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THE REPORT OF THE QUADRENNIAL DEFENSE 

REVIEW INDEPENDENT PANEL 

HEARING 

BEFORE THE

COMMITTEE ON ARMED SERVICES 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

AUGUST 3, 2010 

Printed for the use of the Committee on Armed Services 

( 

Available via the World Wide Web: http://www.fdsys.gov/ 

COMMITTEE ON ARMED SERVICES 

CARL LEVIN, Michigan, Chairman 

JOSEPH I. LIEBERMAN, Connecticut 

JACK REED, Rhode Island 

DANIEL K. AKAKA, Hawaii 

BILL NELSON, Florida 

E. BENJAMIN NELSON, Nebraska 

EVAN BAYH, Indiana 

JIM WEBB, Virginia 

CLAIRE McCASKILL, Missouri 

MARK UDALL, Colorado 

KAY R. HAGAN, North Carolina 

MARK BEGICH, Alaska 

ROLAND W. BURRIS, Illinois 

JEFF BINGAMAN, New Mexico 

EDWARD E. KAUFMAN, Delaware 

CARTE P. GOODWIN, West Virginia 

JOHN MCCAIN, Arizona 

JAMES M. INHOFE, Oklahoma 

JEFF SESSIONS, Alabama 

SAXBY CHAMBLISS, Georgia 

LINDSEY GRAHAM, South Carolina 

JOHN THUNE, South Dakota 

ROGER F. WICKER, Mississippi 

GEORGE S. LeMIEUX, Florida 

SCOTT P. BROWN, Massachusetts 

RICHARD BURR, North Carolina 

DAVID VITTER, Louisiana 

SUSAN M. COLLINS, Maine 

RICHARD D. DEBOBES, Staff Director 

JOSEPH W. BOWAB, Republican Staff Director 

(II) 

C O N T E N T S 

CHRONOLOGICAL LIST OF WITNESSES 

THE REPORT OF THE QUADRENNIAL DEFENSE REVIEW INDEPENDENT PANEL

AUGUST 3, 2010

Page 

Perry, Hon. William J., Co-Chair, Quadrennial Defense Review Independent 

Panel; Accompanied by Hon. Stephen J. Hadley, Co-Chair, Quadrennial 

Defense Review Independent Panel ................................................................... 6 

The Report of the Quadrennial Defense Review Independent Panel .................. 54 

(III) 

(1) 

THE REPORT OF THE QUADRENNIAL 

DEFENSE REVIEW INDEPENDENT PANEL 

TUESDAY, AUGUST 3, 2010 

U.S. SENATE, COMMITTEE ON ARMED SERVICES, Washington, DC. 

The committee met, pursuant to notice, at 9:34 a.m. in room SD– 

G50, Dirksen Senate Office Building, Senator Carl Levin (chairman) presiding. 

Committee members present: Senators Levin, Lieberman, Reed, 

Bill Nelson, E. Benjamin Nelson, Webb, McCaskill, Udall, Hagan, 

Begich, Burris, Bingaman, Kaufman, McCain, Chambliss, Thune, 

LeMieux, Brown, Burr, and Collins. 

Committee staff members present: Richard D. DeBobes, staff director; and Leah C. Brewer, nominations and hearings clerk. 

Majority staff members present: Jonathan D. Clark, counsel; 

Creighton Greene, professional staff member; Jessica L. Kingston, 

research assistant; Gerald J. Leeling, counsel; Peter K. Levine, 

general counsel; Roy F. Phillips, professional staff member; and 

William K. Sutey, professional staff member. 

Minority staff members present: Joseph W. Bowab, Republican 

staff director; Adam J. Barker, professional staff member; Christian D. Brose, professional staff member; Pablo E. Carillo, minority 

investigative counsel; John W. Heath, Jr., minority investigative 

counsel; Michael V. Kostiw, professional staff member; David M. 

Morriss, minority counsel; and Dana W. White, professional staff 

member. 

Staff assistants present: Paul J. Hubbard, Brian F. Sebold, and 

Breon N. Wells. 

Committee members’ assistants present: Christopher Griffin, assistant to Senator Lieberman; Carolyn Chuhta, assistant to Senator Reed; Nick Ikeda, assistant to Senator Akaka; Ann Premer, 

assistant to Senator Ben Nelson; Patrick Hayes, assistant to Senator Bayh; Gordon Peterson, assistant to Senator Webb; Tressa 

Guenov, assistant to Senator McCaskill; Jennifer Barrett, assistant 

to Senator Udall; Roger Pena, assistant to Senator Hagan; Jonathan Epstein, assistant to Senator Bingaman; Lenwood Landrum 

and Sandra Luff, assistants to Senator Sessions; Matthew 

Rimkunas, assistant to Senator Graham; Jason Van Beek, assistant to Senator Thune; Scott Schrage, assistant to Senator Brown; 

and Ryan Kaldahl, assistant to Senator Collins. 

OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN 

Chairman LEVIN. Good morning, everybody. 

2 

The committee meets this morning to receive testimony on the 

report of the Quadrennial Defense Review (QDR) Independent 

Panel. 

Our witnesses, the co-chairs of the independent panel, are wellknown leaders with long careers in and out of government, and we 

are grateful for the willingness of former Secretary of Defense William J. Perry and former National Security Adviser Stephen J. 

Hadley to serve as co-chairs of this panel. 

We are also thankful for the efforts of your 16 other panel members. All of you have brought a breadth and depth of expertise that 

is evident throughout the report that is comprehensive, insightful, 

and even provocative in its many findings and recommendations. 

The QDR is a congressionally mandated, comprehensive examination of our national defense strategy, force structure, modernization, budget plans, and other defense plans and programs intended 

to shape defense priorities, operational planning, and budgets projected as far as 20 years into the future. 

In 2007, Congress required that the Secretary of Defense create 

an independent panel of experts to conduct a review of the Department’s QDR, an independent review that had not been done since 

the very first QDR back in 1997. This new independent panel is 

tasked with providing Congress its assessment of the QDR’s stated 

and implied assumptions, findings, recommendations, vulnerabilities of the underlying strategy and force structure, and providing 

alternative force structures, including a review of their resource requirements. 

Last February, the Department of Defense (DOD) delivered its 

QDR report. This is another explicitly wartime QDR, as was the 

last report in 2006, that emphasizes the need to succeed in the conflicts in Iraq, Afghanistan, and against al Qaeda, and ensuring that 

our strategy and resource priorities support that objective. 

The QDR also argues for realignment of investments from programs that it sometimes describes as ‘‘relics of the Cold War’’ toward those that support critical joint missions, including countering anti-access strategies, building the capacity of partner 

states, and ensuring access to cyberspace. The QDR report also 

proposes measures to reform institutional procedures, including acquisition, security assistance, and export control processes. 

The independent panel acknowledges the QDR is a wartime review that is understandably and appropriately focused on responding to the threats that America now faces. However, they are also 

critical that, like previous QDRs, it fails to provide long-term planning guidance for the threats the Nation could face in the more distant future. 

In taking its own longer, fiscally unconstrained view of America’s 

strategic challenges, the independent panel makes findings and 

recommendations that raise important questions and provide policy 

and program options that we will explore in the months and the 

years ahead. 

The panel’s report begins with the recognition of the many shortfalls in civilian capacity necessary to meet the modern demands of 

the current and future security and stability environment. The 

panel reiterates the longstanding call for participation of U.S. and 

3 

international civilians—both government and nongovernment—in 

preventing conflict and managing post conflict stability situations. 

In some of the panel’s most far-reaching and provocative recommendations, they challenge both the administration and Congress to reform our national security institutions and processes. 

Among other changes, the panel calls for restructuring the U.S. 

Code to realign and integrate executive department and agency responsibilities and authorities, expanding the deployable capabilities 

of civilian agencies, and consolidating the budget processes and appropriations of DOD and the Department of State (DOS) and the 

Intelligence Community. We will want to learn more from our witnesses about these proposals and which of them, in their view, are 

the most important to address in the near- and long-terms. 

The panel goes on to warn us about what it calls the growing gap 

between what the military is capable of doing and what they may 

be called upon to do in the future. To reduce this gap, the panel 

essentially argues that defense spending should be substantially increased, despite the current economic environment and DOD’s 

plans for modest real growth for the foreseeable future. 

With respect to force structure, one of their most significant recommendations would increase the size of the Navy to 346 ships to 

promote and protect our strategic interests in the Pacific. We would 

be interested to know from our witnesses in what way the QDR 

force is inadequate to this challenge and what specific additional 

capabilities that the panel believes are necessary for that region 

and what missions are the priorities. 

In the area of personnel, the panel commends the QDR’s emphasis on the strategic importance of sustaining the All-Volunteer 

Force that has performed so magnificently over the last 10 years 

of war. The panel notes, however, that the recent and dramatic cost 

growth of the All-Volunteer Force is unsustainable for the long 

term and will likely lead to reductions in force structure and benefits or a compromised volunteer system altogether. 

Higher costs per servicemember, as the panel points out, could 

mean fewer servicemembers, resulting in an increased number of 

deployments for those in service and greater stress on them and 

their families. Now that is a vicious budgetary cycle. 

Nevertheless, the panel recommends increasing the Navy end 

strength while maintaining the current strengths of the other Services. We would be interested to hear from our witnesses more about 

their recommendations in this area, which include some kind of a 

bifurcated compensation and assignment system for career and 

non-career military members. 

Many of the panel’s acquisition-related recommendations echo 

Congress’ longstanding concerns and legislation previously enacted 

by this committee. For example, the panel’s call for the increased 

use of competition and dual sourcing parallels requirements enacted in last year’s Weapon Systems Acquisition Reform Act 

(WSARA). The same is true of the panel’s call for increased emphasis on technologically mature programs that can be delivered in the 

shortest practical time. 

Similarly, the panel’s call for shortening the acquisition process 

for wartime response to urgent needs appears to be consistent with 

provisions already included in the National Defense Authorization 

4 

Act (NDAA), which was reported by our committee earlier this 

year. 

The panel’s recommended realignment of acquisition process responsibilities and authorities, however, is less clear. We look forward to learning more from the witnesses regarding the panel’s 

recommendations for adjustments to the lines of authority established two decades ago in response to the recommendations of the 

Packard Commission and to the increased role that the combatant 

commanders are already playing in the acquisition process. 

Finally, the independent panel followed our statutory guidance 

and conducted its review of the QDR and strategic assessments 

from a fiscally unconstrained perspective. When reading their report, however, one cannot escape questioning the affordability of 

many of their recommendations, particularly given the current 

state of our economy and the budget deficit. 

The panel recommends that in order to meet the greater costs associated with its recommendations for force structure increases, 

DOD and Congress should restore fiscal responsibility to the budget process that was lost when balanced budget rules were set aside 

at the beginning of the war. Those rules force decisionmakers to 

make tradeoffs and identify offsets to cover those increased costs. 

Does the panel recommend other steps to generate the resources 

necessary to pay for its many proposals? 

Again, we thank our witnesses and their panel colleagues for this 

very significant contribution to our ongoing national security debate. There is much here to discuss as we work together to meet 

the challenges that confront our Nation today and well into the future. 

Senator McCain. 

STATEMENT OF SENATOR JOHN MCCAIN 

Senator MCCAIN. Thank you, Mr. Chairman. 

Let me thank our distinguished witnesses and old friends, former 

Secretary of Defense William Perry and former National Security 

Adviser Steve Hadley. Thank you for your many years of service 

to our Nation and your leadership of this panel. 

Again, I am grateful for the many years of service to our country 

that both of our witnesses have provided and also the distinguished 

members of your panel, which I think are amongst the finest thinkers that we have in America today on national security issues. 

As we know, the panel was mandated in the 2009 NDAA to provide a separate, outside assessment of the questions posed by the 

QDR. The administration’s QDR, which was released in February, 

is, in their own words, a ‘‘wartime QDR.’’ It is focused mainly on 

winning the wars we are in and meeting the associated needs of 

the force. This priority is understandable and right. 

Our men and women in uniform have for nearly a decade now 

been serving in a force at war. They are defeating America’s enemies in the fight against violent Islamic extremism. They are supporting Iraq’s emergence as an increasingly stable democratic 

state. If given the necessary time and support, they can reverse the 

momentum of the insurgency in Afghanistan and prevent that 

country from ever again becoming a safe haven for international 

terrorists. 

5 

As long as America has troops in combat, they and their mission 

must be our highest priority. Yet prevailing in the wars of today 

cannot be our only priority. We will also need to ensure that our 

force is prepared and resourced to meet a wide array of other challenges over the coming decades, especially amid the tectonic shifts 

now occurring in the global distribution of power. 

In particular, our military must be able to ensure secure access 

to the global commons, including cyberspace, to shape a balance of 

power in critical regions that favors our interests and values and 

those of our allies; to build the capacity of weak partners to secure 

their countries and operate together with us; and, of course, to defend the Homeland. 

These are just some of the major challenges that our force will 

be called on to meet over the next 20 years, which is the period 

of time for which the QDR is mandated by Congress to propose defense programs. However, as this panel’s report correctly observed, 

the intended long-term focus of the QDR is being lost. Instead, successive administrations have increasingly produced QDR after QDR 

that are more reflections of present defense activities than, in the 

words of the panel’s report, a ‘‘strategic guide to the future that 

drives the budget process.’’ 

The 2010 QDR mostly continues this trend, and now more than 

ever we need to regain a long-term strategic focus on our defense 

priorities. In that regard, the report of the QDR Independent Review Panel makes an important contribution. 

We are in the midst of a great national debate about the priorities and spending habits of our Government, driven by the mounting debt that threatens our Nation’s future. For the first time in 

a decade, there is a growing call for real cuts in defense spending 

and a willingness on both sides of the aisle to consider it. 

This panel has now offered a strong counterargument. A bipartisan group of respected national security experts who all agree, as 

Secretary Perry told the House Armed Services Committee (HASC) 

last week, that identifying savings and efficiencies in the defense 

budget is necessary but not sufficient to meet our Nation’s future 

national security priorities. Ultimately, the panel finds overall defense spending must rise. 

As we debate the future of the defense budget at a time of fiscal 

scarcity, this report will not be the final word, but it offers formidable proposals that Congress must take very seriously—from recommendations for fixing DOD’s dysfunctional procurement system 

to bold ideas for reforming TRICARE so that rising healthcare 

costs do not devour the defense budget. The report is also an important reminder that we should not allow arbitrary budget numbers, whether capped top-line figures or percentages of GDP, to 

drive our defense strategy. 

Instead, we must frankly identify the strategic challenges facing 

our Nation over the next 20 years. We must lay out the commitments and capabilities needed to meet these challenges. We must 

cut waste, identify efficiencies, and make every possible reform 

that can save money. 

We must terminate expensive or over-budget programs that we 

can do without. We must put an end to pork barrel earmarking, 

6 

which wastes billions of dollars every year on programs that our 

military doesn’t request and doesn’t need. 

Finally, having done all of this, having identified our real needs 

and gotten the most of our defense dollars that we can, America 

should be prepared to pay the resulting bill, whatever it is, or accept the resulting risk to our national security and that of our 

friends and allies for failing to do so. This will require some very 

hard choices, but the benefit to be gained by sustaining and 

strengthening America’s global leadership is imminently worth it. 

I want to thank the witnesses and their fellow members of the 

QDR Panel for emphasizing the importance of strong, confident 

U.S. leadership in the world and the special role that our Armed 

Forces play in securing not only our own interests, but in defending 

an open international order that benefits all who join it. 

This panel’s report is an important point of reference in our current debates. I appreciate the time and care that our witnesses and 

their fellow panelists put in it. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you, Senator McCain. 

Secretary Perry, if there are any other members of the independent panel who are here with you and Mr. Hadley, could you 

introduce them? Then you can begin your testimony. 

STATEMENT OF HON. WILLIAM J. PERRY, CO-CHAIR, QUADRENNIAL DEFENSE REVIEW INDEPENDENT PANEL; ACCOMPANIED BY HON. STEPHEN J. HADLEY, CO-CHAIR, QUADRENNIAL DEFENSE REVIEW INDEPENDENT PANEL 

Dr. PERRY. John Nagl is the other member of the panel with us. 

Chairman LEVIN. Good. Thank you. 

Mr. Nagl, great to have you. 

Dr. Perry? 

Dr. PERRY. Let us start with Mr. Hadley first. 

Chairman LEVIN. Mr. Hadley, you have your own opening 

statememt? 

Mr. HADLEY. Mr. Chairman, we have a joint statement, which, 

with your permission, we would like submitted into the record. We 

thought we would just summarize that statement. I will do the first 

half. 

Chairman LEVIN. Oh, okay. Great. 

Mr. HADLEY. Secretary Perry will do the hard work at the last 

half, if that is acceptable. 

Chairman LEVIN. I had it reversed. Very good. Mr. Hadley, you 

shall begin then. 

Mr. HADLEY. Thank you, sir. 

Chairman Levin and Ranking Member McCain, we thank you for 

the opportunity to appear before you and other members of this 

distinguished committee to discuss the final report of the QDR 

Independent Panel. 

Congress and Secretary Gates gave us a remarkable set of panel 

members who devoted an enormous amount of time and effort to 

this project. It was a model of decorum and of bipartisan legislative 

and executive branch cooperation. 

Paul Hughes, as executive director of the panel—who is here 

today—ably led a talented expert staff, and the result is the unaniVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
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mous report you have before you titled: ‘‘The QDR in Perspective: 

Meeting America’s National Security Needs in the 21st Century.’’ 

Our report is divided into five parts. The first part conducts a 

brief survey of foreign policy with special emphasis on the missions 

the American military has been called upon to perform since the 

fall of the Berlin Wall. From the strategic habits and actual decisions of American Presidents since 1945, habits and decisions that 

have shown a remarkable degree of bipartisan consistency, we deduce four enduring national interests, which will continue, in our 

view, to transcend political differences and animate American policy in the future. 

Those enduring national interests include the defense of the 

American Homeland; assured access to the sea, air, space, and 

cyberspace; the preservation of a favorable balance of power across 

Eurasia that prevents authoritarian domination of that region; and 

providing for the global common good through such actions as humanitarian aid, development assistance, and disaster relief. 

We also discussed the five greatest potential threats to those interests that are likely to arise over the next generation. These 

threats include, but are not limited to: (1) radical Islamist extremism and the threat of terrorism; (2) the rise of new global great 

powers in Asia; (3) continued struggle for power in the Persian 

Gulf and the greater Middle East; (4) an accelerating global competition for resources; and (5) persistent problems of failed and failing states. 

These five global trends have framed a range of choices for the 

United States. We have a unique opportunity to continue to adapt 

international institutions to the needs of the 21st century and to 

develop new institutions to meet those challenges. 

