize, gentlemen.

The realities of our round of questioning is that it also, for us at the far end of the table, it constitutes an opportunity to make an opening statement. So bear with my preamble, please.

And I want to do something because I think that the deliberations this committee is going to be making this year, Mr. Chairman, are really among the very most important that Congress faces this year.

The president's request of $48 billion for the '03 and $451 billion for the five years is an enormous increase in military spending, so much so that for that and other reasons OMB dropped the customary practice of extending the figures for ten years. Last week Chairman Myers and General Franks made clear to all of us that those increases are not enough to do everything that they believe needs to be done. They talked about the desire to have a procurement budget for '03 of $100 billion to $110 billion, which would be more than $40 billion beyond what the president has proposed, which itself is a sizable increase.

I believe in the House hearing last week one of the Congressmen complained that the request falls 40,000 troops short of what the Army says it needs, that their aircraft procurement is only 100 versus the 400 that the three of you combined would like and the Navy shipbuilding is seriously inadequate to meet that scope of commitment.

So the military leadership, it seems to me, has done what they should properly do, which is to inform us civilians, yourselves, the secretary, the president, the Congress this is what it would cost to do what you've outlined you want and believe we need to do.

And yet if you look at the consequences of that spending over the next decade, the paradox, it seems to me, is that while it would significantly strengthen our national security, our national defense, our military strength, it also seriously weakens our financial security of this country. And that's where I think, unfortunately, no one's here. But out of that context it's going to be very difficult to assess your budget proposals and frankly to deny any of it.

FY 1999 and 2000 were the first two fiscal years in the last 30 years in this country where the federal government's operating budget, the budget that excludes Social Security and Medicare expenditures, was in balance. That fall I promised to my campaign, the president promised to his campaign, I think just about everybody who was running for office that year, federal office, promised that they would preserve that balance and put the Social Security and Medicare trust fund surpluses in what we call the lockboxes, that the money would not be used for the operating funds; it would be used for paying down, paying off the national debt so that in 10 to 12 years when the numbers of retirees increased we'd have ability to do so, so we could use some of the Medicare surplus, some of us envisioned, for prescription drug coverage for seniors.

Now rather than keeping that balance for the next ten years, the budget as proposed would run a ten-year combined deficit of almost $1.5 trillion. That deficit will have to be paid for by wiping out all of the Medicare fund surpluses for those ten years and 60 percent of the Social Security trust fund surpluses for those ten years, which means that every additional dollar that we spend on our military preparedness is a dollar that comes out of the Medicare trust fund or the Social Security trust fund.

And at the conclusion of those ten years we are still in seriously high national debt and we have, I believe, seriously weakened this country's ability to meet its then current and future needs for this society.

So in that way, I think your budget proposals are deficient in two respects. One is I think that the administration has failed to redefine what are the threats that we face in the world and are expecting to face over the next ten years. Because, as the chairman said, these are long-term, long-range commitments, investments that we're making.

I understand that Secretary Rumsfeld has modified the two-war measure for preparedness. But as I understand it, those are two, essentially two, wars against the former Soviet Union or against the former Germany, Japan. Where are those threats in the world today? Where are the nations that have anything approaching the equivalent military strength of the United States who would be able to conduct or engage in that kind of protracted and highly costly war?

When our defense budget now equals the defense budgets of the next nine countries in the world combined, where is even the emerging possibility, the prospect of somebody who could engage us at that level?

Secondly -- and I think these are entirely proper -- the president has said we must include as national defense homeland defense. I believe your budgets combined include $12 billion of the $37 billion the president has proposed for that. $25 billion that is being spent in other categories, really, in my view should be considered part of our national defense spending.

And then thirdly, the president believes and you believe that we need to commit about $8 billion, $8 1/2 billion in '03 and assuming increasing amounts thereafter to build a national missile defense system so that we're protected if a rogue nation, as defined, shoots missiles at us.

But that, it seems to me, is implicitly the total of threats that we are preparing to contend with over the next ten years.

DAYTON: And I'm not sure -- first of all, I don't know that that's even appropriate. And secondly, I know that it's not affordable. So in that context as well I think the other deficiency in these presentations is any real reduction in any of the ongoing expenditures to meet these new commitments.

And the ones that are referenced here, the programmed adjustment for FY '03, that whole $9.3 billion I think as others had asked -- and I'd, you know, be interested in further elaboration too -- are really minimal compared to what was stated by the secretary a year ago of the need to seriously shift from older systems which are either outdated or not necessary for these, that threats of the future. And so this budget basically is one that I'd view avoids any of the really tough decisions of what do you not do in order to be able to do additionally what it is that everybody wants to do?

And I guess I'd ask if you would respond to that.

ROCHE: Yes, sir, I would just make the following point, Senator. One, I think the secretary has reiterated that we're trying in this new era in our programs to not worry about specific threats and try and predict them but in fact to have a portfolio of capabilities that can adapt when we're surprised.

That was our logic during the summer as we were preparing the budget. And it turns out in September it was really brought home, that having a portfolio of forces really did things.

Good example was those who thought big deck aircraft carriers were not useful. They were very useful this time. They were very useful also because there was long-range Air Force tankers. So the notion of capabilities as compared to trying to predict a particular threat.

Secondly, I think in terms of the amount of moneys we need, I understand how the services can say there's a gap. My own point of view, if we just had steadiness, if we could have steady budgets and steady growth, we can manage better, we can do better, and we can get, well, we'll take a little risk on not having everything fixed at once. But we don't have to go and fix everything now and then at some other point create another situation where everything obsolesces at the same time.

So steadiness is probably more important to us than anything else, sir.

And third, when trying to get cost savings, as we were really working on early in the summer before the Congress was able to help us, I can tell you when you try and do something like adjust the size of the B-1 force, it's a very, very painful experience, Senator. DAYTON: And you made that effort.

ROCHE: Yes, sir.

DAYTON: And were rebuffed by the very forces that...

ROCHE: In a very bruised fashion we're reducing the B-1 force from 93 down to 60 plowing the money back to the remaining 60's, realigning a number of bases, doing a number of other things. It's working now. But it was sure a tough, a tough thing to do. And it took an enormous consumption of my time and time of the members who had to explain to their communities what this all meant.

DAYTON: I thank you for pointing that out. And I recognize that. And I think that caused the secretary last week to make the analogy to Gulliver who was being tied down by 2,001 earmarks and the like.

Secretaries.

ENGLAND: Senator, a comment about our national missile defense. You mentioned $8 1/2 billion. I know Senator Landrieu mentioned also.

The fact of the matter is there's people out there developing systems that will hit the United States. It's hard to ignore that fact. If they're developing them, you have to think they're probably doing it for a reason. And therefore certainly in my mind it's very prudent for this administration, for the American people to defend themselves against a threat that's being developed.

DAYTON: I don't disagree with you, Mr. Secretary. And I guess my point is that that in addition to the homeland defense, the terroristic attacks in addition to this prevailing measure of preparedness to fight two major theaters simultaneously, that is, as Secretary Roche said, if that is the portfolio that we believe that we need to address, I guess then we just need to recognize as a nation that at our present structure for financing our government expenditures that we're seriously in arrears.

ENGLAND: Well, I mean, we are spending this year I believe like 3.3 percent of our gross national product on defense. The other day we mentioned, when the secretary was here the last time, it was 10 percent. So we're at the lowest the nation's ever been, I believe, at 3.3 percent.

The question is, what percent of the nation's wealth is the nation willing to invest in defense of the people? And it's a really pretty low number for that insurance policy.

DAYTON: And that may well be the case, sir. I'm just saying that I am not talking percent. I'm talking dollars. And I'm talking real dollars based on the economic projections that OMB is making and the numbers. And I think, again, this is not your problem so much as it is ours. But the fact is they don't add up.

I need to take a vote. And I want to call on Senator Allard. I just want to leave also one query. Maybe you could respond in writing or subsequently.

We spent a lot of time last year, your time as well, on BRAC, domestic BRAC. What consideration is being given to an overseas BRAC, closing down or consolidating these myriad bases, not even pulling out of countries? But I understand we have 52 bases in Korea or different sites in Korea and Japan and the like. Is there some way we can achieve some real savings in the years ahead just by consolidating some of those operations?

(CROSSTALK)

WHITE (?): We don't have any congressional members representing any of those.

ROCHE: Yes, sir, but we -- that's happened. We've dramatically reduced the number of air bases in Europe, I can assure you, just dramatically.

ENGLAND: I'm working on one, Senator.

DAYTON: All right. Thank you.

Senator Allard.

ALLARD: Thank you very much. I want to address my first couple three questions to you, Secretary Roche. And they have to do with the space-based radar. As you know, this is a high priority for me. And I believe it's key to (inaudible) transformation. And I have been encouraged to see the strong support for space-based radar in your support in accelerating that program.

What I'm curious about is, can you talk about what aspects of the program you'll be focusing on with the increased funding that you have in the budget?

ROCHE: Yes, sir. The issue I have with the space-based radar is to make sure that this is done right and I don't have to come back and discuss a situation as I do on SBIRS High where the program is having difficulties.

