```

[Senate Hearing 111-258]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 111-258
 
         THE SECRETARY OF DEFENSE'S 2010 BUDGET RECOMMENDATIONS 

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 30, 2009

                               __________

         Printed for the use of the Committee on Armed Services

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

54-649 PDF                       WASHINGTON : 2010 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, 
Washington, DC 20402-0001 

  

                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

EDWARD M. KENNEDY, Massachusetts     JOHN McCAIN, Arizona
ROBERT C. BYRD, West Virginia        JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut     JEFF SESSIONS, Alabama
JACK REED, Rhode Island              SAXBY CHAMBLISS, Georgia
DANIEL K. AKAKA, Hawaii              LINDSEY GRAHAM, South Carolina
BILL NELSON, Florida                 JOHN THUNE, South Dakota
E. BENJAMIN NELSON, Nebraska         MEL MARTINEZ, Florida
EVAN BAYH, Indiana                   ROGER F. WICKER, Mississippi
JIM WEBB, Virginia                   RICHARD BURR, North Carolina
CLAIRE McCASKILL, Missouri           DAVID VITTER, Louisiana
MARK UDALL, Colorado                 SUSAN M. COLLINS, Maine
KAY R. HAGAN, North Carolina
MARK BEGICH, Alaska
ROLAND W. BURRIS, Illinois

                   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 Secretary of Defense's 2010 Budget Recommendations

                             april 30, 2009

                                                                   Page

Hamre, John J. Ph.D., President and CEO, Center for Strategic and 
  International Studies..........................................     5
Krepinevich, Andrew F. Jr., Ph.D., President, Center for 
  Strategic and Budgetary Assessments............................    10

                                 (iii)

         THE SECRETARY OF DEFENSE'S 2010 BUDGET RECOMMENDATIONS

                              ----------                              

                        THURSDAY, APRIL 30, 2009

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:35 a.m. in room 
SH-216, Hart Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Bill Nelson, 
McCaskill, Udall, Hagan, Begich, Burris, McCain, Chambliss, and 
Thune.
    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; Gerald J. Leeling, 
counsel; Peter K. Levine, general counsel; William G.P. 
Monahan, counsel; Roy F. Phillips, professional staff member; 
Arun A. Seraphin, professional staff member; Russell L. 
Shaffer, counsel; and William K. Sutey, professional staff 
member.
    Minority staff members present: Joseph W. Bowab, Republican 
staff director; Adam J. Barker, professional staff member; 
Richard H. Fontaine, Jr., deputy Republican staff director; 
Paul C. Hutton IV, professional staff member; Michael V. 
Kostiw, professional staff member; Daniel A. Lerner, 
professional staff member; David M. Morriss, minority counsel; 
Lucian L. Niemeyer, professional staff member; and Dana W. 
White, professional staff member.
    Staff assistants present: Kevin A. Cronin, Christine G. 
Lang, and Breon N. Wells.
    Committee members' assistants present: Edward Mason, 
assistant to Senator Reed; Christopher Caple, assistant to 
Senator Bill Nelson; Jon Davey and Patrick Hayes, assistants to 
Senator Bayh; Gordon I. Peterson, assistant to Senator Webb; 
Jennifer Barrett, assistant to Senator Udall; Roger Pena, 
assistant to Senator Hagan; Clyde A. Taylor IV, assistant to 
Senator Chambliss; Jason Van Beek, assistant to Senator Thune; 
and Chip Kennett, assistant to Senator Collins.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. The committee 
meets this morning to receive testimony from Dr. John Hamre, 
President and CEO of the Center for Strategic and International 
Studies; and Dr. Andrew Krepinevich, President of the Center 
for Strategic and Budgetary Assessments. Both of these 
witnesses are well known to the committee. They've provided us 
with valuable insights on broad policy issues in the past. Our 
witnesses are here to present their assessments of Secretary of 
Defense Robert Gates's recommended changes to the Department of 
Defense's (DOD) investment priorities as announced on April 6, 
2009.
    Most of the changes will no doubt be reflected in the 
detailed budget for 2010 that we now expect next Thursday. 
We're also planning on Secretary Gates testifying here on that 
detailed budget the following Thursday, which is 2 weeks from 
today.
    Some time ago Secretary Gates began to broadly question 
some of DOD's investment strategies and program priorities that 
he believes may be less relevant to the current, and most 
likely, future threats that the Nation will face. He has sought 
to identify any institutional biases and inertia that DOD needs 
to overcome to ensure that we build and support the kind of 
military that we need both today and into the future.
    Secretary Gates's concern is that, while the Pentagon is 
predisposed to give its greatest attention and support to the 
large, expensive conventional weapons programs, DOD, in his 
view, has failed to give appropriate support to the forces and 
programs needed to win the kinds of low intensity 
unconventional or irregular wars that we're in right now in 
Iraq and Afghanistan and similar conflicts that he believes are 
most likely to be faced in the future.
    With these concerns in mind, on April 6, Secretary Gates 
announced his recommendations to shift DOD's investment 
strategy away from costly conventional weapons systems and 
those programs that are costing far more than planned or are 
struggling technologically toward those technologies and 
programs that focus on counterinsurgency and irregular warfare.
    The Secretary's recommendations impact all aspects of DOD's 
investment plans, including aviation, space, ground vehicles, 
ships, and services. At the same time that he recommended 
program terminations and reductions, he also recommended 
resource increases for capabilities that are in high demand for 
operations, such as intelligence, surveillance, reconnaissance 
technologies, and programs that support our troops and their 
families.
    Some of the Secretary's recommendations are limited to the 
fiscal year 2010 budget request and he defers final or longer 
range decisions pending the outcomes of the Quadrennial Defense 
Review (QDR) and the Nuclear Posture Review. Congress of course 
will scrutinize the decisions and determine which to approve 
and which to modify or reject.
    Some of the ideas that resonate with me include: first, the 
view that the likelihood of conflict with a major power 
competitor appears low; second, the idea that we need to shift 
more focus onto the kinds of conflicts that we're fighting now 
and more likely to face in the immediate future; third, the 
belief that, while we remain vastly superior militarily to any 
foe, we need to hedge against uncertainties and discourage 
others from thinking that there is something to be gained by 
challenging world stability, rather than by cooperating with 
the community of nations; and finally, in a limited budget 
environment, the point that we cannot continue to support 
programs with long delays, poor performance, and large cost 
overruns.
    There are many questions that I hope our witnesses can help 
us to grapple with, including: Are these strategic and policy 
approaches of Secretary Gates sound? Do they lead to the major 
program recommendations of the Secretary which he made on April 
6? Is the heavy emphasis on counterinsurgency and low intensity 
conflict by Secretary Gates about right? Is there a way of 
gauging the impact of the Secretary's decisions on the defense 
industrial base and on the number of jobs that will be lost or 
impacted?
    While the Gates proposals focus almost entirely on major 
weapons systems, much of the defense budget's growth can be 
attributed to significant increases in the personnel and 
operation and maintenance accounts. Are there any changes that 
should be considered in those areas?
    We are very lucky to have these two witnesses with us this 
morning. Those of us who know them appreciate their talent, 
their independence, and we very much look forward to their 
perspective. I'll turn to Senator McCain now.

                STATEMENT OF SENATOR JOHN McCAIN

    Senator McCain. Thank you, Mr. Chairman.
    I want to thank the witnesses. Mr. Chairman, you and I have 
had the great pleasure and honor of working with Dr. 
Krepinevich and Dr. Hamre for many years. There are no two 
people I know in Washington who have a better understanding 
both of the strategic and tactical challenges the United States 
of America faces now and in the future, and I'm very grateful 
that they are here to give us their insight and their view as 
to not only Secretary Gates' recommendations, but the path that 
we have to be on with the new administration, two wars, and 
significant challenges such as the increasing militarizing of 
China and other challenges, not to mention pirates, and all of 
the other numerous national security challenges that we face.
    I would also be interested in our witnesses' view of what 
may be in my mind the most controversial of Secretary Gates' 
recommendations, and that's concerning missile defense. I'm a 
strong believer in missile defense and always have been. So 
perhaps you can provide us some insight in your views on that 
particular aspect of Secretary Gates's recommendations.
    As you mentioned, Senator Levin, the Pentagon's programming 
and planning is based on a 5-year cycle and they're currently 
working on that plan. Secretary Gates's recommendations are 
focused on next year's budget only. So we have a lot to do here 
and Secretary Gates's recommendations, at least in my view, 
reaffirm support for our military, veterans, and their 
families; rebalance programs; and reform the Pentagon's 
acquisition and contracting mechanism.
    Finally, I would ask our witnesses if they have had the 
chance to review Senator Levin's and my legislation, which 
passed through this committee unanimously, concerning 
acquisition reform, which according to the President's remarks 
last night at his press conference, may be given some priority.
    So, Senator Levin, thank you for inviting these witnesses. 
I welcome the witnesses and it's nice to see old friends and 
colleagues. Thank you.
    [The prepared statement of Senator McCain follows:]
               Prepared Statement by Senator John McCain
    Mr. Chairman, thank you. I join you in welcoming our witnesses here 
today to discuss Secretary Gates' 2010 budget and policy 
recommendations.
    On April 6, Defense Secretary Gates announced a series of 2010 
budget recommendations based on his assessment of the Defense 
Department's capabilities, requirements, risks and needs for the 
purpose of shifting the Pentagon in a different strategic direction.
    I support a number of the Secretary's recommendations, which 
require among other things--making very tough choices now on specific 
weapon systems and defense priorities for the 2010 budget while also 
recognizing the need to defer, revisit, and re-evaluate other weapon 
systems requiring additional understanding and analysis until after the 
Quadrennial Defense Review (QDR).
    Secretary's Gates' overall 2010 budget and policy recommendations 
reflect his best judgment, reflecting lessons learned from prosecuting 
wars in Iraq and Afghanistan for over 2 years. It's the start of a much 
longer-term process to ensure our defense dollars are spent prudently 
to address the threats we face today and will likely face in the years 
ahead, while also addressing the range of potential threats around the 
world, now and in the future.
    The recommendations proposed by Secretary Gates provide a snapshot 
of difficult decisions still to come. The Pentagon's programming and 
planning is based on a 5-year cycle and they are currently working on 
that plan. Secretary Gates' recommendations are focused on next year's 
budget only.
    So those recommendations and their potential impact on DOD's base 
budget have not been factored into their 5-year plan. Many more 
difficult decisions still lie ahead. We will have a better 
understanding of how tough those decisions will be later this year when 
the results of the ongoing QDR are briefed to the committee and whether 
the administration's fiscal year 2011 budget is resourced to support 
the Pentagon's QDR recommendations.
    Secretary Gates' recommendations reaffirm support for our military, 
veterans and their families; rebalance programs; and reform the 
Pentagon's acquisition and contracting mechanisms.
    I greatly appreciate that Secretary Gates continues to place the 
highest priority on supporting the men and women of the U.S. Armed 
Forces.
    Further, I strongly support Secretary Gates' recommendations to 
restructure a number of major defense programs. It has long been 
necessary to shift spending away from weapon systems plagued by 
scheduling and cost overruns to ones that strike the correct balance 
between the needs of our deployed forces and the requirements for 
meeting the emerging threats of tomorrow. I believe Secretary Gates' 
decision is key to ensuring that the defense establishment closes the 
gap between the way it supports current operations and the way it 
prepares for future conventional threats.
    Finally, I fully endorse Secretary Gates' recommendations to 
improve the performance of the Defense Department acquisition programs 
and contracting mechanisms. There is broad agreement on the need for 
acquisition and contracting reform in the Defense Department. Senator 
Levin and I have introduced S. 454, a bill to improve the way the 
Defense Department acquires major weapons systems.
    I welcome the President and Secretary Gates' endorsement of the 
bill and their commitment to work with Congress to quickly enact 
legislation which can improve the performance of the Pentagon's defense 
acquisition system.
    Mr. Chairman, thank you and I look forward to hearing our 
witnesses' thoughts on Secretary Gates' 2010 budget recommendations.

    Chairman Levin. Thank you very much, Senator McCain. In 
regards to the Acquisition Reform Bill, as I mentioned to you, 
I think that because of our efforts, what we've done to let our 
respective party leaders know, there's a very good chance that 
we will get to our bill by the week after next. So that I think 
our efforts are paying off and I very much appreciate your 
raising that here and all you've done to make it possible.
    Senator McCain. Thank you, Mr. Chairman. Thank you for your 
leadership.
    Chairman Levin. I guess we'll go in alphabetical order. If 
we go by age we'd have to let you fight that one out.
    Dr. Hamre. If we go by weight I could go first. [Laughter.]
    Chairman Levin. I think, Dr. Hamre, you're listed first, so 
we're going to call on you. Dr. Hamre.

 STATEMENT OF JOHN J. HAMRE, Ph.D., PRESIDENT AND CEO, CENTER 
            FOR STRATEGIC AND INTERNATIONAL STUDIES

    Dr. Hamre. All right, thank you. Chairman Levin, Ranking 
Member McCain, and all members of the committee: Thank you for 
inviting me. I had the privilege of working for this committee 
for 10 years, and there's an old saying that you don't have a 
second chance to make a good first impression, and so I've 
blown it for all of you. I'm really speaking to the new members 
over here, who don't know me.
    Chairman Levin. Except we've warned them. [Laughter.]
    Dr. Hamre. Well then, I'm toast. [Laughter.]
    I really am grateful to come back. I treasured the time I 
worked on this committee's staff. It really was the best 
professional experience I had, and I miss it.
    I have a formal statement and I'd request that it be placed 
in the record if that's all right.
    Chairman Levin. Of course.
    Dr. Hamre. I'll summarize very briefly.
    I admire Secretary Gates for taking on some very hard 
issues here. I know the purpose of today's hearing is to look 
at the individual programs that he's proposing to cut and what 
impact that may have on the industrial base. But I think even 
more important is what he's trying to do to restore fiscal 
discipline and budgetary discipline in the Department. I was a 
comptroller for 4 years. I know what it's like to do budgets 
and, frankly, the current system is out of control. He is 
really taking some very important steps to bring it back in 
control.
    We misused supplementals these last years and we let an 
awful lot of programming get into supplementals that then took 
the pressure off of making hard and disciplined choices. So I 
think it's an extraordinarily important thing to do. It's tough 
because it does mean that we're having to now bring back into 
tough balance and discipline choices that have long-term 
implications, and I think it's very important.
    I also think that it's very important what he's trying to 
do to restore the relationship between technical support the 
government needs from the private sector and the responsibility 
that only the government can undertake. He's wanting to buy 
back government employees, but I don't think that alone is an 
adequate answer. I think we still have to look deeper into 
that, and I would encourage you to make a focus of that when 
you get done with your bill, because I think that that's just 
as important a question.
    The government does need to buy technical support from the 
private sector, but we haven't really got a good structure in 
place any longer. We have private sector people doing jobs that 
I think the government ought to be doing, and, frankly, we have 
nonprofit guys doing work that ought to be in the profit-making 
sector. This is a big issue. I hope you'll look at that as 
well.
    Senator McCain. Can you give us a couple of examples?
    Dr. Hamre. Sir, if you were to go over to the policy shop 
at DOD, half of those people are contractors. They're not 
government employees. I happen to think that government 
employees ought to be doing policy. In another example, we have 
nonprofit organizations that are basically running labs, 
competing against profit-making entities for the work.
    These are questions we need to sort out, and I don't think 
we have a good framework any longer. We do need technical 
support and sometimes it's in the profit-seeking part of the 
private sector and sometimes it's in the nonprofit-seeking part 
of the private sector. But the ground rules have broken down, 
and we really need to come back and look at that. I think this 
is a start, but it isn't an answer. More work needs to be done. 
I'd be delighted to talk with you at some point about it.
    Chairman Levin. That would be great. We look forward to 
that.
    Dr. Hamre. So let's focus on the specific issue, and let me 
make just a couple of very brief points and then I'll get off 
the stage.
    First, let me say, of all of the programs that were cut by 
the Secretary, or proposed for cuts, because really this is now 
your decision--he's made recommendations. Only Congress can 
decide what the country's going to do. So his are 
recommendations. Every one of the programs he proposed to 
terminate had and has a valid requirement. We still need these 
things. It's a question of priorities.
    I think we're coming on a time when budgets are going to 
become more constrained. They're going to be constrained by a 
desire by the public to reallocate resources in the aggregate 
and, frankly, they're being constrained by rising pressure 
inside the defense budget, especially in the operational and 
personnel accounts. So there have to be some priorities set.
    It is not the case that we've just been wasting money for 
years on bad programs. It's a case where we're having to 
realign and reassess priorities now, and you're going to have 
to do that.
    I think I would like to bring your attention to, what I 
think is a very fundamental issue. Mr. Chairman, you raised 
this in your statement. That is the relationship between the 
strategic investment we make in people and the strategic 
investment we make in equipment. There has been a very strong 
preference in Congress and, frankly, lately in the Department 
for people, and we're going to expand and have expanded the 
Army and the Marine Corps by about 100,000 people.
    Now, I honestly do not believe that this expanded manpower 
base is sustainable going forward, unless it means we're going 
to have dramatically constrained modernization accounts. The 
cost of personnel has skyrocketed in recent years, and during 
wars we're going to do whatever it takes to support them, and 
we should. But we don't take back benefits and pay after wars, 
and we tend to hand them out to absolutely everybody, even 
though maybe only 60 percent of the force ever deploys.
    So there's a real question about the strategic investment 
in people and the strategic investment in things to support 
warfare. This is a budget that basically favors people, and I 
understand that. I think for the next 5 to 10 years that 
certainly is going to be the case before us.
    But I think we have to plan for three types of 
contingencies going forward: asymmetric high-end warfare. If we 
have to go to war in the Taiwan Straits, that's going to be an 
astoundingly challenging environment. Now, I don't want a war 
with China. I don't think we'll have one. We certainly can 
avoid it. But we do have to think about it, and it's going to 
put a real premium on very high-end equipment. That's at the 
high end.
    At the low end, we're involved in two very difficult 
asymmetric wars, and they take lots of people. That's why there 
is this high premium on people in this budget.
    Then we still have to plan for standard conventional, 
traditional warfare. I think this budget tries to do all three 
of those things, but it certainly has made the preference in 
the near term on people. That is a very major question about 
what that does to our industrial base over time.
    Chairman Levin. Just to be clear, when you say people, 
you're talking about the number?
    Dr. Hamre. Military personnel in uniform.
    Chairman Levin. Mainly the number.
    Dr. Hamre. Mainly the number, yes, sir. We're doing a very 
good job of supporting those that we have, and we should. I 
have no quarrel with that. The real question is, can we support 
a larger force structure over time. My sense is that we will 
only be able to do that at the expense of modernization, and 
right now we will have a hard time sustaining competitions 
going forward. Our industrial base is getting that thin.
    So I would ask that you look at that question as you are 
thinking about the choices that you're going to be making.
    Let me make one final comment, and this is, I was the 
Comptroller for 4 years and the Department builds 5-year 
budgets. Five years makes a difference for the DOD. We have to 
make choices now looking downstream. I mean no criticism 
because I worked here and I love this institution, but Congress 
tends to look at 1 year at a time.
    Please do not make a choice just for 1 year to buy the 
political pressure off 1 year. This has to be looked at in a 
long-term context. This is what the Secretary is asking you to 
do. I'll tell you, they're working on 5-year plans now that are 
more painful than the one they've just given you.
    Our budgets have not been properly priced for over 4 years, 
and there is pressure coming that they're now having to take 
program cuts just to make good the program of record. Because 
of that, you have to take a 5-year look at this as well, not 
just a 1-year look at it.
    Let me step back and I'd be delighted to answer any 
questions. Thank you.
    [The prepared statement of Dr. Hamre follows:]
                Prepared Statement by Dr. John J. Hamre
    Chairman Levin, Ranking Member McCain, distinguished members of the 
Armed Services Committee, thank you for inviting me to appear before 
this committee again. I had the privilege of working for this committee 
for nearly 10 years, the best years of my professional life. I will 
always be grateful for that opportunity, and I thank you for giving me 
a chance to appear before you today.
    I congratulate Secretary Gates for his leadership. I know the 
purpose of the hearing today is to examine the specific recommendations 
on individual weapon systems, but the most important contribution he is 
making is to restore budget discipline in the Department and to start 
the long road back to competency in the acquisition process. This is 
crucial and he is courageous to take on this problem.
    I recount my time with this committee because it was as a 
professional staff member of this committee that I had the most 
comparable experience to what we are living today. Back in 1989, then 
Secretary of Defense Richard Cheney offered sweeping recommendations to 
terminate a large number of weapon systems--the F-15, the F-14, the 
Army Helicopter Improvement Program, the V-22 tilt rotor aircraft, the 
M1 tank--to name just a few. In one sense, the circumstances are very 
similar to today. Back then, America had come through the Cold War and 
President Bush and Congress promised major reductions in defense 
spending. The popular sentiment at the time was that we needed to 
harvest the so-called ``peace dividend''.
    Defense budgets started a long-term downward trend. I sense that we 
may be at a comparable pivot point now. In this sense the circumstances 
of these two episodes are similar. They differ, however, in a very 
substantial way. Back then we had a considerably larger base from which 
to cut programs and personnel. We eliminated nearly a third of Active 
Duty and Reserve military personnel. We had 300,000 soldiers stationed 
in Europe. We reduced the Army and pulled them back from Europe. We had 
nearly 20 prime contractors. We could consolidate defense industry. We 
had a relatively large inventory of modern equipment produced during 
the height of the Cold War, so we could cut back production sharply and 
still have a very modern force. We could undertake four rounds of base 
closures--closing nearly a quarter of the physical infrastructure of 
the Department.