We have various tools of smart power—diplomacy, engagement, 

trade, communications about Americans’ ideals and intentions— 

and these will increasingly be necessary to protect America’s national interests. But we conclude that the current trends are likely 

to place an increased demand on American hard-power to preserve 

regional balances because while diplomacy and development have 

important roles to play, the world’s first-order concerns will continue to be security concerns, in our judgment. 

In the next two chapters, we turn to the capabilities of our Government and that our Government must develop and sustain to 

protect our enduring interests. We first discussed the civilian elements of national power, what Secretary Gates has called the tools 

of soft power. 

We make a number of recommendations for the structural and 

cultural changes in both the executive and legislative branches, 

which will be necessary, in our view, if these elements of national 

power are to play their role in protecting America’s enduring interests. 

The panel notes with extreme concern that our current Federal 

Government structures, both executive and legislative, and in particular those related to security, were fashioned in the 1940s. They 

work, at best, imperfectly today. The U.S. defense framework 

adopted after World War II was structured to address the Soviet 

Union in a bipolar world, and the threats today are much different. 

A new approach is needed. 

8 

We recommend that Congress reconvene its Joint Committee on 

the Organization of Congress to examine the current committee 

structure and consider establishing a single national security appropriations subcommittee and a coordinated authorization process 

between relevant committees. 

Furthermore, the panel recommends that the President and Congress establish a national commission on building the civil force of 

the future to develop recommendations and a blueprint for increasing the capability and capacity of our civilian departments and 

agencies to move promptly overseas and cooperate effectively with 

military forces in insecure security environments. 

Let me turn to my colleague, Bill Perry, to summarize the rest 

of the report. I want to thank him for his leadership. He is the person who made clear from the very beginning this needed to be a 

consensus report and, because of his leadership, it is. He is a great 

national resource, and the country is lucky to have him. 

Mr. Secretary? 

Dr. PERRY. Thank you very much, Steve. 

I must say a major part of our panel’s effort was devoted to a 

consideration of future force structure. For many decades during 

the Cold War, the primary mission of DOD was to build a force capable of deterring and containing the Soviet Union. DOD recognized other missions, but considered those missions were lesser included cases—that is, they would be automatically covered by the 

force we had capable of deterring the Soviet Union. 

In 1993, the Cold War was over. We needed a new force structure, and we created something called the bottom-up review. That 

identified the primary missions of DOD to have the force structure 

capable of fighting and winning two major regional conflicts. We 

looked at other cases, but we considered them lesser included cases 

that would be covered by the force we built for the two MRCs. 

Today, the assumptions of the Cold War in the 1990s are no 

longer valid. A major portion of our military is engaged in two insurgency operations. Not surprisingly then, Secretary Gates has focused this QDR on success in Afghanistan and Iraq. I must say, 

had I been the Secretary of Defense, I would have done the same 

thing. 

However, it is also important to plan the forces that we will need 

10, 20 years ahead. A force planning construct is a powerful lever 

for shaping DOD. 

The absence in the QDR of such a construct was a missed opportunity. So our panel decided to offer our own judgments as to what 

that should be, based on the assumption of the global trends and 

the threats that were just described by Mr. Hadley. Those judgments are as follows. 

First, the recent additions to the ground forces, we believe, will 

need to be sustained for the foreseeable future. 

Second, the Air Force has the right force structure, except for the 

need to augment its long-range strike capability. 

Third, we need to increase our maritime forces to sustain the 

ability to transit freely in the Western Pacific. We saw that as the 

primary driving factor for an increased naval size. 

Fourth, DOD needs to be prepared to assist civil departments in 

the event of a cyber attack on the homeland. It is a homeland secuVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
9 

rity issue, but DOD has the primary resources for dealing with a 

cyber problem. 

We believe that a portion of the National Guard should be dedicated to the homeland security mission. In fact, we need to revisit 

the contract with the Guard and the Reserves. 

A major capitalization will be required of our forces, not the least 

of which is because of the wear and tear of the equipment in the 

wars in Iraq and Afghanistan. Secretary Gates’ directive on efficiencies to deal with these costs is a good start but, in our judgment, will not be sufficient. That is, additional top line will be required. What we have described as a need will be expensive, but 

deferring recapitalization could entail even greater expenses in the 

long run. 

We looked carefully at the personnel issue and believe—started 

off with the belief that the All-Volunteer Force has been a great 

success. But the dramatic increases in costs in the last few years 

cannot be sustained. We believe we must seriously address those 

costs, and a failure to do so would lead either to a reduction in 

force or a reduction in benefits or some way compromise our volunteer force, none of which is desirable. 

So we must reconsider longstanding practices, such as extending 

the length of expected service, revising benefits to emphasize cash 

instead of future benefits, looking hard at and revising the current 

longstanding up-and-out personnel policy, and revising TRICARE 

benefits. 

I must say we understand that these are all big issues and all 

very politically sensitive issues, but we believe they have to be addressed. We recommended the establishment of a new commission 

on military personnel comparable to the Gates Commission back in 

1970, which established the All-Volunteer Force. The charter of 

that commission basically should be to implement the recommendations which we have described in this report. 

An important part of the personnel issue is the professional military education. The training and education program in the military 

today plays a key role in making the U.S. military the best in the 

world. It is expensive, but it is worth it. 

We recommended a full college program for Reserves with summer training and a 5-year service commitment. We recommended 

expanding graduate programs in military affairs, foreign culture, 

and language. We recommended providing key officers with a sabbatical year in industry. All of those are evolutionary changes to 

professional military education which would be beneficial. 

We looked carefully at the acquisition and contracting problems 

and recommended, first of all, clarifying the accountability. In fact, 

we devoted several pages to discussion of specific recommendations 

as to how that might be improved. 

We looked at the history of programs in the last decade or so 

which dragged on for 10, 12, 14 years and led to very extensive 

overruns. We believe that we should set limits of 5 to 7 years for 

the delivery of defined programs. Five to 7 years, we have a history 

of programs with that limit that have been successful, and all programs that we know of that have dragged on for 10 to 20 years 

have been unsuccessful. We believe that it is no coincidence that 

the long programs lead to problems. 

10 

1 National Defense Authorization Act for Fiscal Year 2010, P.L. No: 111–84, Section 1061. 

We recommended requiring dual-source competition for production programs whenever such dual-source competition provides real 

competition. We recommended establishing a regular program for 

urgent needs such as now being done by the Under Secretary of 

Defense for Acquisition, Technology, and Logistics in Afghanistan. 

Finally, we had some comments on planning. We believe that the 

QDR, as now mandated, is an inappropriate vehicle for dealing 

with the issues that Congress wants to deal with. It comes too late 

in the process. 

We recommended that you establish an independent strategic review panel in the fall of the presidential election year that would 

be established by the legislative and executive branches, as was the 

QDR, that this panel convene in January of the new administration 

and report 6 months later. This then would be an input to the National Security Council for preparing a national security strategy, 

and this plus the regular procurement planning and budgeting 

process would replace the QDR. 

I would like to close with a final comment that this report we 

hand to you is a unanimous report from a bipartisan panel. Mr. 

Hadley and I, from the very first day of the panel, told our panel 

members that not only was it a bipartisan panel, but our deliberations should not be bipartisan, but rather nonpartisan. The national security issues we deal with are too important to be dealt 

with in a partisan way. 

The panel responded positively to this, and therefore, we are able 

to give you today a bipartisan, unanimous report. 

Thank you very much. 

[The joint prepared statement of Dr. Perry and Mr. Hadley follows:] 

JOINT PREPARED STATEMENT BY HON. WILLIAM J. PERRY AND HON. STEPHEN J. 

HADLEY

Chairman Levin and Ranking Member McCain, we thank you for the opportunity 

to appear before you and other members of this distinguished committee to discuss 

the final report of the Quadrennial Defense Review (QDR) Independent Panel. 

The QDR Independent Panel includes 12 appointees of the Secretary of Defense, 

Robert Gates, and 8 appointees of Congress, and is mandated by the National Defense Authorization Act (NDAA) for Fiscal Year 2010 to: 

• Review the Secretary of Defense’s terms of reference for the 2009 QDR; 

• Conduct an assessment of the assumptions, strategy, findings, and risks 

in the 2009 QDR; 

• Conduct an independent assessment of possible alternative force structures; and 

• Review the resource requirements identified in the 2009 QDR and compare those resource requirements with the resources required for the alternative force structures.1

That is what our panel has tried to do in its review. We have deliberated for over 

5 months, in the process reviewing a mass of documents (both classified and unclassified), interviewing dozens of witnesses from the Department, and consulting a 

number of outside experts. Congress and Secretary Gates gave us a remarkable set 

of panel members who devoted an enormous amount of time and effort to this 

project. It was a model of decorum and of bipartisan, legislative/executive branch 

cooperation. Paul Hughes, as Executive Director of the Panel, ably led a talented 

expert staff. The result is the unanimous report you have before you entitled: ‘‘The 

QDR in Perspective: Meeting America’s National Security Needs in the 21st Century.’’ 

11 

Mr. Chairman, the security challenges facing the United States today are much 

different than the ones we faced over a decade ago. In addition to ongoing military 

operations in Iraq and Afghanistan, the United States faces a geopolitical landscape 

that is increasingly dynamic and significantly more complex. Secretary Gates and 

the Department of Defense deserve considerable credit for attempting to address all 

these challenges in the 2009 QDR. 

The modern QDR originated in 1990 at the end of the Cold War when Secretary 

of Defense Dick Cheney and Chairman of the Joint Chiefs of Staff General Colin 

Powell undertook in the ‘‘Base Force’’ study to reconsider the strategy underpinning 

the military establishment. Then in 1993, building on his own work as the chairman 

of the House Armed Services Committee, Secretary of Defense Les Aspin decided 

to conduct what he called a Bottom-up Review—an examination of the long-term 

risks which America was likely to face, the capabilities necessary to meet them, and 

the various options for developing those capabilities. 

The Bottom-up Review was considered generally a success. Congress thought the 

process worthwhile and mandated that it be repeated every 4 years. Unfortunately, 

once the idea became statutory, it became routine. Instead of unconstrained, longterm analysis by planners who were encouraged to challenge preexisting thinking, 

the QDRs became explanations and justifications, often with marginal changes, of 

established decisions and plans. 

This latest QDR is a wartime QDR, prepared by a Department that is focused— 

understandably and appropriately—on responding to the threats America now faces 

and winning the wars in which America is now engaged. Undoubtedly the QDR is 

of value in helping Congress review and advance the current vital missions of the 

Department. But it is not the kind of long-term planning document that Congress 

envisioned when it enacted the QDR requirement. 

Our Report is divided into five parts. 

It first conducts a brief survey of foreign policy, with special emphasis on the missions that America’s military has been called upon to perform since the fall of the 

Berlin Wall. From the strategic habits and actual decisions of American Presidents 

since 1945—habits and decisions that have shown a remarkable degree of bipartisan 

consistency—we deduce four enduring national interests which will continue to transcend political differences and animate American policy in the future. Those enduring national interests include: 

• The defense of the American homeland; • Assured access to the sea, air, space, and cyberspace; • The preservation of a favorable balance of power across Eurasia that prevents authoritarian domination of that region; and 

• Providing for the global ‘‘common good’’ through such actions as humanitarian aid, development assistance, and disaster relief. 

We also discuss the five gravest potential threats to those interests that are likely 

to arise over the next generation. Those threats include, but are not limited to: 

• Radical Islamist extremism and the threat of terrorism; • The rise of new global great powers in Asia; • Continued struggle for power in the Persian Gulf and the greater Middle 

East; 

• An accelerating global competition for resources; and • Persistent problems from failed and failing states. 

These five key global trends have framed a range of choices for the United States: 

• Current trends are likely to place an increased demand on American 

‘‘hard power’’ to preserve regional balances; while diplomacy and development have important roles to play, the world’s first-order concerns will continue to be security concerns. 

• The various tools of ‘‘smart power’’—diplomacy, engagement, trade, targeted communications about American ideals and intentions, development 

of grassroots political and economic institutions—will increasingly be necessary to protect America’s national interests. 

• Today’s world offers unique opportunities for international cooperation, 

but the United States needs to guide continued adaptation of existing international institutions and alliances and to support development of new institutions appropriate to the demands of the 21st century. This will not happen without global confidence in American leadership, its political, economic, and military strength, and steadfast national purpose. 

• Finally, America cannot abandon a leadership role in support of its national interests. To do so will simply lead to an increasingly unstable and 

unfriendly global climate and eventually to conflicts that America cannot 

ignore, and which we will then have to prosecute with limited choices under 

12 

unfavorable circumstances—and with stakes that are higher than anyone 

would like. 

In the next two chapters, we turn to the capabilities that our Government must 

develop and sustain in order to protect our enduring interests. We first discuss the 

civilian elements of national power—what Secretary Gates has called the ‘‘tools of 

soft power.’’ We make a number of recommendations for the structural and cultural 

changes in both the executive and legislative branches which will be necessary if 

these elements of national power are to play their role in protecting America’s enduring interests. The panel notes with extreme concern that our current Federal 

Government structures—both executive and legislative, and in particular those related to security—were fashioned in the 1940s and they work at best imperfectly 

today. The U.S. defense framework adopted after World War II was structured to 

address the Soviet Union in a bipolar world. The threats of today are much different. A new approach is needed. 

We then turn to the condition of America’s military. We note that there is a significant and growing gap between the ‘‘force structure’’ of the military—its size and 

its inventory of equipment—and the missions it will be called on to perform in the 

future. As required by Congress, we propose an alternative force structure with emphasis on increasing the size of the Navy. We also review the urgent necessity of 

recapitalizing and modernizing the weapons and equipment inventory of all the 

Services; we assess the adequacy of the budget with that need in view; and we make 

recommendations for increasing the Department’s ability to contribute to homeland 

defense and to deal with asymmetric threats such as cyber attack. 

In this third chapter, we also review the military’s personnel policies. We conclude 

that while the all-volunteer military has been an unqualified success, there are 

trends that threaten its sustainability. Major changes must be made in personnel 

management policies and in professional military education. A failure to address the 

increasing costs of the All-Volunteer Force will likely result in: (1) a reduction in 

force structure; (2) a reduction in benefits; and/or (3) a compromised All-Volunteer 

Force. To avoid these undesirable outcomes, we recommend a number of changes in 

retention, promotion, compensation, and professional military education that we believe will serve the interests of America’s servicemembers and strengthen the AllVolunteer Force. 

The fourth chapter of our Report takes on the issue of acquisition reform. We commend Secretary Gates for his emphasis on reducing both the cost of new programs 

and the time it takes to develop them. But we are concerned that the typical direction of past reforms—increasing the process involved in making procurement decisions—may detract from the clear authority and accountability that alone can reduce cost and increase efficiency. We offer several recommendations in this area. 

Finally, our Report’s last chapter deals with the QDR process itself. While we very 

much approve of the impulse behind the QDR—the desire to step back from the flow 

of daily events and think creatively about the future—the QDR process as presently 

constituted is not well suited to the holistic planning process needed by our Nation 

at this time. The United States needs a truly comprehensive National Security Strategic Planning Process that begins at the top and provides the requisite guidance 

not only to the Department of Defense but to the other departments and agencies 

of the U.S. Government that must work together to address the range of global 

threats confronting our Nation. 

The issues raised in our Report are sufficiently serious that we believe an explicit 

warning is appropriate. The aging of the inventories and equipment used by the 

Services, the decline in the size of the Navy, escalating personnel entitlements, increased overhead and procurement costs, and the growing stress on the force means 

that a train wreck is coming in the areas of personnel, acquisition, and force structure. In addition, our Nation needs to build greater civil operational capacity to deploy civilians alongside our military and to partner with international bodies, the 

private sector, and nongovernmental organizations in dealing with failed and failing 

states. 

The potential consequences for the United States of a ‘‘business as usual’’ attitude 

towards the concerns expressed in this Report are not acceptable. We are confident 

that the trend lines can be reversed, but it will require an ongoing, bipartisan concentration of political will in support of decisive action. 

In conclusion, we wish to again acknowledge the cooperation of the Department 

of Defense in the preparation of this Report—and to express our unanimous and undying gratitude to the men and women of America’s military, and their families, 

whose sacrifice and dedication continue to inspire and humble us. 

Mr. Chairman, thank you for the opportunity to testify before you today. We welcome your questions regarding the Final Report of the Quadrennial Defense Review 

Independent Panel. 

13 

Chairman LEVIN. Thank you very much, Dr. Perry. 

We will have a 7-minute first round. 

Dr. Perry, let me start with you. The Department of State (DOS) 

has traditionally had the lead in decisions on security assistance 

through programs like foreign military financing. In recent years, 

DOD has brought an increasing share of resources to the table in 

determining the distribution of U.S. security assistance through 

programs like train-and-equip programs, the Iraq Security Forces 

Fund, the Afghan Security Forces Fund. 

The panel’s report, Secretary Gates, and a number of think tanks 

in Washington have proposed the idea of establishing an interagency-controlled pool of resources in certain areas such as 

counterterrorism, stabilization, and post conflict. DOD, DOS, and 

the U.S. Agency for International Development have national security interests, and each has a role to play in these critical areas, 

and to varying degrees, they cooperate in advancing the foreign 

policy agenda. 

Would you recommend pooling these resources and providing 

each of these agencies an equal seat at the table in distribution of 

the nondirected portions of these military security assistance accounts? 

Dr. PERRY. In a word, yes. The kind of conflicts we have been 

fighting in Bosnia, Iraq, and Afghanistan cannot be done successfully by DOD alone. They are fundamentally interagency problems. 

Providing the right training for that and the right coordination for 

that is very difficult, but we really have to face those issues. 

I would make an analogy with the problems of getting joint service operations in an earlier era, which finally led to the GoldwaterNichols bill and to where we now truly have joint operations. That 

was difficult as well, but it was accomplished. Something comparable needs to be done in this area. 

Chairman LEVIN. Now, is there any recommendations you have 

as to where you would draw the line between where DOS would 

have the lead in providing assistance and where DOD would have 

that authority? 

Dr. PERRY. I don’t have a good formula for drawing that line, 

Senator Levin. 

Chairman LEVIN. Okay. 

Dr. PERRY. I would say that certainly, a basis for making that 

judgment should be on the proportion of effort of each of the various departments. 

Chairman LEVIN. Now for some of us, the civilian agencies, 

which are better suited to build capacity in certain nondefense elements of the security sector, have provided a very uneven performance in those areas to date. We have seen their operations in Iraq 

and Afghanistan, and they have not been particularly steady or 

successful. They have been halting, and we have had to push that 

envelope a lot. 

Would you agree with that? If so, is that not going to be a problem? 

Dr. PERRY. I do agree with that, and I think at least two things 

could be done to correct or improve that process. First would be to 

adequately fund that mission, that function in the civilian agencies 

that has been traditionally underfunded in the past and, second, to 

14 

have DOD and the civilian agencies train together, exercise together for these kinds of missions. That has been completely absent 

in the past. 