So first and foremost is to understand what is the concept of operations that we want the space-based radar for. Now, we believe in the air especially, the PT's and General Jumper and I, that what we're talking about is something that can do ground target moving indicators first and foremost. And therefore the issues for technology are how few in number, how slow are they moving, and how persistent can the system be?

So we're trying first and foremost to develop an architecture that will answer the question as to why we want this and therefore limit people adding onto it additional requirements which may cause its cost to go up very precipitously or cause us a situation where we're trying to solve something that's too difficult to solve.

This system has to work. And it has to serve commanders and then have an ancillary role in terms of intelligence, surveillance, reconnaissance for other people.

To this end, the three of us are devoting our own time. We are the initial configuration control board. We'll be going up to Lincoln Labs in Hanscom in a -- golly, I think a week or within the next two weeks to spend time on the concept of operations, what needs to be there so as to start this program correctly before we get into a feeding frenzy as to who's going to build it, what are the appropriate sensors, how those sensors are going to integrate with other systems, to what degree should this satellite system serve as the only or should it be part of a portfolio, think that through so that we have a success on our hands and not something that just gets an appetite far ahead of our ability to satisfy. ALLARD: Now, you mentioned some of the problems with SBIRS High. You know, we did some reconstruction on SBIRS Low, and like you mentioned, I understand there's some problem with SBIRS High now. And I understand that's in the acquisition processes.

And could you go into a little bit of explanation of what kind of changes need to be happening with that acquisition process or maybe what you're doing to try and improve the acquisition process.

ROCHE: The first order of business, Senator, is to understand why we're of a sudden having difficulties in a couple of space programs, space acquisition programs. Is it a matter that we have allowed the requirements just to build without discipline? Is it a matter that there's an expertise in the industrial base that is retired or retiring and has not passed on the knowledge? Is it a matter that we relied, I think foolishly, on total systems procurement responsibility where everything was devolved down to a contractor in the past years? And I think that was a mistake, or a big mistake.

Is it because we can only get 56 percent of our scientists and engineer billets in the space acquisition community filled, that we're missing the other, the remainders?

We're trying to study that now. We're using the SBIRS High as the most immediate case in point. What's there? What's wrong?

And in each case, Senator, what we come upon is it's not the magic of the system; it's the basic management things. It's the basic technology things that aren't working. And it's sort of, well, why not? What's wrong here?

So we've challenged the entire space acquisition community to the point of saying that we're worried with continuing confidence in them in terms of making sure these things start right, that they stay on track, that we get early indications of difficulties rather than allowing something to go to such a point where it will cost an enormous amount of money to fix it.

Then we have to discipline ourselves back in Washington to not add capabilities in the middle of the program, not change things, to be able to have something that's more steady.

So this field, besides having more attention to it in terms much trying to get some of our brighter people, trying to rerecruit scientists, engineers, we are taking a look at the fundamentals. Because it appears it's in the fundamentals we've had difficulty.

ALLARD: Now, Mr. Secretary, I'm also pleased that you're moving forward in your recent efforts to implement some of the recommendations on the Space Commission Report and also to see that the organization changes you've made is trying to integrate better between military space and the NRO. And I compliment you on that.

Are you planning to follow up on some of the other recommendations from the space committee, such as recommendations to develop a cadre of professionals that we need to reduce our space systems vulnerability to attack?

ROCHE: Sir, I missed part of the question, but...

ALLARD: Well, part of it is are you -- I appreciate what you're done so far as far as following through with the Space Commission Report. There's other areas specifically that was in the report that I want to know whether you're going to follow up with.

One of them is to develop a cadre of space professionals.

ROCHE: Oh, yes.

ALLARD: Training and everything.

And the other one, if you'd address the second area I wonder if you would address, is the need to reduce our space system's vulnerability to attack.

ROCHE: Yes. In both cases we are going to spend the time.

By the way, one helps solve the other. If you have a professional cadre who really worries about this business, they will worry about how the red team -- will red team (ph) it as well.

I think you will find that we will be spending a good bit of time on making this an equal to our pilot community in our Air Force. We believe in global reconnaissance and strike, and that reconnaissance is key, our space community is key to what we do.

In terms of our vision, it's global vigilance and of reach in power and, again, space. I think you'll find the commanders of the space units will start to come from the space community more. We'll worry about their education. We'll worry about their roles in command and how they feel about command.

So we're taking it very seriously by elevating things up to the undersecretary, by making, both General Jumper, myself and Pete Teets, as well as the vice, you know, focus responsible as the executive agents for space. This community is probably going to get more attention than it may want for a while.

ALLARD: I'd like to wrap up with just one question to all of you if you'd respond, please.

The president's budget reflects a savings of about $200 million by decreasing headquarters staff. And I'm interested in how you're planning to accomplish this reduction in each of your areas.

And the question is, will the reductions be in military or government, civilian or both? Or will those reductions be in contract? If you can kind of give the committee some feel about how these reductions are going to occur at that particular level, I'd appreciate it.

Thank you.

WHITE: We're looking at a reduction of both civilian spaces and military spaces. We've already completed the review of the Army headquarters. As I said in my opening statement, we're at the field operating agency level now. And we will achieve our 15 percent reduction. We should exceed it, as a matter of fact.

ALLARD: Secretary England?

ENGLAND: Senator, we're not at the 15 percent yet. I believe we're about 11 1/2 percent. Frankly, we'd like to hold that for just a while because of the intensity of our conflict at the moment. However, we are working this whole issue of headquarters. We're really working well beyond that because the real savings are not just the headquarters. It's across the entire enterprise. So we're looking at every single thing we do.

We get together regularly to look at this. And I mean, hopefully we're going to save far more than $200 million. Now, we're talking to billions of dollars as our objective. So we've really set our sights well beyond just the headquarters staff.

ALLARD: Well, Mr. Secretary, one of the concerns I have is they make cuts they always go down to the lower guys on the totem pole. And you have to be perhaps looking at the higher level. And they protect their own jobs. So I just would hope that that doesn't happen.

ENGLAND: No, as a matter of fact, that's really what happened, I guess, the last time. Lo, these many years whenever the work force was cut, it was all cut at the low end. As a result, we have no young people in the business at the moment. We're very top heavy. And in fact it's very expensive because, you know, it costs more to have longer-term employees than younger ones. You really like to have a mix. It's good for the healthy organization.

So you're absolutely right that we do have to be smart in terms of how we do this.

ALLARD: Secretary Roche?

ROCHE: Senator, you know that in the past the Air Force had combined operating commands.

ROCHE: In fact, it had done it at the top. SAC and TAC became the ACC. And in terms of our acquisition, that blended units together. We've probably made in the headquarters now 7 1/2 percent. There's about 7 1/2 to go.

We have a definitional problem that technology is causing us that we're trying to work out. The folks who are overseas who are in fact coordinating all of this air attack over Afghanistan are considered staff. Whereas in the Navy they're on board an aircraft carrier and they're not considered staff. So we're working with OSD to say can you -- but we don't mind the Pentagon part. That's not a problem. It's down in our component commands where the people who are really manning these combined air operating centers and directing all of this are considered staff, even though they're performing in an absolute war-fighting role.

Technology is causing us difficulties that we can do things at a distance rather than having to be there. And yet we tend to think that that's a staff function. So we're trying to work through these definitions.

ALLARD: Thank you. I see that my time has expired.

I think, Senator Lieberman, you're to resume.

LIEBERMAN: Thanks, Senator Allard.

Thanks, gentlemen, for your service and for your very interesting testimony.

The theme of my questions has in some ways been echoed earlier, which is that though the $48 billion increase in the president's proposed budget for the Pentagon is obviously substantial and the highest in a number of years, we're faced with a multitude of demands that require choices. And my concern is whether we've made enough of the choices to really drive transformation or whether we're still supporting with too much of the budget the programs that are serving us well but whose utility is going to begin to run out.

And obviously, notwithstanding the $48 billion, which is a very substantial sum, the actual buying power rises only modestly because of inflation, because of the increases in pay and benefits, which we all support and because of current operations.

So with that preface let me ask just a few questions, beginning with you, Secretary Roche, for the Air Force. The budget shows a large increase in F-22 procurement but what I would call only a modest increase and in fact some drop in funding for so-called high-demand, low-density programs, which I always want to say high-demand, low- supply programs.

For example, C-17 production drops from 15 to 12 -- that is next year as compared to this year -- despite General Frank's telling us that we need more strategic airlift. The JSTARS acquisition stays at one per year despite what seems to be very substantial interest from the CINC's who think that we've got an inadequate -- well, we do have an inadequate number of JSTARS to provide for full-time coverage.

And although bombers have increasingly demonstrated their importance, certainly over Afghanistan, I don't see that reflected in this budget. Though I did note with some interest, Mr. Secretary, that the F-22 is now described as a fighter bomber; whereas I...

ROCHE: (inaudible) the Navy always says F&A, and we were saying F. But these things have been fighter bombers some time, the F-16.

LIEBERMAN: Yes.

ROCHE: Just think of the attack on Siric (ph). It was all done by fighter bombers.