    We undertook such sweeping changes 20 years ago, but we had a 
substantially larger base from which we could make reductions. The 
budget for the Defense Department now faces a similar pivotal change. 
Seven difficult years of war have removed a public consensus for 
increasing defense budgets. The misuse of supplemental appropriations 
bills has badly eroded budgetary discipline. All of this is coming 
together to create a new era of constrained budgets for the Defense 
Department. As was the case 20 years ago, we now must make major 
changes to the defense program. But unlike the time 20 years ago, all 
of the relatively easy pathways to reduced spending are gone. We cannot 
reconsolidate defense industry. We cannot again reduce our combat units 
by 25-30 percent. We cannot close major bases and installations. We now 
face exceptionally painful choices.
    Secretary Gates has met this demanding situation with sweeping 
recommendations for cuts to major weapon systems. It is a courageous 
step. He has thought through his options and has presented Congress 
with a reasoned way forward. It is now the serious business of Congress 
to decide whether or not to accept his recommendations. After all, they 
are just recommendations. Only Congress can decide what is to be the 
will of the American people going forward.
    I have enormous regard for Secretary Gates. I serve him as the 
Chairman of the Defense Policy Board. But today I appear as a single 
citizen, and my comments do not reflect the thinking of the Defense 
Policy Board, or of my think tank, the Center for Strategic and 
International Studies. These views are solely mine, and I alone am 
responsible for them.
    I fully understand the Secretary's thinking, and believe that he 
has assembled a responsible set of recommendations. I strongly agree 
with the need to restore budget discipline in the Defense Department. 
The wide use of supplemental appropriations bills to fund basic 
activities of the Department was hugely corrosive to budget discipline. 
This was amplified by the very unfortunate practice during the last 
decade of ``unfunded priority lists''. The military departments would 
publish lists of things they couldn't get the Secretary of Defense to 
buy (or didn't even ask), and instead would beg Congress for more money 
to buy them. This broadly corrosive climate of indiscipline was created 
inside the Department, enabled, and in many instances encouraged, by 
Congress. Now this is ending, and I very much support the Secretary's 
commitment to restore regular order and budgetary discipline.
    Where I perhaps differ with the Secretary is on the very 
fundamental decision of where to make strategic investments--in people 
or in modernizing weapon systems. I could easily be misunderstood, so 
let me be very clear here. I honor, as do all Americans, the sacrifice 
of our military personnel who have borne the burdens of these wars. 
Like Secretary Gates, we must provide them and their families the 
support they deserve. The budget should reflect this.
    But I also believe that we are not going to be able to afford over 
time the larger force that is now planned for the future. The cost of 
sustaining the current force is already daunting. The cost of 
sustaining over time a larger force structure will come only with sharp 
cuts in equipment modernization. We are seeing that today with these 
recommendations.
    We have a very complex future to anticipate. During the Cold War we 
had a simple thought. If we built a force to fight the Soviet Union, we 
would have adequate capability to handle any lesser contingency. If we 
could skin a cat, we could skin a kitten.
    But today we have a very different circumstance. We have to prepare 
for three very different contingencies. First, we must prepare for 
highly demanding asymmetric warfare. If we have to take actions in the 
Taiwan Straits, for example, we can anticipate a very challenging 
contingency. I don't want conflict with China, I don't predict it, and 
I don't think we will actually have it. But we do have to anticipate 
what it might entail should we face that crisis, and in this instance 
it will be highly demanding with an emphasis on advanced weapon 
systems.
    At the other end of the spectrum we face asymmetric wars against 
low-technology opponents. We are in two wars like this now. I should 
point out that although our opponents utilize low-technology, we 
continue to depend on high technology in many ways. These wars place 
enormous demands on people, and I fully understand why Secretary Gates 
believes we need to invest in a larger Army and Marine Corps at this 
time. The all volunteer force has performed very well during wartime, 
but we have not sized our force for 7 years of continuous warfare. We 
need a larger force right now. But that larger force--when combined 
with the substantial increase in the costs of maintaining that force--
is now effectively crowding out weapons system modernization.
    The third contingency we must anticipate is more traditional war 
against a serious potential opponent. We have waged two of these types 
of wars in the past 20 years. As a planning construct, it is quite 
different from the high-end asymmetric war, and the low-end asymmetric 
war. We have to plan for all three.
    The Secretary of Defense has given a proposal that balances these 
three, and in his judgment the right balance is to buy a larger force 
now and pay for it by cutting a series of major systems in the near 
term. I think he may be right. But I am also convinced that over time 
we will not be able to sustain even this reduced modernization with the 
expanded military end strength at the current cost structure for that 
military. Once we authorize new pay and benefits, we never take it 
back. So the personnel costs are now structural.
    But if we cut procurement substantially now, we also make 
structural changes on the industrial base. In your letter of 
introduction, you asked me to comment on the industrial base, so let me 
conclude with a few comments about the industrial base. First, let me 
say that we made an enormously important decision 90 years ago to build 
aircraft in the private sector and not in government arsenals. I 
believe that was absolutely the right decision. Indeed, I think it was 
one of the three decisions that helped us win the Cold War--a decision 
made 30 years before the Cold War. This strategic decision continues to 
this day, and it makes the defense industry indispensible partners. We 
cannot go to war and win without our defense industry partners.
    When we harvested the so-called ``peace dividend'' 20 years ago, we 
forced a consolidation of the defense industrial base to an absolute 
minimum. Now we are proposing further cuts. I believe we are coming to 
the point where we will not be able to hold competitions for new weapon 
systems. This may be unavoidable, but I think it is a great worry. I am 
absolutely convinced it will cost us enormously to try to recreate 
capabilities 10 years from now.
    Let me illustrate this by taking only one example. The Department 
is recommending termination of the C-17. The current strategic airlift 
fleet is comprised of C-5s and C-17s. 19 percent of the fleet--the C-5A 
models--is today on average 37 years old. The C-5Ms--16 percent of the 
fleet--are on average 24 years old today. Their reliability reflects 
it. The mission capable rate for the C-5A is only 50 percent today, and 
I personally question that. The mission capable rate for the C-5M we 
hope will be 75 percent, but that will be its high point when we 
complete the modernization. It will decline from there.
    Fortunately the C-17 comprises 65 percent of the strategic airlift 
fleet, and its reliability is 85 percent, which is logical because the 
average age of the fleet today is only 7 years. But we are now 
proposing to terminate the program. It took nearly 15 years to build a 
consensus, design the aircraft and manufacture and deliver the first C-
17. In 15 years the C-5As will be 53 years old, the Ms will be 39 years 
old and the C-17s 22 years old on average. This assumes we terminate 
the C-17 today and start developing its successor next year. I doubt we 
will do that. Indeed, I doubt we will start a new strategic airlift 
aircraft in the next decade, given the budget pressures we face.
    I use this just as an example. The C-17 is one of those systems 
that will be used in high-end asymmetric wars, low-end asymmetric wars 
and in conventional conflicts. I would suggest there is considerable 
risk in terminating the program at this time. I don't doubt we will 
have a producer of large commercial aircraft in 15 years that could 
build the next airlifter, but the only way to have a competition for it 
will be through an international competition, as we have today with the 
tanker modernization program.
    Distinguished members of the committee, I have only made your job 
more difficult. The Department has made important and principled 
recommendations, but only you can make this a national decision. Let me 
conclude by making your task even more complex.
    Congress makes decisions 1 year at a time. The Department makes 
plans over a 5 year period. Right now, the Department of Defense (DOD) 
is working on the next 5 year plan, and I can assure you this is even 
more difficult than the one they have just submitted. The program of 
record was not properly priced. For 4 years the Department has utilized 
unrealistic risk assumptions for most major weapon systems, meaning 
that every sophisticated weapon system is underfunded. There are major 
cuts still coming beyond those announced by the Secretary. Personnel 
costs continue to soar. As you make decisions on this year's budget, 
you must consider the impact this has on the next 5 years. This is 
possible only through a close dialogue with the Department. I know that 
Secretary Gates would welcome that dialogue.
    Thank you for inviting me to testify before you today. I am 
grateful that you are willing to serve at this critical time on these 
important matters. I would be pleased to respond to any questions you 
might have.

    Chairman Levin. Thank you, Dr. Hamre.
    Dr. Krepinevich.

  STATEMENT OF ANDREW F. KREPINEVICH, JR., PH.D., PRESIDENT, 
         CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS

    Dr. Krepinevich. Thank you, Mr. Chairman, thank you, 
Senator McCain, for the opportunity to appear before you today 
to share my views with you and your colleagues on the issue of 
the defense budget and the defense program.
    Upfront I'll say on balance I think Secretary Gates's 
recent decisions will improve our overall military posture. 
Having said that, I think there are a number of major 
outstanding issues that need to be addressed before we can 
really get a sense of which decisions need to be sustained and 
which ones might be refined.
    I think it comes down to three issues. Essentially, what 
Secretary Gates announced was changes in the set of 
capabilities that our military is going to have over time. What 
didn't get addressed are the challenges or the problems that 
these capabilities are intended to address, so the what, and 
the how: How will these capabilities be employed in an optimal 
manner in order to deal with these particular security 
problems?
    You might look at this in terms of a medical analogy. In 
order to have a good prescription, which is to say, what kind 
of equipment should we buy, how large of a force should we 
have, what kind of mix should we have, you need to do a good 
diagnosis of what the problem is, what are the existing and 
emerging threats. You also need to have a good prognosis: Among 
the treatment options, among the possible prescriptions, which 
one is the most attractive and the most relevant for the 
circumstance that we're looking at?
    In looking at that first question, the diagnosis, we 
belatedly diagnosed that we have a challenge in modern 
irregular warfare. I believe Secretary Gates right now is 
struggling to try and institutionalize what is still an 
unfamiliar kind of warfare in the Military Services. I think 
that is a major effort or a major objective of his that's 
animating his actions in terms of some of these changes in the 
programs in the budget.
    But I think equally important, and this came out in his 
Foreign Affairs piece about a balanced defense are, what I 
believe to be, three emerging challenges to our security that 
perhaps haven't been receiving the attention they deserve. One 
is the growing risk we are incurring and likely going to 
continue to incur in terms of our ability to project military 
power into two areas of vital interest.
    One is East Asia as a consequence of the Chinese ongoing 
development of what they call Assassin's Mace, military 
capabilities that are designed to push us progressively further 
and further away from their coast, uncovering key allies that 
we have in the region and compromising key interests.
    Second, as we've seen in a number of military exercises, 
the increased risk that we are incurring, perhaps not 
consciously, in operating in the Persian Gulf area, 
specifically the Persian Gulf itself.
    So the first part of the diagnosis is that the cost of 
projecting power is going up. It's going up in two areas of 
vital interest to the United States. Second, the cost of 
defending forward I think is going to go up, and I think it's 
going to go up substantially, even in the case of irregular 
warfare.
    I think the canary in the mine shaft in terms of this 
particular challenge was the second Lebanon War. In that war 
Hezbollah fired over 4,000 projectiles into Israel, some up to 
50 miles or further inside Israel proper. Several hundred 
thousand people had to be evacuated from their homes. They had 
to shut down the oil refinery and distribution system for fear 
that a lucky hit would cause untold economic damage. Several 
guided weapons, unmanned aerial vehicles (UAVs), and anti-ship 
cruise missiles were fired by either Hezbollah or the Quds 
Force.
    The long and the short of it is, extended range systems are 
diffusing down to irregular forces and over time certainly it 
seems likely that guided weapons or precision guided weapons, 
as some people call them, are going to filter down into these 
forces as well. Then you'll face the challenge of, even in 
irregular warfare operations, this could be the next big thing 
beyond improvised explosive devices (IEDs). How will we defend 
Camp Victory? How will we defend key commercial facilities, key 
transportation nodes, key government facilities, key military 
bases, when these kinds of capabilities diffuse?
    As I said, they have already diffused to Hezbollah, and 
they're not in the single digits or the dozens; they're in the 
thousands. What will happen when this begins to shift into 
precision capabilities?
    Third, there's getting there, projecting power; there's 
defending what you were sent to protect; and there is also the 
ability to sustain that. That requires unfettered access to the 
global commons, which in traditional times were the seas, but 
now they've become space, cyberspace, the seas, and the 
undersea. The Chinese in particular are threatening our access 
to space and cyberspace, and I think progressively in some 
areas the seas. Certainly we're compromised in the littorals.
    If you want to get a very interesting briefing, I suggest 
General Mattis and the results of the Millennium Challenge 2002 
exercise, where the better part of the U.S. fleet was sunk in 
the Persian Gulf by the Iranians. This is going back 7, 8 years 
now.
    But in particular, the growing risk to our assets in space, 
which are increasingly critical to our ability as a military to 
utilize the battle networks that have been created over the 
last 20 years, everything from communications to guiding our 
precision weapons to their targets.
    So these are three, I think, emerging challenges that we 
ignore over time at our peril. Essentially, they present us 
with strategic choices: Are we going to accept or do we have to 
accept an erosion in our position, or are there things we can 
do to offset these challenges and preserve and enhance our 
position?
    So that's the diagnosis. Now, what's the prognosis? Seven 
years ago in 2002, I testified before this committee and I made 
the point that you have a set of capabilities and you have a 
set of problems, and the connective tissue is really the 
operational concept or the doctrine that the military comes up 
with that says: This is how I'm going to apply these 
capabilities to solve these problems.
    The problem is when you start to talk about operational 
concepts, you start to talk about winners and losers. What 
tools, what capabilities am I going to use? What tools come out 
of the toolbox, what tools stay in the toolbox? Despite the 
fact that Senator Levin at the time approached the DOD about 
this issue and Joint Forces Command was given the mission, we 
still don't have anything approximating the kind of operational 
concepts that would really enable the committee, the military, 
or the Secretary of Defense, I think, to make some really good 
decisions.
    Let me give you just a brief example. 25 years ago we had 
an operational concept called air-land battle, because of the 
new challenges the Soviets were presenting in Europe. As a 
consequence of the detailed study that was done on that, the 
layer cake defense, it was determined that the U.S. III Corps 
would reinforce northern Europe, we made adjustments to the air 
defense belt, we established Prepositioning of Material 
Configured in Unit Sets, we talked about 10 divisions 
reinforcing in 10 days, the Navy talked about the outer air 
battle in terms of dealing with the threat from Soviet 
aircraft, and the Marines talked about protecting the northern 
flank up in Norway.
    You look at our position in the Far East today and what the 
Chinese are doing in terms of the Assassin's Mace anti-access, 
area denial capabilities, and whatever doctrine there is or 
whatever operational concepts, they are fuzzy. Fuzzy concepts 
don't provide good debate. They don't provide good intellectual 
rigor. They don't create winners and losers. At the same time, 
they don't give you the kinds of shifts in capabilities that 
you need in order to be able either to deflect these challenges 
or at least to realize that you can't cope with them.
    So again, we need to match how we're going to deal with 
these problems along with the problems themselves.
    Finally, the issue of resources. If we do a good diagnosis 
and we come up with a proper prognosis, as my colleague Dr. 
Hamre says here, we have to be able to execute it in terms of 
resources that are available. I would just simply echo the 
comments he has made about the likely gap between the existing 
program, almost certain gap, between the existing defense 
program and the resources that are likely to be made available 
to sustain it.
    While Secretary Gates made some decisions, the decisions 
really didn't affect the overall shape of the defense budget in 
a dramatic way. I share Dr. Hamre's concerns that we are 
delaying the day of reckoning when it comes to the defense top 
line, given some of the other pressures that we confront right 
now, absent some external threat or external shock to the 
system.
    At this point I think I would like to conclude my 
testimony, Mr. Chairman. I'd be happy to respond to any 
questions you or Senator McCain or the committee might have. 
Thank you.
    [The prepared statement of Dr. Krepinevich follows:]
            Prepared Statement by Dr. Andrew F. Krepinevich
                              introduction
    Thank you, Mr. Chairman, for the opportunity to appear before you 
today, and to share my views on the Defense Department's (DOD) fiscal 
year 2010 Defense budget and program. On balance, I believe Secretary 
of Defense Gates' recent decisions regarding the Defense program will 
improve our overall military posture. However, there are several major 
outstanding issues that must be addressed before we can fully assess 
the secretary's decision. First, have we identified the key existing 
and emerging challenges to our security? Second, how do Secretary Gates 
and our military leaders see the capabilities in the current program 
enabling our Armed Forces to meet these challenges? Third, is this 
approach affordable, given projected resource constraints? Finally, 
what role can the defense industrial base play, not only in supplying 
the needed capabilities in a timely manner, but also as a key U.S. 
strategic asset?
                    existing and emerging challenges
    In his recent Foreign Affairs article, Secretary of Defense Robert 
Gates stated that the United States needs a more ``balanced'' U.S. 
military, one that is better suited for the types of irregular 
conflicts now being waged in Afghanistan and Iraq. At the same time, he 
also cautioned that ``It would be irresponsible not to think about and 
prepare for the future . . . .'' Secretary Gates' admonition is as wise 
as it is obvious. Have we correctly identified the principal military 
challenges to our security? Failure to do so could render much of our 
existing and planned military capabilities ``wasting assets.'' The term 
``wasting asset'' was common among senior U.S. policy makers in the 
Cold War's early days. Even after its massive demobilization at the end 
of World War II, the United States possessed an incalculable strategic 
advantage: a monopoly of nuclear weapons. When the Soviet Union tested 
its atomic bomb in August 1949, it triggered a sense of urgency and a 
period of intense effort in the United States to devise a new strategy 
since its nuclear monopoly was now a wasting asset. These efforts 
brought together the Nation's best strategists and yielded the Truman 
administration's NSC-68 report and, later, the Eisenhower 
administration's Solarium Study and NSC 162/2. These in turn laid the 
foundation for a U.S. strategy to counter a nuclear-armed Soviet Union.
    To help offset the loss of this monopoly, the United States sought 
to develop new advantages while sustaining others: some new 
capabilities would be needed, as well as different methods of 
employment. Shortly after the Soviet nuclear test of a fission weapon, 
President Truman approved plans to develop thermonuclear, or fusion, 
weapons, with far greater destructive power. During the Cold War the 
United States also exploited its longstanding relative advantage in 
technology to maintain a highly effective nuclear deterrent. Faced with 
a nuclear standoff, equally important were efforts to sustain the U.S. 
military's unsurpassed ability to project and sustain large forces 
around the globe. On two occasions, during the Korean and Vietnam Wars, 
and again during the first Gulf War, the United States transported 
large field armies approaching a half million troops or more overseas 
for a significant period of time, enabled by the U.S. military's 
unfettered access to the global commons, principally the seas and the 
air but increasingly space and cyberspace as well.
    With the Soviet Union's collapse in December 1991, the United 
States' ability to project military power was effectively 
unconstrained. Large-scale deployments to Panama, Haiti, and the 
Balkans during the 1990s were eclipsed by the dispatch of hundreds of 
thousands of U.S. troops to Afghanistan and Iraq to topple hostile 
regimes following the September 11 attacks on New York and Washington. 
Throughout the post-Cold War era America's power-projection forces 
continued underwriting America's security commitments around the globe 
and assured the security of allies and partners alike.
    Several events in recent years, although not as dramatic as the 
Soviet nuclear test, strongly suggest that traditional methods of 
projecting power and accessing the global commons, along with perhaps 
hundreds of billions of dollars of U.S. military equipment, risk 
becoming wasting assets. The rise of major powers such as China and 
hostile states such as Iran, combined with the accelerating diffusion 
of advanced military technologies, is making power projection 
increasingly difficult. As these trends play out, Washington will 
likely find it progressively more expensive--and perhaps prohibitively 
expensive--in both blood and treasure to project power into several 
areas of vital interest, to include East Asia and the Persian Gulf. 
Even forces able to deploy forward successfully are liable to find it 
increasingly difficult to defend what they have been sent to protect. 
Moreover, the U.S. military's unfettered access to portions of the 
global commons, especially space and cyberspace, is being challenged.
    For some time now it has become apparent that our military will 
confront increased difficulty in projecting power in maritime 
chokepoints or in constricted waters like the Persian Gulf. In 1987, 
toward the end of the Iran-Iraq War, the Reagan administration directed 
the Navy to protect oil tankers in the Persian Gulf. In May of that 
year an Iraqi warplane fired 2 Exocet missiles at the frigate USS 
Stark, killing 37 sailors and severely damaging the ship. In April 
1988, the frigate USS Samuel B. Roberts was badly damaged by an Iranian 
mine. A few years later, two more U.S. warships, USS Tripoli and USS 
Princeton, suffered severe damage during the first Gulf War after 
striking primitive Iraqi mines, discouraging American commanders from 
contemplating an amphibious assault against an insignificant naval 
power.