Chairman LEVIN. Okay. You have made some recommendations 

relative to Navy capacity, particularly for the Asia-Pacific region, 

and you have cited potential challenges in Asia as the reason to increase the size of the Navy fleet. What specific capabilities did the 

panel find to enhance our capability in the Asia-Pacific region? 

Given the long lead times inherent in the budgeting and construction associated with major acquisition programs such as shipbuilding, what would you consider the most pressing military needs 

in the Asia-Pacific region? Either one of you could answer that. 

Dr. PERRY. I would say, generally, the most pressing need is 

dealing with so-called anti-access missions, that is, various military 

systems that could deny access of our fleet to the Western Pacific. 

High on that list would be certainly anti-ship missiles, divining 

countermeasures for those. 

Mr. HADLEY. We were not in a position to generate a detailed 

force structure. A lot has changed in the 21st century, but the circumference of the Earth and the percent covered by water is one 

thing that hasn’t. What we thought was that a bigger presence requirement would require a bigger Navy. 

Obviously, much more work needs to be done to make sure that 

the Navy is structured in a way that is appropriate to the challenges. The one thing we did identify was that this anti-access 

process needs to be addressed, but exactly what ships with which 

capabilities is something this committee and the Department would 

have to develop. 

Chairman LEVIN. Okay. The panel’s acquisition-related recommendations would give greater responsibility and authority to 

the combatant commands supported by the Services for the identification of weapons and equipment requirements or capability gaps. 

We have included provisions in recent legislation, including both 

the WSARA and the NDAA, which the committee reported earlier 

this year, that would ensure that combatant commanders play an 

important role in the requirements development process. 

However, General Cartwright, who has been a leading advocate 

for an improved requirements process, has told us that the combatant commands have heavy responsibilities as operational headquarters executing missions around the world and cannot be expected to run the requirements process. 

Are you familiar with General Cartwright’s recommendations for 

improving the requirements process? If so, would you agree or disagree with him as to the appropriate role of the combatant commanders? 

Dr. PERRY. I have not read General Cartwright’s testimony. 

Chairman LEVIN. Mr. Hadley, are you familiar with that? 

Mr. HADLEY. Yes, we think—and I think our report suggests— 

that the combatant commander doesn’t necessarily run the process, 

but the combatant commander, supported by the Joint Chiefs, 

should be looked to for his input on this requirements issue since 

they are the closest to the—— 

Chairman LEVIN. More so than is currently the case? 

15 

Mr. HADLEY. Mr. Chairman, what we tried to do was where there 

were reforms that had been in place—and the activities of this 

committee is one—we tried to reaffirm those reforms we thought 

were in the right direction and suggest where we had to go further. 

We think that a number of things in the legislation, which came 

out of this committee are in the right direction, and this was one. 

Chairman LEVIN. Okay. Thank you. 

Senator McCain. 

Senator MCCAIN. Thank you, Mr. Chairman. 

I want to again thank the panel. Could I discuss for a minute 

with the panel members this latest issue of the leak of 93,000 documents? Obviously, we have already had a private first class 

charged with leaking of documents. 

The environment that we grew up in was that classified information was kept on close hold. There was a need-to-know provision 

that even if you had clearance, you did not have access unless you 

had need-to-know. 

Now we have a situation where apparently a private first class 

was able to get access to classified information, and, apparently, 

other people that shouldn’t have obviously did, abetted and aided 

by a willing and compliant media that doesn’t seem to care about 

national security or the lives of the Afghans that have been put at 

risk. 

How do you size up that problem, and what do we need to do? 

It is obviously due to the age of computers. Dr. Perry or Steve, 

whoever wants to take a stab at that. 

Dr. PERRY. I think there are two fundamental factors leading to 

this problem. First is the desire to get intelligence down to the battlefield level so that people who are fighting the battles have access 

to the best intelligence. I completely support that requirement, and 

I understand why there is the desire to do that. That inevitably 

leads to much more information being held at lower levels in the 

military. 

Second, it fundamentally has to do with the fact of the digital 

age that we are now in, as you said. That it is not only possible 

to transmit huge amounts of data, but it is also possible to store 

it in very simple and small devices. That is a fundamental problem. 

I don’t think I can give you a solution for how to deal with that. 

But I do support both factors which have caused this problem, 

both getting the information down to the people who can use it in 

the field and the greater use of the digital systems to handle and 

process data. That does make us highly vulnerable to these kinds 

of leaks. 

Mr. HADLEY. One of the problems is anonymity. I think many 

people believe that if something is anonymous, it makes it more reliable because people will then speak the truth if shielded from responsibility. I think just the opposite. Anonymity is a problem because it does not hold people responsible for the results of their actions, and we don’t have a good way when people leak to hold them 

to account. 

A lot of leaks occur. A lot of leaks get referred to the Justice Department. Very few leaks get prosecuted so that people are able to 

escape responsibility for the consequences of their actions, and that 

is a problem. 

16 

Dr. PERRY. I would say one other thing, Senator McCain. When 

I was the Secretary, we had an example of an egregious leak which 

I thought compromised the national security. We prosecuted a case 

and sent the leaker to prison. I think more examples of that would 

be useful in injecting better discipline in the system. 

Senator MCCAIN. I thank you both. 

The situation as it exists now, obviously, we want to preserve 

those aspects of technology that you point out, Dr. Perry, but at the 

same time, it seems to me that cybersecurity has been rocketed up 

to the top of our priority list here. We have had indications of a 

need for it in the past, entire computer systems being shut down, 

et cetera, et cetera. At least if there is anything good that comes 

out of this, it may put emphasis on the absolute requirement for 

us to address cybersecurity. 

Dr. Perry, in the 1990s, as part of your honorable service, you 

talked to the defense industries and told them that there would 

have to be consolidations, which I don’t disagree with that. But it 

seems to me, we have ended up, despite our efforts legislatively 

and other areas, in the worst of all worlds. We have a consolidated 

defense complex, industrial defense complex, and, at the same 

time, a lack of competition, but yet a lack of sufficient cost controls 

being in place. 

It seems to me that is the fundamental problem here with cost 

overruns. On the one hand, you can impose further government 

intervention and regulation, or you can encourage competition, 

which isn’t likely to happen. In fact, more and more major industries are getting out of the defense business. 

I would really like your thoughts on that because we all know 

that cost overruns not only are damaging to our ability to defend 

the Nation, but it is also greatly damaging to our credibility. 

Dr. PERRY. We were very conscious of that problem when we prepared this report. The primary recommendation we made on controlling costs had to do with strongly recommending that major 

programs be limited from the beginning to a 5- to 7-year period, 

from the time of the beginning of the program to the time of delivering the operational equipment. 

We know that can be done. It was done in the F–15. It was done 

in the F–16. It was done in the F–117, all of which programs came 

in on cost and on schedule. So I think a discipline on schedule is 

the first requirement. 

The competition we have had in major aerospace programs at the 

front end of the program has been, I think, sufficient. The issue is 

also whether you can continue that competition through the production of the equipment. In other words, can you have dual-source 

production? In our report, we recommended that whenever that 

truly leads to continuing competition that we should provide for 

dual source. 

Mr. HADLEY. If I could add a third consideration? Our panel’s 

conclusion is once the performance requirements for a system get 

set, they remain in stone. If the program gets in trouble, you either 

extend the time, and that usually means you increase the cost. Our 

recommendation is that performance should be in the trade space. 

With the advice of the combatant commanders, you should be willVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
17 

ing to trade away performance in order to maintain cost and schedule. 

We need to start using technology not just to drive up performance but, in some cases, to hold performance constant and use technology to drive down cost. That is the only way, in our view, we 

are going to have both an adequate force structure and a modernized force structure. 

Senator MCCAIN. Mr. Chairman, if you will indulge me one other 

question very quickly. It seems to me that your recommendations 

for increasing the size or capability of the Navy, especially in the 

Pacific region, is a recognition of the rise of China and the influence of China in the region. The latest dust-up about the South 

China Sea is an example. 

But yet there are allegations such as Secretary Gates said. It is 

a dire threat that by 2020 the United States will only have 20 

times more advanced stealth fighters than China. Secretary Gates 

says, ‘‘Does the number of warships we have and are building really put America at risk when the U.S. battle fleet is larger than the 

next 13 navies combined, 11 of which belong to allies and partners?’’ How do you respond to that? 

Dr. PERRY. Secretary Gates is operating within restrained budget. Our requirements, we were not restrained by budget. We were 

looking just at the requirements and the needs. We did observe 

that if our recommendations were actually acted upon, they would 

require an increase in the top line of the DOD budget. 

But I believe that there is a growing importance of the United 

States being able to maintain free transit in the Western Pacific, 

and there is a growing difficulty in being able to do that. The only 

way I can see of achieving that is by increasing the size and capability of the Navy. 

Senator MCCAIN. Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you, Senator McCain. 

Senator Lieberman. 

Senator LIEBERMAN. Thanks, Mr. Chairman. 

Secretary Perry, Mr. Hadley, thanks very much for really an extraordinary piece of work. It is a very important document, which 

shows a lot of thoughtfulness. All the more important, I think, because you have achieved your goal of having it be nonpartisan and 

because it is self-evident that you were not special pleading for any 

Service or industry or whatever. 

You start out very methodically with the four traditional security 

interests of the United States. You talk about global trends that 

represent the most significant threats to our security today. Then 

you provide answers to how we can best meet those. 

Along the lines of ‘‘no good deed should go unpunished,’’ I have 

a suggestion for you, which is this. We are heading into a time, 

self-evidently, of fiscal austerity. I fear that the defense budget will 

become a fashionable target for cuts, thereby creating some real 

peril for our country because my own personal belief is that security is the pre-condition to liberty and prosperity. So if we are not 

able to provide for the security of the American people, we are not 

going to be able to guarantee the great values of liberty and prosperity and the pursuit of happiness that our founding documents 

guarantee. 

18 

I want to cite for you the example of the 9/11 Commission, Governor Kean and Congressman Hamilton. After their official work 

was done, they somehow miraculously reconstituted themselves in 

the status of a nonprofit corporation. They continued to issue regular reports and entered the debate about our homeland security. 

I hope that the two of you and your commission members will 

consider doing that because I think we are going to come to some 

points in the not-so-distant future where we in Congress really will 

need an independent outside group to come in and say, ‘‘hey, what 

you are about to do here is not good for the national security of the 

American people or what you are about to do makes sense in a 

tight budget situation.’’ 

I don’t particularly invite a response. I fear that if I give you the 

opportunity, you might be negative. I want you to think about it. 

So I hope you will think about that. 

I note Colonel Nagl is here. He runs the Center for a New American Security. He has proven a remarkable ability to raise money. 

I don’t know how he does it. But I am sure it is all legal. But he 

might be one to assist in making this vision come true. 

I want to say that it was my honor during the 1990s to work 

with former—and it looks like maybe future—Senator Dan Coats 

on the legislation that actually created the responsibility and authority to do the QDR. In that regard, I want to say that I share 

your criticism of what has become of the QDR. 

A lot of the problems you cite, as you say, are understandable. 

It is much more focused on the current threats, the wars, and to 

some extent, unfortunately, on defense of current programs. What 

we had hoped this would be was, at a minimum, looking 4 years 

forward. Instead those other things, the defense of the programs, 

confronting the wars, is what we do, what DOD does in the annual 

budget submissions, what we do here. 

We were trying to get the process to rise above the immediate 

and look over the horizon. I think you have made a very good case 

that it is not doing that now. I think your idea of the independent 

panel is a good one. I would still not want to give up on something 

like the QDR because I think we ought to be trying to force people 

inside the building to look over the horizon, as well as convening 

an independent panel. 

I don’t know if you have a response to that. Is it possible to combine your suggestion for making statutory the independent review 

with some continuation and perhaps sharpening of a QDR? 

Dr. PERRY. I would not want to suggest that the recommendation 

we made is the only way of proceeding on this problem. 

Senator LIEBERMAN. Yes. 

Dr. PERRY. But if you are trying to keep the QDR and have it 

look at long-range planning as well as force, as well as the budgetary issue, it has to be later in the process because for the first 

6 months of a DOD QDR, the team is usually not fully together. 

Senator LIEBERMAN. That is right. 

Dr. PERRY. Therefore, you are asking the team to do something 

that they are not there to do. So it has to be either later in the 

process or, as we suggested, getting it started ahead of the game. 

Then there has to be an independent group outside of it. 

Senator LIEBERMAN. That is a good suggestion. 

19 

Mr. Hadley? 

Mr. HADLEY. I think the only way that would work is if you have 

a front end, as we propose with the independent panel on the national security strategic planning process, that will force and lay 

out a broader framework and then have that broader framework 

with a broader time horizon drive the individual planning processes within DOD. That is the model we propose. 

Whether you formally need a Quadrennial Diplomacy and Development Review or QDR at DOD or whether you can do that 

through the normal planning, programming, budgeting, and execution process, I leave to you. But I think you won’t get there without 

the broader front-end process that we recommend in our report. 

Senator LIEBERMAN. Okay. I would like to continue that conversation. I thank you. 

I think that perhaps the most important contribution of the 

panel will have been to highlight the need for continued, sustained, 

strong defense funding if we are to maintain the forces we need to 

protect our security. I was particularly struck by your recommendation about the Navy. 

We are now at about 285 vessels at sea. The goal for a long time 

has been a 313-ship fleet, which we are not reaching at all. You 

have recommended 346 ships. I wanted to ask you in this public 

session whether you would describe what capabilities you envision 

growing in this larger fleet and why. 

Dr. PERRY. Three points. First of all, more ships give you more 

presence, and presence itself is important. Second, improved antiship capabilities. Third, improved anti-submarine warfare capabilities. 

Senator LIEBERMAN. Mr. Hadley? 

Mr. HADLEY. The principal task is to maintain our ability to have 

access to international waters throughout the world. People have 

focused on China and the anti-access threat there. It is also in the 

Persian Gulf. There are a lot of places. 

That, I think, is the principal mission. You want a configuration 

of ships and operational concepts that vindicate that mission. That 

entails both, in our view, a larger Navy, but it also involves in 

some sense doing things differently and more creatively so we can 

achieve that objective with an operationally sound concept and as 

modest a cost as we can achieve. 

Senator LIEBERMAN. So is it fair to conclude from your recommendation that you would say that the 285-ship Navy that we 

have now or the 313-ship Navy that is our goal now is not adequate to give us the access we need around the world to protect our 

national security in the decades ahead? 

Mr. HADLEY. We think the challenge is going to get greater, and 

we don’t see how you can meet a greater challenge with a diminishing number of ships. Again, bottom-up review seemed a good 

place to start, and that is what that number is, a starting point, 

because it was at a time 17 years ago when we thought the world 

was going to be much more benign than it turned out to be. 

Senator LIEBERMAN. Right. 

Mr. HADLEY. We see challenges coming even greater in the future in this area, and that is why we think as a mark on the wall 

that 340 is probably the right number. 

20 

Senator LIEBERMAN. Thank you both. 

Thanks, Mr. Chairman. 

Chairman LEVIN. Thank you, Senator Lieberman. 

Senator Burr. 

Senator BURR. Thank you, Mr. Chairman. 

Dr. Perry, Mr. Hadley, welcome. 

To either one of you, the comprehensive approach also requires 

international security assistance and cooperation programs. As we 

have seen in Iraq and to a different degree in Afghanistan, our coalition and North Atlantic Treaty Organization (NATO) partners are 

often constrained in the near-term by public opinion and in the 

long-term by budgetary austerity measures that limit their ability 

to provide the proper mix and quantity of forces. 

With the latitude to participate without strict rules of engagement, it is likely that these nations will continue to spend far less 

than we do on national security. Given that reality, should we expect many of our NATO partners and allies will not be willing or 

able to support the types of operations that will be undertaken in 

the future and that that may be better suited for a more defined, 

nonkinetic role in support of future operations? 

Mr. HADLEY. Those are certainly constraints. I think the point 

the report tries to make is part of the constraints of building better 

partners are not just their reluctance or the constraints they are 

under, but constraints that we have imposed on ourselves. 

So we talk about in our security systems reforms, building systems in the United States that are able to be shared with allies in 

the get-go, so that we can have allies working with common systems with us. We talk about identifying communications and others’ equipment that can be shared among allies so that it enables 

them to partner with us in the most effective way. 

So the constraints you describe are real. But within those constraints, we have imposed some constraints on ourselves. The recommendations of the report are how to eliminate the constraints 

we have imposed on ourselves. 

Senator BURR. Great. Steve, if I could, one last question to you. 

Part of your review is to look at emerging threats, and this is not 

the first time you have had the responsibility to look at emerging 

threats. 

Do you see chemical and biological weapons as a real threat? Is 

our research and response in this country today sufficient for the 

threat that you perceive? 

Mr. HADLEY. No. There has been a lot recently about the need 

for greater preparedness, particularly on biological, which is a 

much more strategic threat than is chemical. I think the priorities 

are nuclear, biological, and chemical. I think the report says that 

there is more to be done on weapons of mass destruction, and the 

priority there, I think, is nuclear and then bio. More to do. 

Senator BURR. On many of those threats, there is a fine line between an agent that is a disease threat to us and an agent that 

is used for the purposes of terrorism. You were in the administration when we stood up biomedical advanced research and development authority at Health and Human Services, and we created the 

BioShield procurement fund. Those most recently have been under 

21 

attack to steal the money out of both. Do you see that as a threat 

to our country’s national security? 

Mr. HADLEY. It is a threat. It is also, as you point out, short-term 

thinking because the investments we make in defending against 

the biological weapon threat also help enable us to deal with disease threats. So it is a case where if we do it right—and there are 

members on this panel with more expertise than myself—it can be 

win-win both for defending the country and enabling us to better 

deal with pandemic and other threats. 

Senator BURR. Thank you for that. I thank both of you for the 

review. 

I thank the chairman. 

Chairman LEVIN. Thank you very much, Senator Burr. 

Senator Ben Nelson. 

Senator BEN NELSON. Thank you, Mr. Chairman. 

Thank you, gentlemen, for your service. 

In your report, you highlight the cooperation between the Air 

Force and Navy on the AirSea Battle concept as one of the best examples of Services developing I think what you called new conceptual approaches to deal with operational challenges we will face. 

I am glad you have drawn attention to an effort to break down 

the barriers, sometimes referred to as stovepipes, between the various branches so that they can use their collective and collaborative 

capabilities more efficiently. 

One of the things that has always been important is enhancing 

overall mission effectiveness, and the best use of available resources where the branches of Services come together. But one area 

where there just simply doesn’t seem to be that level of cooperation 

is each branch wants to develop its own fleet of unmanned aircraft. 

What can we do, in your opinion? How do you assess the ability 

to avoid duplication and unnecessary redundancy that very often 

develops from each wanting to develop its own? 

I am in favor of competition from time to time, but not necessarily in this area, where cooperation and collaboration would 

serve us a lot better. What are your thoughts about that? Dr. Perry 

first, and then Steve. 