LIEBERMAN: All right. So let me ask that question...

ROCHE: Really.

LIEBERMAN: ... which is, why has the Air Force chosen to place such a priority on procuring the short-range TACAIR, which one could argue we have a lot of, rather than placing more emphasis on the other high-demand, low-density capabilities that I've talked about? But forget me. It seems to me that the CINCs are telling us they want more of these.

ROCHE: We're in violent agreement. If I can, the C-17, because it's multiyear, a lot of what would normally go in the beginning as being put in for long lead, it is to have an equal 15 a year come out at the line. And in fact it exceeds 15 for a couple years and at the very end it's 13. So you can't just look at the moneys funded in this particular thing for numbers of airplanes. It's an accumulative effect.

So the C-17 is not going down. In fact it's at 15 a year, which is a steady economic way to be able to do this at the Boeing line.

We probably will be -- well, I know we will be looking at whether we need more of the C-17s given how we're working them to death in this situation over and above the normal war planning. This is the kind of example the real world that Secretary Rumsfeld has pointed out that is a surprise. You have to be able to do things. So C-17 is one of those high-demand, low-density things that's getting addressed.

The others, including GMTI, we're pressing on trying to put GMTI on drones. And so the MPR team (ph) will be doing that. In the case of Joint STARS, we're moving, unfortunately, one more 707. We want to then go beyond to make a GMTI-specific version of a different aircraft which is larger but can still take the radar gondola and to make the back end more battle management. This is an area we are addressing dramatically. And it's a problem that we've been hooked to the old 707, which is just getting older and older and older as we go on.

So in fact we're doing that.

With respect to the F-22, the program is 20 years old this year, Senator. This is the first time that we're finally going into production. But since the introduction of the last five-year bomber, we have introduced the B-1, the B-2, the F-117, the C-17, the C-130J, Joint STARS, et cetera, et cetera. This is an area that has to get addressed.

LIEBERMAN: Let me ask you...

ROCHE: And so we're doing it. And its time has come.

LIEBERMAN: OK, let me ask you one more question briefly -- and I want to turn the same focus to Secretary England -- which is, what about the bomber force? What about the upgrading of the bomber force, and particularly considering the remarkable performance in the last couple of conflicts we've been involved in of the B-2?

ROCHE: The B-2 we are putting all the mods in that we ought to put in. What's changed in this over history is that each weapon has got such an effectiveness because of precision that in fact you don't have the situation which created bombers, which is you had to drop 1100 weapons to get a .9 probability of hitting a certain part of a factory in Europe. Each of these is so precise that you don't have that problem.

So they perform beautifully. But we've used 18 bombers. For the most part, we had four of the B-2's that we used initially when we weren't sure of the air defenses. Post knowing about the air defenses, ten B-52's and eight B-1's have just done a remarkable job, a very, very small proportion of the overall force, because the effectiveness of each weapon has changed.

LIEBERMAN: So you don't think we need to be thinking about procuring more bombers.

ROCHE: No, sir. I think procuring more of the weapons that make the bombers effective and upgrading the systems on the bombers is the appropriate thing. That's why JASSM will take the 60 B-1's and make them dramatically useful.

LIEBERMAN: Secretary England, let me just ask you briefly -- my time's running out -- if I'm not mistaken, at the current rate of acquisition, as you've suggested in the next, what, couple of years we're going to go under the 300-ship Navy.

ENGLAND: No. No, sir, we don't go under 300 ships, even with our retirements I believe the lowest we'd drop to is about 304 ships, sir. So we maintain our level (inaudible).

LIEBERMAN: Even though we've got to do the eight to ten a year -- that's the number we've heard -- and we're at about five now.

ENGLAND: That also includes our submarines, sir. And we're adding two of those this year.

LIEBERMAN: I don't actually want to argue the numbers. I want to give you a chance to make the case for why we need a 300-ship Navy. In other words, it wasn't so long ago that folks were arguing for a 600-ship Navy. And you know, I believe in the standard.

But I want to take you back to the fundamentals because some might say, "Hey" -- and somebody, just as Secretary Roche just said, "high technology is allowing us to get so much more out of every platform that we can do with less than 300." So tell us why we need to keep it at standard.

ENGLAND: The last study, which was last fall conducted by OSD, concluded we needed about 340 ships, Senator. That's because theater missile defense and also another class of ship called the littorals -- and that's one reason we went to DD(X) instead. We put a new program in this year, DD(X), dealing with intermissile defense, also ship-to- shore in terms of fire support and also from the littorals.

The Navy has a recent study. It concludes we need about 375 ships.

LIEBERMAN: Right.

ENGLAND: Now, I'm not sure what that answer is. But the answer is more than where we are today, which is about 310 ships. And over a long period of time we do have to capitalize at about eight to ten ships a year. Ships last about 30 years. It turns out the average age of our ships today is 16 years. Optimum would be 15 years.

So we do not have an old fleet today. We do have some older ships, some of them very old, that we do desperately have to get rid of.

What we need to do, frankly, I believe this year, we have built a base and with DD(X) and with our other ships now in develop, finishing design, it turns out at this period in time most of our ships are still in some form of design. We need to get through this point so we can actually get some rate production and move into DD(X). And the FYDP represents them. I mean, that is the way that we have this structured as we go into our out years.

So this is still building the base so we can build more into the future. I believe it is the right decision at this point, Senator. But we do have to accelerate ship build. There's no question about that.

LIEBERMAN: I agree.

My time is up, thank you.

ENGLAND: You're welcome, sir.

LIEBERMAN: Senator Warner?

WARNER: Yes, thank you very much. Service end strengths. With the exception of the Marine Corps, the president's budget request for fiscal year 2003 includes no increases in end strength.

Secretary Roche, I understand you've been quoted as urging an increase of 7,000 to 10,000 airmen. It's also my understanding the Army feels it might need upwards of 40,000 troops. Now, to what extent in the course of the budget deliberations did this subject come up? And how do you gentleman feel about the decisions that were given by the secretary of defense that this year we'd not try it?

ROCHE: Well, Senator, I think the secretary has asked the right question, which you would do, any businessman would do, which is we know we need certain skills to increase. Are there other skills that we don't need as much? Or are there things that we can move to the Reserve or move to the Guard or contract out?

And so I think the first order of business -- and we are engaged in this -- is that the parallel track -- one is to try to coordinate together in the services what are end strength situations. And to do that, we're going to have to have some answers to questions like the degree to which we have to maintain capital of the United States.

Secondly, at the same time he's asked us quite rightfully, I believe, to take a look at what things can we do without. What skills do we have a very deep bench we don't need as many of.

And so you would do both of those in parallel. And that's being looked at at this time.

WARNER: Before we move on to you, while we have Secretary Roche, I understand while I was voting you talked, Secretary White, about the important role of the National Guard and where there are some stress points particularly with regard to employers, the ancient problem that we've always had.

Did you have a piece of that equation that you wanted to put in this record about the Air Guard? Because the Air Guard has performed brilliantly. I mean, way back in the early days of the campaign in the Balkans I took Air Guard planes into Sarajevo in '91, as far back as that. And I've always been impressed with the way they responded.

ROCHE: They responded magnificently, sir. And in this case we would normally be using them to help rotate forces in Operation Enduring Freedom, but we're tying up an enormous number of them here over the skies of the United States. There is a strain on them.

The Guard has been quite imaginative in almost having just-in- time guardsmen. If they need to get someone back to a job for a day or two they substitute someone for that person. And they've been very, very imaginative in doing this.

But in the very long run, we have to understand what it is we're asking of them and what ought to be done by active forces as compared to the Guard and Reserve forces.

WARNER: So their senior offices have got a strong voice in these decision-makings in your judgment?

ROCHE: Oh, yes. They're very close. In the case of the Air Force, both of them are very much involved in my deliberations.

WARNER: Now let's go back to the original question, Secretary White. You're talking about your...

WHITE: Well, the secretary of defense's position has been that the way we ought to unburden our structure is to start cutting back on deployments, that some of these deployments we've been in for years and years, the Sinai for example. And at least in that particular commitment he's come forward to say we ought to terminate it.

So the one way to do this is to cut back on the deployments that we have at such a high operating tempo. And I think his direction is that we start at that point rather than immediately looking at plus- ups and end strength.

WARNER: So you feel you can survive this period without any consequences on family structure, which in turn would affect your retention?

WHITE: Well, I think we're hard pressed right now, Senator -- where we talked about being hard pressed before 9/11 a year ago -- the 35,000 Guard and reservists mobilized right now in a fairly unpredictable mobilization as to a rotation in Bosnia with the 29th Division from your home state. And that is causing a rising concern with employers and with families. The question is, the A number one question is, how long do we have to sustain this?

WARNER: Thank you.

WARNER: Thank you.

On the question of unmanned systems, this committee several years ago set a goal that by 2010 one-third of the U.S. military operational strike aircraft will be unmanned and by 2015 one-third of all U.S. military ground combat vehicles would be unmanned. Do we feel that this budget enables sufficient funding to keep on track those goals?

Secretary White?