    These events occurred in a relatively benign environment. The 
United States was not at war with either Iran or Iraq during its naval 
escort operations, and Iraq's navy at the time of the first Gulf War 
was miniscule compared to the U.S. fleet. As later military exercises 
would show, the risks are far greater when facing an active, clever 
adversary. Operating in confined waters close to shore significantly 
reduces the warning time a fleet has to deal with the threat of high-
speed, sea-skimming anti-ship cruise missiles. The same can be said of 
the dangers from high-speed suicide boats packed with explosives that 
can hide among the many commercial craft plying these waters. Anti-ship 
mines are both proliferating and becoming far more difficult to detect 
than those that plagued the U.S. fleet in the first Gulf War. If 
nothing else, by slowing ships' movement and restricting their 
maneuverability, mines make them easier prey for missiles and suicide 
craft. Iran is also looking to master the operation of quiet diesel 
submarines in the Gulf's noisy waters. All this suggests that the 
Persian Gulf, the jugular vein of the world's oil supply, risks 
gradually becoming a ``no-go'' zone for the U.S. Navy.
    The challenge emerging from China to the U.S. military's ability to 
reassure its allies and friends in East Asia is even more formidable. 
The Chinese People's Liberation Army (PLA) is aggressively developing 
capabilities and strategies to degrade the U.S. military's ability to 
project power into the region. Senior Chinese political and military 
leaders decided it would be foolhardy to challenge the U.S. military 
head-on for military dominance. Rather, China would combine western 
technology with eastern stratagems. To the Chinese, this means seizing 
the initiative in the event of a conflict by exploiting surprise. This 
will be accomplished by breaking up the U.S. military's communications 
networks and launching preemptive attacks to the point where such 
attacks, or even the threat of such attacks, would raise the costs of 
U.S. action to prohibitive levels. The Chinese have a name for the set 
of military capabilities that support this strategic philosophy: 
``Assassin's Mace'' or, in Chinese, Shashoujian.
    The Assassin's Mace mantra is that such forces enable the 
``inferior'' (China) to defeat the ``superior'' (the United States). 
The Chinese effort rests on two pillars. One is developing and fielding 
what U.S. military analysts refer to as anti-access/area-denial (A2/AD) 
capabilities. Generally speaking, Chinese anti-access forces seek to 
deny U.S. forces the ability to operate from forward bases such as 
Kadena Air Base on Okinawa and Anderson Air Force Base on Guam. The 
Chinese are fielding large numbers of conventionally armed ballistic 
missiles capable of striking these air bases with a high degree of 
accuracy. At present, U.S. defenses against ballistic missile attacks, 
especially from missiles employing penetration aids, are limited. These 
defenses can be overwhelmed when confronted with barrage attacks 
involving large numbers of missiles. The message to the United States 
and its East Asian allies and partners is clear: China has the means to 
hold at risk the forward bases from which most U.S. strike aircraft 
must operate.
    Area-denial capabilities are generally directed at restricting the 
U.S. Navy's freedom of action out to the second island chain, a line 
that extends from China's coast as far east as Guam. The PLA Navy 
(PLAN) is investing in submarines to stalk American carriers and the 
surface warships tasked with protecting them. In 2006 a Chinese 
submarine emerged in the midst of a U.S. carrier strike group, much to 
the Americans' embarrassment. The Chinese Navy is emphasizing the 
production of quiet diesel submarines that can form a ``picket line'' 
near the second island chain, silently waiting to ambush an approaching 
U.S. fleet. It would likely require significant time for an American 
fleet to reduce Chinese submarine defenses to the point where it could 
safely advance without risking heavy losses.
    The Chinese are relying on more than submarines to support area-
denial operations. They are constructing over-the-horizon radars, 
fielding unmanned aerial vehicles (UAVs), and deploying reconnaissance 
satellites to detect American surface warships at progressively greater 
distances, while also enhancing their ability to strike U.S. warships 
once they are located. PLAN submarines are being equipped with advanced 
torpedoes and high-speed, sea-skimming anti-ship cruise missiles. The 
PLA is procuring aircraft that can carry high-speed anti-ship cruise 
missiles, and fielding ballistic missiles that are capable of striking 
American carriers at extended ranges. China also possesses advanced 
anti-ship mines which may limit even further the maneuverability of 
U.S. naval forces and, by so doing, render them easier to target. 
Consequently, East Asian waters are slowly but surely becoming a ``no-
man's land'' for American warships, and particularly for aircraft 
carriers with their short-range strike aircraft.
    The same is true of the large air bases in the region that host the 
U.S. Air Force's short-range strike aircraft. Simply stated, a failure 
to adapt to this emerging challenge could find large surface warships 
and ``short-legged'' aircraft becoming wasting assets. If the U.S. 
military fails to address this growing problem and the current East 
Asian military balance becomes increasingly unstable, Beijing might be 
encouraged to resolve outstanding security issues with Japan, Taiwan 
and other states through coercion, if not aggression.
    Even if the U.S. military overcomes these obstacles to its power-
projection forces, it will still find that many of its forward 
operating bases and other key infrastructures risk becoming wasting 
assets. Since the Korean War the U.S. military has become used to 
operating with secure rear areas. Even when U.S. forces have engaged in 
irregular warfare, large American bases at Camh Ranh Bay in South 
Vietnam and, more recently, Camp Victory in Iraq and Bagram Air Base in 
Afghanistan have been relative sanctuaries in the midst of conflict. To 
be sure, there was the occasional raid or act of sabotage, but the 
damage inflicted was generally minor. Even insurgent attacks on the 
Green Zone in Baghdad failed to yield significant harm. This happy 
state of affairs is almost surely coming to an end.
    The second Lebanon War waged between Hezbollah and Israel during 
the summer of 2006 is the canary in the Pentagon's mineshaft. The war 
shows how difficult it is becoming for advanced military forces to 
defend key fixed targets such as military bases, critical economic 
infrastructure, and densely populated areas against irregular forces 
armed with rapidly proliferating ``RAMM'' (rocket, artillery, mortar 
and missile) capabilities. During the 34-day conflict Hezbollah fired 
some 4,000 rockets into Israel, most of them short-range and all of 
them unguided. Yet over 300,000 Israeli citizens had to be evacuated 
from their homes. Israel's oil refinery at Haifa had to reduce its oil 
inventory and dump oil out of fear that a rocket attack could spark a 
major explosion and fire in the city.
    While Hezbollah's rockets are short-range by modern military 
standards, some could be fired over 50 miles, a major increase over the 
mortars and rockets used by Viet Cong guerrillas 40 years ago against 
U.S. bases in South Vietnam. In coping with the problem at that time, 
U.S. forces often engaged in intensive patrolling to keep the enemy 
beyond his 4-mile effective mortar range. Applying this approach 
against an enemy whose rocket range may extend out to 50 miles is 
simply not a practical solution.
    Defending key targets will become even more difficult still as 
guided weapon, or ``G-RAMM,'' capabilities diffuse from great powers 
like China and Russia into the hands of irregular forces. This is 
already occurring. During the second Lebanon War, Hezbollah fired a 
guided anti-ship cruise missile, launched several UAVs, and destroyed 
or disabled over 50 Israeli tanks with sophisticated Russian-made 
antitank guided missiles.
    By historical standards, the U.S. military has enjoyed an unusually 
long near-monopoly in the use of guided, or ``smart,'' munitions, which 
offer the enormous benefit of high accuracy independent of a weapon's 
range. The value of guided weapons became clear to all in the first 
Gulf War, even though they comprised less than 10 percent of the bombs 
dropped but were more effective by an order of magnitude than unguided 
``dumb'' bombs. The American military currently has no easy answer to 
the challenge posed by ``G-RAMM's'' combination of range and accuracy, 
other than a massive expenditure of resources in what will likely prove 
a fruitless attempt to keep an enemy beyond its ever-growing capacity 
to strike targets at extended ranges.
    A major factor enabling the U.S. military to project power abroad, 
and to sustain forces once they are operating in an overseas combat 
zone, is access to the global commons--international waters and air 
space, as well as space and cyberspace. Since the Soviet Union's 
collapse nearly two decades ago, America's military has enjoyed 
generally unfettered access to the global commons. This favorable 
situation is fading away.
    As noted above, the rise of anti-access/area-denial capabilities, 
both to state and non-state entities, threatens to make key straits and 
coastal waters prohibitively risky areas in which to operate. Offshore 
oil and natural gas facilities and related infrastructure may be 
particularly vulnerable, as are undersea fiber optic cables. China 
alone seeks to create a maritime no-man's land extending several 
hundred miles out to sea.
    As for cyberspace, it is no exaggeration to say that information 
technologies (IT) permeate every aspect of America's military 
operations, from training to logistics, from command and control to 
targeting and guidance. As the military's dependence on IT has grown, 
so too has its vulnerability to disruptions, especially disruptions of 
its battle networks. This vulnerability also exists in America's 
economic infrastructure, where everything from transportation to 
electric power generation and finance depends upon the proper 
functioning of cyber networks. Attacks on both military and civilian IT 
networks have been growing for at least a decade. Russia has been 
accused of conducting cyber war campaigns against Estonia in 2007, 
Georgia in 2008, and Kyrgyzstan in 2009, while China is reputed to be 
behind cyber attacks that disabled computer systems at the Pentagon, as 
well as attacks against Britain, France and Germany. Part of the 
problem with cyber attacks is the difficulty in identifying their 
source. In the murky world of computer hacking and related activities, 
it is unclear whether cyber warfare will enable other countries, or 
even disaffected groups, to inflict crippling damage on the United 
States military or its economy.
    The situation is somewhat reminiscent of air power in the period 
between the world wars. At the time, air power advocates claimed that 
aerial bombardment of an enemy's territory in itself would produce 
prompt, decisive results, while others were far more skeptical. As it 
turned out, air power proved critical to the success of military 
operations in World War II, but failed to yield the kinds of results 
claimed by its zealots. Today it remains unclear how devastating an 
all-out cyber attack on the U.S. military or America itself would be. 
If such strikes are able to cause substantial damage to the U.S. 
economic infrastructure, much of the military systems fielded to defend 
the American homeland, such as missile defenses, could prove to be a 
modern Maginot Line.
    The U.S. Armed Forces rely heavily upon military and commercial 
satellites, key nodes in the military's battle networks. The global 
positioning system (GPS) satellite constellation is essential for 
guiding many ``smart'' weapons to their targets. In recent years the 
PLA has neutralized or destroyed satellites in low-earth orbit (where 
most satellites are located), by launching an anti-satellite (ASAT) 
ballistic missile or by firing ground-based ASAT lasers. As China's 
lunar exploration program matures, the PLA will likely acquire the 
ability to destroy the GPS constellation, which is positioned in 
medium-earth orbit. Of course, the system might also be disabled by 
jamming it or through cyber strikes. Assuming China continues to 
develop and field ASAT capabilities, the U.S. satellite architecture 
may be a wasting asset, highly dependent upon Chinese sufferance for 
its effective operation; indeed, its existence.
    If history is any guide, these trends cannot be reversed. 
Technology inevitably spreads, and no military has ever enjoyed a 
perpetual monopoly over any capability. To a significant extent, the 
U.S. military's wasting assets are the consequence of losing its near-
monopoly in guided weapons. This is true in targeting objects in space 
and in cyberspace, as well as ships at sea and air bases on land.
    As the Truman and Eisenhower administrations were faced with the 
need to confront some difficult strategic choices nearly 60 years ago, 
so too is the Obama administration today. Will the United States accept 
that several areas of vital interest are becoming ``no-go'' zones for 
its military, or will it take steps to address the challenge? Will the 
United States accept a posture of vulnerability regarding its satellite 
architecture and cyber infrastructure, or are alternatives available to 
redress the problem? The United States can either ignore these 
developments, at its peril, or adapt to them. Simply put, if strategy 
involves identifying and creating new sources of advantage as existing 
ones erode, what new advantages should the U.S. military seek? Equally 
important, where should the U.S. military scale back its investments, 
and what wasting assets should it divest?
    Presidents Truman and Eisenhower did not make decisions with regard 
to U.S. military force levels and capabilities in isolation, but within 
the context of an overall strategy that emphasized containing Soviet 
power, deterring aggression, preserving a strong American economy, and 
cultivating alliances with like-minded countries in general, and the 
great powers in particular. Similarly, the Obama administration's 
choices regarding the future military posture must be informed by an 
overarching strategy. This is no simple matter. Given the changes 
underway in the geopolitical environment, rapid advances in military-
related technologies, and the United States' weakened economic 
standing, a major strategy review comparable to those during the first 
decade of the Cold War is in order.
    Any strategic review must take into account three major challenges. 
The most immediate challenge is posed by radical Islamist groups, and 
finds the U.S. military engaged in campaigns in Afghanistan and Iraq, 
and in operations around the globe in an attempt to defeat or at least 
suppress them. There is also the prospect of nuclear proliferation. 
Should Iran become a nuclear-armed state, it could well spur a round of 
proliferation in the Arab world and further complicate the U.S. 
military's ability to project power into the Middle East in defense of 
key interests. Finally there is China, a key trading partner of the 
United States and potentially a strong force in support of well-
established international norms of behavior. However, China's military 
buildup suggests that it may be susceptible to pursuing its aims 
through coercion, if not aggression, unless steps are taken to address 
its development of threatening capabilities.
    Exploring options for addressing these emerging challenges will not 
be cheap. The United States' financial picture has eroded substantially 
in recent years, both in absolute and relative terms. This circumstance 
is not likely to be reversed anytime soon, further constraining 
strategic options. This suggests the United States pursue a more 
measured strategy, one that better balances the goals it seeks to 
achieve with the resources likely to be available.
    In addressing instability in the developing world the United States 
should adopt a strategy of the indirect approach. This means using the 
U.S. military's advantages in highly trained (but relatively limited) 
manpower to leverage the developing world's large manpower base. 
Emphasis should be placed on training, equipping and advising 
indigenous forces of countries threatened by subversion, especially 
states confronting radical Islamist groups like al Qaeda, but also 
states confronting other sources of instability, such as transnational 
drug cartels in Latin America. Assistance should ideally be provided 
before states become destabilized. Where U.S. forces are deployed in 
large numbers, as in Afghanistan and Iraq, they should continue their 
efforts to field indigenous forces to enable reductions in American 
ground combat units. To be sure, the U.S. military will need to 
maintain a capacity to ``surge'' forces should a state of vital 
interest begin to fail, but such deployments should be a last resort, 
and not the first option. To support this approach, the Pentagon will 
need to determine the kinds of equipment it will use to outfit the 
indigenous forces of partner states, and procure the equipment in 
quantities sufficient to establish Reserve stocks that can be quickly 
deployed when needed.
    How will our military cope with irregular forces armed with G-RAMM 
capabilities? Success will require intercepting relatively inexpensive 
projectiles reliably and at an acceptable cost. Several alternatives 
are worth exploring, either separately or in combination. One involves 
deploying loitering ``hunter-killer'' reconnaissance and strike 
aircraft to search for enemy G-RAMM forces and, once they are 
identified, engaging them quickly before the enemy can fire or 
disperse. Another option is to harden targets against such attacks. 
This is an expensive proposition and is probably feasible only for the 
highest priority targets. Then there are active defenses that involve 
intercepting G-RAMM projectiles. Cost is a major problem here as well, 
as kinetic-kill interceptors tend to cost far more than G-RAMM 
projectiles. Another possibility may be found in the rapid advances in 
solid-state lasers, which have a cost-per-shot that is far less than 
traditional interceptors. Any solution to the problem, if there is one, 
will most likely be found in a combination of existing and emerging 
capabilities, and in new ways of employing them.
    When it comes to power projection, the United States should adopt 
an offsetting strategy making it clear to Beijing that it intends to 
continue reassuring allies and friends in the region that they will not 
become victims of coercion or aggression. The growing PLA threat to 
U.S. forward air bases might be handled in several possible ways. One 
is to harden these bases against attack by missiles with conventional 
warheads. Another might involve deploying missile defenses to protect 
these bases. Still another might be to forego such bases in favor of 
developing long-range strike systems. Of course, some combination of 
these options might provide the best solution. To offset its growing 
vulnerability the Navy might reduce its emphasis on large surface ships 
to conduct strike operations in favor of submarines armed with 
conventional cruise missiles. Or carriers might reduce their reliance 
on short-range manned aircraft in favor of much longer-range unmanned 
aircraft, some of which (e.g., N-UCAS) are now in development.
    In terms of preserving U.S. access to space, it may be possible to 
shift away from relying on relatively few large ``mainframe'' 
satellites and toward micro- and nano-satellites that can be configured 
in less vulnerable networks. If part of the network is destroyed, it 
might be replaced through the rapid re-launch of backup satellites, or 
by activating dormant satellites previously positioned in space. 
Alternatively, it may be possible to use terrestrial-based clusters of 
UAVs to substitute, at least on a limited basis, for damaged or 
destroyed satellites. If a challenge emerges to the U.S. stewardship of 
the world's oceans, it is likely to come in the form of enemy 
submarines, which are far more difficult to detect than surface 
warships. Priority must be given to preserving and expanding upon the 
Navy's advantage in antisubmarine warfare, while also developing more 
capable countermine capabilities. Current Pentagon plans to increase 
submarine production must be sustained, while design work on unmanned 
underwater vehicles and a new class of submarines is initiated.
    Alas, as for the cyber warfare competition, it is so shrouded in 
secrecy that it is difficult to determine the United States' level of 
vulnerability, let alone options for addressing it. It may be that a 
defensive strategy cannot be successfully pursued, and that the U.S. 
military will be forced to rely on deterring the worst sorts of cyber 
attacks. But given the paucity of information on this area of the 
military competition, we are left to speculate.
    Determining whether these approaches and capabilities can offset 
the U.S. military's wasting assets will take time and resources, both 
of which are in short supply. Significant resources may be liberated by 
reducing emphasis on capabilities whose value stands to be greatly 
diminished by the shift in the military competition. The Air Force, 
Navy and Marine Corps plan to purchase several thousand short-range F-
35 strike aircraft that must operate from forward land bases or off of 
large surface ships, both of which are increasingly vulnerable. Indeed, 
the F-35 seems overdesigned for the emerging low-end threat while 
lacking the range it will likely need against a high-end threat. The 
Navy's new Zumwalt-class destroyers are the kind of large surface ships 
that are likely too expensive to address the challenges posed by 
irregular warfare and too vulnerable to operate in East Asia or the 
Persian Gulf. Plans to terminate their production should go forward. 
The Marines are looking to field an Expeditionary Fighting Vehicle 
(EFV) that swims ashore and then fights as a land combat vehicle. Yet 
the fleet is being forced to operate ever further from the shore, far 
beyond the distance for which the EFV was designed. The EFV is also 
highly vulnerable to the improvised explosive devices that are now 
proliferating throughout the developing world. The Army anticipates 
spending over $150 billion on its constellation of Future Combat 
Systems (FCS). Yet the FCS is optimized for traditional conventional 
warfare rather than the era of persistent irregular warfare the Army 
now confronts. Satellites like TSAT that are highly effective so long 
as space is a sanctuary must be reconsidered in recognition of the fact 
that this condition no longer obtains.
                          operational concepts
    While it is possible to identify with reasonable clarity what 
military capabilities are unlikely to prove effective in addressing 
existing and emerging challenges to U.S. security, identifying the 
capabilities mix that would best preserve the Nation's interests is a 
more challenging proposition. Ideally, the answer would be found in the 
development and testing of new concepts of operation--how the Armed 
Forces would combine their capabilities to deter or, if necessary, 
defeat a threat to the national security. Some progress has been made 
in this regard. For example, in the wake of confronting enemies waging 
modern irregular warfare in Afghanistan and Iraq, the military Services 
have developed new ways of operating (i.e. doctrine) and adapted 
existing equipment while emphasizing new systems and capabilities (e.g. 
unmanned aerial vehicles, mine resistant ambush protected).
    This is all to the good. However, most of this was accomplished 
after the fact. The U.S. military found itself reacting to a threat, 
rather than anticipating it. Such an approach is wasteful in lives and 
resources, and increases the risk to the Nation's security. The DOD 
needs to become better at anticipating emerging challenges and 
identifying wasting assets. For example, during the Cold War the Army 
and Air Force collaborated on the AirLand Battle concept for deterring 
Soviet aggression against the North Atlantic Treaty Organization. A 
healthy debate ensued over the alliance's ``layer cake'' defense, 
resulting in the U.S. Army's III Corps being shifted to the Northern 
Army Group. The need for forward-positioned equipment--``Prepositioning 
of Material Configured in Unit Sets''--was identified. The need to 
reinforce forward-deployed U.S. forces--``10 divisions in 10 days''--
was identified and exercised (i.e. ``REFORGER''). The maritime forces 
joined the process. The Navy explored options for conducting an ``outer 
air battle'' against Soviet strike aircraft threatening the Atlantic 
supply lines, while the Marine Corps assessed how it might help anchor 
the alliance's northern flank in Norway. These efforts proved crucial 
in enabling our senior civilian and military leaders to make informed 
choices regarding military systems and capabilities mix. Unfortunately, 
the U.S. military has yet to develop an ``AirSea Battle'' concept to 
offset China's actions and reassure allies and friends in East Asia.
                               the budget
    Of course, all this presumes that funding will be made available to 
sustain the revised defense program, and that the capabilities needed 
can be produced in a timely and efficient manner by the industrial 
base. While the fiscal year 2010 defense budget represents a modest 
increase over the previous year's budget, a portion of this increase is 
the result of shifting programs and activities previously funded 
through supplemental appropriations into the base budget. In addition, 
the administration's future years defense program has not yet been 
announced. Absent this data it is difficult to state with any degree of 
confidence how affordable the changes announced by Secretary Gates will 
be. However, given the relatively weak state of the economy, the 
administration's projections regarding Federal budget deficits in the 
coming decade, and independent assessments that reveal a significant 
shortfall between the defense program and the previous administration's 
funding estimates, it seems likely that more difficult choices lie 
ahead.