Dr. PERRY. I can see the need for each of the Services for unmanned aircraft. Further, that each of the Services probably have 

needs for unique aircraft. 

In the case of the Army, it would be very short range, basically 

soldier-launched aircraft. In the Navy, it would be ship-launched 

aircraft, unmanned aircraft. 

But having said that, there is a very broad area of commonality 

here as well, and I would think it would be very appropriate to 

have a joint office for unmanned aircraft, which would deal with 

the requirements for all three Services and would strive to get 

standardization even among the different Services’ unmanned aircraft. I think nothing could be more important to our future than 

continuing to aggressively develop this capability, but I do very 

much take your point that there is a greater need for jointness in 

this field. 

Senator BEN NELSON. Steve? 

Mr. HADLEY. I agree with that. It needs to be done in a coordinated way with an eye on duplication that is unnecessary and emVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
22 

phasizing commonality wherever possible. I think it is important 

that this report not get characterized as the ‘‘we need more’’ report. 

The essence of this report is, in some cases, we need more, but that 

we need to do things in a better, in a smarter way, in a different 

way, a more effective way with an eye on cost. 

Having said all that, where quantity matters, we have tried to 

make that point as well. But I don’t want the rest of it to be lost. 

Senator BEN NELSON. Thank you. 

Regarding force structure, the report concludes, first and foremost, that it is important to rapidly modernize our force. You also 

recommend an alternative force structure, increasing the size of 

our existing force. 

We really would like to do everything that we could afford to do, 

but is it even likely that we might be able to afford an alternative 

force? 

Dr. PERRY. Briefly, my answer would be yes. There are many different ways of assessing affordability. One common way through 

the years has been as a percentage of the gross domestic product 

(GDP). As a percentage of GDP, our defense spending is not excessively high. By that criterion, I think the answer is, yes, we could 

afford more. 

Mr. HADLEY. The report applauds ongoing efforts to reduce costs, 

reduce duplication, acquisition reform, suggests additional ways 

and additional reforms, which we think will produce additional cost 

savings. We think we need to address the cost increase of the AllVolunteer Force. Our view is we need to do all of those things very 

vigorously and save as much money as we can. 

But what we thought we owed this committee was to say that 

if those savings do not produce enough savings in order for us to 

afford the force structure we need, a modernized force and the AllVolunteer Force, then the country has to be prepared to increase 

the top line. Our expectation is that there may need to be some increase in the top line. We thought we owed this committee that 

statement. 

Senator BEN NELSON. Thank you. 

Last week, Dr. Hadley, you told the HASC that your panel 

thinks we really need to rethink the relationship between the Active Force, the Guard, and the Reserve. Of course, you said the 

question is which role for the Guard and Reserve? How much of it 

is an operational reserve and how much of it is a strategic reserve? 

Just last Saturday, we sent an additional 300 Nebraskans to Afghanistan. The Guard and Reserve continue to contribute to the 

operational reserve. Can you speak to the significant factors you 

see affecting the balance between a strategic and an operational reserve force? What is your assessment of our current mix in that regard? 

Mr. HADLEY. Obviously, the Active Force is the most expensive 

way to deal with the mission. Where the Guard and Reserve can 

make a contribution, we think it is a smart way to go. 

The Guard and Reserve is very stretched, and it needs to be 

looked at. It is operational reserve, strategic reserve, and homeland 

mission. We talked, for example, that there needs to be perhaps 

greater priority for that in terms of the Guard and Reserve. We 

could not, within our own resources, make a specific recommendaVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
23 

tion on the right balance, which is why we thought it was important to have the national commission on military personnel take a 

thoughtful look at it. 

But we believe that we can and should have a better balance between Active, Guard, and Reserve and consider some kind of capacity to mobilize beyond the Guard and Reserve. We have talked on 

the civilian side of a civilian response corps—firefighters, policemen, and the like—that would be available potentially for missions 

overseas as required. That may be a concept that we can be using, 

for example, dealing with issues like cybersecurity and the like. 

So our only point here is we need some new thinking. We have 

given our own recommendations, the direction of change, and suggested that Congress and the White House establish this national 

commission to follow it up. 

Senator BEN NELSON. Part of the continuing obligation and requirements would be at the State level in the event of emergencies—nonmilitary emergencies, natural disasters, and the like. 

I would assume that would continue to be part of the ongoing role 

of the Guard in particular? 

Mr. HADLEY. Yes, sir. 

Dr. PERRY. Senator Nelson, I think that is a particularly important part of our recommendation, to focus some part of the National Guard on preparing for the homeland defense mission. They 

are uniquely able to do that, and some segment of the Guard ought 

to be focused on that particular mission. 

They train with the local police. They train with the State police. 

That makes them uniquely able to respond to emergencies. 

Senator BEN NELSON. Thank you. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you very much, Senator Nelson. 

Senator Chambliss. 

Senator CHAMBLISS. Thanks, Mr. Chairman. 

Gentlemen, good to see both of you again. Thanks for your continuing service to our country. 

The United States has been successful in maintaining air dominance, basically, since the Korean War. That has allowed us to provide ground support in every theater we have ever been in. Times 

have changed. Conditions on the ground have changed relative to 

the war on terrorism, but obviously, we don’t know where the next 

adversary is going to come from. 

Today, we know that both Russia and China are building airplanes that they have publicly said compete or, in their opinion, 

are superior to the F–22, which is designed to make sure that we 

maintain air dominance. The F–35 is a great airplane, but it is interesting to note that those countries don’t even mention the F–35 

in their public statements because its mission is primarily air-toground, and from an air dominance standpoint, the F–22 is our 

lone asset in the sky out there. 

Obviously, we have made a decision to discontinue production of 

that. We now will have somewhere between 120 and 140 F–22s at 

any one time available to maintain that air dominance in whatever 

region of the world the next adversary appears. 

24 

During the course of your review of the QDR, did your panel 

have any discussion about this issue? Assuming that you did, what 

kind of conclusions did you arrive at relative to air dominance? 

Mr. HADLEY. We thought that we need to look at the Air Force 

in terms of air superiority—we talked about the need for more 

long-range strike. There is, of course, also continuing need for a 

modernized force for lift. 

Our judgment was that we do need a fully modernized force and 

a fully capable force, but our judgment was that the requirements 

of the Air Force could be met within the current size of the force. 

The issue then becomes the right mix, ensuring a fully modernized 

force within that mix. That was the challenge, and the one thing 

we emphasized was that modernization be long-range strike. 

As a first approximation, that is how we looked at the Air Force, 

the emphasis on the air superiority mission, but believing that it 

could be accomplished adequately within the currently sized force. 

Senator CHAMBLISS. Okay. I think it is interesting that you did 

conclude that the top line needs to continue to rise. I know one of 

your panel members was Senator Jim Talent, and Jim and I have 

been long-time advocates. I am sure that he was very forceful in 

his comments and discussions with the panel about that. 

You found that the 2010 QDR lacked a clear force planning construct and that thus, by implication, DOD doesn’t really have one. 

In the absence of a clear force planning construct, how does DOD 

determine priorities, goals, and investment decisions across the department? 

Dr. PERRY. Our critique of the force planning structure was on 

the future, the 10- to 20-year planning period. We believe they certainly have a careful consideration on the way to structure the 

force for the present needs. So the critique was only directed to the 

20-year time planning period. That is where we felt that there was 

a missed opportunity. 

Senator CHAMBLISS. In your report, you talk about how the aging 

of the inventories and equipment used by the Services, the decline 

in the size of the Navy, and the escalating personnel entitlements 

is going to lead to a train wreck in the areas of personnel acquisition and force structure. In your view, which of these issues is most 

pressing, and what are the potential consequences of not addressing these issues and those priorities? 

Dr. PERRY. Certainly, number one on my list was the fact that 

we are simply wearing out or destroying our equipment in the ongoing wars in Iraq and Afghanistan. The need for recapitalization, 

at a minimum, is going to be very extensive and very expensive. 

Mr. HADLEY. I don’t think that we have the luxury, really, of 

picking among the three. We thought all three were a top priority, 

that we had to save the All-Volunteer Force, have adequate structure, and do the modernization. That really was behind the recommendation. 

Senator CHAMBLISS. Lastly, I want to veer off-course for just a 

minute and take advantage of both of your being here to ask you 

a question about an issue that is very much front and center with 

this committee right now, as well as with the Senate Foreign Relations Committee. That is the issue of the Strategic Arms Reduction 

25 

Treaty (START). I know both of you have made public comments 

about that. 

I know both of you have come out in support of the treaty, but 

what concerns do you both have about the treaty? What would be 

the implication for the United States if we fail to ratify this treaty 

in the Senate? 

Dr. Perry? 

Dr. PERRY. I believe if the United States failed to ratify this treaty, our country would essentially lose any ability for international 

leadership in this field and international influence in the field. I 

think this would be a very unhappy consequence. 

Senator CHAMBLISS. Do you have any concerns about provisions 

in the treaty? 

Dr. PERRY. I do not. I have studied the treaty rather carefully, 

and it is my own judgment that it provides adequately for the national security interests of the United States. 

Senator CHAMBLISS. Steve? 

Mr. HADLEY. I think there are concerns about some ambiguities 

on some of the coverage issues, the concerns about whether it indirectly would put some limitations on missile defense or conventional strike. I think there are concerns that we have, the kind of 

modernization of our nuclear infrastructure, our weapons, and our 

delivery systems to maintain a credible strategic force going forward. 

The good news is, in the appearance I had on this, Republicans 

and Democrats seem to share these concerns and believe they need 

to be addressed. So my view is, with that bipartisan consensus, let 

us address these problems in the ratification process. Then we can, 

on a bipartisan basis, ratify the New START treaty because the 

problem has been fixed. 

I have not seen much disagreement about the commitment to a 

modernized force, to not have defenses constrained, and, obviously, 

to sort out any ambiguity. So I think there is a terrific opportunity 

in the Senate in the ratification process to address these bipartisan 

concerns. Then, having addressed them, I think people can feel 

very comfortable about ratifying this agreement. 

Senator CHAMBLISS. Your thoughts about not ratifying it, the implications of that? 

Mr. HADLEY. I don’t get there because I think the problems that 

people have identified need to be fixed in their own right. Once 

they are fixed, then the issue of ratification becomes easy. 

So I think they should be fixed, and then the treaty should be 

ratified. It makes a modest, but useful contribution to the process 

of dealing with these strategic weapons. 

Senator CHAMBLISS. Okay. Thank you very much. 

Thanks, Mr. Chairman. 

Chairman LEVIN. Thank you very much, Senator Chambliss. 

Senator Udall. 

Senator UDALL. Thank you, Mr. Chairman. 

Good morning, gentlemen. 

I want to thank Senator Chambliss for his important questions 

about the START. I think it is a fact that, right now, we have no 

treaty in place. Is that correct, gentlemen? 

Dr. PERRY. That is correct. 

26 

Senator UDALL. I think that is an important reason to move forward. I appreciate, Mr. Hadley, what you said about building on 

what START II would provide us. There are some significant questions that need to be answered. But I, too, hope the Senate will 

move quickly to ratify the treaty by the end of the year. 

Let me turn to the QDR itself. There was some attention paid 

in the QDR to energy security and the effects of climate change on 

the DOD. The QDR made it clear that these were concerns that the 

DOD leadership thought were real and needed to be addressed. 

Did you, in your efforts, look at energy security and climate? Did 

you draw any conclusions about whether the Pentagon has enough 

resources to respond? 

Mr. HADLEY. We addressed it in a couple of different ways. First 

of all, one of the emerging problems we feel is increased competition for resources and as countries try to get energy security. 

Second, our report noted that energy issues and climate change 

are liable to exacerbate some of the problems we are going to face 

over the next 20 years. 

Third, we talked about the need to take into account cost of energy, both in fueling platforms, but in terms of also getting energy—gas, oil, and the like—into combat theaters. We thought that 

that should be a consideration in the acquisition process—energy 

efficiency. But we could not come up with a specific recommendation as to how to take that into account in the acquisition process. 

So I think our judgment was that it is a priority. DOD needs to 

address it. We did not have any specific recommendations to offer 

on it at this time. 

Dr. PERRY. Senator Udall, I would just offer one additional comment by way of example. We complain about the high cost of gasoline at the pump of $3 or $4 a gallon, depending on where you live in this country. But 

the cost of gasoline delivered to a forward operating base can be 

$50 or $500 or $1,000, not counting the lives that are put at stake 

by getting the gasoline there. The importance of energy considerations in our national security is very clear, I think. 

Senator UDALL. Thank you, Dr. Perry. 

I am convinced DOD will lead us toward more energy security 

and new technologies, if we provide them with the support and the 

interest. Thank you for taking time in your commission’s efforts to 

consider that important area. 

Senator Chambliss and others, including yourself, have talked 

about the rising costs associated with doing right by our men and 

women in uniform. I think you proposed a commission, a national 

commission on military personnel, of the quality and stature I 

think of the Gates Commission back in the 1970s. 

Could you talk just a little bit more about the mandate that you 

propose and the challenges it would address? How do you think the 

service chiefs would react to such a commission? 

Dr. PERRY. The Gates Commission was originally established because they considered the problems were so fundamental, they 

should not be left to each military department considering what to 

do about them. They made a sweeping recommendation, which led 

to the All-Volunteer Force, which has been a very important benefit. 

27 

Such a commission, if it were established, should consider very 

basic issues—for example, the longstanding up-and-out practice of 

the military. With the trend of rising longevity, and with the importance of technical aspects in the military today, it is very clear 

that we need people who have benefited from the training, who 

have the technical background, to stay in the Service longer than 

they are now staying. 

That is going to take making a fairly fundamental change to the 

way our personnel systems are run today. 

A related issue is, of course, the rising costs of healthcare, the 

TRICARE costs. That has to be reconsidered from first principles 

as well, exceedingly important to the military to have some sort of 

a benefit. But the benefits, as they are now established, will simply 

be unaffordable to go on into the future. 

So those are the kinds of issues that need to be considered. They 

are very difficult, and they are very politically sensitive issues. 

Therefore, it is going to take something of the nature of the Gates 

Commission to make those changes. 

Senator UDALL. Would you recommend that the Simpson-Bowles 

Commission, which is undertaking an important study right now— 

it will hopefully be followed by recommendations on how we drive 

down our deficits—that they give the chiefs a chance to testify 

along with Secretary Gates? 

Mr. HADLEY. I think that would be useful. But I think our judgment was these issues are so technical, and you want to reform the 

All-Volunteer Force and the career patterns without breaking 

them, and reform them—we are in the middle of fighting a war. 

This is a delicate business. That is why we thought you really 

needed a commission of distinguished people supported by the right 

expertise that would really focus exclusively on this problem. 

Our sense in the witnesses we heard from is that the Military 

Services would see this needs to be done, see the train wreck government coming, and would generally welcome this recommendation. That is our belief. 

Senator UDALL. That is a very powerful image, by the way, a 

train wreck. 

Let me talk on the macrocosmic level. I think it is probably my 

last question. I think the chairman alluded to this and asked some 

specific questions as well. 

But you actually, as I understand it, recommend that we set 

aside the QDR process and craft a new way forward. An independent strategic review panel, I think, is the way in which you 

characterized it. Would you comment, both of you, about your 

thinking in that regard and how we would put such a new approach in place? 

Dr. PERRY. First of all, the timing of the QDR is wrong in terms 

of the capability of a newly established DOD. Second, the focus on 

strategic issues instead of budgetary and program issues is needed. 

Given both of those factors, we felt that it was important to get 

this process started earlier, and that almost by definition has to be 

an independent panel outside of DOD. 

So the key to our recommendation there was the establishment 

of this independent strategic review panel, and we felt that it 

would be best established before the new administration came in 

28 

place. So Congress and the executive branch, about the time of the 

presidential elections, would appoint the panel, and they would be 

ready to start then in January of the year and have the report 

ready 6 months later. That would get the timing in sync with the 

objectives that we called for. 

Mr. HADLEY. That report then would be taken by this national 

security strategic planning process to give a government-wide look 

to set some priorities, and with that guidance, then you could go 

into the departmental planning processes. 

Our judgment was that what this committee was seeking out of 

the QDR process was right, but a DOD-only process was not going 

to get you there. So, what we tried to design was a process that 

would get you what you were looking for in a way that would actually perform, and that is what we hope we have done. 

Senator UDALL. Thank you, gentlemen. 

It is uplifting to see the two of you sitting there together, working together. So thank you for being here today, and thanks for 

your good work. 

Chairman LEVIN. Thank you, Senator Udall. 

Senator Collins. 

Senator COLLINS. Thank you, Mr. Chairman. 

Let me echo the comments of Senator Udall that it is wonderful 

that you have come together to produce such an excellent report. 

I thank you for that public service, as well as both of you for your 

previous public service. 

Your report very clearly states that to project power and ensure 

access, we need a larger Navy. Mr. Hadley, you said it very well 

this morning. You said greater challenges require more ships. That 

raises the question of why didn’t the QDR reach that conclusion, 

which you document carefully in your report. 

The law requires that the QDR directly state the recommendations in a way that are not limited by the President’s budget request. Do you believe that DOD in the QDR proposed a smaller 

force structure than your panel proposed for the Navy because 

DOD was, in effect, considering budget requirements, even though 

the law very clearly states that that is not supposed to be a consideration? 

Mr. Hadley? 

Mr. HADLEY. I think they tried to walk a line between budget 

constrained and budget unconstrained. I think our best judgment 

was that the QDR was informed by the budget, that in some sense 

they were developing their budget proposals in parallel with the 

QDR. 

It is laudable in one sense because they did not want to make 

policy or force structure recommendations that they could not afford, and you can understand why they would do that. But the effect of it was, I think, that it was not an unconstrained look. 

Our judgment is that it is almost inevitable, if you give this to 

DOD, that that is probably the best you are going to get. Therefore, 

if you really want an unconstrained look, you need a different kind 

of process, which is what led us to the recommendations that are 

contained in our report. 

Senator COLLINS. The problem is that the law is pretty clear that 

it is supposed to be unconstrained by budget considerations. I think 

29 

you are right that the practical reality is that it is not going to be, 

given that the same people who are involved in the budget analysis 

and the budget request are also performing the QDR. 

But what we really need is an assessment that is unconstrained 

by the budget requests. That is what you have given us. It is significant that in the case of the Navy, your recommendation—looking at the threats, looking at the need to project power and ensure 

access—is a Navy that would be sized at 346 ships. That is considerably above the current level of 282 and higher than the goals set 

out by the Navy on shipbuilding plans, which I believe is 313. 

We do need that kind of analysis. We need to know what we really should be providing in a world that is free from budget constraints. Now, we are not going to be able to ever have that kind 

of a situation. But if we are going to set priorities and make the 

best judgments, we do need that analysis. 