WHITE: Well, yes, for the unmanned activities that we support in our unarmed brigades going forward, we think we've put the money to resource that from our perspective. Our commitment obviously is much smaller than the Air Force and the Navy in this regard.

WARNER: One of the great chapters is this conflict in Afghanistan has been the unmanned aircraft.

WHITE: Yes.

WARNER: Secretary Roche?

ROCHE: Yes, sir, I don't know about meeting those specific goals.

I can tell you that we've used these enough that, as Secretary Rumsfeld has pointed out, to see how efficacious they can be. But also understand the difficulties of operating with them. There is only so much band width in the world. And you can't take the band width of a brain and bring it back to a ground station. So exactly how to use them, not to use them is one of the conditions that we're trying to work on.

The judgment of a pilot is still something that can be very important, although we have pilots who are manning these who are looking at the world with a very strong (inaudible). The new tactics and doctrine we're developing from them has been very important. But there are issues of when something goes wrong, how to fix it in the air, how to change to a different system. So the issues of working with them are being understood.

WARNER: Got to catch this last vote.

Did you have anything to add to this question, Secretary England?

ENGLAND: Senator, I don't think we're going to hit those percentages by 2010. But I can tell you we have active programs both in the air and underwater. Very active underwater, working with the Air Force on the UCAV.

So we are working. It's in our budget this year, sir.

WARNER: Thank you (OFF-MIKE).

MCCAIN: Senator Carnahan?

CARNAHAN: Thank you, Mr. Chairman.

I'd like to direct my comments to Secretary Roche.

I'd like to discuss one particular provision of the 2002 Defense Authorization Act. According to the 2002 conference report, the Defense Department has been directed to report on how it intends to encourage teaming arrangements between Boeing and Lockheed on the joint strike fighter. This report was due when the 2003 defense budget was submitted to Congress.

I recently wrote a letter to secretary Rumsfeld requesting his cooperation in developing this report. But to date I have not seen any sign of the report.

I would like, Secretary Roche, if you would consult with Secretaries Rumsfeld and Aldridge and get back to me sometime this week with a date certain when this report would be completed and ready for our committee review.

ROCHE: Senator, I'd be glad to, except the way the joint strike fighter works, I've now shifted the helm to the secretary of the Navy. So if you could substitute his name for mine, he currently has the lead.

CARNAHAN: Very good. Well, I thank you and would appreciate your help in this matter.

(CROSSTALK)

WHITE: (inaudible).

CARNAHAN: I have one more question I'd like to direct to both Secretaries Roche and England.

Recent operations in Iraq and in Kosovo have shown that we cannot simply rely on self-technology to avoid detection from enemy radar. Future air campaigns will bear little resemblance to the war in Afghanistan. Countries that President Bush identified as the "axis of evil" have far more advanced antiaircraft capabilities.

Unfortunately, our only electronic jamming aircraft, the Navy's EA-6B is over a decade old. Would you please explain the importance of honing our electronic warfare capabilities.

ROCHE: Yes, Senator.

Electronic warfare, or in fact trying to provide for the survivability of aircraft in the air, is a combination of thing. Stealth is one area. Electronic warfare is another. With some of the new modern electronically active, electronically scanned antenna radars you have the notion of electronic attack. You can reverse the radar and jam.

So all of these have to be put together in a portfolio. There have been a number of programs to upgrade the types of pods and also the jammers on things like the F-15's. Secretary England has talked about a follow-on aircraft to the EA-6B or follow-on program to the EA-6B. We look to it as well.

But it's a combination of things. It's not just electronic jammers. But the jammers have been looked at both in terms of offboard jammers, towed decoys, upgrades to internal systems, electronic attack. There's more to it than just jamming.

CARNAHAN: Could you discuss also any plans you might have to develop new electronic attack technologies, such as the EA-18.

WHITE: Do you want the Navy, ma'am?

CARNAHAN: Yes. Yes, if you would.

ENGLAND: If I can answer that, Senator.

First of all, the prior (ph) EA-6B we've had both cracking problems with the airplane and recently we've had engine problems because of oil contamination. So we've had a difficult time here with EA-6Bs. As you observe, it is the only jammer we have left in the inventory. It performs it for all missions. So that is of concern. Although we do have sufficient numbers today, even with those problems.

But we are looking at a replacement. One of the possibilities is what's called a growler, which would be an F-18E/F version.

We have what's called an AOA, analysis of alternatives, underway at the present time. That will be completed here in several months. And at that time we'll have a preferred configuration to replace the EA-6B. So in a few months we'll be able to give you a definitive answer in terms of what's the best approach to do that.

One of the considerations is an EA-6B version. It would keep us from having another unique airplane. But like I said, that analysis is still in work.

WARNER: Thank you very much.

MCCAIN: Senator Bunning?

BUNNING: Thank you, Mr. Chairman.

I'd like to talk to the secretary of the Navy for just a few minutes. In listening to your responses to Senator Inhofe about Vieques, Mr. Secretary, if you would have testified before this committee as you have testified in response to Senator Inhofe during your confirmation hearings, you would have not received my vote at least.

I thought when we confirmed secretaries of the Army, Navy and Air Force, they were supposed to be forthright in their answers and not try to evade questions. And sir, today you have done just that. So I'm embarrassed for Senator Inhofe. And I'm also embarrassed for you.

I also would like to ask you about the V-22 Osprey. Have we made any progress in making that airworthy?

ENGLAND: Senator, I believe we have. We will know very shortly. In April we start the flight test program. So we have incorporated into the airplanes for flight test a lot of the fixes that came out of all the studies and analysis on the airplane that led up to the crash the last time and then stopped the program.

We have a much better organization, I believe, both in our facility and also in our contractor facility in terms of how these problems with being worked. My judgment at this point is that it is now up to the airplane to prove itself. The flight tests start in April. It will run until sometime later in '03. And there will be several different configurations.

Frankly, I believe that program will demonstrate that it can perform the mission for the United States Marines and also special forces. But that's what the flight test program is set to prove.

In the meantime we are buying a minimum sustaining rate of airplanes, 11 airplanes this year.

BUNNING: But at $1.5 billion in cost.

ENGLAND: I believe my number is $1.32 billion plus $600 million that were put in in R&D and approved.

BUNNING: Oh, OK. You asked $1.5 billion for 11 of the aircraft in '03, two more in the current year? Or is that incorrect?

ENGLAND: Sir, I believe it's 11 this year and -- the number I recall is $1.32 billion, but there may be spares or something with that. So we're in the same...

BUNNING: So we're continuing to maintain the line.

ENGLAND: Yes, sir.

BUNNING: BUNNING: ... on an aircraft that we're not sure we can make airworthy?

ENGLAND: Well, I believe it will prove its worth, Senator. So that's...

BUNNING: Well, it may do just that.

ENGLAND: The issue we have if we don't maintain the line and we prove the airplane, then it would be extremely expensive to get the program back on track. So we took the most cost effective approach.

BUNNING: I can get to the DD 21, DD 21 destroyer, if we want to talk about start-up again. Because we've got additional $961 million to do that again for the Navy. Start up from scratch after...

ENGLAND: No, we didn't start up from scratch, Senator. We took the DD 21 program and we continued all the R&D that was going on. We didn't start...

BUNNING: Oh, all the R&D.

ENGLAND: We didn't stop the program.

BUNNING: OK.

ENGLAND: We didn't have a line. We continued the program with all the development, but we expanded the program from just one version to three versions so...

BUNNING: And additional $961 million.

ENGLAND: I believe that was what was programmed for DD 21, and we continue that for DD(X). And that's a whole range of technologies. It's all in the R&D.

BUNNING: R&D.

ENGLAND: It's R&D, yes, sir.

BUNNING: But your testimony today is that the V-22 is going to succeed and be airworthy?

ENGLAND: Yes, sir, that's my judgment.

BUNNING: OK.

Question on the EA-6B Navy reconnaissance and radar jamming aircraft. Is it true or is it not true that that was a joint decision with the Army to discontinue the EF-111 that did the same program that the EA-6B does now?

ENGLAND: That was an Air Force airplane, the EF-111, which was...

BUNNING: Yes, I'm familiar with it.

ENGLAND: Yes, some years ago -- I can't remember the exact time, but the decision was was to have one jamming airplane that would be the EA-6B.

BUNNING: And now you're having problems with it.

ENGLAND: Well, we're having cracks with it. We just had an engine problem where we had contaminated oil that we lost some engines. So they're recoverable. But the airplane is just getting older. And we've had some problems with it.

We are looking to a replacement downstream.

BUNNING: Would that be an upgrade of that aircraft, or would that be a new aircraft?

ENGLAND: There is an analysis of alternatives being conducted right now, Senator. And I believe in a few months we will have a recommendation as to how to proceed.

BUNNING: When you finally make that decision, will you inform this committee?

ENGLAND: Absolutely.

BUNNING: Thank you, Mr. Chairman.

MCCAIN: Secretary Roche, you wanted to respond to my comments. And please proceed.

ROCHE: Thank you very much, Senator. I appreciate it.