                          the industrial base
    With respect to the industrial base, there is a strong case to be 
made for reforming the Defense acquisition system, and I applaud the 
efforts of Senator Levin and Senator McCain to approach this in a bi-
partisan manner. However, I am also concerned by the DOD's general 
absence of attention to the industrial base with respect to its value 
as an important strategic asset of the United States. Properly 
incentivized and structured, there are at least two important sources 
of competitive advantage the defense industrial base can provide for 
the Nation: the ability to compete based on time, and complexity and 
diversity.
Time-Based Competition
    Time, while always an important consideration, is especially 
precious during periods of great change. Assuming the Department has 
the resources to affect major shifts in its investment posture, it must 
still incur a cost in the form of the time it takes to realize the 
benefits of these investments. Periods characterized by uncertainty and 
the potential for discontinuous change in military competitions may 
present those militaries who do not lead the change with insufficient 
time to adapt.
    The longer it takes to produce new capabilities, the higher the 
risk to be addressed, since there is a lag between the time a 
discontinuity is diagnosed, the Department's investment strategy 
altered, and new military capabilities fielded. If, for example, the 
DOD could realize instantaneously the results of a major shift in its 
investment strategy, it would incur no risk other than that associated 
with sunk costs--i.e., those capabilities invested in prior to the 
appearance of a discontinuity, whose value may not hold up well 
following its occurrence. The longer a military requires to field new 
capabilities--be they in the form of new systems, doctrine, individual 
skill sets, or the creation of new infrastructure (e.g., bases)--the 
greater the risk that it will not be able to respond quickly enough to 
the new threats emerging from a discontinuity. In brief, the greater 
the risk, the greater the need to hedge against that risk. The 
inability to compete based on time thus imposes a cost penalty. The 
cost here can be thought of in terms of an insurance policy, where the 
Department invests in a range of capabilities to insure that it is at 
least minimally competitive if and when a discontinuity occurs. In 
doing so, however, the Department pays a price--by preparing for a 
range of futures, it is less prepared for any particular future.
    This leads to the key observation that if the time required to 
translate resources to capabilities can be compressed, it is possible 
to apply resources more efficiently. This is because when hedging 
against a given level of risk, the ability to operate along short time 
lines means fewer resources need to be expended. It was not all that 
long ago that our defense acquisition system and industrial base were 
very adept at time-based competition. For example, our first Polaris 
Submarine, the USS George Washington, launched the first Polaris 
missile in 1960, with construction beginning only 3 years earlier in 
which an attack submarine was modified to incorporate a missile 
compartment during construction. Design on the missile itself began in 
1956, only 4 years before it was first launched. Around that time, in 
the late 1950s, work began on what became the SR-71, whose first flight 
was in 1964. The Saturn V rocket that carried our astronauts to the 
moon began development in 1962, and entered use in 1967.
    The ability to compete based on time can also be used as a weapon. 
If DOD's defense planners can wait longer before committing resources, 
it complicates adversaries' investment strategies, since they have less 
information regarding the ultimate investment path the Department might 
take. It is somewhat similar to a game of poker, in which the adversary 
must begin to reveal his hand, card by card, while we continue to 
conceal ours. We have a much better sense of the risks and 
opportunities we face relative to the opponent, and (assuming we can 
exchange unexposed cards through a request to the dealer) a much 
greater opportunity to shift our competitive posture. The difference, 
of course, is that the Department can decide what cards it will be 
dealt, since it can choose where to invest.
    Given the importance of this aspect of investment strategy--
especially during periods of anticipated discontinuity in the military 
competition--high priority should be accorded to improving dramatically 
the Department's capability in this area. This implies a commitment to 
reforming the acquisition system. Unless the Department can make some 
major improvements in its defense acquisition process, the Department's 
ability to exploit time-based competition will be far below its 
potential.
Complexity and Diversity
    Investment strategists exploring opportunities to impose costs on 
adversaries might also achieve their aims by inducing risk and 
uncertainty into an adversary's calculations. This can be accomplished 
by pursuing an investment strategy that exploits complexity and 
diversity. This strategy is particularly attractive during periods of 
discontinuity (or anticipated discontinuity) in the military 
competition, where uncertainty is already high. The problem posed to 
the adversary here, again, is not directly linked to its investment 
calculations concerning perceived costs and benefits. The adversary 
experiences no direct impact on its cost to field a given set of 
military capabilities. Rather, the imposed costs are indirect.
    How is an investment strategy of complexity and diversity pursued? 
First, it helps to have certain enduring advantages. A competitor like 
the United States has an enduring advantage in both the scale of its 
defense effort and the technological sophistication of its defense 
industrial base. The United States has no rival (or combinations of 
rivals) that can muster even half the U.S. gross domestic product 
(GDP). Moreover, the United States can also count most of the world's 
greatest economic powers (e.g., France, Germany, Great Britain, Japan) 
among its allies. America's defense industrial base is unsurpassed in 
its ability to combine technologies in complex combinations through its 
unparalleled expertise in systems integration and architecture 
integration (i.e., the building of networks).
    These advantages enable the United States, should it choose, to 
develop (and, in select cases, field) a relatively wide range of 
capabilities that can be combined in complex systems. This confronts an 
adversary with a wide array of existing and potential military 
``tools'' that may be used against it in a military competition.
    For example, during the 1930s the U.S. Navy was developing a 
relatively diverse set of means for destroying an enemy battle fleet. 
In the years immediately prior to its entry into World War II, 
improvements were being made in the Navy's battleships (e.g., new 
ships, larger caliber guns, radar-directed fires); submarines (torpedo 
attack); and, perhaps most importantly, strike aviation (dive bombing 
and torpedo attack). Any rival contemplating competing with the U.S. 
fleet would have to stretch its resources to account for this diversity 
in striking power, and the variety of combinations in which it might be 
employed. For instance, developing defenses against torpedo bombers but 
not dive bombers or submarines would cause a U.S. rival to incur high 
risk. Moreover, until the early 1940s the U.S. fleet was comparatively 
small relative to the size it would quickly achieve during the war. 
Would-be adversaries could still not be certain as to how the United 
States would choose to scale up the size of its fleet if war came, or 
the mix of capabilities it would emphasize, as it had created a 
substantial number of options for itself.
    In short, by introducing risk and uncertainty through an investment 
strategy of complexity and diversity, the United States posed a problem 
for Japan, a greatly inferior industrial power, of whether to stretch 
its resources rather than concentrate them. With the considerable 
advantage it enjoyed in scale, the United States was able to both 
choose the preferred forms of competition when the war began (i.e., 
submarine warfare and fast carrier task force operations vice 
battleships operating in a battle line), and to combine these forces in 
the most effective manner, and on a scale that the enemy could not 
match.
    In summary, as Congress and the DOD work to reform the defense 
acquisition system, it will be important not only to improve the 
system's overall efficiency, but to accord equal priority to ensuring 
the defense industrial base's potential to serve as a strategic asset 
is both enhanced and consciously exploited.
                               conclusion
    Secretary Gates' recent decisions regarding the fiscal year 2010 
defense program mark what hopefully is the start of a much-needed 
debate on the state of the Nation's defense posture. Given emerging 
changes in the threat environment, the United States has a number of 
major strategic decisions to make. The nation's senior leaders need to 
know if there is an acceptable alternative to America's growing 
vulnerability in key areas of the military competition. If no practical 
alternative exists, then U.S. national security strategy must be 
adjusted accordingly, and the sooner the better. However, just as it 
took over half a decade of effort to address the problem of America's 
loss of its nuclear monopoly, a strategy that addresses the United 
States' current wasting assets will not be crafted overnight. A sense 
of urgency similar to that which animated senior national security 
decisionmakers at the Cold War's beginning is needed. This will require 
the persistent attention of the president and his senior national 
security advisors, as well as the secretary of defense and 
Congressional leaders. To be sure, the Nation confronts a severe 
financial crisis, which the president cannot ignore. However, President 
Obama may take some solace from President Franklin Roosevelt, who 
simultaneously tackled both the Great Depression and the need to 
prepare the Nation's military for what became a global conflict.
    A decade ago the debate in defense circles centered on whether or 
not the U.S. military needed to undertake a ``transformation''--to 
field a substantially different kind of military to address the 
challenges of a new era populated by new rivals and rapidly diffusing 
technologies. The idea faced stiff resistance from many in the 
military, who argued that the evidence for undertaking major changes in 
what was by far the world's most capable military was lacking. It calls 
to mind the wishful thinking of many senior officials in the Truman 
administration who discounted warnings regarding Soviet progress toward 
an atomic bomb.
    Confronted with modern insurgency warfare in the wake of the 
invasions of Afghanistan in 2002 and Iraq in 2003, the United States 
has found itself engaging in ``reactive'' transformation, as have the 
Israeli Defense Forces following the second Lebanon War. Despite the 
growing evidence that a wide array of U.S. military capabilities may 
depreciate rapidly in value, some policymakers remain reluctant to 
accept the need to engage in the hard thinking that would characterize 
``anticipatory'' transformation: preparing for emerging challenges by 
identifying new capabilities and methods of operating to offset or 
replace those whose value is depreciating. Ignoring the growing 
challenges to the United States' ability to project and sustain 
military capability overseas in defense of the Nation's interests does 
not mean these challenges do not exist. Sooner or later they, and their 
implications for America's security, must be confronted. A decline in 
the U.S. military's ability to defend key national interests may be 
inevitable; however, it should not be the result of indifference or 
lack of attention. There are important strategic choices to be made--
either in offsetting efforts to undermine America's military shield, or 
accepting it and adapting accordingly. In a time of increasingly scarce 
resources and growing competing national priorities, the sooner such 
choices can be made, the better.

    Chairman Levin. Thank you both for, as we always receive 
from you, extremely thoughtful testimony.
    Why don't we just try 8 minutes for our first round of 
questions.
    This will go to either or both of you. You've talked about 
it, we've talked about it, but I'd like you to be more specific 
in your reaction to what Secretary Gates's programmatic 
recommendations are, which are a reflection of his shift of 
emphasis towards irregular operations, counterinsurgency 
operations, and stability type operations.
    First, before I get to the impact of those shifts 
programmatically, I'm curious as to something else which he has 
stressed. That is, he has said that the Department needs to 
institutionalize and finance the support necessary for 
irregular warfare capabilities. What does that mean? Assuming, 
first of all, I think you both generally agree that that's the 
direction we need to go, although you, Dr. Krepinevich, raised 
some nuances to that. But in general, I think you both would 
agree that that is the right direction.
    Assuming you do, what institutional challenges are there? 
What are the hurdles institutionally to properly support 
irregular warfare capabilities that the Secretary wants to put 
greater focus on? Let me start with you, Dr. Krepinevich.
    Dr. Krepinevich. Mr. Chairman, I would say to the issue of 
institutionalization, Secretary Gates some months back talked 
about his concerns about next-war-itis, that we focus too much 
on the next war, not enough on winning the war we have. I took 
his Foreign Affairs article to really separate this out into 
three dimensions. There's next-war-itis, there's the war we 
have, and there's last-war-itis.
    I think what he's really arguing against is the Services 
gravitating back towards their familiar institutional centers 
of gravity, preparing to fight the last war. I think, based on 
my conversations with him and my reading of his public 
statements, there is a concern that the military will view this 
conflict as a one-off, much as the ``no more Vietnams'' slogan 
that was heard after the Vietnam war.
    I had one general tell me: ``We've had our hand on the 
stove in Iraq and Afghanistan for the last 7 years; once we 
take it off, nobody's going to want us to put it back on 
again.'' But again, the enemy gets a vote and the military 
doesn't make those decisions. It's the Secretary and the 
President.
    So I think his concern is how do we institutionalize that 
in the Services? How does the Army, for example, create an 
institutional force structure to deal with these kinds of 
problems? How does the Army develop a way of training advisers 
and trainers that can go in and actually execute the overall 
strategy, which is to build partner capacity?
    Our competitive advantage here isn't in large numbers of 
soldiers. It's in small numbers of quality soldiers that can 
train and advise the indigenous forces of other countries. 
Where are the War Reserve Stocks? If that's our strategy, why 
aren't we buying equipment that we might not equip our own 
soldiers with, but we would be familiar and comfortable with 
equipping the soldiers of indigenous countries threatened with 
instability, insurgency, terrorism, and so on? They don't have 
to have U.S. quality. We can give them quality that's good 
enough for them in terms of their training and their culture 
and so on. Where is the focus on that?
    Again, the idea of a good strategy is to play to your 
strong suits. Our strong suit is not masses of manpower. Our 
strong suit is high quality, high-trained manpower.
    In terms of finances, I think what you're seeing is an 
attempt, as Dr. Hamre said, you have the base budget and you 
have the supplementals. They're trying to move a number of 
items that were associated with irregular warfare back into the 
base budget, in the hope that it'll have the sanctuary of being 
in the base, it won't die when the supplementals are reduced 
and done away with at some point.
    So here you see the intelligence, surveillance, and 
reconnaissance funding, some of the funding for UAVs, I think a 
total of about $2 billion, being brought back into the base 
budget. Even then, though, I think the Secretary knows that he 
has to convince the Services, at some point, to keep those in 
the base budget and not essentially take those dollars and put 
them toward more comfortable, more familiar kinds of 
capabilities and programs.
    So institutionalization, I think he knows the military has 
learned a lot of lessons, that we've developed a lot of 
proficiency in this kind of warfare. Let's not lose it, because 
we lost a lot of what we learned after Vietnam.
    The second point is to get that worked into the budget, so 
you have an institutional home for the kinds of capabilities 
that are going to be needed to support our forces that have to 
conduct irregular warfare operations.
    Chairman Levin. Dr. Hamre?
    Dr. Hamre. Sir, I agree with what Andy said. I think that 
institutionalizing and financing really means getting out of 
this business of using supplementals. I think that had a 
corrosive impact.
    If I could just add a couple of things, however. I don't 
think they're going to walk away from thinking about insurgency 
warfare. I think the military sees this as the primary 
challenge going forward. It certainly has a different impact 
for different Services, but I know for the Army and the Marine 
Corps, they're in the middle of it and I think they know that 
insurgency warfare is the most likely future. I personally 
don't think they're going to walk away.
    Chairman Levin. You don't see any institutional impediments 
to reflecting that shift?
    Dr. Hamre. No, sir, I don't. As a matter of fact, I think 
that the greater concern you would find in the Army is that the 
emphasis on that is taking them away from more traditional 
doctrinal work on things like coordinating artillery with 
ground maneuver and things like that. It reflects the demands. 
They've been conducting a very difficult war for 7 years and 
it's going to continue in Afghanistan. I do not see them 
walking away and trying to say, ``we can't hardly wait to get 
out of that stuff so we can go back to tank warfare again.''
    Certainly there are those that feel that we're not paying 
attention to that. I honestly don't think that's the problem at 
the time. I think there's a bigger structural question. That 
is, how do we prepare for contingencies that are beyond what 
we're in right now.
    Chairman Levin. Beyond what?
    Dr. Hamre. Beyond the low end. We have these three 
different types and we're really focusing right now on low-end 
asymmetric war.
    Chairman Levin. Maybe this goes mainly to Dr. Krepinevich, 
and that has to do with the specifics that were announced on 
April 6. If you're able to connect some of those major 
decisions, which are going to be, as Dr. Hamre pointed out, 
recommendations to us, assuming they're in the budget which is 
coming up next week, but they are decisions in the executive 
branch. If you could react to some of the major ones.
    Let me rattle off about half a dozen of them, just to get a 
flavor of this as to whether in your judgment, and Dr. Hamre, 
just jump in if you feel that you want to do that; we'd be 
happy to have your comments. Let's start with Air Force 
tactical fighter aircraft. There's a cut here that he's going 
to propose of these older tactical fighter aircraft that have 
many in the Air Guard and Reserve.
    Second is the C-17 production end. Third would be the F-22. 
He would stop the DDG-1000 program, revert to the DDG-51s. The 
cancellation and the apparently rethinking through the manned 
ground vehicle portion of the Future Combat System (FCS). 
Limiting the interceptor missiles to 33. These are the ones in 
the Missile Defense Agency's (MDA) program, and shifting some 
of that funding to the short-range missiles, the Patriots and 
the missiles. It's a reduction in one and a shift to the other. 
The termination of the Multiple Kill Vehicle program.
    I think I've probably thrown enough at you, but just if you 
can give us your flavor, and add, both of you, any that come to 
your mind. Which ones you think should be or are going to be 
major issues, and connect those comments to what your beliefs 
are about the wisdom of the shift that you've just described?
    Dr. Krepinevich. I can address certainly a few of them with 
some level of competence. In terms of the FCS, the system was 
originally designed to deal with a combined arms mechanized 
force in open battle, the Republican Guard kind of force. The 
program has risk in four areas. One is technical risk, if you 
look at the Government Accountability Office (GAO) reviews, a 
high-level technical risk, which means likely future cost 
growth down the road. It has already exceeded its cost 
estimates. They had to cut, most recently, 4 programs out of 
the 18 just to maintain roughly the same level of costs.
    There is a temporal risk associated with the program, which 
is to say the projected deployment date keeps slipping. Of 
course, if you slip past a certain date then what you have to 
do is begin to recapitalize your existing equipment that you 
had expected to retire, because the FCS hasn't arrived on the 
scene.
    But I think the greatest area of risk is in operational 
risk. In other words, I think the system was fundamentally 
designed to do something else, which is that open battle 
against a traditional conventional adversary, and I don't think 
it translates very well to irregular warfare.
    Yet, if I could add one word to General Casey's 
description, I think we are in an era of persistent irregular 
conflict, in addition to the other challenges.
    In terms of the DDG-1000, based on what we have in terms of 
the character of the challenges we face, I think the ship is 
probably underdesigned for the kinds of problems that the 
Chinese are going to cause for us and are already causing for 
us in terms of operating large surface ships near the Chinese 
littoral in the Far East, and also not particularly survivable 
in an area like the Persian Gulf. I think it's probably 
overdesigned for the low-end threat, where I agree with 
Secretary Gates, if we can get the costs under control, I think 
LCS is a much better approach to guerrilla warfare or irregular 
warfare in the littorals.
    In terms of the F-22, I go back to my comment about, how 
would you use this aircraft? The problem, in a sense--that the 
aircraft has come to be irrelevant--is how to maintain a stable 
military balance in the Far East? How do you pursue an 
offsetting strategy to what the Chinese are doing so that the 
Chinese aren't tempted to get what they want through coercion, 
let alone aggression, and to maintain the confidence of our 
allies in countries like Japan?
    It's not clear to me how you can base the F-22 forward in 
places like Kadena Air Base because we haven't solved the anti-
access problem that the Chinese are developing. It's not clear 
we can tank them from Anderson or from other locations to get 
them into the fight in that area. So again, it's a very 
interesting capability, but I haven't been convinced about how 
it might be effectively employed, in order to address one of 
the security challenges we confront.
    I think I was disappointed in the case of the Next 
Generation Bomber. I think what we have is an investment 
portfolio that, especially on the aviation side, is trending 
more and more toward shorter range systems, and I think what 
we're going to need is a Next Generation Bomber the sooner the 
better. I also think the Navy Unmanned Combat Air System (NU-
CAS), we're going to have to find some way to get that on the 
decks of the carrier probably early in the fight because that 
gives you the extended range that you need to win that outer 
network, outer air battle now in the Far East and not in the 
Atlantic.
    So those are--one final observation, and that is the guided 
rockets, artillery, mortors, and missiles (G-RAMM) problem, as 
it's being called, the G-RAMM problem that we're facing on the 
low end. The Israelis are struggling with this problem of how 
to intercept these things, both in the second Lebanon War and 
in the recent conflict in Gaza.
    One problem you run into is that, consciously or not, 
Hezbollah and Hamas are pursuing a cost-imposing strategy. The 
Israelis can't afford to fire a $20,000 or $30,000 interceptor 
again and again and again to intercept $2,000 and $3,000 
rockets. So what is the way to get out from underneath that 
rock? The only thing I've seen that may hold promise is the 
rapid advances that have been made recently in the form of 
solid state lasers, where the power has gone up dramatically in 
terms of what they're able to achieve. It's a lot more workable 
and battlefield-worthy than chemical lasers.
    But again, where is the operational concept that says on 
the front end we're going to have hunter-killer teams 
suppressing the fire, we're going to maybe have boost phase 
interceptors on the front end, and on the back end we're going 
to harden key targets that we have to harden, we're going to 
have maybe a mix of kinetic and directed energy intercept? I 
don't know if that's the answer, but it seems to me that that 
ought to be a problem that gains the kind of attention and the 
kind of professional debate that we had with air-land battle 
back 20, 25 years ago, and that seems to be absent now. Its 
absence really, I think, hurts our ability to make informed 
decisions about what are the capabilities we want and what mix 
of capabilities do we want.
    Chairman Levin. Dr. Hamre, did you want to add?
    Dr. Hamre. I'll just address one, and that's the C-17. This 
is one asset we're going to need in the high end asymmetric 
war, the low end asymmetric war, and the traditional war. Our 
strategic airlift fleet today is made up of C-5s and C-17s. The 
C-5s are two models. The A model is, on average, 37 years old 
today. The B models, turning into the M model, are today on the 
average 22 years old.