I want to turn to a second issue. Due to the wars in Iraq and 

Afghanistan, our focus in recent years has been on determining the 

appropriate end strength for the Army and the Marine Corps. We 

have seen our troops under tremendous pressure because of repeated deployments. We have seen the National Guard and the Reserves called up repeatedly as well. 

I was interested in your conclusion that the Army and the Marine Corps are sized about right, in your judgment, while the Navy 

and the Air Force are a bit too small and do need to be increased. 

Did you reach that conclusion because you are looking at the drawdown of troops in Iraq? Or did that reflect the recent increases that 

we have authorized in the end strength of the Army and the Marine Corps? What is behind that analysis, which surprised some of 

us? 

Mr. HADLEY. We think this issue has been worked pretty hard 

by DOD and Congress in the context of meeting the needs of these 

conflicts. While we think there will be continuing requirements, we 

don’t see an increasing requirement. 

So we thought the level was probably about right, and the recommendation we had is that it be sustained for the next 3 or 4 

years because the Army and the Marine Corps do have a plan to 

get dwell times and the like on a more sustainable basis. So what 

we thought was needed for Army and Marine Corps end strength 

was stability over the years so that it can then be built into the 

rotation and return times and all the rest. That was our judgment. 

Dr. PERRY. It does reflect, though, the recent increase very much. 

Senator COLLINS. Thank you. Thank you both. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you, Senator Collins. 

Senator Hagan. 

Senator HAGAN. Thank you, Mr. Chairman. 

I want to thank both of the gentlemen here for your excellent 

work and your testimony today. 

In your opening comments, you recommended that DOD return 

to a strategy requiring dual-source competition for the production 

programs in circumstances where we will have real competition. In 

most situations, competition works better than sole-source contracting. That was an underlying reason last year, under Senator 

Levin’s and Senator McCain’s leadership, the Senate passed 

30 

WSARA. Hopefully, competition does drive down costs, enhances 

performance, and yields savings ultimately to the taxpayer. 

Currently, the Secretary of Defense continues to recommend solesourcing one Joint Strike Fighter (JSF) into the F–135. Terminating the F–136 JSF alternate engine will leave only one U.S. 

company to produce high-performance military engines for this 

platform. It is expected to be the largest engine procurement in the 

history of DOD. 

The development of the F–136 engine is 75 percent complete. I 

understand that DOD has experienced 50 percent cost overruns beyond the original estimates in the JSF F–135 engine. 

Can you describe your views on the JSF alternate engine and 

whether DOD should have dual competition in this sector? If not, 

could you please describe your rationale consistent with the panel’s 

overall recommendation on ensuring dual competition? 

Dr. PERRY. Senator Hagan, when I was the Secretary and earlier, 

when I was the Under Secretary for Acquisition, I was confronted 

with these kinds of decisions frequently. I found in each case that 

each case was a special case, and I had to dig very deeply into it 

before I came to a judgment. 

I have not studied this problem enough to make an informed 

judgment. While we support dual sources whenever it leads to appropriate competition, I cannot give you a personal judgment on 

whether that applies to this case. 

So, therefore, I am really obliged to defer to the judgment made 

by the people in DOD who have studied it carefully and trust that 

they have made the right decision. But I would not presume to 

offer an independent judgment on that, not having studied it carefully and deeply. 

Senator HAGAN. Mr. Hadley? 

Mr. HADLEY. I think what our panel could do was establish a set 

of general principles, which is what we did. But we didn’t really 

have the time and resources to take the two or three leading cases 

and look at them and to be able to come with a specific judgment 

or recommendation. 

So we did what we could do, which was to establish principle, 

dual sourcing when it results in real competition. Then this committee, DOD is going to have to take those principles, if you agree 

with them, and apply them case-by-case. 

Senator HAGAN. Thank you. 

I also appreciate your comments on reducing the number of years 

in the contract situation. 

Let me ask a question on personnel. All of the Services are concerned with driving down the cost of manning the All-Volunteer 

Force. Your panel indicated that the growth in the costs of the AllVolunteer Force cannot be sustained for the long-term. The panel 

further indicated that a failure to address the increasing costs of 

the All-Volunteer Force may result in a reduction in force structure, a reduction in benefits, or a compromised All-Volunteer Force. 

You made several recommendations aimed at modernizing the 

military personnel system, including compensation reform; adjusting military career progression to allow for the longer and more 

flexible military careers; rebalance the missions of Active, Guard, 

and Reserve and mobilization forces; reduce overhead and staff duVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
31 

plication; and reform Active, Reserve, and retired military 

healthcare and retirement benefits to put their financing on a more 

stabilized basis. 

Our military personnel, we know, are highly specialized with 

specific skill sets that are needed in this persistent, irregular warfare environment. We obviously cannot compromise the QDR’s goal 

of preserving and enhancing the All-Volunteer Force and to develop 

our future military leaders. 

Would you please elaborate how the All-Volunteer Force may be 

compromised if we fail to address the increasing personnel costs? 

Will we see a sharp decrease in retaining personnel that have 

served in overseas contingency operations and what long-term impact this might have to our military? 

Mr. HADLEY. Even in times of relative prosperity, it has been 

costly to make sure that the incentive system was enough to get 

the people we need to have a fully fleshed-out All-Volunteer Force 

that meets our standards. Our concern is that as we return to more 

prosperous times, the cost of retaining the structure to fill out the 

All-Volunteer Force will just continue to increase. At some point 

the money won’t be there, either for the All-Volunteer Force or for 

adequate force structure for modernization, and that is the train 

wreck we talk about. 

So our judgment is we need to take a smarter approach, maybe 

not so much a one-size-fits-all approach, tailoring the military personnel system and the compensation to the different groups of people available who have different objectives in serving. That is the 

door we tried to open and suggest that this military personnel commission needs to explore. 

So the main concerns are we are okay now. But as you look at 

the projections of the costs, we may not be in the future. Let us 

address the problem now. That was our recommendation. 

Senator HAGAN. How do you weigh that with the increased number of contractors? 

Mr. HADLEY. One of the things we recommend is that there be 

a good look at the contracting issue and that there be an Assistant 

Secretary-level person appointed to look hard at the whole contracting issue. But there are reasons why we have contractors. 

For example, the fact that our civilian departments and agencies 

have difficulty deploying promptly overseas has resulted in a reliance on contractors, for example, to do functions that couldn’t be 

done in a different way. So one of the things I think we need to 

do is to ask the question why is it that we are relying on contractors? Where does it make sense? Is it because of something else 

that we should address and maybe solve a problem in a different 

way without using contractors? We have suggested in our recommendations that there needs to be more focus on that issue. 

Senator HAGAN. Dr. Perry? 

Dr. PERRY. I just wanted to make a really, I think, basic point 

on this issue, which is that we have, without doubt, the best military in the world, maybe the best the world has ever seen. I think 

a primary reason for that is because of the superb training and 

professional military education we have. Those are very expensive, 

but they are worth it. 

32 

The second factor, though, is when you invest all of this in training, to get the benefit of that, you need retention. I have two comments regarding retention. The first is that retention does depend 

on our benefits because the reenlistment decision is made as much 

by families as it is by the military personnel themselves. So that 

is a very important issue. 

We are not getting enough benefit from that when we have people leave the military at 20, 25—when we force people to leave the 

military at 20 or 25 years. We need to revise our procedures on 

how people leave the benefit. In particular, we need to fundamentally review the up-and-out system. 

Senator HAGAN. Thank you. 

Chairman LEVIN. Thank you, Senator Hagan. 

Senator LeMieux. 

Senator LEMIEUX. Thank you, Mr. Chairman. 

Dr. Perry, Mr. Hadley, thank you for being here today. Thank 

you for this very thoughtful report. I enjoyed reading it. 

I want to talk to you about these emerging first powers—Brazil, 

Russia, India, and China—the so-called BRIC countries and what 

their role will be, as you see it, going forward. It seems that these 

nations want to have all the benefits of first-tier powers but don’t 

necessarily want to shoulder the responsibilities. 

We don’t see Brazil taking a strong role in dealing with Venezuela, for example. We don’t see China taking a strong role in 

dealing with North Korea. It falls upon the United States to shoulder the burden in issues such as terrorism and dealing with rogue 

countries. 

How do you think that relationship can change? What can we do 

so that we are not the only nation in the world that is responsible 

for fighting terrorism around the world, for shouldering this immense burden that we shoulder now? How can we get those countries more engaged? 

Mr. HADLEY. I think the four countries you mentioned are very 

different. BRIC are all different cases. But I think particularly with 

respect to China and India, we have to recognize that China is 

going through a period of enormously rapid change. Their government is, I think, struggling to deal with probably the fastest rate 

of change in the world’s most populous country, fastest rate of 

change we have ever seen. 

So the role that China is playing and being asked to play is new. 

I think it is, in some sense, true for India. India has broken out 

from being a regional country to be a global country, and it is going 

to take them time to adjust to that new role. 

So it is both a challenge and an opportunity. I think that some 

of the language in our report makes that point. We need to be both 

engaging them, trying to work with them to understand their responsibilities and them working with us to solve global problems. 

At the same time, we make it clear that there are a set of international rules and that all countries, including India and China, 

would be better if they played within those rules. We have to have 

the capabilities to enforce those rules, if necessary. 

So it is not all black or white. It is a challenge and an opportunity, but we need to be engaging those two countries, and we 

33 

need to be present and active in Asia not just in terms of militarily, 

but economically, in terms of business, in terms of diplomacy. 

There are free trade agreements being signed all the time in 

Asia, and we are on the sidelines. I think the number-one point we 

would make is Asia is where the action is going forward, and we 

need to be a player, not on the sidelines. 

Senator LEMIEUX. Dr. Perry? 

Dr. PERRY. The last administration called on China to be a responsible stakeholder. I think that is a pretty good term. I think 

pushing that concept, not only with China, but with the other three 

countries, is a very good idea. 

I think the point you raise is a very important one. The best approach I can describe to dealing with that is to continue to call 

these countries to be responsible stakeholders. We need their assistance in dealing with global problems. 

Senator LEMIEUX. I want to focus, if I can, specifically, as part 

of that larger subject, on Latin America. Not a lot of attention in 

your report to it, but some. There was one line I liked in your report where you said America has too often been chasing the future 

rather than working to shape it. I have that concern about Latin 

America. I think that we have taken our eye off the ball because 

of all of the other things we have had to work on around the world. 

The hemisphere is obviously very important to us from a trade 

perspective, but it is also important to us from an emerging democracy perspective, as well as the challenges to democracy that folks 

like Chavez and Morales and others pose in the region. 

Where do you see our relationship with Latin America in the 

next 10 to 20 years? Do you have concerns about Venezuela and 

threats that they may pose? I see the growing connections between 

Caracas and Tehran. The presence of Hezbollah and Hamas in 

Latin America gives me a lot of cause for concern. 

Mr. HADLEY. To be honest, I think with all the things going on, 

it is a struggle for any administration to pay as much attention to 

Latin America as we should, particularly with Mexico, which is in 

a life-and-death struggle with narcotraffickers, which are really 

posing a threat to the future of the Mexican democracy. 

The prior administration made some initiatives to try to be a 

partner to Mexico. The current administration has continued those. 

Second, we need to be working with Brazil, Chile, Colombia, 

Peru—those countries that have not chosen the Chavez way, but 

are really trying to proceed and develop their countries on the basis 

of free-market and democratic principles. Those are our natural allies in the hemisphere. We need to be partnering closely with them. 

I would like to think that Chavez has peaked, in some sense, in 

terms of his appeal. Certainly what is happening within Venezuela 

is an enormous tragedy. It is destroying that country—not only its 

politics, but also its economy—and that is an example for all to see. 

But it is a struggle in Latin America. 

I think, as I say, it is a challenge for every administration to pay 

as much attention as they should and to be standing with those 

countries that are trying to make the right decisions based on right 

principles. 

Dr. PERRY. I would like to comment on how strongly I agree with 

your comments on Latin America. Indeed, when I was the SecVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
34 

retary, I visited Mexico, Brazil, Argentina, Chile, and Venezuela. I 

was amazed to learn that I was the first Secretary of Defense to 

visit Mexico. 

I established a meeting of all the defense ministers in the hemisphere—biannual meetings which still continue to this day, and we 

created the Center for Hemispheric Defense Studies. 

In spite of that, I think that there has been a slacking off of interest in that in recent years, and I would very much urge that we 

return to that interest and strengthen those. We have substantial 

security interests in Latin America. 

Senator LEMIEUX. Thank you both. 

My time is up, but a follow-on comment to what both of you said, 

Mr. Hadley, what you commented about Mexico. It occurs to me 

that Mexico is in the situation Colombia was in 10 years ago when 

they are fighting for their very life. 

We need to have not just diplomatic help for Mexico, but we need 

to have, like we did with Colombia, a military-to-military strong relationship now so that they can fight back what has really become 

an existential threat to that government. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you. 

Dr. PERRY. I couldn’t agree more, by the way, with you on that 

last point, the importance of working with Mexico, specifically in 

helping them deal with their problem and using Colombia as an example of what can and should be done. 

Chairman LEVIN. Thank you, Senator LeMieux. 

Senator Reed. 

Senator REED. Thank you very much, Mr. Chairman. 

Thank you, gentlemen, and your colleagues for your important 

contribution. 

Secretary Perry, can you help us think through this tradeoff between quantity and quality, which is going to be one of the issues 

we will have to address? I think it is identified in the report between the number of platforms versus the high-tech platforms? 

Dr. PERRY. We have a unique advantage in the United States in 

the way we can apply technology to our weapons systems. This has 

given us a strong, competitive, unfair advantage over any other 

military. It is manifested in the way we have used stealth in our 

systems. It is manifested in the way we use smart intelligence and 

smart weapons. That is a huge advantage, and we should sustain 

that advantage. 

There are some areas, though, where quantity is necessary, 

whatever the quality of your systems. You have to have presence, 

for example, in the Western Pacific, and that takes a number of 

ships. That was one of the factors driving our recommendation for 

increasing the size of the Navy. 

But there is no doubt, particularly in the case of air platforms, 

that quality gives us a huge advantage and allows us to reduce the 

numbers of our air platforms. 

Senator REED. But in practice, it seems, over the last several 

years at least, that the quality issue wins out. Look at the initial 

plans for procurement of F–22, hundreds and hundreds of fighter 

planes which have shrunk dramatically as the price has gone up 

35 

and, arguably, hopefully, the quality has also been maintained or 

enhanced. 

As we go forward, I think we are going to be in that similar dilemma, where you want to have a lot of platforms, but after DOD 

gets through with the design, it is pretty expensive, and it gets 

more expensive in the contracting phase. 

Dr. Perry or Mr. Hadley, any sort of sense of how we break 

through that? 

Dr. PERRY. Specifically in the case of air platforms, if you look, 

for example, at the bombing mission, the fact that our bombs are 

precision bombs now and fall directly on the target means it takes 

a small fraction of the total number of bombs and, therefore, fewer 

bombers. That is one very obvious example. 

The fact that our airplanes have stealth and can resist air defense systems means we have less attrition that way. So, in that 

area, I think it has allowed for a substantial decrease in quantity. 

There are other areas that are like where we need boots-on-theground, where we need the presence of naval ships, where we need 

quantity as well. 

Senator REED. Thank you. 

Mr. Hadley, your comments? 

Mr. HADLEY. We seem to have an iron law of increasing performance, and you wonder whether it is driven by need or just by inertia. One of the things we say in this report is technology is a tool. 

We have been using it to drive performance. We need to use technology to reduce costs that would allow us to increase quantity. 

So I read Bob Gates’ comments not about quantity, but quality. 

If there are places where the quality of our forces far exceed what 

our adversaries have, then that is an opportunity to use technology 

to bring down the cost of fielding systems in adequate numbers to 

affect those things that haven’t changed, which is the size of the 

globe and, for example, the proportion of it covered by water. 

That is what we need to be thinking about, to put capability and 

performance into the trade space and be willing smartly to trade 

it against cost and schedule and quantity. 

Senator REED. Going forward, it seems that we have seen a shift 

from the Cold War, where there was a competition between two superpowers based upon these issues we have talked about—technology, quantity, innovation, in terms of more and more sophisticated weapons and systems. 

But over the last several years, we have seen asymmetric warfare become the predominant. One of the great and even cruel ironies is that we have produced very sophisticated equipment, which 

is being defeated and our troops being killed by plastic containers 

of fertilizer and detonation. 

The irony here as we go forward is as we build these new systems, build these new platforms, build all these things, we ironically might become more susceptible to asymmetric attacks. How 

do you propose that we think about these things? This is a large 

question, but it might be an important one. 

Dr. Perry? 

Dr. PERRY. In the specific example of the use of improvised explosive devices, for example, using insurgent forces to attack our conVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
36 

voys, we need two things. First of all, we need boots-on-the-ground. 

We do need quantity to deal with that. 

But additionally, technology can be directed to dealing with those 

problems. We have unmanned aircraft, for example. Our drones 

can be used to provide protective cover over our convoys and is 

being used for that today I think quite effectively. We also have devices which can detect the presence of buried explosive devices by 

sophisticated infrared detection means. So the technology and quality does have a role in that. 

But fundamentally, in the battle going on and the insurgency 

battles going on today, we cannot get around the fact that a quantity of troops, indeed boots-on-the-ground, are important. 

Senator REED. Mr. Hadley, your comments? 

Mr. HADLEY. Senator, part of it is just asking the question you 

asked. It is interesting, in our deliberations, we met with a QDR 

task force that was dealing with the asymmetric threats. We asked 

them, ‘‘Is the acquisition system giving you what you need?’’ The 

answer was ‘‘no.’’ 

Then we met with the panel that was dealing with the high-end 

anti-access threats, and we said, ‘‘Is the acquisition system giving 

you what you need?’’ The answer was ‘‘no.’’ 

It made us ask the question, ‘‘Well, who is the acquisition service 

system serving?’’ I think it tends to serve that kind of traditional 

set of requirements for conventional forces that we have looked at 

and that has driven the situation for the last 20, 30 years. 

The question is whether that is the right allocation of effort. I 

think you are right to ask that question, and we somehow have to 

drive that into the planning process within DOD. 

Senator REED. Gentlemen, again, I not only thank you for this 

report, but for your service to the Nation. Thank you very much. 

Chairman LEVIN. Thank you, Senator Reed. 

Senator McCaskill. 

Senator MCCASKILL. Thank you, Mr. Chairman. 

Thank you, gentlemen, and the rest of the panel, for your service. 

I know that my colleague from North Carolina touched on contracting, but I would like to go a little further as it relates to contracting. I was very disappointed at the QDR and how it handled 

contracting, almost as if this was an acquisitions personnel matter 

as opposed to the dominant role that contracting has taken in our 

contingency operations in both Iraq and Afghanistan. We are north of $750 billion worth of contracting in these two 

contingency operations, and I don’t think there has been a time for 

a long time that we have had more active military on the ground 

and engaged in the contingency operations than we had contractors. Contractors have been more in volume, and contractors have 

been a huge, huge cost driver of these contingency operations. 