The point I hope to make, sir, is that at this stage no moneys have been asked for. We don't know what the price of a lease would be.

The second point is I am required to come back to the authorizing and appropriating committees once an amount of money and the conditions of a lease are put together. Therefore, based on the historic precedent of the 737 leases that the Air Force was asked to do a few years ago, we were following that procedure.

I think the basic point, sir, that I would hope that I would get an agreement with you on is that the 707's are old airplanes. Granted, their age means that we probably aren't going to find a class problem, but we might find a class problem. And we are heavily reliant on those almost exclusively in our tanker force.

Therefore, introducing a new plane is one that is of great concern to me after I went to Tinker and saw catalytic corrosion, saw delaminating aluminum and then checked on what happened when we refurbished the planes for Joint STARS, which takes them back to Class A condition.

Do these come in the forces as brand-new airplanes? Or do they behave for repairs like 10-year-old airplanes? And it turns out our data shows that they act like planes that are 15 to 20 years old. There's only so much you can redo when you take them back.

So therefore the concern to replace tankers is what has been most on my mind. Trying to do that more quickly and save some money was also a point, sir.

MCCAIN: Well, I guess we could continue this discussion for quite a while. But I got to tell you, I work in my office here in the Russell Senate office building, the former chairman of the Armed Services Committee. I was privileged to serve when Senator Stennis was chairman, my great hero and mentor Senator Tower, chairman of the Armed Services Committee. And here you orchestrated a deal without a hearing, without even informing the chairman and ranking member of the authorizing committee.

I think I know where Senator Tower is today. He wouldn't stand for it. He wouldn't stand for it. It's not only an indictment of your behavior, but it's an indictment of the system we have here where the appropriators have basically taken over the process. The authorizing committees are now very pleasant debating organizations.

MCCAIN: But we all know that the authorizing bill comes at the very end and all the money. And in a case like yours authorizing is put into an appropriations bill.

And now we've reached the point where the secretary of the Air Force with a 100-plane deal, a 126-plane deal, doesn't go directly to the secretary of the Air Force, who might be interested -- I mean, excuse me, doesn't go directly to the secretary of defense, who might be interested -- when I talked to him and said something about that I thought it was outrageous, he didn't know anything about it -- and corresponds with members of the appropriations committees and lobbies with the Boeing lobbyists to get a deal which, quote, authorizes $26 billion in a deal that is noncompetitive because it names Boeing -- it doesn't name Airbus. It doesn't name United Airlines, who has a lot of excess airplanes. It names Boeing.

You know, campaign finance reform is on the floor of the house today. Maybe this will cure some of this. Because I know that Boeing has contributed millions in campaign contributions to both parties. And so here we have a situation that is really kind of the ultimate of a process we've been on for a long time.

In a way I don't blame you for playing the game, Mr. Secretary.

ROCHE: Senator, I...

MCCAIN: But the fact is that the chairman of this committee and the ranking member were not consulted by you. You didn't even pick up the phone and say, "Hey, you know, we'd like to lease these. We'd like to get it put into an appropriations bill" -- where there is no place for it because appropriations are to give money for previously authorized programs -- "We're going to try to get into the appropriations bill an authorization which will then allow eventually the purchase of $26 billion worth of airplanes.

Now, my other question to you is -- and you're free to respond -- have you solicited any other offers? Have you solicited? Have you said, "Hey, anybody else want to offer up airplanes that we could use for Air Force tankers?" Have you solicited anybody?

ROCHE: Again, Senator, if I can go back. And I'm sorry if I'm not communicating well to you, sir.

No monies were asked for. It was just the authority.

MCCAIN: Well, why didn't you go to the appropriators and ask for it to be authorized?

ROCHE: Based, Senator, on what I understood -- and it could be my mistake -- of what has happened in the past when the Senate asked the Air Force to try to lease 737's. This happened a number of years ago. It happened the same way. The Air Force could not come to a good deal for a lease and therefore did not do it.

So we're asking for the authority to try to do something, which then has to come back to the authorizing committee and to the appropriating committees in order to go into effect. But no moneys were involved.

The second point, in term...

MCCAIN: But it authorized the use of moneys, Mr. Roche. It authorized the use of moneys.

ROCHE: As best as I can read the language, sir, it authorized -- it gives me authority to attempt to negotiate a lease. I can't do anything unless -- or the Air Force can't do anything unless we come back to the defense committees. It cannot move unless the defense committees approve.

So effectively you have to, then, once there is a dollar amount and once there are terms and conditions, it must come to the authorizing committees and the appropriating committees, as I understand, sir. I could be mistaken.

MCCAIN: Why did you go to the Appropriations Committee, Mr. Roche?

ROCHE: Again, sir, it was based on the historic precedent set by the 737's. And it has again four 737's in the current bill to ask me to go and try to do a lease on 737's for a VIP travel.

MCCAIN: Wow, that's remarkable. 100 airplanes based on the precedent that some VIP aircraft were requested.

Would you answer my question about you solicited...

ROCHE: Second point, soliciting others.

MCCAIN: Have you solicited any offers from any other entities besides Boeing? And does the language that you orchestrated to be put into the bill allow for you to solicit any other company or corporation to make an offer since it specifically states only Boeing aircraft?

ROCHE: Senator, first and foremost, I don't believe I orchestrated the language.

MCCAIN: Well, I've got your letters, (inaudible) Roche. I ask (inaudible)...

(CROSSTALK)

ROCHE: You have the letters, though, but the specific language...

MCCAIN: MCCAIN: ... that they be made part of the record.

ROCHE: I didn't -- I don't believe I orchestrated this. I asked for something because I feel...

MCCAIN: You advocated it.

ROCHE: I advocated, yes, sir. Because I feel that the tank...

(CROSSTALK)

MCCAIN: (inaudible) OK, I'll change my (inaudible)...

(CROSSTALK)

ROCHE: ... the tanker situation is sufficiently worrisome to me that the sooner we can fix it the better, which is one of the reasons you do leases. Like Her Majesty's Air Force is leasing C-17s, to get a capability much, much more quickly.

With regard to asking others, at the time there had been competitions both in Italy and Japan, and in both cases the Airbus candidate lost. But I was open to -- and I stated publicly -- open to...

MCCAIN: Have you solicited? I ask my question again. Have you solicited any other offers from any other entity...

ROCHE: Yes.

MCCAIN: ... that may be able to compete, number one, like we do usually, to compete for bids and things like that?

And number two is, does the language prohibit any other, since it says only Boeing aircraft?

ROCHE: The language as it currently stands would prohibit it, but if I were to come back and say that X has got a much better deal for the country, can in fact help Navy and Air Force planes be tanked and it requires some changes, I would assume that that language could be changed.

MCCAIN: Which is why your letters ask specifically for Boeing aircraft.

ROCHE: If I can on that point, sir, if I may?

At the 11th of September after the attack there was a drop in commercial airlines. There were a number of canceled orders, very much like the situation a predecessor of mine a number of years ago faced when he found a number of DC-10s that were not usable, brought them into the Air Force, converted them into KC-10s. I looked to see could there be a deal that would be good for the American people, good for the Air Force by picking up excess aircraft that were made excess because of canceled orders to Boeing.

And that's what started it, sir.

MCCAIN: I would again like an answer to the question. Have you solicited any group or organization or entity to make a proposal for...

ROCHE: Sir, I said I've spoken with Philippe Camus.

MCCAIN: Have you solicited -- I'd like an answer. Have you solicited...

ROCHE: The answer is yes.

MCCAIN: ... anyone to propose, to make a proposal to -- have you in writing said, "We need -- we'd love to have proposals"? Is it published anywhere, "We'd like to have proposals by different corporations, companies, anybody who thinks that they can fulfill this requirement"?

ROCHE: In writing, no, sir. But I don't think I've solicited -- obviously, I have not solicited Boeing in writing either.

MCCAIN: Boeing's in the law, Mr. Secretary. Why would you have to solicit them?

ROCHE: Senator, I've spoken to Philippe Camus who is the chief executive of (inaudible)...

MCCAIN: But you have not solicited any.

Now it was passed in December, and here we are in February.

ROCH: ... (inaudible) I have asked if he has a proposal, I'd be more than willing to look at it.

MCCAIN: I thank you very much, Mr. Chairman. And again, I strongly urge that we have a full committee hearing on this issue. It's $26 billion which is on track to go to Boeing Aircraft in violation of what the head of the Office of Management and Budget deems inappropriate ways of lease purchase contracts. I strongly urge a hearing.

I thank you, Mr. Chairman.

LEVIN: Senator Collins?

COLLINS: Thank you, Mr. Chairman.

Secretary England, as you well know from our numerous conversations, I'm very concerned about the low current procurement rates of ships and aircraft. The Navy has over and over stated that its goals are to procure eight to ten ships per year and 180 to 210 aircraft per year. Yet the Navy's budget does not reach these goals until very late in the future year defense program.

And that is also of great concern to me because I've seen too often the pattern where the Navy or the other services sincerely intend in those out years to reach the goals, but then events intervene or budget constraints interfere and we never get to where we need to go.