    Now, their reliability shows it. Their reliability is low. 
Now, if we're going to terminate the C-17, we're going to need 
to replace those C-5s. It took us 15 years to get the C-17. If 
we wait 15 years, start right away next year with the next 
airlifter, the C-5s are going to be 52 years old when the new 
system enters service. That's just untenable.
    It'll cost us $10 billion to buy and develop a new 
replacement for the C-17. You can buy 40 C-17s for that. I 
really think we ought to look at this one. I've had a 
conversation with the Secretary about it and his problem is 
that Congress constrains him to operate old C-5s. So we have an 
issue here. But I think this is one I would suggest that 
Congress re-examine, and I think it's in any one of the 
scenarios going forward.
    I'd be happy to talk about any of the others.
    Chairman Levin. Senator McCain.
    Senator McCain. Thank you, Mr. Chairman, and I thank the 
witnesses.
    Here's the conundrum in my view. It's everything that 
President Eisenhower warned us about. What has exacerbated and 
exaggerated the problem, to an alarming degree, is that we've 
seen this consolidation in the defense industry. 20 years ago, 
if there was a new airplane or a new missile or whatever it is, 
you had numerous corporations and parts of the defense industry 
competing for it. Now we have at best two. Sometimes it is sole 
source, cost-plus contract, which lurches out of control.
    You can't make it up, the story of the presidential 
helicopter, the story of the LCS, and the cost overruns of the 
FCSs. The numbers are so staggering that nobody believes it.
    So here we have a situation, and John, you just alluded to 
the fact that the contractors are now embedded in the Pentagon 
to a degree where we've lost the balance between the kind of 
input and expertise we need to the point where the most 
fundamental decisions are being made. It is now conventional 
wisdom--and we're going to find out whether it's correct or 
not--that no weapons system, once it's in production, can ever 
be killed or can ever be terminated. When the defense 
contractors, and I say this with the utmost respect, have 
subcontractors in 40 of the 50 States, then they can rally the 
support in Congress to make sure that these acquisitions go on 
forever.
    Meanwhile, there's the tension that both of you have 
described between our rising personnel costs as a necessity of 
expanding the Army and the Marine Corps.
    I think that Senator Levin's and my effort under his 
leadership is a stab at the problem, but I'm not sure we get at 
the fundamentals of the problem. So does that mean to you that 
we need to go to fixed cost contracts?
    If you disagree with my assessment of the situation, please 
do so, or want to modify it.
    Dr. Hamre. I don't disagree with your assessment of it, but 
I do want to talk with you about the origins and causes of it. 
There's an old saying back home that you can grow a pig so fat 
it can't walk. What we tend to do with systems is we let the 
requirements get out of control. That's what happened on the 
VH-71. The President needs a replacement helicopter. The 
current helicopters are 30 years old. But in this case, the 
requirements people were unconstrained by any discipline in the 
budget, and it got bigger and bigger and heavier and more 
elaborate. The President's seat on that helicopter weighs 250 
pounds. It just went crazy.
    So I think the root cause of most of this growth is that we 
do not discipline our requirements adequately. I think the 
Secretary is speaking to that. That would be the first thing I 
would say.
    Sir, if I could say one other thing, you asked if your 
legislation was going to fix the problem. I would encourage 
support of your legislation, but I also think it is not getting 
at some root causes. This isn't any criticism of the 
legislation. There are two elements of the budget that are not 
addressed by the legislation, which are the real cause of the 
chaos in the procurement accounts. We do not budget real cost 
growth for personnel and yet we know for 100 years that 
personnel costs go up 1.5 percent a year.
    Senator McCain. More than that recently.
    Dr. Hamre. More than that recently. This isn't inflation. 
This is real cost growth. But since we do not budget real cost 
growth for personnel, by the end of a 5-year plan the DOD has a 
10 percent hole in its budget. The way you make it up is you 
have to cut weapons systems, the only thing you can control. We 
have a decentralized control on part of the budget and we have 
centralized control on the other part.
    Operations and maintenance (O&M) is decentralized. We do 
not know how to introduce efficiencies in O&M. We basically 
say: I'm going to cut your budget in 3 years by 10 percent and 
you figure it out. Well, the people who get that assignment 
will not even be in the job in 3 years. So those bills have to 
get paid when that 3-year-out budget year becomes the current 
year, and the way we pay for it is we cut back on the things we 
have direct control over, which is procurement and research and 
development.
    So these programs, instead of being stable, are hugely 
unstable because O&M and personnel costs are not budgeted 
accurately.
    Senator McCain. You were talking about the requirements 
increase. Is a fixed cost contract the answer? Then your 
requirements have to fit in within that contract or no 
additional requirements.
    Dr. Hamre. The challenge with fixed cost contracts is the 
technical uncertainty we tend to program into weapons systems. 
If you can break it into smaller segments and introduce 
technology in subsequent flights or in retrofits, then it is 
more feasible.
    The challenge here is we have to get control over 
requirements. This is what happened to the LCS. The LCS went 
from a $78 million ferry and turned into a $750 million war 
ship, and it was largely because of requirements. Now, 
perfectly valid on any individual case, but when you aggregate 
them it gets out of control.
    That's what happened on the VH-71. So somehow we have to 
get back. You're dealing here very rightly and asking people to 
do a better job of estimating costs, disciplining themselves to 
know it before you budget it, et cetera. But we have to get at 
the requirements side of this. Somehow we have to get at that 
piece.
    Dr. Krepinevich. I'm nowhere near the expert John is on 
this issue, but I would like to make a couple of observations. 
One in particular is not only reform to make the industrial 
base more efficient and costs more predictable, but the 
industrial base is a strategic asset of the United States. It 
is an asset that we have that no other country in the world 
has. Really, since the end of the Cold War it's been suffering 
from benign neglect and in some cases maybe malign neglect.
    Just let me make I guess two points. One is, and I think 
Secretary Gates spoke to this, you can shoot for the 100 
percent solution in terms of capability: Give me the absolute 
best. It will take you longer to build something, and of course 
the longer it takes you to build the more opportunities you 
have to build in new best performance characteristics.
    There is also the matter of speed as a different metric. 
Not the best in 20 years, but maybe an 80 percent solution in 8 
years. I don't know what the tradeoffs are, but I do know that 
not only does that get you capability into the hands of our 
Armed Forces more quickly, but if you can produce something 
more quickly it does two other things. One is it reduces the 
amount of money, the amount of insurance money you have to pay. 
In other words, if it takes us 20 years to generate a new 
capability, we have to develop hedges. We have to have standing 
military capability because we can't produce something quickly 
enough.
    The other is, if you can compete based on time, which is 
what the business world has learned about, you vastly 
complicate your enemies' calculations. They have to plan not 
against a narrow set of American capabilities, but a 
potentially broad set of American military capabilities. That 
can have a cost-imposing and a deterrent effect on your rivals.
    So again, I think that John's the expert here, not me, but 
as you say, Senator McCain, how do we gain in terms of cost 
control when we have one bidder or two bidders, where you know 
that if this guy doesn't get it this time he's going to go out 
of business? How do you gain innovation where you have so few 
opportunities to bid because we bid for systems that are 
supposed to last for 20, 30, 40, or 50 years? Is that the right 
metric we ought to be using, especially when technology is 
turning over so fast and the conflict environment is changing 
rather rapidly?
    So what are the basic metrics we use to gauge how we are 
using our defense industrial base, not only to get what we need 
in a cost effective way, sort of the efficiency question, but 
the effectiveness question, how well are we using this 
instrument as a strategic asset, not only to put capabilities 
in the hands of our soldiers, airmen, sailors, and marines, but 
also to complicate the calculations of our rivals.
    One final point, our black programs. The fact that if you 
are an enemy or a rival of the United States, every so many 
years the American defense industry comes out with something 
that just blows your mind, whether it's a U-2, an SR-71, the 
Manhattan Project, or Stealth. That vastly complicates the 
rivals' planning. But it's not something that we traditionally 
think about. We usually think about what's the enemy doing and 
what have I got to do to parry what the enemy's doing.
    We have an industrial base that is a tool for us to vastly 
complicate our enemies' planning and, quite frankly, if we can 
compete based on time, perhaps actually reduce the amount of 
insurance we have to buy in terms of standing military 
capability to deal with these problems.
    Senator McCain. Mr. Chairman, my time is up. Could I just 
ask very briefly on the missile defense cuts, the $1.4 billion 
reduction in missile defense systems. Do you think that's a 
good idea or a bad idea?
    Dr. Hamre. Sir, I think what they did was move dollars into 
the shorter range theater systems. So the standard missile-3 
(SM-3) and Terminal High Altitude Area Defense (THAAD) got 
increased funding. I think it was their judgment that that was 
going to be more flexible than it would be to put in additional 
increments for the National Missile Defense (NMD) System. 
Personally, I think we need to have a NMD System. We have to 
tell countries like Iran and North Korea they can't intimidate 
us by threatening to lob a nuclear device.
    Whether that can be done and has to be done with a larger 
increment of national missile interceptors or with a theater 
system, I'm not current on the details. They made a technical 
judgment that they went with the theater systems.
    Dr. Krepinevich. I'd like to get answers to two questions 
from the Pentagon before I made a decision. One would be what 
is a holistic or comprehensive approach to defending ourselves 
from weapons of mass destruction attack, ballistic missile 
attack, cruise missile attack, and covert insertion? How do we 
balance against those three threats?
    Second is how do we solve the G-RAMM problem at an 
acceptable level of costs? Because we might be able to deter 
attacks on our homeland. You go overseas and confront a group 
like Hezbollah 5, 8, or 10 years down the road and they have 
even what they have today, let alone a higher percentage of 
guided weapons, and we're going to have to figure out a cost 
effective way of solving that missile defense problem.
    So I think before you make decisions about where you move 
money into theater or nationally or whether the overall number 
goes up or down, again we have to do some serious thinking 
here, and I don't know that that's been done. That's the shame 
of it.
    Senator McCain. Thank you.
    Mr. Chairman, I thank you for your indulgence and that of 
my colleagues. Thank you.
    Chairman Levin. Thank you, Senator McCain.
    Senator Udall.
    Senator Udall. Thank you, Mr. Chairman.
    Welcome, gentlemen. It's been very informative already. I 
know we're all looking forward to the continuing back and forth 
here over the next hour or so.
    I want to start by saluting Secretary Gates. I think he's 
asked us all to engage in a very serious and important 
conversation, and it took courage, I believe, for him to lay 
out his vision and his strategy. If you think of a strategy as 
a path down which you spend money, that's what we're talking 
about.
    Also, Senator McCain and Senator Levin, I think, are 
engaged in a timely effort on this procurement reform. I for 
one look forward to the fight, Senator McCain, that I think 
we'll have, because this opportunity doesn't come along very 
often and it's just crucial that we match up the resources. 
There's a limit to dollars, no limit to virtue, no limit to 
what we could do with our military. But this is just so 
important. We hear it over and over again, I know you do, at 
home from taxpayers when it comes to the public dollars.
    Doctor, could we talk about as you mentioned the global 
commons. I was just out at Peterson Air Force Base, Space 
Command (SPACECOM), just a few weeks ago. We talked a lot about 
cyber attack, cyber defense, and cyber offense. You appear to 
agree. In your testimony you said: ``Assuming China continues 
to develop and field anti-satellite (ASAT) capabilities, the 
U.S. satellite architecture may be a wasting asset, highly 
dependent upon Chinese sufferance for its effective operation, 
indeed its existence.''
    So what is the answer? We're highly dependent on cyber 
space and our satellites. We have to protect these assets. Do 
we need a counter-offensive capability to protect against the 
ASAT threat? What are some ideas that you might have? Dr. 
Hamre, if you are interested in following on I'd appreciate 
your thoughts, too.
    Dr. Krepinevich. I've talked to some folks in the Air Force 
and the National Aeronautics and Space Administration and a few 
other places. Obviously, one answer is you accept the 
vulnerability. You hope that it remains a sanctuary, but you 
know that they can deny you those assets.
    Second, as you begin to develop alternatives. For example, 
some people have talked about using unmanned systems to fill in 
gaps over certain areas. But of course, we'd have to build them 
and test them.
    Others talk about in the event of a serious conflict, 
threatening to take out the Chinese ASAT capability, and you'd 
have to have a rapid re-launch capability to replace the 
satellites.
    Depending upon advances in nanotechnology and propulsion 
technology, some folks talk about launching dormant or spare 
satellites, again depending upon cost. There are places in our 
solar system known as LaGrange points and they are locations 
where the gravitational pull of the sun, the moon, and the 
earth roughly allows you to maintain a static position with a 
very low expenditure of energy. It could be possible that that 
could, depending upon advances in nanotech, information 
technology, and propulsion technology, be a possible solution. 
So there may be some combination thereof.
    In terms of the cyber threat, again, unfortunately for us 
people in the think-tank community, that world is very opaque. 
I think, though, one of the questions is, is that the next big 
thing? Using an historical example, in the 1920s air power was 
going to be the next big thing. Everyone knew it was going to 
be important. There were some people, like Billy Mitchell, who 
thought it would win the war all by itself, others who thought 
it would be very important, others who thought it would be 
marginally important. Of course, in the war that came we 
discovered what its utilities were. But nobody could really 
predict at the time.
    I think it's the same thing today with cyber warfare. Is it 
going to be effective at the strategic level, the operational 
level, or the tactical level? Is it going to favor the offense 
or the defense? Is the competition going to be static or 
dynamic, which is to say the nuclear competition has been 
static. It's favored the offense since 1945. Submarine-
antisubmarine warfare tends to be dynamic. One side develops a 
way to find submarines, the other side develops a way to quiet 
them and to make them less trackable. I think there are many 
different permutations of different kinds of cyber attacks.
    One of the interesting things is to look at, to the extent 
that we can, the cyber attacks on Estonia, Georgia, and 
Kyrghyzstan. Evidently the Georgians actually, if I understand 
correctly, started maneuvering on cyber terrain by relocating a 
lot of their cyber assets to the United States. Again, I'm 
reaching the limit of my competence when it comes to cyber 
warfare, but it's one of those things I think, like space, that 
you ignore at your peril. It's not familiar. It's not even 
something we've thought about a great deal in the past. But it 
certainly is important today.
    Senator Udall. Dr. Hamre, would you care to comment?
    Dr. Hamre. Very briefly. Sir, first, to you and to the 
committee, I would encourage you to take a briefing from the 
SPACECOM on the Schriever Series. It's an exercise series that 
they've undertaken on space dependency and space vulnerability. 
We can't talk about it here, but I would very much encourage 
you to take that briefing.
    As Dr. Krepinevich said, you only have three options. You 
can harden the satellite, but that is pretty tough. You can 
pursue redundancy, and here we bump up against cost. It's very 
hard to do that. Third, you can pursue replacement. There are 
real challenges to do each of those three.
    I suspect we're going to have to develop a more 
comprehensive solution, a different way of thinking about this 
problem. It's probably better to do this in a classified 
session, to have that discussion with you.
    On cyber, the problem of course with cyber is we have an 
ubiquitous and dramatically expanding cyber space that is 
designed in a way to make it vulnerable, I hate to say it. It 
was designed with open protocols, very little discipline from a 
security standpoint. It's expanding every day and it's global, 
and it's bigger and bigger and bigger, and the problems are 
greater.
    Now, the DOD can do things to protect itself inside cyber 
space, but it's just a little tiny speck inside cyber space, 
and the real question is just how vulnerable is the American 
economy to cyber disruption. The DOD does not have jurisdiction 
over this. The Bush administration wrestled with this problem, 
and the Obama administration is wrestling with this very 
question: Where do you put the planning, coordination, 
prophylactic thinking for the government when it really is 
about the health of the economy? Should it be in the Department 
of Homeland Security? Should it be put into the National 
Security Council? These are open debates that are still 
continuing.
    It is a bigger problem and it's going to be a growing 
problem. I really do think the committee should spend some time 
looking at this. I'd be happy to come on another occasion and 
to talk with you about it.
    Senator Udall. I'm sure my time's expired, but I hear both 
you gentlemen saying this is serious, we should take it 
seriously, it deserves a lot of attention. Thank you.
    Chairman Levin. Thank you, Senator Udall. The issue which 
you raised and which Dr. Hamre responded to, apparently the 
briefing has been scheduled for next Wednesday. So we're on 
track.
    Senator Thune is next.
    Senator Thune. Thank you, Mr. Chairman.
    Dr. Krepinevich, Dr. Hamre, thank you for appearing here. 
Dr. Hamre, your fellow Augustana College alums in South Dakota 
continue to be proud of your work and your accomplishments.
    Dr. Krepinevich, I want to ask a question. In announcing 
his 2010 budget decisions on April 6, Secretary Gates talked 
about at a media roundtable the following day that his 
decisions were based largely on positions that he had taken or 
been advocating in speeches for the last 18 months. That 
statement was not true as it relates to the Next Generation 
Bomber. There are three instances that I'm aware of where 
Secretary Gates publicly advocated for the Next Generation 
Bomber in the past 6 to 7 months, and in fact he gave a speech 
at the National Defense University in September stating that 
China's anti-access, anti-denial capabilities will put a 
premium on the United States' ability to strike from over the 
horizon and will require shifts from short-range to long-range 
systems, such as the Next Generation Bomber. Then he used 
virtually the same language in an article in the first quarter 
of this year in an edition of Joint Force Quarterly, as well as 
in a Foreign Affairs article in January of this year.
    So his statements would appear to be a direct 
contradiction, his most recent statements, with the position 
that he's advocated for some time leading up to that. I guess, 
knowing of your organization's recommendation in its ``Strategy 
for the Long Haul'' document to develop the Next Generation 
Bomber by 2020 and to develop an unmanned variant quickly and 
buy 130 total, what are your views of that decision to delay 
the Next Generation Bomber?
    Dr. Krepinevich. They're pretty much as you noted in our 
study, ``The Strategy for the Long Haul.'' If you look at some 
recent conflicts, the Balkan conflict in 1999, certainly 
Afghanistan in 2001, the second Gulf War, you see bombers 
playing a prominent role. We have relatively few of them. A 
significant number of the B-52s are really quite old.
    If you are going to pursue a serious offset strategy with 
respect to China, I think you have to have extended range. I 
don't think we've come up with a solution to the vulnerability 
of forward air bases because of anti-access, area denial 
capabilities.
    There's also the risk of loss of base access for political 
reasons. We certainly saw that in Afghanistan. We were denied 
the use of a number of bases in the Middle East. In Turkey, we 
were denied the use of bases in Turkey in the second Gulf War. 
Then there's just the geography issue. Our base density is very 
high in Europe. Of course, Europe is relatively quiet right 
now, but if you look at areas like East Asia, where the 
distances are enormous relative to, say, Central Europe, where 
we focused our attention during the Cold War, distances are 
enormous.
    So I think under those circumstances, both on the high end 
and the low end, because in terms of going after critical time-
sensitive targets--if you look at some of the data that came 
out of the second Gulf War, the fact that bombers have long 
range, even if they're flying long distances, allows them to 
hover. Of course, we found that out with UAVs as well, that the 
solution so far in going after time-sensitive targets doesn't 
seem to be rapid dash; it seems to be this persistent dwell.
    So for a number of reasons, I think the sooner we get a 
Next Generation Bomber the better.
    Senator Thune. In your opinion, does the budget represent a 
shift in the Nation's mind set, by making decisions like 
postponing the Next Generation Bomber and ending F-22 
production, are we essentially making a decision to no longer 
dominate at the higher end of conflict?
    Dr. Krepinevich. Again, I think the Secretary's comment on 
the Next Generation Bomber was not a cancellation, but that 
there were some issues that needed to be worked out in terms of 
requirements, I believe. I'm only speculating here. Is it going 
to be manned or unmanned? What is the range going to be? To 
nail down those requirements, and then to get it moving on to 
production.
    I'm mildly surprised because we've had the B-2 debate 
throughout the 1990s and into the early part of the Bush 
administration. Debates about what we would like to have, what 
we would need to have in terms of a long-range strike system I 
think are pretty well established.
    In terms of the F-22, again you can look at it in two ways. 
One is, what practical problems that I mentioned does it help 
us to solve? I think potentially it could help us deal with the 
China anti-access, area denial problem. However, the military 
hasn't really developed an operational concept that allows us 
to think our way through.
    The other aspect is to support a strategy of dissuasion, 
which is to say it's very important for us to have air 
superiority, and by building a significant number of fighter 
aircraft that are so far above what anyone else can build we 
discourage other countries from entering into that competition, 
and that's an important area for us to dissuade competitors.
    Is 187 enough? I don't know. But I think those are the two 
things that I'd be looking at most closely when I think about 
the F-22 and how many we ought to buy and what utility they 
might have.
    Senator Thune. If I could direct a question to both of you: 
One of the issues, and I think, Dr. Hamre, you touched on it, 
is that we're all dealing with some very serious constraints on 
budget. But we have objectives, it seems to me, to dominate at 
the full spectrum of conflict, from low-end asymmetric warfare 
such as what we're facing in Iraq and Afghanistan to higher-end 
conventional and asymmetric warfare, as would be the case if we 
entered a conflict with a near peer.
    I support those objectives. But what you see across the 
board is that our military's equipment is old and getting 
older. Half of our bombers are pre-Cuban missile crisis 
vintage. The Army burns readiness as soon as they produce it, 
in both the form of soldiers and material. The Air Force's 
fleet averages 24 years old.