I appreciate the fact that the panel at least did more than the 

QDR did as it related to contracting. I think that that is helpful. 

But I want to try to visit with you about this because I worry that 

it has not really penetrated yet that we will never again have a 

contingency operation where our military is really executing logistics support. 

It is questionable whether or not we will ever again have a military that is executing some of the important missions that must be 

37 

undertaken in a conflict like Afghanistan. Best example I can give 

you is police training, where, clearly, training the army and police 

is one of the primary missions we have in this contingency operation. But yet I can give you example after example—I could take 

all my time citing something far beyond anecdotal examples of failure of contracting in this regard. 

So I would like you to take another round at what we can do specifically that will begin to bring some accountability. My favorite 

story to tell, when I went over on contracting oversight in Iraq and 

realized that that Logistics Civil Augmentation Program 

(LOGCAP) was so out of control that when I asked someone in the 

room, the civilian personnel that was briefing with the ubiquitous 

powerpoint, how they could explain that it went from—I think the 

figure went from the first year of $20 billion on a contract, by the 

way, that was estimated to be $700 million when it was entered 

into. It went from an estimate of $700 million to a cost of $20 billion in its first year, and it went down to $17 billion in the second 

year. 

I thought this poor woman who had been asked to do the presentation, the civilian employee over there, I said to her—well, she 

clearly forgot what measures they took to get it down from $20 billion to $17 billion. You know the answer she gave me in that briefing in Baghdad? It was a fluke. 

So here you are recommending that we spend more and more and more, and we reduced a contract by $3 billion in 1 year, and 

nobody even knew how we did it. That is one example of many, 

many I can give you because I have focused on this in my time in 

the Senate. That is why I put in the NDAA this year that the QDR 

will be required to address contracting in a more in-depth manner 

when we go around for this again in 2013. 

But I would like both of you to take a moment and talk about 

this in terms of ways that we can get some urgency within DOD 

that this is no longer an afterthought. This is a core competency 

that, frankly, we are just now beginning to get our arms around. 

Mr. HADLEY. You are right. I think the thing that is easy to get 

lost is that there is a role for contractors, an appropriate role when 

it makes sense for contractors to do things it doesn’t make sense 

for Active-Duty Forces to be doing. 

But it is clear that the use of contractors grew like Topsy without 

adequate oversight. We have really tried to address that problem. 

I know it is going to sound very bureaucratic, but we couldn’t 

find any other way to do it other than to say DOD needs to have 

an Assistant Secretary-level person who is responsible for contracting and can look at the whole way we manage them, the way 

we train them. How do we hold them to account? How do we make 

sure they are accountable, for example, when they are involved in 

the security side, to the consequences of their actions the way our 

military is? 

The whole area needs to be re-thought and managed. It is, in our 

view, not being managed now. So our solution was you put somebody in charge and say, ‘‘Your job is to try to manage this problem.’’ 

But second, we also recognize that, appropriately used, contractors can play an important role in the battlefield. The question is 

38 

to get it down to that appropriate role and then integrate them into 

our planning and training so that they are actually doing effectively the role we have asked them to do, not just treat them off 

to the side. 

So that was the philosophy, if you will, of the report. A lot more, 

obviously, to be done. One of the questions will be whether this national commission, for example, on military personnel or the national commission on building the civil force for the future ought 

to have as part of their responsibilities looking at this contractor 

question as well. 

Dr. PERRY. This is a very important issue. The QDR, in my judgment, did not adequately address it. Our panel looked at the issue, 

saw the problem, but I must say we did not have the resources to 

do a detailed examination or recommend solutions. 

I think the first step in trying to get a handle on this would be 

what the military calls an after action report on Iraq. We are far 

enough along in Iraq now that I think a look back at what has happened there in this field in the last number of years could be very 

useful in identifying the issues and problems and recommending 

solutions. 

It could be done by one of these two commissions, as Steve Hadley has said. But it ought to be an explicit charge to that commission to do this. It is very important. 

Senator MCCASKILL. I know my time is up, and I appreciate that 

you all recognize the importance of this. I urge both of you, because 

you have a sphere of influence and connections, this is something 

that is going to have to be inserted in the culture because it is not 

there now. 

It is not something that commanders really feel like they have 

true accountability for. It is like who is the low man on the totem 

pole? We hand the Contracting Officer Representative a clipboard. 

Typically, this was somebody who wasn’t trained or experienced. 

They are doing slightly better in Afghanistan. I have to give 

credit where credit is due. But I also think it is important that we 

take a look at what, if any, impact earmarking has on overall cost 

drivers. There are a lot of good ideas that Senators have about 

what should be earmarked to either a company in their State or 

a university in their State, research that must be done on this 

armor or on this technology, and that this all is about the future 

and our technological capabilities. 

But I am not sure that there has ever been an analysis as to how 

much of that money that has been spent actually produced something the military wanted or needed. We are past the point we can 

afford that anymore. 

So I certainly would urge you all, as you finished your work, as 

we look at the next QDR, and then we look at these other commissions that are coming, I think it is time we take a look at whether 

or not what one Senator thinks is a good idea is something that 

we can afford in light of the overall stresses—and we all know that 

our deficit is a national security threat. That stress is something 

that I think that needs to be brought to bear. 

So, thank you both, and thank you, Mr. Chairman. 

Chairman LEVIN. Thank you, Senator McCaskill. 

Senator Thune. 

39 

Senator THUNE. Thank you, Mr. Chairman. 

Dr. Perry and Mr. Hadley, thank you very much for your good 

work. 

Please convey to the other members of your panel our appreciation for all that they and you put into this. This is an important 

review, something that I had advocated in the defense authorization bill. I think it has borne out that it was something that needed 

to be done. 

I think your assessment and recommendations are very useful as 

we try and do everything we can to make sure that America stays 

strong not only for the near term and the challenges we face today, 

but also those that we are going to face in the future. 

Your report states on page 58 that the Air Force’s need for an 

increased deep strike capability is a priority matter. On page 60, 

the report goes on to say, ‘‘The panel supports an increased investment in long-range strike systems and their associated sensors.’’ 

As part of your recommendation to increase investment in longrange strike systems, do you believe that the Air Force should be 

modernizing its aging bomber fleet by developing a next-generation 

bomber? 

Dr. PERRY. My answer to that is a short one, which is: yes. 

Senator THUNE. What do you think about the prospect of Services retiring weapon systems before a replacement weapon system 

is built and made operational? 

In other words, before the replacement for, say, the next-generation bomber, the follow-on bomber is operational, some of the existing fleet being taken out of service? Your view on that, the Services 

retiring weapon systems. 

Dr. PERRY. Particularly, are you thinking of the B–52s? 

Senator THUNE. B–52s, right. B–1s. 

Dr. PERRY. I would be reluctant to retire the B–52s until the new 

bomber force has been established. 

Senator THUNE. Any comment on that, Mr. Hadley? 

Mr. HADLEY. There are obviously cost pressures. But I think the 

obvious question you have to ask is, if a Service is willing to retire 

something before the next generation comes in, how important is 

the requirement if they are willing to accept a gap? It raises questions about the seriousness of the requirement. 

Senator THUNE. For the Air Force, the QDR provides for a bomber force structure from 2011 to 2015 to be up to 96 in primary mission bombers, implying that the number could be less than 96. 

Your report suggests that the alternative force structure that you 

recommend was 180 bombers. 

I guess my question is what assumptions led you to recommend 

a number of bombers that is well above what the QDR recommends? When do you believe the Air Force will need those 180 

bombers? 

Mr. HADLEY. It was part of our recommendation to enhance longrange strike. We explicitly have in the report a list of systems we 

thought that were required. A new bomber was part of them. So 

it is part of our notion that we need to be able to have long-range 

strike capability to deal with emerging anti-access threats, which 

we think will get worse over the next 20 years. 

40 

So, as to when, I think our reaction is it takes a long time to get 

these systems fielded. It is time to get on with these necessary 

modernizations. 

Dr. PERRY. To that I would add that our emphasis on long-range 

strike, among other things, included our concern that we would not 

have continuing access to forward bases that we now have. That 

was the reason for the emphasis on the long-range aspect of strike. 

Senator THUNE. Why do you think that the QDR recommends 

the lower number compared to what is recommended in your report? That is probably not a fair question. 

Dr. PERRY. ‘‘I don’t know,’’ is the short answer. 

Senator THUNE. Okay. Let me just put it this way. The 2006 

QDR directed that a next-generation bomber be built by the year 

2018. The 2010 QDR states that long-range strike capabilities must 

be expanded, but only directed that a study be conducted to determine what combination of joint persistent surveillance, electronic 

warfare, and precision attack capabilities, including both penetrating platforms and stand-off weapons, will best support U.S. 

power projection operations over the next 2 to 3 decades. 

In fact, Secretary Gates stated in a hearing earlier this year that 

a new bomber would not be developed until the mid to late 2020s. 

So let me put the question this way, in the 2006 QDR, they said 

we need to have a bomber fielded, operational by 2018. Now it has 

been pushed back to the 2020s. Do you believe that the need for 

the new bomber became less urgent over that 4-year span from the 

2006 QDR to the 2010 QDR? 

Dr. PERRY. No. 

Senator THUNE. I like the way you answer questions. 

Let me shift over for one other observation here and a question 

dealing with UAVs. You write in your report on page 58 that the 

Air Force end strength may require only a modest increase in order 

to meet the requirements of the increased use of UAVs. 

What do you estimate that modest increase in Air Force end 

strength should be to accommodate the increased use of UAVs? Do 

you believe that UAVs are going to become more and more prominent in terms of our force structure in future years? 

Dr. PERRY. I definitely believe there will be increased prominence 

of the UAVs for the indefinite future. I think they continually demonstrate their increased effectiveness and their increased ability to 

use our limited manpower very effectively. 

Mr. HADLEY. We could not put a number on that. It is not just 

Air Force personnel, but there are additional intelligence requirements generated to process the information that you get from the 

UAVs. So it is a terrific tool. There is a big footprint associated 

with it. It is much more than the Air Force. 

We were not in a position to put numbers on it. So what we 

thought we needed to do was just to flag that as a consideration 

as you look forward in terms of planning. 

Dr. PERRY. One other comment about the UAVs in terms of their 

effective use of manpower. Of course, even though they are unmanned, they do require personnel on the ground to operate and 

maintain. 

So they are not—in the use of the UAVs in Afghanistan, for example, a substantial percentage of the personnel are actually based 

41 

in the United States instead of overseas. So not only the fact that 

they use less manpower, but the fact that some of the manpower 

can be based out of theater, which is a great advantage. 

Senator THUNE. Mr. Chairman, my time is up. I thank you all 

again. Thank you very much for your very complete body of work 

and for the great assistance that it provides us in looking into 

these important issues. Thank you. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you, Senator Thune. 

Senator Webb. 

Senator WEBB. Thank you, Mr. Chairman. 

Gentlemen, I would like to say first that I have been here 

through most of the hearing today, and I appreciate your frankness. Also, it has been a long, long morning for you. I know it is 

getting on 21⁄2 hours here. So I appreciate very much your patience 

in getting through our litany of questions. 

I had to leave briefly to meet with the Commandant of the Marine Corps. But I wanted to come back and make this point because 

I think it is so vital in terms of the findings that you have brought 

forth. That is really a valuable service to have had the input of the 

people on your commission providing us a continuity here of defense experience as we try to project into the future as opposed to, 

as has been hinted a few times, the more immediate budgetary nature of the QDR itself. 

But I would support the idea of having a continuing independent 

strategic review panel. I think that would be very valuable to how 

these issues are analyzed up here. We get caught up so much in 

reacting to events that we need something like that. 

I have spent many years trying to address the issues of the Navy 

force structure and how vital it is in terms of our national strategy. 

We tend, when we get in these long-term ground engagements, to 

eat the gingerbread house a little bit. We have to pay for what is 

in front of us. 

But there is going to come a time at some point where the 

ground commitments in Iraq and Afghanistan are going to end, I 

hope, and we may be looking at rebalancing the ground forces. 

Then we are going to turn around, and without the right sort of 

planning and projection, we may be in a very vulnerable place in 

terms of our sea power presence around the world. 

I have heard a few questions here today, a few comments about 

the size of other navies in the world and why should our Navy be 

a much larger size. As both of you well know, in the articulation 

of national strategy, the issue for us is how we communicate our 

national interests to the rest of the world, not how a navy can fight 

a navy. It is how a nation can have credibility and link up with 

its allies. 

So that particular question is basically irrelevant of a size of a 

navy versus a size of a navy. It is how we are going—particularly 

in Asia and the Pacific—to help maintain stability in that region. 

I have spent a good bit of time there. I have spent a good bit of 

time there this year, in the last 12 months. 

When we look at the increased size and the sophistication of the 

Chinese navy and the buildup in places like Hainan Island and its 

increased activity throughout that region and the sovereignty 

42 

claims in the South China Sea that have gone beyond anything 

that we have seen in our collective lifetimes, I think, with China 

stating that the South China Sea areas in terms of sovereignty are 

a core interest and putting it on the same level as Taiwan has always been, and the reality that only the United States can ensure 

the right sort of stability in the face of this kind of growth. 

We see a lot of nervousness in the region, as I am sure you know. 

Vietnam has just ordered six submarines from Russia. There is a 

great deal of concern as to whether we are going to stay and a realization that bilateral arrangements don’t work with China when 

these countries are so much smaller. 

So I was very gratified to see the report and with the collective 

experience of the people on your panel saying we need to grow the 

size of the Navy. The big question—and, Dr. Perry, I would really 

like to get your advice on this—is how to get there, how to get 

there when we want to grow the Navy back up. 

When I was commissioned in 1968, we had 930 ships in the 

United States Navy. They were different types of ships. That is not 

an apples-to-apples comparison. We went down to 479 by 1979. We 

got up to 568 when I was Secretary of the Navy. I have heard several different numbers here, but we are somewhere just north of 

280 today. 

The goal stated by the Navy is 313. I think you were talking 346. 

But the key question that I have been struggling with up here is 

that there is a very unusual economic model when we talk about 

shipbuilding. It is not normal competitive process because of the sophistication and our very low profit margin, quite frankly, for the 

industry. 

So, if you were Secretary of Defense today, how would you be 

going about this so that we could—and with all the other pressures 

that we have—increase the force structure? 

Dr. PERRY. A couple comments, Senator Webb. First of all, I don’t 

see the relevance in comparing with the size of other navies. The 

United States has global interests, and those global interests require presence around the world, around the globe. 

In particular, we have increasingly important economic interests 

and security interests in the Western Pacific. That requires not 

only a presence in the Western Pacific, but an ability to confidently 

assure transit there and a competence that our allies can have confidence in. So I do want to underscore the importance of that recommendation. It does require presence, and it requires a larger 

fleet than we now have to do that with confidence. 

It takes a long time to build a ship, from the time you conceive 

it to the time you actually have it operational. So it is important 

to get started. I don’t think that the Secretary of Defense can make 

the tradeoffs with this present budget to do this. That is why we 

say there has to be a way of decreasing other costs. Even if you 

are successful in that, there will have to be a larger top line at 

DOD than we now have. 

So this is something that the Secretary of Defense cannot do by 

himself. The Secretary of Defense, although he advocates a defense 

budget, is not the one that finally determines the size of the budget. So it will take a greater top line to do that. It needs to get started, I think, because it is going to take a while to build it up. But 

43 

the presence—there is no substitute, in my judgment, to maintaining our security in the Western Pacific, in particular, than having 

a strong and able maritime presence there. 

Senator WEBB. Thank you very much. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you, Senator Webb. 

Senator Nelson. 

Senator BILL NELSON. Thank you, Mr. Chairman. 

In your report, you discussed the concept called comprehensive 

approach. It goes beyond the concept of the whole-of-government 

concept that was emphasized in the QDR. So can you explain the 

comprehensive approach and why you think the whole-of-government concept falls short of addressing the national security requirement? 

Mr. HADLEY. Yes, sir. We have learned in Iraq and Afghanistan 

that in those kinds of missions, it is not just the U.S. Government. 

Yes, you want all elements of national power or all agencies, departments working together in an organized way. But there are 

other players. 

There are other allies that are with us on the ground, both militarily and in terms of civilians. There are in Afghanistan, for example, and in Iraq international organizations that are present. There 

are nongovernmental organizations, private voluntary organizations that are players. 

It was an effort to say that in those efforts there are players beyond the U.S. Government, and there needs to be a coordinated activity with a common set of objectives, working together as much 

as possible in an organized way to achieve those objectives. We 

thought the best way of showcasing that requirement was whole of 

government and then, beyond it, comprehensive approach. 

Senator BILL NELSON. Thank you. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you. 

Senator BILL NELSON. Thank you, gentlemen. Thank you for 

your continuing service to our country. 

Chairman LEVIN. Thank you very much, Senator Nelson. 

I just had one additional question of you, Secretary Perry. The 

issue of the START has come up here this morning, and I want to 

just ask you a question about the fact that tactical nuclear weapons 

are not included in the START. That has been raised by some as 

a problem. 

Now, as I understand it, this issue is a topic which the Strategic 

Posture Commission, which you chaired, discussed and concluded 

that the first treaty should focus on strategic offensive nuclear 

arms, and then, hopefully, there would be a subsequent treaty addressing the tactical nuclear weapons issue. 

Can you give us your thinking as to the argument that there is 

a flaw in START because it does not include tactical nuclear weapons—if that is a reason for opposing the START? 

Dr. PERRY. The START did not do everything we want to see 

done in the field of nuclear weapons, but it is a very important first 

step. But it is only a first step, and we need to be looking beyond 

that to follow-on treaties, which would deal, among other things, 

with tactical nuclear weapons. 

44 

So I don’t think the fact that it does not do everything we want 

in the field means that it is not a very useful and important treaty. 

I strongly support the START the way it is now negotiated, but I 

do look forward to follow-on treaties which deal with these other 

issues. 

Chairman LEVIN. Mr. Hadley, does the fact that the START does 

not include tactical nuclear weapons, is that a reason not to ratify 

it? 

Mr. HADLEY. No. 

Chairman LEVIN. Okay. Looks like Senator Nelson and I are the 

last ones here. So if you are all set, Bill, we will adjourn, with our 

thanks again to you and your panelists. 

I hope that you could pass that along when you see them, that 

we are greatly indebted to them. 

Mr. HADLEY. Thank you. We will do that, Mr. Chairman. 

Chairman LEVIN. We are adjourned. 