The fact is that we're seeing a continual increase in the operational tempo. We're seeing increases in the average age per platform. Ship depot maintenance availabilities are more often than not exceeding the notational costs. Aircraft are requiring more maintenance per hour and are experiencing increasing failure rates on major components, resulting in significantly increased costs per flight hour.

My concern is that we need to start rectifying these deficiencies now and that we're fast sliding down a procurement hole that's going to be very difficult for us to climb out of and to meet our goals and current requirements.

I was struck in my visit to Central Asia and talking to the service men and women, the sailors and the admirals on the USS Theodore Roosevelt, the operational tempo is incredible. I don't know what we would have done if we didn't have our aircraft carriers and our carrier battle groups in this war, since so many of the strikes have originated from our aircraft carriers. I think it's in the neighborhood of 75 percent, according to your testimony.

So what are your thoughts on our current force structure and our budget plans and whether or not we have a match here for our mission requirements?

ENGLAND: Well, first of all, as Secretary Roche just said, I violently agree with you, to use the same expression. Obviously we do need more ships. We need more airplanes.

We made some hard decisions this year. And I believe we made the right decisions in '03.

Just like the Kennedy that had trouble getting out to sea because the maintenance hadn't been, you know, done in the past, right, and we had a lot of delays, it's of no value to our Navy to have assets that don't operate. So this year we put a lot of money, we put $3 billion into our O&M accounts. So $3 billion went into O&M accounts.

By the way, the Navy had an increase this year $9 1/2 billion. $4 billion went to personnel accounts, $3 billion went to O&M accounts. A little over $1 billion went into R&D. And $1 billion went into procurement.

But the billion dollars that went into procurement went into munitions because in the past years it had been way underfunded and we had to fund the munitions. So we put a lot of money into munitions this year, $1 billion over last year.

Now, also, we are doing two SSGNs. That's another billion dollars we invested. And they count. I mean, they are real assets to the United States Navy.

We had prior year's shipbuilding accounts. Last year it was $800 million. This year it's $645 million. That is money that we spend for prior year contracts. We don't get anything for that. I mean, that's for bills from prior years, prior year accounts. And we still have, by the way, $1.2 billion to work off in that account. So we'll be back here every year working that off.

We put $400 million into our current shipbuilding accounts so we would forestall these problems in the future. So just our prior years' shipbuilding and our $400 million where we increased our funding level, that's another whole ship, frankly. But it's just paid -- it was help protect the future and pay bills, you know, that we had run up in the past.

Now, what we did this year, what I call we filled all the buckets. It does to at least my knowledge. We filled all the buckets across the Navy and Marines. So in the out years we shouldn't have to take money out of shipbuilding or airplanes. We should actually see the benefits of that money to buy airplanes and ships.

But I'd certainly like to buy more this year. But we made priority decisions. And I believe they were the right decisions, Senator.

COLLINS: I don't dispute the need for more funding in each of the accounts. I guess maybe the question for this committee is whether the Navy's share of the $48 billion increase overall is sufficient given the shortfall in procurement accounts.

One other quick question, before I go on to a question for Secretary Roche and for you as well, is the down-select for the DD(X) still on track for April?

ENGLAND: Yes, it is.

COLLINS: Thank you.

Secretary Roche, as you're well aware, the Mobility Requirement Study 2005 identified a sea and airlift shortfall -- and this obviously applies, I guess, across the board. Could both you and Secretary England tell us more specifically how the current operations of Enduring Freedom and Noble Eagle have exacerbated the lift shortfall?

ROCHE: Yes, Senator. A couple things come to mind. One, the older aircraft, like the C-141s, a number of our C-5s, are breaking. They're old. They're just old. C-141s have to be retire. We're using them now until we get enough C-17s in place.

Secondly, we're using the C-17 more than we ever intended into. And I'm concerned that its maintenance is not getting the attention because it's not being pulled off the line enough.

We are looking for the future to say there was the study having to do with expected scenarios of conflict, but then there's the realities of what we're doing in the long-term war on terrorism. And mobility is key since Afghanistan is totally landlocked. Everything that goes in, everything that comes out has to go in by air, including the water our troops drink.

Therefore we will look over the next couple of years at the C-17 situation to see if we should extend that line. At the same time we're in this year's budget requesting permission of the committee to have a multiyear funding for the C-130J, which is a longer haul, more retailing airplane as compared to C-17, which is wholesaling.

COLLINS: Secretary England, would you like to add any comments?

ENGLAND: Senator, I really don't have much of that here. I believe we've been able to deal with the requirements for Operation Enduring Freedom. As you know, our deployed forces have 30 days of supply with them.

ENGLAND: Submarines, when they go into Afghanistan, they have 30 days of everything with them. So to the best of my knowledge we have not had an issue during Enduring Freedom. We've been able to supply our ships and our people.

Fortunately, we have two countries that are very important to us, Bahrain and United Arab Emirates, and they've been very helpful to us. So that my judgment is we've done quite well in that regard.

COLLINS: My time has expired.

Thank you, Mr. Chairman.

LEVIN: Thank you very much, Senator Collins.

Senator Sessions?

SESSIONS: Thank you, Mr. Chairman.

Secretary England, you were talking about this prior year funding debt you had to pay, or obligated money that's fallen to you to pay, that you don't get to spend. Is that what Secretary Rumsfeld has felt is bad management and said he's going to try to end? Or is that something we have to live with year after year?

ENGLAND: Well, I certainly hope we don't have to live with it. Like I say, this year we've added the funding of current contracts by about $400 million; that is, we've brought the estimate up to completion by $400 million to hopefully forestall this problem in the future.

When we look at this issue, it's for lots of reasons. You know, rates have gone up. Perhaps changes that we imposed. Now, keep in mind these ships are over a long period of time, so obviously we introduced technology, et cetera. There is some cost associated with that. And that's really a valid cost because it improves our product.

But a lot of this, frankly, has to do with I guess I would say the imposed inefficiency of the yards. That is, we buy at very, very low rates. So we buy at very low rates and we pay top dollars. Therefore it is important for us to get the rate up so that we get the cost down and get better control of our ship costs.

I certainly hope this is not something we have to live with. We are working very, very hard to end these prior year shipbuilding accounts. The assistant secretary, John Young, and myself work this regularly. And I believe we will be successful at this, Senator.

SESSIONS: Well, it's important, I think, for us. It's difficult enough to manage and try to oversee a budget and approve a budget that has got numbers shifting from one year to the next. And I appreciate your working on that.

Let me just make a point and ask a couple of questions. Today's Navy, I understand, includes about 315 ships, although I saw an article the other day that said 310. You got a hard number on that, Mr. Secretary?

ENGLAND: Yes, I believe -- let me see if I have an exact number here. I believe the number of ships today is 310.

SESSIONS: Which is lower than we've been complaining about at 315. And we do have escalating operations and maintenance and personnel costs that have gone up. And we want to pay our sailors and personnel more.

And it has kept us from recapitalizing the Navy at the rate we'd like to. It's capitalizing below the 2001 QDR, Quadrennial Defense Review, statement of what's necessary. And the fiscal year 2003 budget accompanying future years' defense program does not allocate sufficient investment to build the number of ships required to recapitalize the fleet. The request for years 2003 through 2007, as I read it, is 18 ships less than was required by the QDR plans.

So this is a result of retiring ships earlier than their projected service life, not building the required Virginia class of submarines called for by the Joint Chiefs Attack Submarine Study and low procurement rates for other ships.

So I am not criticizing you. It's not your fault that we're in this predicament. And I salute you for making some tough calls. You had to make some tough decisions looking at the numbers you were allocated.

Let me ask you about some potential ways that we could improve our ship effectiveness, the actual number deployed in a wartime environment, and see if you've thought about these and what ideas you might have about it.

The four areas that I think the Navy should examine are -- and Senator Kennedy's chairman of the Sea Power Subcommittee, and I'm the ranking member. And I will be seeking information on these issues this year in some hearings.

One, we could assign additional ships and submarines to home ports closer to their areas of operation. This is sometimes referred to as forward home porting. We could assign a ship to remain in a permanent forward area of operations and rotate crews back and forth, which isn't historic Navy policy, but we do it on submarines. And that has some real potential, I think.

We could retain ships to the end of their full service life rather than retiring them early. And we're doing that. I was on the O'Brien, a Spruance class destroyer, a few weeks ago in Japan. It performed well in Afghanistan. And it's now set to be decommissioned pretty rapidly.

And we could preposition additional ships in forward operating areas that would be maintained by very small crews during normal circumstances. And they could be beefed up in times of emergency. This would be analogous to the manner in which the ready reserve force ships are being kept ready to begin operation in a few days.

Are those some ideas that you're considering? And if we did those, is it possible to get more ships in fighting areas where we need them, recognizing, Mr. Chairman, that most Americans may not know that it takes three ships to maintain one ship in forward deployment the way we operate today?

ENGLAND: Senator, I believe you're right on. And the fact is I think the CNO would also agree with you. We have initiated across the Navy and with the CNO and the leadership role to look at a wide range of options as to how do we get greater deployment out of our existing fleet.