    I'm concerned that the budget doesn't do enough to address 
these issues. It's just simply too small. If the budget 
attempts to fight two wars and grow the forces that are 
required to fight low-end conflicts while failing to adequately 
address the Nation's aging military equipment and prepare for 
an uncertain future, I have real concerns about that.
    I guess the question is, in your opinion, how much would 
the budget need to increase in order to truly balance the force 
and prepare it for the full spectrum of conflict?
    We always talk about what the top line needs to be and 
there's been some reference to it today. I say that again 
bearing in mind that we are facing some very serious budgetary 
constraints. But it seems to me, we're trying to do a lot of 
things and we're not allocating the resources that are 
necessary to do them.
    Dr. Krepinevich. I think the short answer is we're not 
going to dominate across the full spectrum of conflict. The 
scale of the challenges that we are confronting is 
significantly greater than we saw in the decade of the 1990s. 
The form of the challenges is changing. There are a number of 
what I would say cost-imposing strategies that we confront, 
that are not going to be easy to get out from underneath. 
Irregular warfare is a cost-imposing strategy, if you totaled 
up what radical Islamist groups are spending versus what we 
have to spend to compete. If you look at space, it's a lot 
easier to take down satellites than it is to put them up and 
sustain them. Cyber warfare, as Dr. Hamre said, our 
infrastructure is very vulnerable. As I mentioned, the costs of 
projecting power are going up as a consequence of G-RAMM and 
other guided weapons systems.
    So I don't think that, quite frankly, we are going to 
dominate across the spectrum of conflict in the future the way 
that we did in the 15 years at the end of the Cold War. The 
British faced this problem about 100 years ago. Also, the 
character of conflict was changing dramatically, particularly 
at sea, and they also faced just fundamental budget 
constraints, somewhat similar to what we face now. One senior 
British Government official I think summed it up well: ``We're 
running out of money; we'll have to start to think.''
    I believe that there is real value in looking at our 
overall strategy. Senator McCain mentioned President 
Eisenhower. When the Soviets detonated their atomic bomb, first 
the Truman administration and then the Eisenhower 
administration used the term ``wasting asset.'' We had an 
enormous advantage before 1949, which was our nuclear monopoly. 
Once the Soviets tested their weapon, that monopoly was a 
wasting asset. It was going away.
    If you talk to people who are really serious strategists, 
they will say that the whole business of strategy is 
identifying where your wasting sources of advantage are and 
identifying, creating, and exploiting new sources of advantage. 
I think that is what we have to be about now. I think we're 
really in a pinch because the problems are getting more severe 
and the resources are getting tighter. This is not the 
situation you want to be in.
    But again, a strategy that does a good diagnosis, does a 
good prognosis of what our options are, that explicitly looks 
not just to improve our own capabilities, but to impose costs 
on our rivals, that has to be the fundamentals of this QDR. If 
the QDR can accomplish this, then I think we'll have a much 
better feel coming out as to the wisdom of the specific 
decisions regarding individual weapons systems and areas of 
investment.
    We've been cutting out the middleman. We go straight from 
the threat to the systems. There's a big area in there for 
strategy and concepts of operation that really take us from 
point A to point B. Absent that, it really becomes difficult to 
make, I think, informed judgments about where we need to be 
going.
    Senator Thune. My time has expired, Mr. Chairman. But Dr. 
Hamre, anything to add to that?
    Dr. Hamre. Sir, I first started working for this committee 
back in 1985, it was so memorable, at the height of the Reagan 
defense buildup. The purchasing power of the budget back then 
is almost identical to the purchasing power of today's budget 
in real terms.
    But back then we had 20 prime contractors. Today we have 
four and a half. We had 300,000 troops in Europe. Today we have 
30,000 troops in Europe. We had 20 combat aircraft in 
production. Today we have about three, I think. We bought 900 
combat aircraft in 1985 and this year we're going to buy about 
120. We were buying 1,200 tanks and 1,800 combat vehicles a 
year. We're now buying 150.
    Costs have just skyrocketed, people costs and hardware 
costs. Unless we get at this underlying problem, adding a 
little more top line isn't going to buy us a lot more defense. 
I hate to say it. The trends are wrong here and we have to find 
a way to live with the requirements, be more disciplined with 
requirements, as Dr. Krepinevich said, think our way a little 
more creatively than just the old brute force solutions, and 
figure out a composite way that we're going to try to address 
as many of the needs as we can.
    We can't address them all. Our budget isn't possibly big 
enough. We're going to have to temper our appetites. I think 
the Secretary was trying to do that with this budget. Only you 
can decide how much the Federal Government ought to devote to 
defense. Obviously, I think it's an important investment that 
we ought to make for our future. But you're the individuals 
that have to decide that.
    Senator Thune. Thank you, Mr. Chairman.
    Thank you very much for your contributions to our better 
understanding of these issues.
    Chairman Levin. Thank you, Senator Thune.
    Senator Hagan.
    Senator Hagan. Thank you, Mr. Chairman. I too want to 
applaud Secretary Gates's focus on restoring budget discipline 
in the DOD, and obviously the acquisition process is critical 
in this component to restoring budget discipline. I thank the 
two of you for your testimony today and I enjoyed reading your 
written comments. They certainly are thought-provoking and 
raise a lot of concerns.
    Dr. Hamre, in your opening statement you were talking about 
the fact that we have private contractors developing policy and 
that, I think you stated, it's your belief that these policy 
decisions should be brought in house. I obviously am aware that 
we have private contractors doing security and a lot of other 
issues, but you did raise a red flag with me when you commented 
on policy.
    Do you see this as changing? Do you see this as status quo? 
Can you be specific?
    Dr. Hamre. I probably was too careless on how I wrote the 
statement, because I do not think that the private sector is 
making policy for the United States. But you find a very blurry 
line that separates contractor personnel and policy personnel 
inside the Department these days. I think that does need to be 
clarified.
    Now, let's get at the underlying causes. The underlying 
causes are we have had effective pay caps on civil servants for 
17 years. It's hard to get talent. We have not brought in and 
sustained and replenished the talent that we need in the civil 
service that we should have. We have not updated the Office of 
Personnel Management rules. It's so hard to hire a civilian. 
It's a heck of a lot easier to hire a civilian through a 
contractor. Just issue an O&M contract. That takes a couple 
weeks. Try to get a new position created and advertised, et 
cetera, it takes years. So it's just a lot easier.
    We have placed so many impediments in the way of rationally 
managing the civilian force. It just was easier to use 
contractors. It wasn't because people were wicked. It's because 
people were trying to solve a problem.
    As we get at this, please look at the underlying causes for 
it. This is a big, serious, and difficult problem. There's a 
very good book that's just been written. Scott Gould and a 
colleague, I don't remember his name, just wrote it, and it 
really delineates this fairly well. I'd encourage you to look 
at that as a starting point.
    Senator Hagan. Thanks.
    I also wanted to ask a question about safeguarding the 
industrial base. Dr. Krepinevich, you mentioned this a few 
minutes ago. I'd like to ask you about the impact that cuts 
could have on our industrial base. Obviously, when we cut major 
programs we run the risk of diminishing the industrial base, 
which can in turn result in a reduction in the quality of 
systems and platforms and an increase in the unit cost.
    I also think that we need to be cognizant of the fact that 
when terminating programs there's obviously a significant 
termination cost, too. But none of this is to say that the 
programs shouldn't be subjected to a rigorous cost-benefit 
analysis and phased out if they don't make the grade. But 
certainly the impact on the industrial base is one of the 
factors that has to be considered when we talk about major 
program changes.
    I was just wondering what your thoughts are about the 
impact of the Secretary's proposed cuts on the industrial base?
    Dr. Krepinevich. Again, I'm not an expert on the industry, 
but certainly if you look at the stock prices, Boeing 
Corporation was the one firm I think that was hit particularly 
hard, at least in terms of the way people on Wall Street look 
at things. I'll just give you one example. Back in 1997, I 
believe there was a down-select on the Joint Strike Fighter 
(JSF). There were three firms competing, McDonnell Douglas, 
Boeing, and Lockheed Martin. The down-select was Lockheed-
Martin and Boeing, and McDonnell Douglas essentially sat there 
and said: ``There's not going to be another tactical fighter 
bid for another 20 or 30 years, perhaps we can't stay in 
business,'' essentially, and they merged with Boeing.
    So I do think that, as John has said, we've gone from so 
many prime contractors down to so few that now this becomes an 
issue when you terminate a program. It's not to say that you 
can't terminate the program, but if you think that firm has a 
lot of talent to offer, you want to preserve the option of more 
firms bidding, what can you do? If you say we're terminating 
production on the F-18E and F-18F; okay, is there a bid 
somewhere down the road where Boeing is going to be able to 
keep its aerospace design team together, its production 
facilities together? Maybe there is, maybe there isn't. Maybe 
you just have to make a hard choice.
    But for example, Boeing was very much engaged with building 
unmanned strike aircraft for the Air Force. The Air Force 
cancelled the program a few years ago. Again, if you're talking 
about personnel costs, maintenance costs, and so on, fewer man-
hours required to operate these kind of aircraft, less pilot 
risk, less pilot training obviously. These aircraft have longer 
range, typically, because you don't have to have a person in 
the aircraft, and so on.
    If an air-sea battle concept for stabilizing the balance in 
the Far East we could use something like this, then you might 
get the best of both worlds. You might, say, cancel the 
relatively short-range FA-18, you might move to a longer range 
ground system, and you might bring on another unmanned system, 
the NUCAS, which is being built by another firm, and again 
maintain that healthy competition, maintain that firm in the 
base, and yet still make program decisions that were consistent 
with the way you see the military having to operate.
    Senator Hagan. Dr. Hamre?
    Dr. Hamre. It's pretty hard to hold a competition. Look 
what we're struggling with on the tanker. It's a big buy. It's 
going to be a huge investment. We can't get a competition with 
only American producers. That's going to be more the norm.
    I think again it's very hard to sustain a competitive 
industrial base if you don't buy enough stuff. The industrial 
base is increasingly getting fragile. I thought the DDG-51, the 
DDG-1000 decision was rather clever because it really does put 
that competitive picture back and make people decide, what do 
we want to do in terms of ships. We just can't afford $3.5 
billion destroyers, but we can afford a $700 million LCS.
    Again, it comes back to the point that we're going to have 
to temper our requirements expectations. When we do have to buy 
the very top end, we have to buy quality, but there's probably 
not going to be very many, and it has to then be able to 
leverage a larger force. I think this is what Dr. Krepinevich 
was saying, is that we have to do a lot more campaign modeling.
    But we are losing the capacity for competition in our 
industrial base. We will still have an industrial base.
    Senator Hagan. Thank you.
    Chairman Levin. Thank you, Senator Hagan.
    Senator Chambliss.
    Senator Chambliss. Thank you, Mr. Chairman.
    Gentlemen, thank you for your very frank and concise 
comments here. If I hear what both of you are saying with 
respect to this budget, that really the problem goes way beyond 
the budget. This is a 1-year decision and the real problem is 
the acquisition process. Dr. Hamre, when you say that 
increasing the top line doesn't give us the ability to add much 
more in the way of weapons systems or assets, that's a serious 
problem that I think goes way beyond the budget process. It 
means that we have to get serious about addressing that, and 
certainly Senator Levin and Senator McCain are moving us in 
that direction.
    Dr. Hamre, you were last at the Pentagon, as I recall, at 
the end of the 1990s, with the change in administrations. 
During your tenure there in the late 1990s, was there any 
consideration given in a 5-year program to looking out to a 
conflict where we might have to defend our men and women 
against IEDs or explosively formed penetrators, and that we'd 
need mine resistant ambush protected?
    Dr. Hamre. Sir, no, not that I recall. I don't recall any 
systematic review of that. That was something that really 
emerged with this war.
    Senator Chambliss. The reason I ask that is because we 
wouldn't expect it. I'm not sure even the previous 
administration had any conversation about that early on. It's 
something that developed. If we look to where we're going to be 
in a 5-year projected plan, Lord knows, the way the world is 
changing today, how can we even project who the next potential 
enemy may be even within a 5-year period?
    Again, my point being that, Dr. Krepinevich, you alluded to 
the fact that we have to get away from the next war-itis and 
let's concentrate on winning, and that's what this budget, at 
least I think your comment was, seeks to do. But by the same 
token, we've still got to be prepared, and we have to certainly 
imagine that conventional warfare is not out of the realm.
    What concerns me about this budget is that I think we're 
giving up a capability that we're going to need, not next year, 
not the year after, not 5 years but maybe 20 years. Who knows 
when it may be, but we're giving up a capability in this budget 
with the termination of certainly the F-22, the C-17, and maybe 
parts of the FCS, that we're going to need for the preparation 
of that.
    Dr. Krepinevich, you mentioned air superiority, air 
dominance, so I'll ask you about it first. But John, I want 
your comment on this, too. We've not lost a foot soldier to 
enemy aircraft since the Korean War. It's imperative in my 
mind, and I think you said this, that we have to maintain air 
dominance and air superiority.
    You also talked about the exercises that we've been through 
recently, going back to 2002, and there have been others since 
then, where when we put our current component of aircraft, F-
15s and F-16s, into the air against current weapons systems 
that are available to the Chinese, and the Russians, they don't 
survive. They get taken out regularly. When we put those 
weapons systems into a scenario of a theater where they're up 
against S-300s, for example, and we know they're being 
improved, they don't survive.
    The only thing that we have in our inventory that gives us 
the ability to maintain air superiority and air dominance is 
the F-22. If we terminate the F-22 now, we're going to have a 
gap in there before we ever get to the next fighter, obviously 
the JSF.
    So my question to you is, let's talk for a minute about the 
importance of air superiority. This decision on 187, I don't 
know that anybody has the answer on what the number is. But the 
Air Force says it's 243. They said at one time it was 787, I 
think it was. So how important is air superiority? Is there a 
current weapon system on the drawing board that's going to 
ensure within the next 5 years and 20 years from now that we 
can maintain air superiority without having a sufficient 
complement of the F-22?
    Dr. Krepinevich. I think air superiority has become a more 
complex issue over time. For example, if you're looking at the 
Far East, part of the equation is addressing the question of 
what does air superiority mean against an enemy with a missile 
force? What does it mean to have a fighter squadron at Kadena 
Air Base when you have waves of Chinese ballistic missiles that 
can take out that air base?
    So what does it mean to have air superiority when it's not 
just a matter of aircraft on aircraft, but you bring in the 
electronic aspect of it? I really can't get into it here, but 
there was a fairly famous exercise between American aircraft 
and Indian aircraft a few years back. As you alluded to, F-15s 
and F-16s didn't come out looking too well in that engagement.
    But it's not just a matter of the aircraft itself. It's a 
matter of other factors, and in particular one aspect--it goes 
by the name of digital radio-frequency memory systems and 
capabilities that have to do with electronic warfare, that can 
play a significant role no matter what aircraft you're talking 
about.
    So I guess my answer is that I don't know if the number 187 
is correct. I don't know if the number 260 is correct. If I 
were Secretary Gates, I would say: ``Here's the problem in the 
Far East. Do I need F-22s over Taiwan? Okay, if I do, where can 
I base them? If I can't base them, how can I tank them? Where 
are the tanker orbits going to be? Are they going to be 
vulnerable? Is there some other way I can deal with this 
problem? Are there other capabilities I can bring to bear?''
    Back in the 1980s, Senator Levin had enough material to 
work with in terms of air-land battle that he produced a 
thoughtful paper called ``Beyond the Bean Count,'' which was 
how do we think about, beyond numbers, beyond 187 or whatever 
it is, how do we think about what we need. You could have that 
kind of a thoughtful debate then, and I think that's what's 
lacking now.
    So when somebody says 187 and you say why isn't it 240 or 
750? Again, once you get into the business of sitting down and 
developing warfighting concepts and testing them out, you don't 
have a mathematical outcome that says winner and loser, but you 
begin to see what professional military people begin to take 
out of that toolbox, what they say they need, how they're going 
to use it.
    Just another example. In the period between the two world 
wars there were literally hundreds of war games conducted at 
the Naval War College looking at the problem of the Far East, 
specifically Japan. It was called War Plan Orange. At the end 
of that war, Admiral Nimitz was able to say that nothing, even 
the attack on Pearl Harbor, surprised us in that war. The only 
thing that surprised us, that hadn't been played out at the 
Naval War College, was the kamikaze.
    We have war games today, these title 10 war games, they're 
good, but they come along only once a year. They're sort of Ben 
Hur productions, casts of thousands. What we need, I think, is 
a kind of persistent study of these problems, so that we'll 
never get to the exact answer. As you pointed out, we're always 
going to be surprised in some way. But will we get close enough 
so that the decisions we make, that whatever turns out to be 
with the F-22, is closer to the right decision.
    Dr. Hamre. Sir, we're not going to go into combat without 
air superiority. It's just such a foundational issue for us 
that we're just not going to do it.
    Now, I think the Secretary's view is that the F-35 will be 
an adequate substitute for the F-22. The only thing I would 
like to put on the table is like Andy, don't really know what 
the right ultimate number is. But this is an airplane we're 
going to operate for 30 years. If we only buy 187, you're going 
to take off 24 for a training squadron. Then you're going to 
take off probably another 30 for long-term maintenance. Then 
we're going to lose an airplane, probably one every year or 
every other year. We're going to have to have this force for 30 
years.
    So I think the question is, is it an adequate high-end 
force at this number over time. I think you ought to be looking 
at that as you're making your decision.
    Senator Chambliss. Thank you.
    Chairman Levin. Thank you, Senator Chambliss.
    Senator Burris.
    Senator Burris. Thank you, Mr. Chairman.
    Our witnesses have been very informative and I'm sitting 
here trying to soak all this in, especially for the budget 
that's coming up. But my mind keeps running that 5-years-out 
situation and that 10-years-out situation. I just left a Boeing 
plant a couple of weeks ago, watching them building that F-18. 
They tell me that they had put in the budget for 330 something 
and I think in this budget they cut it down. Boeing is 
concerned about the continuation of the line.
    When you say our industrial base is shrinking, I'm just 
wondering what's going to happen if there's nothing else that's 
going to come to use that line. I look at all this technology 
that they've put in in this major plant over there, they hire 
quite a few Illinoisans that come across the river over into 
St. Louis, so I'm looking at it from two perspectives. One is 
to keep our citizens working, but also to keep our military 
strong; but also to make sure that we have a reasonable budget 
in the DOD.
    We're trying to balance all of these various interests, 
which leads to so many questions, I'm trying to figure out 
which one to put first. Are we letting the foreign competition 
absorb our industrial base? Are we not going to use that 
industrial base in the future? What happens to the Boeing line 
when they shut down the F-18, which I understand will be 
replacing two or three of the Navy's current fighters that are 
on those ships because of the technology that's in the F-18.
    Can you enlighten me, Dr. Krepinevich or Mr. Hamre, either 
one? Please, help me out.
    Dr. Hamre. I think it's important to look at the health of 
Navy aviation. We have 11 carriers today. We're going to 
probably go down to 10 carriers over time. But when it comes to 
fighter aircraft, we only have enough F-18 aircraft to put on 
about seven of the carrier decks. We have not been buying 
enough F-18s.
    The F-18 aircraft was originally designed for about 6,000 
hours of service life. The average of the fleet today is almost 
8,000 hours. We have really flown these aircraft hard.
    So we have a combination of an aging inventory and an 
inadequate number because we haven't been buying enough over 
these last several years. The question I think is should the 
Navy buy a few more F-18s for a couple of years until the F-35 
comes in quantity to replace it. Now, the F-35 is supposed to 
be the replacement airplane for the Navy over time. It's going 
to take a while to get them.
    I personally think that there is a gap and we ought to 
address it because it's putting in question the force 
structure. Now, this budget I believe is going to buy 30 or 
something.
    Senator Burris. 31.
    Dr. Hamre. So it is keeping it alive as it's being reviewed 
in the QDR.
    Senator Burris. But my Boeing people are saying to me that 
those 31 are just not enough to keep the line going in terms of 
costs and overhead. Am I wrong?
    Dr. Hamre. Sir, I don't know. I don't know the answer to 
that.
    Senator Burris. That's what they're saying.
    Dr. Hamre. I don't know the answer. I've spent some time 
with the Navy on this and again it's a question of how do we 
provide aviation for a maritime presence when we don't have 
enough airplanes to outfit the carriers. I think there's a very 
legitimate question of whether or not we ought to be buying 
some additional F-18s in the near term, until the F-35 does 
come on line.
    My personal view is that we probably should. But again, I 
think that's a decision that's in the out years. I'm afraid I 
just don't know the answer on whether 31 is adequate or not. My 
experience has been that there's always a minimum that is 
unbreachable, and we have those successively lower numbers.
    But I would look at it. It's worth looking at, sir.
    Senator Burris. Dr. Krepinevich, we'd have the same problem 
with the C-17, wouldn't we, in terms of whether or not we 
have--what is the number there?
    Dr. Krepinevich. I think John is probably better positioned 
to answer on the C-17.
    Let me just add something on the F-18 in terms of how you 
might think about the issue. If stealth is important to you, 
you gravitate away from the F-18. If range is important to you, 
you gravitate away from the F-18. If cost is important to you, 
then the F-18 presents a good argument.
    If you need stealth, then you're going to go with the F-35 
or the NUCAS. If you need range, you're going to go with NUCAS. 