[Questions for the record with answers supplied follow:] 

QUESTIONS SUBMITTED BY SENATOR DANIEL K. AKAKA

UNIFIED MEDICAL COMMAND

1. Senator AKAKA. Dr. Perry and Mr. Hadley, the Quadrennial Defense Review 

(QDR) Independent Panel report notes that the rising cost of medical care is taking 

an ever increasing portion of the Department of Defense (DOD) budget. Between the 

years 2000 and 2015, the Department’s health care budget will increase by 179 percent ($48.5 billion), with cost inflation amounting to 37 percent of that total increase 

and medical care to retirees amounting to 31 percent. These total costs, projected 

to exceed $65 billion in 2015, show retirees as the fastest growing portion of the 

military medical budget since 2001, when the TRICARE for Life program began. 

Some have proposed a Unified Medical Command (MEDCOM) as a way to help 

DOD realize health care cost savings. Did your panel look at the Unified MEDCOM 

as a method to help DOD realize cost savings? 

Dr. PERRY and Mr. HADLEY. The QDR Independent Panel shares your concern 

about the rapidly rising costs of military health care, which are unsustainable over 

the long-term. While the panel did not specifically examine a reorganization of service medical activities into a centralized Joint/Unified MEDCOM, a 2001 RAND Corporation report on reorganizing the military health system discovered at least 13 

previous studies examining military health care organization since the 1940s. All 

but three had either favored a unified system or recommended a stronger central 

authority to improve coordination among the Services. 

A Unified MEDCOM would have value, if the Military Services would endorse and 

commit to the concept of a single organizational structure to deliver health care. 

Currently, TRICARE is being implemented as a separate program that comes on top 

of the three independent medical structures for each of the Military Services. 

As part of the panel’s work to ‘‘stress test’’ the All-Volunteer Force, we came to 

the conclusion that military personnel management policies and benefits must be 

reexamined by a national commission to fully examine and consider these complex 

issues in depth, particularly health care. As part of the review, we recommend the 

commission consider updating the military health care system to allow a shift to a 

defined-contribution plan allowing all employers to contribute to health care for 

serving and retired members of the Armed Forces. A helpful precursor to this reform could be the establishment of a Unified MEDCOM. The standing up of this 

command would also align with the Secretary of Defense’s latest efforts to find efficiencies within the Department and to streamline operations and consolidate redundant bureaucracies and thereby generate cost savings that may be applied to modernization. 

While the potential savings would be helpful, this command would not address 

the cost explosion connected to TRICARE. The Defense Health Program base budget—including retiree health care costs—has grown 151 percent in the past decade 

in constant dollars. Meanwhile, private sector benefits have decreased, leading 

many military retirees who are working to abandon their civilian health care program in favor of TRICARE. One challenge will be the long-term solvency of the retiree medical benefit, which is extremely important to the men and women who 

45 

have served in the Armed Forces and earned this benefit. To guarantee retiree 

health care for the long term, bold options need to be considered. 

2. Senator AKAKA. Dr. Perry and Mr. Hadley, what is your opinion of a Unified 

MEDCOM as a way to address increasing healthcare costs in DOD? 

Dr. PERRY and Mr. HADLEY. A Unified MEDCOM has been studied by various organizations and has the endorsement of the Defense Business Board. The Center 

for Naval Analyses estimates annual savings of roughly $300 to $500 million depending on the organization’s structure and mandate. The Government Accountability Office (GAO) determined that DOD must overcome both a cultural resistance 

to change and the inertia of various subordinate organizations, policies, and practices, including longstanding organizational and budgetary problems, to update the 

military health system structure. 

Given that the challenges and solutions go beyond organizational restructuring, 

however, we also urge Congress to consider the establishment of a national commission, perhaps as part of a mandate for the panel-proposed National Commission on 

Military Personnel, to further study these recommendations and to offer additional 

bold solutions to keep the All-Volunteer Force healthy and the defense health program viable. A Unified MEDCOM would have value, if the Military Services would 

endorse and commit to the concept of a single organizational structure to deliver 

health care. Currently, TRICARE is being implemented as a separate program that 

comes on top of the three independent medical structures for each of the Military 

Services. Careful attention would have to be paid to ensure the unique needs of each 

Service are met under a Unified MEDCOM. To reap the level of savings required 

to make military health care more affordable, however, the creation of this command would need to be synchronized and integrated with larger changes in the 

health care system, particularly for retirees. 

FOREIGN LANGUAGE PROFICIENCY

3. Senator AKAKA. Dr. Perry and Mr. Hadley, foreign language proficiency and 

cultural understanding are essential to protecting our national security. Threats to 

our national security are becoming more complex, interconnected, and unconventional. These evolving threats have increased the Federal Government’s needs for 

employees proficient in foreign languages. In June 2009, the GAO found that DOD 

had made progress on increasing its language capabilities, but lacked a comprehensive strategic plan and standardized methodology to identify language requirements, 

which made it difficult for DOD to assess the risk to its ability to conduct operations. I noticed that the QDR Independent Panel report recommends that foreign 

language proficiency should be a requirement for those receiving a military commission from the Reserve Officer Training Corps (ROTC) and the Service academies. 

What do you recommend that DOD do to increase currently serving servicemembers’ 

foreign language proficiency? 

Dr. PERRY and Mr. HADLEY. We would support DOD’s continuation of its efforts 

in this direction and reinforce the need for Active and Reserve Forces and DOD civilians to be prepared for the complexities of the operational environment in foreign 

countries. First, if officers begin their time of service with foreign language proficiency, that skill will likely be renewed in a master’s degree program, given that 

many encourage or require proficiency in one foreign language. Second, in pursuing 

programs and policies to promote foreign language proficiency, DOD should develop 

more training opportunities. These may include online distributed learning, resident, and/or localized instruction for visiting units preparing for deployment to provide some basic instruction for all personnel in the language(s) used while on deployment. Successful company grade or junior field grade officers should be offered 

fully-funded civilian graduate degrees to study in residence military affairs and foreign cultures and languages, without specific connection to a follow-on assignment. 

Additionally, personnel already serving should be identified for language schooling 

prior to deployment, especially in the Army and Marine Corps due to their interaction with local people as part of combat operations. Finally, while the 2009 GAO 

report notes DOD’s deficiencies in fulfilling its plans, we are encouraged by the June 

2010 updated report that is similar but notes progress in solidifying those plans. 

46 

QUESTIONS SUBMITTED BY SENATOR MARK UDALL

CLIMATE CHANGE AND ENERGY

4. Senator UDALL. Dr. Perry and Mr. Hadley, I would like to ask some questions 

related to climate change and energy in both a domestic and international context, 

and the role of DOD in these areas. In the domestic context, the QDR noted that 

both energy security and the impacts of climate change are major concerns of DOD, 

and referred specifically to the roles of the Services and especially of the Strategic 

Environmental Research and Development Program (SERDP) and the Environmental Security and Technology Certification Program (ESTCP) in assessing and responding to the impacts of climate change on DOD within the United States and 

of developing and serving as a test bed for emerging energy technologies to increase 

both domestic energy security and reduce the energy-related logistical burden on deployed U.S. forces. 

Did your panel consider that aspect of the QDR report, and, if so, did you reach 

any conclusions about the current DOD activities in this regard, and especially 

whether the SERDP/ESTCP program as currently constituted and resourced is sufficiently robust to effectively perform the roles described in the QDR report? 

Dr. PERRY and Mr. HADLEY. The DOD’s SERDP and its companion demonstration/ 

validation program, the ESTCP, are essential to DOD’s ability to address climate 

and energy security concerns. Since the early 1990s these two technology development programs enabled DOD to address critical energy and environmental challenges confronting our Armed Forces. Given the significant energy and climate security challenges DOD faces, including that it consumes approximately 1 percent of 

total U.S. energy and that DOD’s energy needs present continuing operational challenges and logistical burdens to our deployed forces, investments in ESTCP and 

SERDP should enable DOD to improve delivery of energy to our forces, reduce overall energy demand, and reduce climate risks. With greater investment in ESTCP, 

DOD installations could serve as testbeds for improved energy technologies that reduce the fuel burden on our troops. Additionally, DOD installations will face future 

risks from natural disasters and other environmental changes. These programs constitute an important set of capabilities needed by DOD to provide the information 

and resiliency necessary to make appropriate decisions to protect its assets in the 

face of these risks. 

5. Senator UDALL. Dr. Perry and Mr. Hadley, in the international context, the 

QDR report concluded—and the Independent Panel concurred—that climate change 

and energy are two key factors that will play a significant role in shaping the future 

security environment and that climate change may act as an accelerant of instability or conflict. More broadly, your report identified as one of the five key global 

trends an accelerating global competition for resources. Your report also indicates, 

and as I understand it, many in the Intelligence Community (IC) and many other 

international security experts agree, that increasing global water scarcity as a result 

of climate change and other factors may both raise the potential for and perhaps 

the scope of instability and conflict. 

The QDR report indicated merely that, ‘‘Working closely with relevant U.S. departments and agencies, DOD has undertaken environmental security cooperative 

initiatives with foreign militaries that represent a nonthreatening way of building 

trust, sharing best practices on installations management and operations, and developing response capacity’’ and further, that ‘‘Abroad, the Department will increase 

its investment in the Defense Environmental International Cooperation Program 

(DEIC) not only to promote cooperation on environmental security issues, but also 

to augment international adaptation efforts.’’ Unstated in the QDR is the fact that 

these efforts are minimally funded (the global budget for the DEIC is currently 

around $5 million per year) and that the environmental security cooperative initiatives are largely low-budget initiatives included as minor aspects of the Theater Security Cooperation plans of the combatant commanders and that these efforts are 

divorced from the broader Security Assistance and Foreign Military Sales (FMS) 

programs. 

Your report calls for significant restructuring of the Security Assistance and FMS 

programs as part of the overall effort to achieve a true whole-of-government approach to the new security challenges facing us. Both the QDR and your review concluded that those challenges include climate change and energy and more broadly 

competition for resources, including energy but perhaps especially water resources. 

Given the major impacts that the international aspects of climate change, energy 

resources, development and fielding of new energy technologies, and water management will have on our national security, should the reform of the Security AssistVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6621 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
47 

ance and FMS programs also include support aimed at conflict prevention by addressing climate change, energy, and water management to allow DOD to play a 

more effective supporting role to U.S. civilian agencies within a whole-of-government approach to these security challenges? 

Dr. PERRY and Mr. HADLEY. The QDR Independent Panel noted that the roles and 

responsibilities of DOD have grown across many nontraditional military missions. 

The militarization of these roles outside traditional defense, deterrence, security, 

and disaster assistance missions has a direct impact on the ability of DOD to accomplish its traditional missions. This growth also imparts a military persona to traditional civil roles and issues with all the attendant foreign perception issues a military presence creates. A whole-of-government approach does not mean that the 

whole-of-government must be used on all issues, but instead means that the wholeof-government must be reviewed for the appropriate pieces and resources to solve 

the issue. It is our opinion that the role of prevention, vice deterrence, is best performed by the civil departments and agencies, with DOD assisting in its traditional 

roles as needed, filling in near-term capability gaps, and with technology as appropriate. 

The scope of the panel did not include reviewing the roles and capabilities of U.S. 

civilian agencies. We cannot directly opine on what level of assistance may be needed by them in this matter, and by extension whether DOD would, or could have the 

right capabilities to meet any shortfalls. It was to this type of question that the 

panel recognized and recommended that the United States needs a truly comprehensive National Security Planning Process to address the roles, responsibilities, and 

balance between executive departments and agencies so that resource decisions such 

as the above may be cogently answered. This question also goes to the panel’s recommendation on reconvening the Joint Committee on the Organization of Congress 

to review national security authorities, appropriations, and oversight to establish a 

single national security appropriations subcommittee for Defense, State, State/AID, 

and the IC so that Congress may also address such issues from a holistic viewpoint. 

6. Senator UDALL. Dr. Perry and Mr. Hadley, do you see a potential for a technology transfer program where the results of both the DOD energy and the DOD 

climate change assessments and adaptation programs in a U.S. domestic and operational context could be, perhaps in a Security Assistance/FMS context, transferred 

to foreign militaries to assist those militaries in addressing similar challenges within their own countries? Could that be extended, under the leadership of U.S. civilian 

agencies, to transfers beyond the militaries as such, much as the advances in energy 

technologies developed by DOD in the United States are transferred to and benefit 

energy production and use in the civil sector in the United States? 

Dr. PERRY and Mr. HADLEY. The potential for a technology transfer program has 

merit. Any ability to provide peaceful, preventive measures to reduce the risk of crisis and military intervention in areas vital to U.S. national security is worth investigating. Broadening the range of ways in which the Security Assistance and FMS 

programs can help foreign militaries train and equip their forces to address emerging threats to security and stability would enable DOD to play a more effective supporting role to the U.S. civilian agencies, such as the State, State/AID, and Energy 

departments. This would enhance the U.S. comprehensive approach to address the 

complex and interrelated security challenges we will face in coming years. 

In many nations, the military is the only institution with the capacity to rapidly 

respond to widespread humanitarian crises that may be caused by climate change 

or water management failures. Certain organizations within DOD, such as the National Guard Bureau and the Army Corps of Engineer, possess significant technical 

expertise that could support the State Department, State/AID, and Energy in their 

efforts to build capabilities in partner nations and international institutions to respond more effectively to climate change, energy, and water management challenges. Such capabilities would likely enhance regional and State-specific stability. 

Additionally, new technology developed to address operational energy and water 

management challenges may be appropriate for consideration under FMS programs. 

Certainly, including the leadership of all relevant U.S. civilian agencies in such decisions is consistent with the panel’s recommendation to establish a National Commission on Building the Civil Force of the Future. 

Projects designed to support partner nations by building such capabilities should 

be allowed to compete for funding under Section 1206 of the 2006 National Defense 

Authorization Act along with more traditional proposals for improving capabilities 

to conduct counterterrorism or stability operations. The U.S. Government should 

consider issuing revised guidance to ensure the review process considers the security threats posed by climate change and natural resource competition as it seeks 

48 

to prioritize proposals and to select projects aligned with regional security cooperation and foreign policy goals. 

Linking energy, climate, and water challenges to the broader context of Security 

Assistance and FMS programs will help enhance awareness and understanding of 

the interrelated nature of security challenges the United States will face in the coming years and promote an integrated approach to preventing crises. As in all FMS 

and technology transfer programs, any technology transfer should be reviewed for 

the balance between the value to the United States, resources available, and the potential threat of the transfer before approving any individual transfer within such 

a program. 

RECOMMENDATIONS

7. Senator UDALL. Dr. Perry and Mr. Hadley, your panel recommends that Congress consider structural reforms to improve whole-of-government planning and 

budgeting. With regard to cybersecurity, you specifically recommend the establishment of a special committee with members drawn from Armed Services, Intelligence, Judiciary, and Homeland Security because cybersecurity cuts across all of 

the departments and agencies overseen by these committees. My question is why 

stop there? There are numerous, important national security challenges that cut 

across multiple Federal departments and committee jurisdictions—terrorism, proliferation of weapons of mass destruction, narcotics and organized crime, capacity 

building and stability operations, and so forth. Why single out cybersecurity for a 

joint committee approach? 

Dr. PERRY and Mr. HADLEY. Though the panel was focused on areas specifically 

addressed by the QDR, the panel agrees that there are other areas of concern for 

national security that could be well served by developing a variety of mechanisms 

to enable all U.S. Government stakeholders to work together on coordinated solutions, including, but not limited to, a joint committee approach. The panel views the 

present organization of Congress as being inefficient because its organization precludes the ability of Congress to harmonize its decisions relative to a host of national security challenges. The recommendation to establish a joint committee on 

cybersecurity would improve the ability of Congress to address the multi-faceted nature of the cyber threat, not just to DOD, but to the entire nation. 

INTERAGENCY TEAMS

8. Senator UDALL. Dr. Perry and Mr. Hadley, the government has faced the problem of ineffective interagency integration and coordination for decades, and frequently has turned to the creation of so-called czars with questionable results. You 

recommend that the President try naming lead departments and establishing interagency teams. But naming lead agencies is nothing new, and the interagency process already is replete with interagency policy teams and processes. The executive 

branch is managed by powerful cabinet secretaries who answer to no one other than 

the President and defend their departments’ interests in the interagency. Thus, 

short of the President presiding over everything, progress depends largely upon consensus—in other words, often the lowest common denominator of agreement among 

the departments and agencies. 

The President’s executive authority by law can be exercised only by presidentiallyappointed and Senate-confirmed officials. There is no ‘‘joint’’ or interagency space 

where the President’s authority can be delegated. Is that needed to balance the 

power of cabinet secretaries and their subordinates? 

Dr. PERRY and Mr. HADLEY. We believe our panel’s recommendations for revamping the national security strategic planning process provides the necessary space 

within which the President can exercise his constitutional authorities to provide for 

the defense of the Nation. The recommendations identify the need to a develop a 

national security strategy based on input developed by a proposed Independent 

Strategic Review Panel and timed to ensure a top-down driven development process. 

Our recommendations also provide for a whole-of-government approach to ensure an 

efficient and effective strategy emerges from the process. 

QUESTIONS SUBMITTED BY SENATOR MARK BEGICH

MISSILE DEFENSE

9. Senator BEGICH. Dr. Perry, in the findings and recommendations, the panel 

identifies the five key global trends that the Nation faces as it seeks to sustain its 

49 

role as the leader of international system that protects our enduring security interest. The QDR discusses how we will seek out opportunities to work with Moscow 

on emerging issues, such as the future of the arctic and the need for effective missile 

defense architectures designed to protect the region from external threats. Can you 

further elaborate on the arctic being critical to our national security and the need 

to cooperate in missile defense? 

Dr. PERRY. The arctic is a region that affects many nations, both because of its 

natural resources, as well as the fact that it may, in the future, serve as an important maritime trade route. Because of that, we believe that the arctic represents a 

promising region for international cooperation. Moscow has in recent years attempted to stake out its sovereignty over the arctic. We believe it would be undesirable for any state to dominate the region, and as a result would support efforts to 

cooperate with the international community to keep the arctic free and open to all. 

As to missile defense, U.S. presidential administrations since that of Ronald 

Reagan have sought to cooperate with Russia on missile defense. Both the Bush and 

Obama administrations have demonstrated at length to the Russian leadership that 

American missile defense deployments are not aimed at Russia. We face common 

threats such long-range ballistic missiles in the hands of a nuclear North Korea and 

(prospectively) a nuclear Iran. Cooperation is in both nations’ interest. 

THE LAW OF THE SEA TREATY

10. Senator BEGICH. Dr. Perry, keeping with the importance of the arctic and the 

opportunity for further international cooperation, the QDR, DOD supports the 

United Nation’s Convention on the Law of Sea (UNCLOS) Treaty and says it is necessary for cooperative engagement in the arctic. Do you agree with this statement? 

Dr. PERRY. Yes, absolutely. The UNLOS is a comprehensive, multi-lateral regime 

that provides the structure and general international rules for maritime navigation 

(the principle of freedom of navigation is central), coastal states rights versus those 

of maritime users in the high seas as well as provisions dealing with protection of 

the marine environment in ice-covered areas and maritime boundary delimitation. 