Also, by the way, the faster we get them through the depots, faster we get them through maintenance cycles, that effectively increases the size of our navy.

So you're right, anything that effectively increases the size of the Navy is certainly worth looking at. And we're looking at all those ideas and other ones also.

SESSIONS: Well, even if the numbers of ships were low, if you could maintain more ships in war-fighting areas the impact wouldn't be as great.

ENGLAND: No, you're absolutely right. Effectively increases the size of the Navy if we can do that. And like I say, we're looking at all those alternatives. It's the most efficient way to go. It's the most effective way to go.

And we'd be happy to come and brief your committee on all these initiatives, Senator.

SESSIONS: We'll be submitting some follow-up questions on that subject and know that we're still going to need some new ships.

ENGLAND: Absolutely.

SESSIONS: But if we could maximize those old ones, I think that would be helpful.

Thank you, Mr. Chairman.

ENGLAND: Thank you, sir.

LEVIN: Thank you, Senator Sessions.

I want to go back to the Tinker leasing question and ask you, Secretary Roche, a few questions on this point.

You were quoted in the press as saying that the language implementing any such lease would need to be changed. In other words, legislative language would be necessary in order for you to enter into such a lease. And I'm wondering if that is accurate.

ROCHE: No, sir. I don't know the contents of that. What I'm saying is that we are now -- what the facts are as follows, sir. We are now taking the language from the bill and seeing what are the conditions and can a lease be done under those circumstances.

If we can, then we would move forward and we would try to put one together. But it's a function of cost of money. It's a function of residual values. There are no dollars involved.

I have to come back to you once there's something that involves dollars. But it is the constraints, the guidelines. Originally I had asked if there was a chance to waive the provisions of a capital lease for scoring purposes in order to have these aircraft get here sooner.

But that's not my position that we would have to have a change. We're trying to work with it as it is.

LEVIN: So you're saying there's no legislative changes or guidelines that would have to be amended in order for you to enter into such a lease?

ROCHE: Only if somebody like Airbus came along and made a deal that was so good, an offer that was so good that we felt that we would prefer it, then we would come forward, yes, sir.

LEVIN: Other than that?

ROCHE: Other than that...

LEVIN: Changes in guidelines.

ROCHE: As best as we can tell now, sir. As I say, we're examining, because there's also colloquies on the floor that were done to explain what some of these provisions meant. Like what is a new aircraft? Is it one with a tanker boom or one without the tanker boom?

LEVIN: All right, now, is there any funding in the '03 budget request to begin these leases if you decided to go forward?

ROCHE: No, sir, it is not. Because I was trying to see if I had permission to go forward. In fact, there's no money at all in the budget for leasing. It was a plan B. If we could do something faster, fine. But we would stay on track with plan A, which was to develop the KC-X.

And, in fact, the only...

LEVIN: Is it possible you could enter into a lease without funding?

ROCHE: Oh, no, sir. I'd have to come back and either amend a budget -- as I understand it, Senator -- have to amend a request or reprogram money to pay the first payment or not make the first payment until next year and get permission to do so.

Because as far as I know I cannot do anything unless I come back to an authorizing committee, an appropriations committee, with the thing in hand as compared to authority to try and get the thing.

And I faced the same problem, Senator, on the four 737's that are there. And the...

LEVIN: Just so that we're real clear, for one of two reasons, either of two reasons you could not proceed without coming back to the authorizing committees...

ROCHE: Yes, sir. I...

LEVIN: Excuse me -- and the appropriation committee.

ROCHE: Yes, sir. As I read the bill, which I always thought was the case, once I got to money, I'd have to have the money authorized and the money appropriated. It was a matter...

LEVIN: Once you got the...

ROCHE: Once I got to money...

LEVIN: ... not the money.

ROCHE: ... the deal. Once I had a construct so I had an "it" to bring the "it" (ph) forward, that I would require authorization for the it and I would require appropriations for the it. But I could not do anything with the companies if it was totally out of the question, which is the reason I was asking could we go forward.

LEVIN: Could not do something with the companies if it was completely...

(CROSSTALK)

ROCHE: Could not negotiate.

LEVIN: Let me just finish -- if it's totally out of the question.

I ask you a very direct question. Can you enter, is there any potential lease agreement that you believe you could enter into without coming back to the authorizing and appropriating committees?

ROCHE: No, sir.

LEVIN: OK. Let's leave it at that.

You can qualify it if you want. I don't want to cut you off, but...

ROCHE: No, sir. No, no, you're absolutely right. The only reason I'm pausing is the language says I must come back before the defense committees, which is exactly what I would have thought in the first place.

LEVIN: OK.

ROCHE: But again, the only qualifier was to start negotiations if something would never even have a chance would not have been sensible. And also I was truly seeing to what degree could the scoring rules be amended given the situation of the old tankers.

They cannot be amended. And as Mr. Daniels has said, some leases are good leases. Some leases are bad leases. And I'm not going to bring back a bad lease, a bad lease proposal.

LEVIN: OK. Both civilian and military witnesses from the Defense Department and the services have stressed the importance of quality of life and the impact that substandard living and working facilities have on the ability to accomplish the mission.

Last year the readiness subcommittee received testimony that 69 percent of the department's facilities are rated "have serious deficiencies," C-3, or "do not support mission requirements," C-4. And it was stated that the administration is committed to restoring the installations and facilities. That was just last year.

This year, despite a $48 billion increase in the overall defense budget, the administration is proposing to reduce funding for military construction by a billion dollars below what the department requested last year, a billion and a half dollars below the level that was appropriated for 2002.

How do you explain this? I must tell you I'm a little bit at sea, I guess maybe I should say also in the air or underground. But anyway, I'm at sea as to try to figure out what was meant last year.

The Army was said to have underfunded long-term facilities. This is your testimony this year, actually, Mr. Secretary. "For too many years the Army has underfunded long-term facilities maintenance." And so you come in with a budget request a billion dollars below last year's request and a billion and a half dollars below what we appropriated.

So I don't get it. What's going on?

WHITE: Well, Senator, in the MILCON area, if you add the normal MILCON with what we are putting into Army family housing and then you add the private capital that we are attracting to support RCI, the residential communities initiative, if you put all those pieces together, we're basically flat between the two years. They total up to about $3.9 billion in each year.

LEVIN: OK. If you want to put the three pieces together.

What is the Navy's position?

ENGLAND: It's similar. We're slightly down in the budget. We did increase housing allowance, however, by $225 million. And we improved our housing construction accounts.

And then this year, in FY '03, we will have public/private venture, that is, private money supporting the military to the tune of $700 million. I don't know what it was last year. But we worked very hard this year to bring private money into the mechanism.

So I don't know how that compares at the end of the day, Senator, but...

LEVIN: Well, let's try to compare them. Let's compare apples and apples.

LEVIN: When you gave us your three pieces, Secretary White, did you include the same three pieces last year for your comparison?

WHITE: I don't know whether we included the RCI private capital. But in fact I don't think there was any RCI private capital in last year. The two that we have...

LEVIN: And what about the third piece?

WHITE: Well, we have the normal military construction. We have the Army family housing. There's small amounts of money for base realignment and closure. And then there's the private capital, which is the third piece.

LEVIN: I just want to make sure you're adding all the same pieces for both years. And do you know whether you are or not?

WHITE: I think so, yes. I think it's a valid...

LEVIN: On that basis you think it's level funding?

WHITE: Yes.

LEVIN: Now, Navy, you don't know.

ENGLAND: I don't know, Senator. I don't know what we had last year in terms private venture funding.

LEVIN: Is your MILCON lower this year than last year?

ENGLAND: Yes. MILCON is decreased somewhat from '02. But I don't know what the total amount of investment dollars are, Senator. We'll get back with you on that.

LEVIN: And the reason for the reduction?

ENGLAND: Just hard choices we made. And we had, you know, again, private companies investing, so that obviated the need somewhat for MILCON. We would obviously rather have private companies investing along with us. As the BAH goes up, you can attract more and more private venture capital.

LEVIN: Get us the figures, if you would, for the record.

ENGLAND: Yes, I will.

ROCHE: Sir, I'm prepared. We had three categories investment, family housing, military construction and sustainment. We, if you take all three, we are $45 million less this year than we were the year before. And I think that's to us, with your advice (ph), going to be a little bit lower.

We specifically made a decision to increase money for family housing and to fix things, to fix runways, fix hangars, put new roofs on, refurbish, et cetera, which comes out of the sustainment account, which we plussed up by $362 million.

The military construction of brand-new buildings we focused on only that which would be needed for new systems that are coming in. So for instance, construction at Langley Air Force Base to accompany the F-22 teams that are starting to form.

But in total we are very close to what was in the '02 budget.

LEVIN: What do we do, then, with last year's testimony that the administration is committed to restoring installations and facilities of 69 percent of the department's facilities that have serious deficiencies? Where does that get fixed in this year's budget?

ROCHE: I believe in the sustainment we do a good bit of that, sir. We make a big dent in that to the sustainment, which is to fix things. MILCON is to build brand-new.

LEVIN: Yes. And that you're down.