How do you plan to fight? Do you have to have all of one 
aircraft on the deck because you want to minimize the amount of 
logistics and spare parts variations you have? Or can you mix 
and match? Can you have some different kinds of aircraft on the 
deck of a carrier?
    How do you measure what's important for these aircraft to 
do? Again, Senator Levin's ``Beyond the Bean Count'' numbers of 
aircraft, but when I come and get briefings from admirals, they 
say: ``back in 1991, we could hit this many targets off the 
deck, this many sorties per day in carrier strikes.'' Then we 
got precision weapons and it's been going up ever since.
    So if the measure is how many aim points can I hit with a 
carrier strike per day, you could argue a carrier strike wing 
could be significantly smaller than it was back in the early 
1990s and you'd still have more striking power. So even though 
you only have enough aircraft, as John says, to put on seven 
decks, who says you need the same number of aircraft on a deck 
when you can hit more targets, many more targets, today than 
you could 20 years ago?
    So again, it depends on what you want and how you measure 
it. That ought to depend upon what the problem is and how you, 
as the military, see yourself conducting operations to solve 
those problems.
    Admiral Tom Fargo, who I have enormous respect for, was our 
commander in the Pacific, said some day the Navy and the Air 
Force ought to sit down and figure out how we're going to deal 
with this situation together. What's the mix of stealth and 
non-stealth, short- and long-range, air base and carrier base, 
manned and unmanned. When are we going to sit down and do this?
    I think the frustration is because we really haven't done a 
rigorous job of addressing these questions, that we have a hard 
time coming up with good answers.
    Senator Burris. On the industrial base question, do you 
have knowledge of whether or not, in terms of this budget, we 
are getting suppliers from the foreign markets for our military 
budgets?
    Dr. Krepinevich. Just one thing on production. You could 
allocate money or funding for 31 aircraft, but the production 
line and the second tier suppliers will begin to shut down long 
before the last aircraft is produced, because they'll stockpile 
those parts that they need to produce those aircraft. Of 
course, it goes along an assembly line. So you'll begin to shut 
down parts of the line as the last aircraft are moving through 
it.
    I'm not expert enough and I don't know enough about Boeing 
to say when that would happen. But everything doesn't stay in 
place until the 31st aircraft rolls off the line.
    Dr. Hamre. Sir, in my testimony I wrote about the C-17, and 
I really do think it merits the committee look at that. Again, 
my concern is that the strategic airlift fleet, 65 percent of 
it are C-17s, which is good, but 35 percent are old C-5s. The 
oldest C-5s, the C-5A models, are about 20 percent of the 
fleet, and their current average age is 37 years old.
    Now, it's a remarkable airplane. The original Wright 
Brothers flight could have taken place inside that airplane. 
It's amazing.
    Senator Burris. Yes. I was down at Scott Air Force Base, 
where General McNabb was saying that they're concerned about 
the future of those C-5s.
    Dr. Hamre. We're just not going to be able to sustain the 
C-5 for 50 years, which is what in essence we're going to have 
to do if we shut down the C-17 line.
    Senator Burris. Are some new ones coming down the line? Are 
there some new cargo--the new one is the--what's the big cargo 
that's coming on to replace the C-5?
    Dr. Hamre. The C-17 is the only military transport that is 
currently in production. Now, the Air Force has a very long-
range program which I think is called the Joint Theater Lift 
System or something like that. If you were to go back, it looks 
an awful lot like the old Advanced Medium STOL Transport back 
in the early 1970s. It would be a smaller version of a C-17.
    It would be a lot longer discussion. I'd be happy to come 
up and talk with you about it. But again, my personal view is 
that we really need to ask the question, how long can we rely 
with a third of our strategic airlift fleet being quite old 
airplanes? I think that's an issue you need to seriously look 
at.
    Senator Burris. Thank you, gentlemen.
    My time has expired. Thank you, Mr. Chairman. I appreciate 
that.
    Chairman Levin. Thank you very much.
    Just very quickly, Dr. Hamre, on the requirements issue 
that you made reference to, I want to give you some reassurance 
on our bill, that there are some provisions there that do 
address that requirement problem, where they keep adding 
requirements without consideration of cost. There's a number of 
provisions I won't go into, but maybe the key one is section 
201, which requires this early tradeoff between cost, schedule, 
and performance by having the cost assessment person, who 
hopefully will be independent, to be at the table. Then there 
are some other provisions which we can get into perhaps later 
if there's a second round, on competitive prototyping in 
section 203. So there's a little effort here, at least, I hope 
adequate, but not as much as probably you point out correctly 
we would need to get at the excessive requirements and the 
continual add-on of requirements in a number of provisions.
    Now, I'm going to have to leave for a few minutes. Let me 
set the following order for the next 15 or 20 minutes. Senator 
Begich is next. If a Republican comes back, we would switch 
over. Then Senator Bill Nelson if he comes back, then Senator 
McCaskill. Then we would start a second round, and I expect 
I'll be back by then.
    So I thank my colleague.
    Senator Begich [presiding]. Thank you, Mr. Chairman.
    Thank you very much. Thanks for being here. It's very 
informative for me. I'm a new member, so this is a lot of good 
information coming in my direction.
    I want to show you something and then maybe--this is a 
general comment. I'll make a statement and then get a general 
comment, and then I have some very specific questions to some 
of the commentary you made.
    It's going to be hard to see, so I'll just show it and 
you'll have to trust me here. This is the expenditure outlay 
for DOD in regard to gross domestic product (GDP). In World War 
I it shows, you see the spike; World War II, you see the spike. 
Here we are over here; there is no spike.
    There is some discussion that the budget should be based on 
4 percent of GDP and we're at about 3.4. That's one debate. 
Then there's the other debate based on capabilities and 
requirements.
    Can you just give me some general thoughts? When you see a 
chart like this, it stands out pretty strongly that here we are 
in two theaters and yet the spike is a little bump, and 
therefore it puts a lot of strain within the internal budgets 
of these different forces.
    So could you just give me a general comment, and then I 
have some very specific things I want to try to get from you, 
from either one of you?
    Dr. Krepinevich. I don't think the 4 percent metric is at 
all useful in thinking about what our level of defense 
expenditures should be. In times when the threat is high, as 
your graphic shows, we were spending almost 50 percent of our 
GDP during World War II on military issues. In other periods 
where the threat was very low, it certainly seemed to make 
sense that it could go below 4 percent of GDP.
    It also depends on your strategy. If you have a clever 
strategy, you can get by with fewer resources. So in a sense, 
writing blank checks is not quite an invitation to think dumb, 
but it certainly isn't a prod to think cleverly. In fact, 
people in the private sector who do strategy say that the best 
strategy is done when the wolf is at the door, in other words, 
when resources are tight and problems are growing.
    In public finance there's a term called the free rider 
principle. Basically, if somebody else is willing to do it for 
you, then you're willing to let them. Again, there's this issue 
of the more you can get your allies to do, the less, hopefully, 
you have to do. So in a sense, it can in some circumstances 
make you less attentive to the need or the opportunities that 
are presented by engaging other countries as prospective 
allies.
    Then finally, risks. You can never eliminate all risks to 
your security. So in theory you would spend, if you had zero 
risk tolerance, 100 percent of your GDP on defense, sort of an 
extreme example. But different people have different levels of 
risk. So if you are deathly afraid of something going wrong in 
a particular area you may be willing to invest a lot more than 
I would. So it's a judgment call there in terms of how much 
risk.
    Of course, then the final issue is opportunity costs, what 
other priorities are being unmet. President Eisenhower, for 
example, when he took office and had his famous Solarium 
Strategy Review, said that he would not support any strategy 
that undermined the economic foundation of the country, because 
that was the key to the country's ability to compete long-term. 
So his risk profile, if you will, essentially said, ``I'm 
willing to take some risks in terms of the level of defense 
spending in order to ensure that I minimize the risk to our 
economy.''
    So there's a number of factors, and again I don't think the 
4 percent number is particularly helpful.
    Senator Begich. Thank you very much.
    Dr. Hamre, do you want to add to that?
    Dr. Hamre. Sir, I take a much simpler-minded approach. I 
used to be the comptroller and then the chief operating officer 
at DOD. For me the concern is that we have to put together 5-
year plans and they're real, and we really are making decisions 
today that impact our force 4 and 5 years out. If we were to 
establish some artificial metric that we will budget X percent 
of GDP, right now we'd be cutting to compensate for a 
recession, and I just don't think that, just from a mechanical 
standpoint, that would be really hard on the Department.
    I've been around for 30 years and I've seen these debates. 
Congress is just not interested in a mechanical process that 
ties their hands. They want to decide every year how much they 
want to put to these things. So unfortunately, it's very 
incremental, and I don't think it's probably going to change.
    Senator Begich. I hope you can be more positive, but I just 
talked to my staff on it while we were listening to some of the 
testimony here. I'm a former mayor and I know that the 1-year 
process is painful. That's why we did 5-year labor contracts. 
That's why we did 5 year contracts with regard to services, 
because it created better balance and you could focus on 
management of those resources rather than paperwork for those 
resources, and you became more efficient. The system here is 
not very efficient, as you pointed out in your testimony.
    I found it interesting, your discussion of as we build a 
defense strategy, for both of you on this. Obviously I'm a 
little parochial here on the missile defense system in Alaska 
and I see it from a strategic purpose. It sounded like what you 
were saying was sometimes you have to have multiple systems to 
keep your opposition also spending some money and causing them 
some unknown on where you're at and where you'll go.
    I see the missile defense, obviously, again as a very 
important strategic, especially in the Pacific Rim, as well as 
I think one of you mentioned the issues of Iran in developing 
our systems better and better, so we have greater capacity. But 
I also see it that it's a way to force those that are thinking 
of specializing in certain weapon systems, they have to look at 
all ours to figure out how to balance against them, which means 
an economic hardship on them potentially.
    Do you want to expand on that, or do you see that, what I'm 
laying out there, as a positive, as a piece of the defense 
strategy? Either one of you want to comment on that?
    Dr. Hamre. Each of these different capabilities brings 
strengths and weaknesses. The difficulty of the national 
system, of course, is that it's dependent on sites that are 
crucial for the architecture, both the long-range radars as 
well as the interceptor fields, and they're vulnerable. We will 
try to protect against that, but they are vulnerable.
    On the other hand, when you get a mobile capacity, like the 
Aegis with the SM-3, it doesn't have that vulnerability. It has 
a different vulnerability. So it's really the range and mix of 
these resources.
    I think this administration has decided that they want to 
put more emphasis on the mobile assets, and I think there's a 
good case for that. Now, it would be a different case if we 
didn't already have a commitment to the deployment that already 
exists. Its biggest impact is obviously for the third site in 
Europe. But I think they believe that the Aegis with SM-3 is 
actually superior because of its flexibility and it avoids a 
lot of complicating issues with basing. So I think that's why 
they're thinking about that as a substitute for it.
    This is not like the debate we had in 1993, when President 
Clinton was elected. President Clinton had promised to cut $60 
billion from the defense budget in his campaign, and 60 percent 
of those cuts came in missile defense. That's not the case 
here. In this case I think it's a repackaging of the 
investment. There is, I think, a sentiment that too much 
emphasis has been placed on the fixed base deployments as 
opposed to the mobile based deployment, and I think that's what 
they're trying to address.
    Senator Begich. My time is up, but if you have one comment 
on the economic component, too?
    Dr. Krepinevich. Just first, I think John made excellent 
points. I think as long as you're talking about ballistic 
missiles with nuclear weapons on them, it just becomes very 
hard to achieve the level of intercept probability that you 
need to talk about imposing costs on the other side.
    I will say, though, that if you look at certain dimensions 
of ballistic missile defense, for example there are concerns 
that the Chinese are developing ballistic missiles with 
maneuverable warheads to go after carriers in particular at 
significant distances from their coast. To defend against a 
ballistic missile with a ballistic trajectory, it's a lot 
easier calculation and it's a lot easier intercept. They have 
kinetic systems, SM-3, as John was mentioning, and so on, that 
can go after these kinds of warheads.
    Directed energy systems that are still interesting but not 
yet proven, would be better to go after the maneuverable 
vehicles because the computational problem is different, 
because they are maneuvering, they're not following a 
predictable path. Plus, maneuverable vehicles, because they do 
maneuver, spend more time before they get to the target, and 
that allows a laser with a given power level to lase more or 
burn more on the warhead.
    I probably sound like I'm getting a little bit too 
technical, but really there are a lot of moving parts to 
determine this. You probably want to take a look at that before 
you came to a determination as to whether you could really 
impose costs by pursuing missile defenses.
    Senator Begich. Great. Thank you very much, and thank you. 
I've expired my time, but thank you for your comments.
    Senator McCaskill. I Thank you both for being here.
    Senator Burris jumped my area a little bit because I wanted 
to talk a little bit about F-18 versus F-35. You outlined it 
pretty well, Dr. Krepinevich, about cost versus stealth and 
range. I've heard that the Secretary of Defense has said that 
if we can get 80 to 85 percent of what you need with a cheaper 
way to go, we should do it. I'm trying to get a handle on how 
we, and correct me if I'm wrong, that the F-18 does 80 percent 
of what the F-35 does, what JSF does, and it's 40 percent of 
the cost, about $50 million versus $130 million a pop.
    I am trying to figure out, it's almost unfortunate for me 
in a way that St. Louis figures into this equation, because the 
auditor hat that I wear here in terms of cost-benefit would 
have me probably pounding for F-18s just based on that 
analysis. Now, the added whipped cream and cherry are obviously 
those jobs in St. Louis.
    But just based on the data as it relates to capability 
versus cost, can you speak to that as to why we're doing 31, to 
say nothing of the gap that you talked about? We're talking 
about a serious gap on  carriers  in  the  next  2  or  3  
years. GAO  is  telling  us  that  the  F-35 is not on time, 
it's not on schedule. We have some problems in terms of the 
technology. We're not ready to buy it yet.
    This is really serious. How many carriers are going to sit 
empty for 3 or 4 years if we don't come down on the side of a 
blend here going forward? Now, I get the countervailing 
argument about what do you have to fix them and the maintenance 
capabilities and all that. But if you would speak to that 
briefly. I know we've covered it. I don't want you to go over 
new territory. I want to home in on the 80 percent capability 
and the 40 percent of the cost.
    Dr. Krepinevich. I think if you're just looking at range 
and payload, the range and the payload of the F-35 and the F-18 
are roughly the same. I don't have the details. So if it were 
just those two metrics that you were using, certainly when you 
introduce the cost metric the F-18 would look quite good.
    If you introduce stealth into the equation, then the F-35 
really dominates in that area relative to the F-18. How 
survivable is this plane going to be? How well is it going to 
be able to penetrate?
    Advocates of NUCAS, the unmanned system, would say that's 
all good, but NUCAS has payload, it has stealth, it has range, 
and it may have lower operational costs because we don't use a 
pilot, and so on. If range becomes important, and quite 
frankly, that's becoming a growing issue for the Navy because 
as the Chinese develop their capabilities the carriers are 
probably going to have to operate further and further from 
China, at least in the early stages of the conflict.
    But then, there's always another question. The other 
question is sea-based versus land-based. How do I think about 
that? Or Admiral Fargo's question was, maybe if the Air Force 
can take down a lot of the Chinese ability to see deep into the 
ocean, then the carriers can move in fairly quickly and we 
don't need stealthy aircraft. So that leads you to how are we 
going to fight, how are we going to operate this air-sea battle 
concept?
    Then there are folks who are saying if we can harden our 
air bases it may be cheaper to put unmanned land-based aircraft 
on them, that may be the cheapest solution of all. Then 
finally, as I mentioned before, I have admirals who tell me 
essentially you could have significantly fewer aircraft, in 
other words, you could spread those 7 carriers' worth of 
aircraft over 10 or 11 decks, have fewer aircraft, but still be 
able to strike a lot more targets than you could 15 or 20 years 
ago, because now all these planes carry precision weapons that 
can hit and you can be confident they have a very high 
probability of hitting what they're aiming at.
    So it comes down to what metrics do you choose to evaluate 
these various options against and then how do you value the 
metrics. Depending upon how you do that, you come up with an F-
18 as an answer or the F-35 or a NUCAS or maybe a different 
answer altogether.
    Dr. Hamre. Senator McCaskill, I personally don't look at 
this as a tradeoff between F-35 and F-18. There's a difference 
in timing between these two fleets. I personally look at the 
health of the current F-18 fleet and it's already beyond its 
design life. If we're going to be able to outfit the carriers, 
and we probably have several hundred billion dollars invested 
in the carriers, it doesn't make sense to me that we wouldn't 
put airplanes on that investment over a period of about 10 
years until you can start getting F-35s in quantity.
    So I look at it from a much narrower perspective. We have a 
substantial investment. We use the carriers every day. We want 
a naval presence every day. It's a matter of whether the air 
component is up to speed and should we be making an additional 
investment to ensure that it is up to speed for that period.
    So I don't personally put it in the tradeoff calculus 
between F-35 and F-18. I think instead that it's a question of 
a serious investment in the fleet, and the need to maintain 
that over the period of the next decade.
    Senator McCaskill. It's hard. But with the C-17, we're 
flying the wings off of them. The F-18, in terms of the utility 
of it, even though I support what the Secretary is trying to do 
as it relates to, kind of arm-wrestle this bear to the ground, 
the weapons systems and acquisitions and how we do this in a 
more thoughtful way, rather than the way we typically do it 
around here, which is all of us fight each other based on 
what's built in our States. That's probably not the best way to 
equip the military.
    Since we've covered a lot on the JSF and the F-18, I want 
to take a minute to talk about contracting and the irregular 
warfare issue. It is not talked about, I think don't enough, as 
a component of modern warfare. We clearly have taken 
contracting to a level that the military would have never 
envisioned 20 or 30 years ago in terms of what contractors are 
doing in the contingency. You have spent a lot of time talking 
about the future of ground forces and what kind of ground 
forces we need.
    I have asked repeatedly about the drawing down of 
contractors in Iraq and the building up of contractors in 
Afghanistan and whether or not we're going to change the way we 
embrace contracting going forward. We didn't learn lessons from 
Bosnia and I'm hoping that we've learned lessons. I was very 
proud that Secretary Gates embraces acquisition personnel to 
the extent that he did in his message, and I think he is 
serious about that.
    But I'm not sure that we've figured out how to invade the 
culture in terms of contracting oversight within the military. 
You are both in a position to speak to that. I know that the 
folks in charge of the theater didn't think contracting 
oversight was part of their mission. They knew what their 
mission was and it wasn't controlling costs on Logistics Civil 
Augmentation Program, and it got completely away from us over 
there in so many ways.
    I would like both of you to speak to that in terms of what 
you would urge us to do to get a handle on this, because I 
don't think we're going to go back to having our Army peeling 
potatoes.
    Dr. Hamre. This is an area that needs to be examined in 
depth and we need to take the anger out of it, because there's 
an awful lot of anger about it. We do need contractors on the 
battlefield. We have depended on them for a very long time, and 
to get the technical support, not just peeling potatoes, but 
for example, maintaining night vision equipment. It's very 
sophisticated stuff. It's cheaper to buy that from the private 
sector than it is to try to bring it into the military.
    So we really need to examine it carefully. We do not do 
well in managing service contracts in the Department. We have a 
very deep culture that revolves around contracting for things, 
acquisition of things. We don't have anything like it for the 
acquisition of services. We've experimented with using 
contractors to supervise contractors, and I'm not sure that's a 
very good idea.
    So this is a longer-term, serious effort that needs to be 
undertaken. We are going to depend on contractors in 
Afghanistan. We will depend on them everywhere, and we do need 
to ensure that we're getting value for money when we do it. 
This needs real attention. The Army let its eye off the ball on 
contracting expertise and it's starting to rebuild that because 
of some bitter experiences that they have had in Iraq.
    Now, I will say I do suspect that we're going to have to 
invent some new ideas here. We have too high personnel costs, 
we don't have a big enough military, and we want to do more 
supervision. This just isn't coming together. So we're probably 
going to have to invent some new things for this, and utilizing 
instruments like Federally Funded Research and Development 
Centers (FFRDCs) to help with technical guidance and support to 
the government is probably going to be a part of that.
    By way of disclosure, I serve on a board of an FFRDC. It's 
not to advocate. The company is doing perfectly fine. We're not 
going to put profit-seeking people in charge of other profit-
seeking people. I think we're going to have to find other ways 
to get at that. I would be very happy to come up and talk with 
you about it. It's going to take some time to work out a 
formula for it.
    Dr. Krepinevich. There's a principle in the business world 
that you don't outsource your core capabilities. I do think 
John's correct that a certain amount of outsourcing, certainly 
in terms of support activities, if you can do it in an 
efficient way, makes sense. What concerns me most is the 
outsourcing to some of the security firms of core military 
capabilities, which is the providing of security, conducting 
security operations.
    I was talking to one of the Service Chiefs who actually 
spent a fair amount of time in Iraq. He said the number when he 
was there was somewhere on the order of 30,000 or so. I suspect 
the reason we had so many is because of the limitations on the 
size of the Army and the Marine Corps at the time.
    But you really run into trouble when you begin to outsource 
core functions. It wasn't clear whether these people were or 
weren't under the Uniform Code of Military Justice. They move 
around the battlefield. Are you obligated to share intelligence 
with them on where the enemy might be? If they run into 
trouble, should you take your rapid response force and dedicate 
it to their support when some of your uniformed people could be 
getting in trouble? They don't operate under the same standards 
of discipline that soldiers do. Obviously there have been a 
number of very unpleasant incidents that are associated with 
contractors operating in poor discipline.