Because of the inherent difficulties in operating in harsh arctic waters, rules and 

procedures will need to be evolved to deal with oil and gas exploration, transarctic 

shipping, and search and rescue responsibilities. It will be more difficult for the 

United States to be a powerful broker of those policies in organizations like the 

International Maritime Organization, the Arctic Council, and other UNCLOS fora 

if the United States remains a nonparty to the UNCLOS. Also, as a nonparty the 

United States lacks the ability to legally register its claims to the arctic extended 

continental shelf areas north of Alaska and to have its own experts on the Continental Shelf Commission to pass on the legality of the claims of other arctic claimants. Such registration is the only way for U.S. claims to gain the international recognition that is necessary to minimize conflicts and incent investment activities. By 

contrast, Russia, Norway, Canada, and Denmark have all ratified the UNCLOS and 

have either registered their claims or are in the process of doing so. Finally, so long 

as the United States remains outside of the UNCLOS it lacks full access to the 

mandatory dispute settlement mechanisms that it might use to deal with excessive 

maritime claims or high seas fishing violations in the arctic. 

11. Senator BEGICH. Dr. Perry, in your opinion, how does ratification of UNCLOS 

impact our national security? 

Dr. PERRY. In the modern security environment, it is increasingly important that 

the United States moves quickly to accede to the UNCLOS. The UNCLOS, as modified, provides a written legal regime that would protect U.S. national security interests, principally by preserving freedom of navigation and overflight worldwide. In 

dealing with threats such as the proliferation of weapons of mass destruction, international terrorism, and worldwide narcotics trafficking, U.S. forces must have freedom to move swiftly and as a matter of right through the world’s oceans and straits. 

U.S. accession of the UNCLOS would protect these rights and preserve reciprocity 

with other coastal nations. The UNCLOS guarantees the right of innocent passage 

through foreign territorial seas and constrains coastal nations from unreasonably 

extending their maritime boundaries. These assurances of vessel and aircraft mobility and limitations on unreasonable maritime claims will ensure preservation of our 

capability to deter and respond whenever and wherever required pursuant to national security objectives. 

The United States is currently the only maritime power that has not become a 

State Party to the UNCLOS. The failure to accede to the UNCLOS continues to be 

detrimental to U.S. international reputation and adversely affects U.S. credibility in 

50 

international fora, where the United States continues its efforts to preserve the 

right to freely move throughout the world’s oceans. In many respects, the UNCLOS 

codifies customary international law and the state practice comprised of the cumulative actions of governments in areas such as transit through international straits 

and establishment of the exclusive economic zone. 

The UNCLOS has been an enormously positive influence on the development of 

authoritative decision, shaping the process in a direction that protects the international community’s right to freedom of the seas. Whether UNCLOS is able to continue to serve the critical function on the development of authoritative decision will 

depend on the outcome of the ongoing deliberations about international law governing the oceans. As an outsider, the United States is hamstrung in its ability to 

shape and influence this deliberation for public order in the oceans. 

This issue is exemplified by the current ‘‘disputes’’ associated with resource exploitation, maritime claims, and transshipment of the very sensitive (and hazardous) 

waters in the arctic. Additionally, the recent actions by China to seek to deny the 

U.S. access to areas in the South China Sea are another example of challenges we 

face. That denial of access is predicated on China’s unwillingness to abide by the 

maritime boundary rules in the UNCLOS and its unwillingness to respect the rights 

of maritime users to exercise high seas freedoms in areas outside of Chinese territorial waters. China asserts that the United States, as a nonparty to the UNCLOS, 

has no right to exercise the rights and freedoms that are codified in the UNCLOS. 

In this respect and others, becoming a state-party to the UNCLOS would enable the 

United States to exercise both leadership and a stabilizing influence regarding overreaching claims of China and other countries. 

LEGISLATIVE REFORM TO NATIONAL SECURITY

12. Senator BEGICH. Dr. Perry, in the findings and recommendations, the panel 

identifies several recommendations for the legislative branch in reforming the national security effort. Which one of the recommendations for the legislative reform 

package would you deem as the most important? 

Dr. PERRY. The panel identifies several recommendations for needed interagency 

and DOD process and capability improvements, some of which may be solved by the 

executive branch, and others requiring legislative action. Yet, no matter how well 

these recommendations are implemented, their true effectiveness and the driver of 

the resource management decisions required lie within the effectiveness of the guiding strategy documents. The panel concluded that sufficient strategic guidance does 

not exist at the national level for DOD to make required mission and resource decisions, nor does sufficient guidance exist to allow a complementary, coordinated mission and resource management of the interagency. Based upon this conclusion, we 

recommend that the most important legislative reform package is the establishment 

of a standing Independent Strategic Review Panel to review the strategic environment over the next 20 years and provide prioritized goals, risk assessments, and 

strategic recommendations for use by the U.S. Government. The results of this 

panel, as adopted by the administration, would then be the driver that guides the 

rest of the strategic planning process and determines both the capabilities and resources needed. 

13. Senator BEGICH. Dr. Perry, how would you suggest moving forward on this 

recommendation? 

Dr. PERRY. We recommend that Congress use our panel’s recommendations found 

in Appendix 4, ‘‘Independent Strategic Review Panel,’’ as a guide to prepare legislative language jointly with the executive branch to implement and empower this 

panel. 

TRAINING EXERCISES FOR CIVILIANS

14. Senator BEGICH. Mr. Hadley, I believe the panel recommended the Army and 

Marine Corps remain at the planned authorized end strength. With that being said, 

you also recommended enhancing the civilian whole-of-government capacity and 

said ‘‘DOD needs to contribute to training and exercising these civilian forces with 

U.S. military forces so that they will be able to operate effectively together.’’ Without changing the strength of the Army and Marine Corps, would they be able to 

assume a potential mission to train civilians? If so, how should we go about this? 

Mr. HADLEY. When we addressed the training and exercising the civilian forces 

with U.S. military forces, the panel sought to set the foundation for U.S. civil agencies and military units to train and exercise with allied and coalition partners so 

51 

that they are collectively better prepared to handle a variety of missions that require extensive collaboration and cooperation with multiple government and military entities. This, in turn, would enhance our whole-of-government capacity to prepare for and participate in operations overseas. 

We believe that DOD’s optimal contribution to the enhancement of civilian wholeof-government capacities should be through the integration of civilian agencies into 

its exercises and training events. This may require Congress to expand civil agencies’ capabilities to allow them to surge as a situation may require. In the event that 

DOD might have to commit its forces to an ongoing operation at the expense of 

training civilian agency staffs, the most viable alternative with which to replace 

these Active-Duty Forces is to use a mix of National Guard and Reserve Forces and 

contractor personnel, both to provide the training personnel and to act as surrogates 

for Active Duty formations with whom non-DOD civilians must interact. 

NATIONAL SECURITY STRATEGIC PLANNING PROCESS

15. Senator BEGICH. Mr. Hadley, in the last chapter, the panel recommends the 

United States needs a truly comprehensive National Security Strategic Planning 

Process that begins at the top and provides the requisite guidance not only to DOD, 

but to the other departments and agencies of the U.S. Government. Do you also recommend DOD being the lead agency to implement across the U.S. Government? 

Mr. HADLEY. We do not recommend that DOD be the lead agency to implement 

across the U.S. Government. The national security concerns of the United States 

and the tools that may be used to address them are broad and varied. In many 

cases, if not in a majority, the traditional roles of the military may not be the right 

ones to use, and the inclusion of, or lead of the military in these, may in fact create 

a negative reaction to the intended goal from the perception and perspective of other 

nations and peoples. To determine the appropriate missions, strategies, lead agencies, and resources needed to meet our national security goals is the most important 

reason for our recommendation to establish a new National Security Strategic Planning Process. 

QUESTIONS SUBMITTED BY SENATOR ROLAND W. BURRIS

STRATEGIC SCOPE

16. Senator BURRIS. Dr. Perry and Mr. Hadley, QDR 2010 is the second to be conducted while at war. QDR 2010 supports the military’s mission to disrupt, dismantle, and defeat al Qaeda. Will we miss strategic opportunities, given our current 

focus on today’s wars, one particular region, and the current adversary? 

Dr. PERRY and Mr. HADLEY. Concern about seizing opportunities as well as preparing for future threats was one of the reasons the panel began its assessment of 

the strategic environment with an appreciation of enduring U.S. security interests. 

As a nation with global concerns and responsibilities, America must be alert to multiple and divergent trends at the same time, even while fighting two wars. 

A good example of this approach is reflected in the panel’s emphasis on the AsiaPacific; the current balance of power in the region—the world’s most dynamic and 

clearly a key to the prospects for peace in the 21st century—is fundamentally favorable to the United States. Recent decades have seen both rising prosperity, lifting 

hundreds of millions out of poverty, and the spread of political liberty. But this very 

dynamism creates geopolitical uncertainties, particularly as the panel report outlines, in regard to the rise of China and India as great powers. 

It is fair to say that the panel saw these emerging conditions as a tremendous 

opportunity for the United States diplomatically, economically, and in the realm of 

political ideas, not only to avoid the kind of terrible conflicts that characterized 

great-power relations in Europe over the last century, but to provide continued security for the very positive recent trends across the region. Thus, we concluded that 

maintaining adequate U.S. military forces in the Asia-Pacific—yet not detracting 

from current operations in Iraq, Afghanistan, and in the broader effort against al 

Qaeda and other terrorists—was a key element in seizing this strategic opportunity 

on which so much of our future rests. 

17. Senator BURRIS. Dr. Perry and Mr. Hadley, how confident are you that this 

QDR ensures that our military will be more flexible and adaptable to respond to 

a dynamic security environment? 

Dr. PERRY and Mr. HADLEY. We agree that flexibility and adaptability are core 

attributes the U.S. military must cultivate to deal with the threats of today and toVerDate Aug 31 2005 13:58 Feb 08, 2011 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6621 Y:\BORAWSKI\DOCS\64136.TXT JUNE PsN: JUNEB
52 

morrow. We share Secretary Gates’ goal of a balanced force. However, our panel’s 

report noted a number of shortfalls in ensuring that the United States can respond 

to these challenges. Specifically, we noted the need to strengthen U.S. force structure to address the need to counter anti-access challenges, protect the Homeland (including defense against cyber threats), and conduct post-conflict stabilization missions. 

Flexibility and adaptability also come from having highly-trained and well-educated officers and enlisted members. In our report, we noted the need to strengthen 

professional military education by increasing both the opportunities and incentives 

for education within the Armed Forces. For example, we believe that successful company grade or junior field grade officers should be offered fully funded civilian graduate degree programs in residence to study military affairs and foreign cultures and 

languages, without specific connection to a follow-on assignment. Additionally, all 

officers selected for advanced promotion to the rank of major should be required and 

funded to earn a graduate degree in residence at a top-tier civilian graduate school 

in a war-related discipline in the humanities and social sciences. We also believe 

that attendance at intermediate and senior service school should be by application, 

and require entrance examinations administered by the schools in cooperation with 

the service personnel offices. 

RESERVE FORCE COMPONENTS

18. Senator BURRIS. Dr. Perry and Mr. Hadley, the findings and recommendations 

speak to joint training, professional military education (PME) for General/Flag Officers, strategy, and force sizing. I applaud the fact these QDR recommendations are 

very thorough and specific, but they appear to focus on Active Forces. How do these 

QDR recommendations apply to the Reserve component? 

Dr. PERRY and Mr. HADLEY. The United States must have well-trained and experienced personnel in both the Active and Reserve components. Many of our recommendations should apply to both Active and Reserve Forces keeping in mind the 

time constraints on members of the Reserves. One of our recommendations is for 

Congress to establish a new National Commission on Military Personnel of the quality and stature of the 1970 Gates Commission. Its mandate would include an examination of the mix of Active and Reserve Forces and a comprehensive review of personnel management policies. We recommend, for example, that officers selected for 

general officer or flag rank serve an assignment in some level of the teaching faculty 

in the PME system. There are currently positions in the Reserves for officers to 

serve as instructors. We also call for the curricula of ROTC and the service academies to be aligned so as to strengthen the education of the officer corps in the profession of arms. It is clear that the Nation goes to war using both its Active and 

Reserve Forces, and they must be interchangeable as much as possible. 

19. Senator BURRIS. Dr. Perry and Mr. Hadley, should these recommendations be 

supported by a top-down review of the many disparate pay, personnel management, 

and promotion systems used by the Active and Reserve components of each Service? 

Dr. PERRY and Mr. HADLEY. These are complex and challenging recommendations 

that should not be implemented without realizing that many of the QDR Independent Panel recommendations are interlinked. Our panel strongly recommends a 

top-down review of the policies for both Active and Reserve components of each Military Service as part of the broader National Commission on Military Personnel. 

Given that many of the military’s personnel policies were established in the 1940s 

and 1950s, the laws, policies, and structures therein must be reformed to more 

closely align with the needs and demands of a highly-mobile 21st century workforce. 

The panel continues to recommend the lengthening of officer careers to 40 years, 

including in the Reserve components. Changes in medicine, longevity of life, and the 

nature of military service make this possible. Additionally, this would save money 

and allow the Services to realize their full investment in the education, training, 

experience, and accomplishments of their officer corps. This recommendation should 

be considered by the commission, along with a July 2005 RAND study, ‘‘Reforming 

the Military by Lengthening Military Careers,’’ by Bernard Rostker. If enacted, personnel management and promotion policies could be improved as a result. 

We also support DOD adopting a continuum-of-service model for personnel allowing them to move fluidly between the Active and Reserve components and between 

the military, private sector, civil service, and other employment. Such changes 

would make military service and its compensation system more flexible and offer 

attractive intangible benefits. 

53 

Given that many DOD witnesses with whom we met predict today’s operational 

reserve will remain for the next 20 years, our panel was concerned the Department 

was not planning for mobilization beyond standing forces. We are also concerned 

about the expectations of service in the Reserves, as well as the cost effectiveness 

of an operational reserve which diminishes the cost differential between the two 

components. Again, a continuum-of-service model would allow different pay systems 

and offer the Services the ability to transfer skill sets from the private sector readily, which improves readiness. 

QUESTIONS SUBMITTED BY SENATOR DAVID VITTER

DEFENSE AND STATE DEPARTMENTS COORDINATION

20. Senator VITTER. Dr. Perry, during your testimony you stated that we’ve come 

to a point where the relationship between DOD and the Department of State (DOS) 

now merits legislative action similar to Goldwater-Nichols. I agree that like Goldwater-Nichols, something needs to be done to better integrate DOS and DOD in 

terms of planning, operations, and training. Could you elaborate on your recommendation and provide a blueprint, even if only in rough format, for what you 

envision? 

Dr. PERRY. We believe the panel’s recommendations to establish a single national 

security funding line and a new national security strategic planning process are the 

basic building blocks to improve interagency integration, planning, training, and 

operational capabilities. We fully recognize the difficulty for Congress when the 

issue involves the appropriations process but the national security threats have 

changed dramatically since the current appropriations process was created. We believe the time has come to improve it so that the executive branch departments and 

agencies are provided funding that is coordinated and integrated from the very start 

of the process in Congress. 

We also recognize that having the funds in the appropriate hands of Federal departments and agencies is not enough. The executive branch needs a better planning process and our recommendations outlined in Chapter 5 of the report provides 

that blueprint. The United States needs a truly comprehensive National Security 

Strategic Planning Process that begins at the top and provides the requisite guidance, not only to DOD but to other departments and agencies that must work together to address the full range of threats confronting our Nation. The first step in 

creating this new process calls for both the White House and Congress to jointly establish a standing Independent Strategic Review Panel as we described in appendices 4 and 5 of our panel’s report. 

REPORTING ALTERNATIVES TO THE QDR

21. Senator VITTER. Mr. Hadley, as pointed out in the QDR Independent Panel 

Report, the initial legislative intent behind the defense QDR has degraded over 

time. Recent QDRs, and especially the 2010 QDR, have devolved into near-term 

planning documents instead of reviewing/projecting long-term defense policy. You 

stated that the 2010 QDR lacked a clear future planning construct going forward 

20 years, and recommended replacing the QDR with an independent QDR panel 

from here forward. What, if any, reporting requirements would you recommend for 

continued internal DOD action were DOD to be relieved of the QDR requirement? 

Mr. HADLEY. The DOD would still need to have an internal process to review and 

project long-term defense policy based on a current administration’s policy and 

strategy guidance—informed and advised by our proposed Independent Strategic Review Panel. This DOD long-term policy would then influence the budgeting process 

to ensure that the missions, structures, forces, and processes would meet the administration’s strategic guidance. How this is integrated and planned for should be a 

required part of the annual budget report. 

The panel’s recommendation for the independent panel does the following: 

• Provides a clear future planning construct going forward 20 years; 

• Ensures that strategic guidance is top-down rather than a bottom-up program defense; 

• Ensures that a holistic whole-of-government approach is used in defining 

the strategy to balance and define the roles, missions, and requirements of 

the interagency; and 

• Ensures that the strategic guidance provides sufficient details and priorities to allow departments and agencies to make informed, critical resource 

decisions in a whole-of-government perspective. 

54 

MARITIME FORCE STRENGTH

22. Senator VITTER. Mr. Hadley, the administration exempted the defense budget 

from spending freezes being applied to other parts of the government. However, due 

to cuts and delays to the defense shipbuilding budget, Northrop Grumman has announced it will close its Avondale and related shipbuilding facilities by 2013 as it 

consolidates its shipyards on the Gulf Coast. 

Given your recommendation within the QDR Independent Panel Report to increase the size of maritime forces, do you think that this announcement will have 

an adverse effect on America’s commitment to see that our forces have the tools they 

need to prevail in the wars we are in while making the investments necessary to 

prepare for threats on or beyond the horizon? 

Mr. HADLEY. As we recommended in our panel’s report, DOD should return to a 

strategy requiring dual-source competition for production programs where this will 

produce real competition. This applies to shipbuilding as well as other areas. However, if the Pentagon policy does not change to increase shipbuilding and encourage 

competition in production between qualified competitors, then Avondale and other 

shipyards should be closed. The worst of all worlds would be to allocate too few 

ships to too many yards. We would note, however, that such closures would send 

an adverse signal to the world of our lack of commitment to maintain maritime deterrence. 

23. Senator VITTER. Mr. Hadley, does this have an effect on U.S.-based dualsource competition for shipbuilding? 

Mr. HADLEY. Closure of good shipyards and dispersal of skilled and experienced 

work forces cannot easily be resurrected. Once they are closed, the waterfront tends 

rapidly to put the land to other uses. Thus, in the future, if the Nation requires 

an expanded fleet there will not be the industrial base available to build it. But to 

repeat, to avoid closure of yards like Avondale, the shipbuilding program must increase and competitive production must be the procurement policy. 

[The Report of the Quadrennial Defense Review Independent 

Panel follows:] 

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[Whereupon, at 12:02 p.m., the committee adjourned.] 

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