ROCHE: No, sir. In sustainment we're way up.

LEVIN: Oh, on MILCON you're down.

ROCHE: On brand-new buildings we're down because we're restricting it to new systems. But in sustainment we're trying to fix things as much as we can. And in family housing we're moving up. That's this our moneys for family housing, not including privatization.

LEVIN: Well, in the materials that were given to us, the briefing materials, the controller said that the reduction was a conscious decision to defer military construction projects to reflect delay in additional round of base closures in 2005. I'm glad to hear none of you used that as an excuse.

ROCHE: Well, sir...

LEVIN: Because there was no delay. For the first time we've got a round of base closing. It wasn't a delay. We finally got one. I thought that was a pretty feeble excuse when I read it. And I'm happy to hear you fellows have not, you secretaries have not used it today.

What we'll need to do is review the reasons you did give, however. And so we're going to need to see those figures for the record.

And Secretary White, if you would also provide those for the record.

WHITE: Yes, we will.

LEVIN: On the question of Army transformation, the budget request Army terminates 18 existing programs, including some that were restored by Congress at the Army's request over the last couple years. And I'm wondering whether or not the 18 programs that were terminated by the Army were your initiative or was that a direction of the office of the secretary of defense?

WHITE: It was not a direction of the office of secretary of defense, Senator. It was our initiative. We had to make some tough choices. And those were the programs we chose to kill.

LEVIN: All right, now, I'm going to ask each of you for a list of unfunded requirements. You have such requirements that are unfunded? I'm not going to ask you for them right now. I'll ask you those for the record.

But before we get them in the record, are there unfunded requirement in the Army?

WHITE: Yes, there are. And again, what we tried to build in this budget was a budget that would sustain us through an expected level of effort where the current was where a supplemental would not be required.

LEVIN: OK.

WHITE: But there are areas of the budget that we did not fully fund against requirements because we had to make tough choices.

LEVIN: Yes, would you provide for the record...

WHITE: Yes, I will.

LEVIN: ... immediate, promptly that? And, Secretary, would you do that as well?

ENGLAND: Ships and airplanes, Senator, obviously we need funding for those two recapitalization accounts.

LEVIN: Even though you have them in the FYDP?

ENGLAND: We do build up to 10 ships at the end of the FYDP; that's correct.

LEVIN: But you have unfunded requirements this year?

ENGLAND: Correct. We're not at the level we'd like to be this year; that's correct.

LEVIN: You'll give us a list of those, will you?

ENGLAND: Yes, sir.

ROCHE: As I was just saying, but if I could make the point that steadiness of this budget with some steady increases will take care of things in time. And we have unfunded requirements which we met in years later. It's really an issue of bringing them into the near term.

LEVIN: So you have, as of this year, you have unfunded requirements?

ROCHE: Sir, we've had to make trades, sure.

LEVIN: Would you give us a list?

ROCHE: I would have liked to have bought tankers.

(LAUGHTER)

For instance, I would like to have purchased tankers and not gone through the grief I'm going through.

LEVIN: I can understand why, actually.

But you'll give us the list, will you, of unfunded requirements?

ROCHE: (Inaudible).

LEVIN: Senator Sessions has a question?

SESSIONS: Well, just briefly.

Secretary White, we had a nice tour in Korea first week of January. And the reports I'd heard about inadequate housing. The inadequate compensation for family split-ups for tours there are really causing some problems in getting people to accept an assignment that they enjoy when doing the work but they don't enjoy the matters that go with it.

Does this budget provide any relief and improvement in housing? We simply, in my view, need to do some consolidation of bases and improvement of housing in Korea.

WHITE: We have allocated resources to Korea. But I will have to get back to you for the record with the specifics of where the money will be spent.

SESSIONS: I would just repeat that I don't believe that's an exaggerated problem. I know you hear problems everywhere you go.

WHITE: No, I don't think it is either. I think...

(CROSSTALK)

SESSIONS: I think we have a real problem there that is undermining some of the good things that are happening in the Army. And we could fix it, it would be great.

WHITE: We've been there 50 years one year at a time.

SESSIONS: And exactly right. The facilities are 50 years old, many of them, and are just not adequate.

And just to get the numbers down, the JDAMs, I believe, Secretary England, you indicated the Navy has 18,000 in for 2003?

ENGLAND: No, sir. Over 9,800, I believe the number is for '03.

SESSIONS: For '03 it would be 9,800.

And what about the Air Force? Where are you?

ROCHE: Sir, I've got to get the exact numbers. I was worried more about the production capacity. We are producing 1,500 a month right now for both services. Wanted to get that to 3,000 a month. We will be facilitating for 3,000 a month.

SESSIONS: When do you think you would be batting to 3,000 a month?

ROCHE: We could get to about 2,000 at the end of '03. And I think by the end of '04 we'd be able to go to 3,000 a month. That's roughly, sir. We'll get the exact details to you.

SESSIONS: Well, Mr. Chairman, I think that's probably not enough to meet our needs. And maybe we ought to think about (inaudible) on more production lines. Is that possible?

ROCHE: Sir, the way things are going now, as we're building up inventory -- remember, we're still producing JDAMs. We're starting to catch up very quickly because we're not using that many. We were using about 80 a day. And that's now dropped down to a number of days none are used.

So we're building up the inventory again. It's the capacity to be able to do it which is effectively like opening up a second line.

SESSIONS: Well, you wouldn't want to be in a position of having to tell the president we're not prepared to undertake a military operation because we've got to wait six more months to get our munitions recocked.

ROCHE: No, sir. And we feel very good this is not a big risk. When you get to the point where you can do 3,000 a month, you're talking 36,000 a year. That's a heck of a lot of weapons.

SESSIONS: But that's two years away.

ROCHE: But we can do 15 now, and within a year it will be about 2,000. Plus there are other precise weapons. It's not just that JDAM is the only weapon.

SESSIONS: Turned out to be the weapon of choice right now.

ROCHE: Absolutely.

SESSIONS: It was a magnificent thing.

I just will probably ask some more questions in writing. We'll talk about that maybe in confidential hearings. But I do believe we've got to confront that question.

Thank you, Mr. Chairman.

LEVIN: Senator Sessions.

Just one more question for me. And that relates to your active duty strengths.

Did any of you propose increases in your service's active duty strength for this year's budget?

WHITE: No, we did not, Senator.

LEVIN: Secretary of the Navy?

ENGLAND: Sir, we have 2400 Marines increase this year.

LEVIN: In the Navy?

ENGLAND: No, sir.

LEVIN: No, but did you request it?

ENGLAND: No, sir.

LEVIN: Secretary Roche?

ROCHE: I don't think so. Although we were talking about an end strength increase, I can't figure -- I can't remember which we've hooked it to, sir. And we talked about an increase of roughly 7,000.

The secretary has asked the reasonable question to go back to look to see if there are offsets, if there's some -- it's what skill areas are really needed. Are there other skill areas that we can put in the Guard and Reserve, et cetera, and -- before he makes decisions on those. So that's probably now part of the '04 process.

I lose track of are we in the, you know, executing one (inaudible)...

LEVIN: How do you track your answer?

ROCHE: The answer is...

LEVIN: Let me ask the question again.

ROCHE: I answer the question yes. The answer to the question is yes, we asked for 7,000. I don't know whether we did it in the '03 process or we're doing it as part of the '04 process. That's what I can't remember.

LEVIN: Let us know for the record which one it was.

Recent press reports indicated that the Army had asked for 40,000 additional troops, the Air Force for 8,000 additional airmen, the Navy for 3,000 more. And apparently that is not accurate. And that's what you're telling us?

WHITE: Well, I think the 40,000 came from a hearing last year of the House Armed Services Committee, where we discussed with Congressman Skelton whether the 480 was adequate or not and, if it wasn't adequate, what the plus-up should look like.

LEVIN: All right. But anyway, the press report that indicates that you requested them, that is not accurate?

WHITE: No. It's not accurate.

LEVIN: Is that correct also for the Navy?

ENGLAND: That's correct.

ROCHE: And I did ask for the 7, but I can't remember which part of it was -- whether it was '03 or part of the '04.

LEVIN: Well, then at least -- OK, you'll let us know that for the record.

Thank you very, very much.

I think we've concluded our hearing. We appreciate your presence, your answers. And we'll stand adjourned.

END

NOTES:
[????] - Indicates Speaker Unknown
   [--] - Indicates could not make out what was being said.[off mike] - Indicates could not make out what was being said.

PERSON:  CARL M LEVIN (94%); BILL NELSON (68%); EDWARD M KENNEDY (57%); ROBERT C BYRD (57%); MARY LANDRIEU (56%); DANIEL K AKAKA (55%); JACK REED (55%); JOHN W WARNER (55%); MARK DAYTON (54%); JEFF BINGAMAN (53%); STROM THURMOND (53%); JAMES M INHOFE (52%); ROBERT C SMITH (52%); JOHN MCCAIN (52%); PAT ROBERTS (51%); JEFF SESSIONS (50%); A WAYNE ALLARD (50%); TIM HUTCHINSON (50%); 

LOAD-DATE: February 16, 2002