    If the goal is to save money, it's not clear over the long 
term that we do save money. In a sense, it almost seemed to me 
that the U.S. Government was competing against itself for the 
services of these people, engaging in bidding wars with 
Blackwater, up to $150,000 to get a Special Forces 
noncommissioned officer (NCO) to reenlist.
    Then I quite frankly have concerns about the political 
factor when firms like this begin to lobby Congress, contribute 
funds to campaigns, and so on, because it's not clear to me 
what their motives are. It's not like their motives are the 
same as the U.S. military's.
    Finally, a lot of the people who seem to be recruited for 
these sorts of positions in some cases are people that were 
rejected by the military or foreigners. These are not draftees 
that once the job is over they go back home. Whether it's a 
fellow from Chile or Ukraine or somewhere else, these people in 
a sense are mercenaries and they're looking for the next war. 
Again, it's not clear to me that that's the sort of capability 
that we want to have after the war is over and looking for 
something else.
    So it was done, I think, out of the stress of the moment, 
the necessity of the moment. But I really have grave questions 
about whether this is an approach you want to take when it 
comes to core military capabilities and functions.
    Senator McCaskill. Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator McCaskill.
    Senator Bill Nelson.
    Senator Bill Nelson. Thank you, Mr. Chairman. I'll be 
brief.
    Thank you, gentlemen, for your testimony. I would say good 
morning and I think I'm making it by about 10 minutes.
    I want to get your opinion; Secretary Gates is proposing 
the Joint Cargo Aircraft procurement to cut the aircraft from 
78 to 38. Yet, the Joint Requirements Oversight Council and the 
Defense Acquisition Board have both said that there is a 
requirement for these aircraft and they say 78. Indeed, the 
Quadrennial Review of Rolls and Missions supports that joint 
program.
    So as we are looking to try to respond to the threats in 
the future, where we can't rely on big cargo aircraft, is this 
a mistake to cut that program in half?
    Dr. Hamre. Senator, I'm embarrassed to tell you I don't 
know very much about the program. I'd be happy to learn more 
about it and come back and talk to you. What I don't know is 
the degree to which it is taking the burden off of the C-130s 
or it's filling a mission that can't be addressed by C-130s, I 
just don't know enough about it.
    Senator Bill Nelson. I understand. It's a smaller, shorter 
takeoff and landing cargo aircraft that can get into a dirt 
field, for example.
    Dr. Hamre. Yes, sir.
    Dr. Krepinevich. Is this the C-27, Senator?
    Senator Bill Nelson. Yes.
    Dr. Krepinevich. Okay. I'm a micrometer ahead of John Hamre 
in terms of understanding this program. My understanding is 
some of the aircraft were going to the Army and some were going 
to the Air Force. Now all the aircraft are going to the Air 
Force. I think there is an issue with respect to how we think 
about homeland security, disaster relief, and those kinds of 
issues. I'm not an expert on what the demands are or how we're 
going to deal with various contingencies relating to homeland 
security.
    I would say, though, that in terms of requirements, and 
this gets back to a point I think I made earlier, Secretary 
Gates is saying, ``look, when I look at the threat profile I am 
coming to different conclusions than those that are derived 
from the defense planning scenarios that we've been using in 
the past, so I think these scenarios need to be updated.'' Once 
you update those scenarios and say this is what we want the 
military to focus on, then that creates the potential for a 
change in requirements. Okay, Mr. Secretary, if this is what 
you want to focus on, our requirements shift.
    Certainly we've seen that happen over time. For example, 
with the F-22 there was a requirement a few years ago for 381, 
the Air Force said; then 243; now I think it's 187.
    Senator Bill Nelson. Right.
    Dr. Krepinevich. So I think what you have to do is look at 
how this QDR process is going to play out in terms of adjusted 
requirements. Then we may have 10 pounds of requirements and, 
as Dr. Hamre said, a 6 pound budget, and then you have to start 
to say we may have requirements, we can't fill all the 
requirements, we have tough decisions we have to make; how do 
we make those tough decisions?
    Senator Bill Nelson. I agree, and we have to make those 
tough decisions. But I must say that I was surprised, because 
the whole thrust is quick response, surgical strikes, get into 
very difficult areas. So that was the idea, bring this cargo 
aircraft down in size, short field takeoff and landing, rough 
terrain to land on, et cetera.
    Now, in the same vein, what the Secretary is proposing is 
to retire 250 of the oldest Air Force tactical fighter 
aircraft. The GAO found that unless the Air Force extends the 
life of F-15s and 16s or speeds up the introduction of new 
aircraft, then it's going to lack the aircraft to perform the 
air sovereignty alert mission all the way up through 2015.
    So any comments from you as to whether or not it's prudent 
to retire that kind of aircraft?
    Dr. Hamre. I assume air sovereignty alert is airplanes 
based in the United States to fly up and intercept a Russian 
Bear bomber or something.
    Senator Bill Nelson. Right.
    Dr. Hamre. I didn't know we did that any more.
    Senator Bill Nelson. The Air National Guard does.
    Dr. Hamre. The Air National Guard has that as a mission?
    Senator Bill Nelson. Yes.
    Dr. Hamre. So this is largely going to be retirement of Air 
National Guard assets? Is that what this would do?
    Senator Bill Nelson. That's correct.
    Dr. Hamre. I see, and they're primarily old F-15s?
    Senator Bill Nelson. F-15s and 16s.
    Dr. Hamre. Forgive me. Again, I'm not very up to speed on 
that. There is a real problem. We keep holding on to old assets 
and make them keep them in service. Boy, it's tough to keep 
them going. It would be far better to find a way to modernize, 
but we're buying new things, it's hard to do that.
    But I just don't know enough to question the Secretary's 
judgment at this stage, but I'd be happy to learn more about 
it. Andy?
    Dr. Krepinevich. I'm sure glad John's taking these 
questions first because, like I said, I'm barely catching up to 
him. But again, I'm speculating a bit here, as John is. You get 
to a point where it's like the old car in the driveway that's 
dripping oil and the transmission's going, and you say: Look, I 
could keep this thing going, it's probably not going to perform 
all that well, it's probably going to be a hangar queen, it's 
going to spend more hours down than up. How much capability am 
I really getting out of this and what's the opportunity cost? 
Could I be investing, for example, in advanced radars that can 
help detect when an incursion might be occurring, or perhaps in 
UAVs, unmanned systems that can fly and incorporate the latest 
electronics and avionics in terms of having a wide area of 
surveillance?
    What is the problem? Is the problem drug smugglers? Is the 
problem illegal immigrants? Is the problem a Russian Bear 
bomber? What are the new requirements today, as opposed to the 
ones that existed when continental air defense was a big issue 
during the Cold War?
    So I think you have to look at the range of issues there 
before you can judge whether this decision makes a lot of sense 
or not.
    Senator Bill Nelson. Okay. One more question regarding 
contractor rapes of American contractor personnel in the war 
zone. We've had difficulty. We've had a number of those rapes. 
The evidence was swept under the rug. The DOD not requiring the 
contractors to preserve the evidence, not setting a set of 
procedures whereby a woman who was raped would be attended to 
immediately, and the condescension toward a woman who was raped 
in the war zone.
    We obviously need to have better DOD oversight and 
responsibility and referring these cases to the Department of 
Justice for prosecution. Has this come onto your radar scope, 
either one of you?
    Dr. Hamre. Yes, sir, it has. A couple of years ago at my 
little think tank we looked at this problem. It was a problem 
in the Balkans and it was a problem that we had, to a lesser 
degree, in Iraq. I think it's a serious issue because right now 
it's treated as just a moral deviancy question and get them out 
of country, terminate that person from employment, et cetera.
    I think it's a little more serious than that, because what 
we do know is our opponents do try to target us for 
intelligence purposes through some of this contract activity. I 
suspect that the vector of convenience is also potentially a 
vector of vulnerability in some of it. So I think it ought to 
be taken much more seriously than we have been taking it.
    We did for a time, I remember talking to General Jones when 
he was Supreme Allied Commander Europe about this as an issue. 
He actually had a conference on the problem in Brussels. But I 
must confess I have not followed through to know whether there 
was implementation on it. But I do think it's worth your 
looking at and following through on it.
    I think there's a bigger security issue, not just a moral 
justice issue here.
    Senator Bill Nelson. Thank you.
    Chairman Levin. Thank you, Senator Nelson, for your 
continuing focus on that issue.
    I just have a few more questions. One of the things that 
Secretary Gates's announcement suggested was that we limit the 
growth of combat brigades to 45 instead of 48, as originally 
planned. What this does, it seems consistent with the goal that 
the increase in end strength will be used to build force 
stability and depth, and not just result in a larger version of 
a thinly stretched and less ready Army. In other words, we 
would use the end strength growth to thicken the existing units 
and allow the Army to quit using stop-loss as a force meeting 
tool.
    Have you given any thought to that, either of you, as to 
what your reaction would be?
    Dr. Krepinevich. Yes. I had the opportunity to spend a 
little bit of time with Secretary Gates and his rationale was 
as you've described it. The Army was building toward 48 
brigades. In Secretary Gates's estimation it could only really 
adequately fill 45. So the concern on the part of the Army was 
the dwell time. The more brigades we have, the longer the dwell 
time in between rotations into combat.
    From my point of view, I think the Secretary made a wise 
choice. In our assessment of the Army, we actually recommended 
the Army stay at 42 brigades. The reason was the strategy that 
the DOD is pursuing, which is a strategy of indirect approach 
and building partner capacity. If your strategy is building 
partner capacity, you need essentially a higher density of 
officers and NCOs. You need them because they're going to be 
your trainers and advisers. They're the ones who are going to 
provide the reinforcing rods in the Iraqi security forces and 
help build up and advise the Afghan National Army.
    To me, that strategy makes perfect sense because it plays 
to our strengths, and it also seems to be the direction the 
administration is going in with the drawdown in Iraq and I 
think a limited buildup in Afghanistan. So there should be less 
concerns about dwell time as that deployment or redeployment is 
executed. So I think for my money Secretary Gates actually went 
too far in going to 45.
    The other point I would make is, if you look at the 
structure of the Army proposal, 19 of the 48 Active brigades 
were going to be heavy brigades. That's almost 40 percent of 
the Active Force. Zero brigades were brigades that were going 
to be specifically oriented on security cooperation operations. 
On the other hand, of the Guard brigades, only 25 percent were 
heavy brigades.
    This struck me as very odd, given that the Active brigades 
can be rotated more frequently into these combat zones. It's 
obviously an irregular war. Infantry brigades are structured 
more optimally for that if you don't want to create security 
cooperation brigade combat teams or increase the number of 
advisers and trainers. So I still have a bit of a caution on 
whether the Army isn't really either consciously or 
subconsciously trying to get back to its heavy force comfort 
zone.
    Dr. Hamre. I take Dr. Krepinevich's view on this.
    Chairman Levin. Thank you.
    One of the things our bill does, our Levin-McCain 
Acquisition bill, is that we really have a focus on the 
development of independent cost estimates. We do it in a number 
of ways, one of which is we would have the cost estimator 
report, that independent person, report directly to the 
Secretary, to increase the independence, instead of going 
through someone else. Do you have any thoughts on that?
    Dr. Hamre. Sir, I think the Cost Analysis Improvement Group 
(CAIG) and the independent cost estimates have been pretty 
accurate through the years. I think they've had a very good 
track record. I don't think that there was ever a difficulty in 
getting their estimate in front of the Secretary. I think it 
routinely came in front of the Secretary through the program 
review.
    It's just that when you're living with constrained budgets 
and you have this unrealistic pressure toward optimism, you 
choose to ignore the CAIG. It's not that there hasn't been the 
knowledge. It's that people have chosen to ignore it.
    Chairman Levin. Should we make it harder to ignore?
    Dr. Hamre. Sir, you're making people----
    Chairman Levin. Isn't that exactly what your point was here 
this morning, was that we have to rein in costs?
    Dr. Hamre. Yes, sir.
    Chairman Levin. Doesn't that mean we have to make the cost 
estimator a stronger position? Isn't that the whole point?
    Dr. Hamre. But I don't personally think you're going to get 
that by just putting a requirement on top of people like this. 
I have a different view on why we're in this trouble.
    Chairman Levin. Is that a requirement?
    Dr. Hamre. Pardon me, sir?
    Chairman Levin. Is that a requirement, or is that a 
capability?
    Dr. Hamre. Which?
    Chairman Levin. You said put a requirement on these people.
    Dr. Hamre. If we were to put a statutory hurdle to get 
over.
    Chairman Levin. No, we're getting rid of a hurdle. We want 
direct access to the Secretary.
    Dr. Hamre. I honestly don't think that's the problem. I 
think that we knew that the F-22 was going to cost more than 
the Air Force said it was going to cost, and we budgeted the 
lower number. I was there.
    Chairman Levin. Why was that?
    Dr. Hamre. It was too painful politically either to force 
them to cut the procurement quantity or to budget a high 
funding number.
    Chairman Levin. Is it too painful politically in the 
executive or the legislative branch, or both?
    Dr. Hamre. Both.
    Chairman Levin. Okay. We have given extraordinary 
flexibility to the MDA and we've given them immunity from the 
normal acquisition rules on missile defense. Some senior DOD 
officials have indicated they think missile defense should be 
held to the same standards of acquisition discipline as other 
major defense acquisition programs. Do you have a comment on 
that? Do you agree with that?
    Dr. Krepinevich. I would defer to Dr. Hamre. I'm not 
knowledgeable enough.
    Chairman Levin. You guys keep deferring to each another.
    Dr. Hamre. It should be subjected to the same discipline, 
of course.
    Chairman Levin. One of the things that was proposed here, 
and I think you may have briefly commented on this when I 
stepped away, is the shift of funds in the missile defense area 
that is being proposed. Secretary Gates says that in order to, 
and these are his words, ``better protect our forces and those 
of our allies in theater from ballistic missile attack,'' that 
he's proposing to add $700 million to field more of the most 
capable theater missile defense systems, specifically THAAD and 
SM-3 program.
    Now, that follows the guidance provided by Congress last 
year, or it's consistent with the guidance anyway, that the 
highest missile defense priority, based on the findings of the 
so-called Joint Capabilities Mix Study. That study showed that 
DOD was not planning for even half of the interceptors needed 
for our regional combatant commanders. So we put the focus in 
our last bill on additional THAAD and SM-3 interceptors as the 
highest priority. We put less less emphasis on NMD for three 
reasons.
    Number one was it is not as near-term, it is not as 
immediate. Number two, not as likely. Number three, that the 
operational effectiveness had not been demonstrated for the NMD 
interceptors, and that we should demonstrate their operational 
effectiveness before we continue to purchase additional ones.
    That was the tradeoff, and I'm wondering if either of you 
want to comment or have a comment. I heard part of what I 
believe you said, Dr. Krepinevich. I'm not sure whether you, 
Dr. Hamre, had a comment that I missed. But could you comment 
on that point?
    Dr. Krepinevich. I think the logic is strong there. I think 
theater defense is more likely to be used in the near-term. It 
gives you an opportunity to field test, if you will, systems, 
find out where their strengths and weaknesses are.
    I think, with respect to defense of the Homeland, it has to 
be more than missile defense. It has to be ballistic missile 
defense. It has to be cruise missile defense and a holistic 
strategy that looks to both of them, plus nontraditional means 
of inserting weapons of mass destruction. I think the dog that 
isn't barking here is what I called earlier the G-RAMM threat, 
which really isn't addressed by a Patriot Advanced Capability-3 
system because of the flight times and trajectories. The 
Israelis, for example, have come up with systems like Iron 
Dome. But again, the expense of the interceptor so exceeds the 
cost of the projectile that I think again we're going to have 
to look for novel ways to come up with defending against that 
kind of problem.
    The only promising technology I see in the near-term has to 
do with the solid state laser technology, the Slab lasers, or 
prospectively the fiber lasers that they're coming up with. But 
even then, it's far from being a done deal.
    Chairman Levin. Dr. Hamre?
    Dr. Hamre. Sir, I apologize for not being aware of the 
direction that you gave. But I think the logic is very strong. 
The threat we're facing every day tends to be from intermediate 
range missiles. Theater systems are appropriate investments 
right now, and we do have this foundation in national ballistic 
missile defense that we've invested in. We should make sure it 
works.
    Chairman Levin. Thank you both. You've been really 
wonderful witnesses. I know how much all the members who were 
able to get here appreciated it, and we appreciate your 
service.
    We'll stand adjourned.
    [Questions for the record with answers supplied follow:]
               Questions Submitted by Senator Carl Levin
            joint forces command role in joint requirements
    1. Senator Levin. Dr. Krepinevich, there has been a longstanding 
concern that our acquisition system is not well-designed or run to 
procure the technologies and systems that we need for joint operations. 
Senator McCain and I try to address this issue partially in our 
acquisition reform legislation, by clarifying and emphasizing the role 
that combatant commanders should play in advising the Joint 
Requirements Oversight Council (JROC) in reviewing and establishing 
requirements. Under Secretary of Defense for Acquisition, Technology, 
and Logistics, Ashton Carter, endorsed the idea of Joint Forces Command 
(JFCOM) becoming a full member of the JROC in testimony before this 
committee in 2000. What is your view of the role that JFCOM should be 
playing in the JROC and in establishing joint requirements?
    Dr. Krepinevich. The JFCOM is the only senior military officer 
charged with representing the views of the ``Combatant Commands 
(COCOMs)-After-Next.'' Put another way, the future generals and 
admirals who will command the U.S. Armed Forces 7 or 8 years from now 
should be JFCOM's principal customers. Obviously, these future 
commanders cannot yet speak for themselves. They must count on the 
Commander, JFCOM, to speak for them. In this role, the JFCOM 
Commander's voice can best be heard as a member of the JROC and the 
Defense Acquisition Board (DAB).
    Given current trends, these COCOMs-After-Next will encounter some 
very different challenges from those that confront us at present. The 
COCOMs will require new concepts of operation, which will themselves 
necessitate new types of equipment and new force structures to execute 
properly. It is the Joint Forces Commander's job to ensure the COCOMs-
After-Next will have what they need to best protect the Nation.
    This will likely require significant changes in the Joint Force. 
Such change in large military organizations almost inevitably involves 
a process that spans a decade or more. However, the U.S. military's 
institutional practices typically find senior leaders--including the 
Commander, JFCOM--rotated out of their assignments every 2 to 4 years. 
While this rotation cycle may work well for leaders whose 
responsibilities are focused on the near-term (for example, the 
regional COCOM who is responsible for the immediate warfighting mission 
in his area of operation), the task of identifying the key emerging 
challenges to national security and adapting the military to meet them 
is one that can only be accomplished over an extended period of time.
    It is not surprising, then, that military organizations that have 
successfully changed to address major shifts in the character of the 
threats confronting them (or exploited opportunities to create a major 
new advantage) have almost always had key senior military leaders 
serving an extended tour of duty, often double or even triple the 
length of a typical flag tour. During the onset of German Army's 
transformation to blitzkrieg in the 1920s, for example, the head of its 
shadow general staff, General Hans von Seeckt, served 7 years in that 
position. The American Navy's exploitation of naval aviation was 
shepherded by Vice Admiral William Moffett, who remained head of the 
Navy's Bureau of Aeronautics for an astounding 12 consecutive years. 
Admiral Hyman Rickover, widely known as the ``Father'' of the Navy's 
nuclear submarine force, remained Director of the Naval Reactors Branch 
for over 30 years. Yet the tour of duty for the Commander of JFCOM is 
the same as those of senior commanders of operational units. A strong 
case can be made for the JFCOM commander to have extended tenure to 
enable him to see his job through to completion.
    It almost goes without saying that the insights and lessons derived 
from JFCOM's analytic efforts, wargames and simulations, as well as 
field exercises, must be harvested if our military is to adapt to meet 
emerging challenges. Properly formulated and executed, the command's 
efforts toward this end should yield important insights regarding what 
operational concepts, force structures, and equipment will be of 
greatest value to future COCOMs. Moreover, changes in force structure, 
doctrine, and equipment under consideration today will not be created 
or fielded in significant quantities until well into the next decade--
when the COCOMs-After-Next will assume their duties. Given these 
considerations, a strong case can be made that the JFCOM commander's 
views should be accorded great weight in DOD decisions regarding 
Defense program priorities.
    At present, however, even if one assumes a robust level of Service 
and Joint experimentation focused on emerging challenges, it is not 
clear how the insights derived from these efforts will be translated 
into new requirements and ultimately, new doctrines, force structures, 
equipment and capabilities. In recent years the Joint Chiefs' JROC have 
generally proven incapable of effecting significant changes in Service 
budget shares or program focus.
    One way to help remedy this problem is to assign the Commander, 
JFCOM, a seat on the JROC, as well as membership on the DAB. As a 
member of the JROC and the DAB, the Commander, JFCOM, could give voice 
to the demands levied by meeting emerging challenges. He could also 
guard against unwarranted influence being exerted by the military 
Services, which are often tempted to act more out of narrow 
institutional interest than from a broader, joint perspective.
    Assuming that the Commander, JFCOM, receives the extended tenure 
(i.e., consecutive 3-year terms) necessary to develop new concepts of 
operation, a logical follow-on assignment would be a 4-year tour of 
duty as Vice Chairman of the Joint Chiefs of Staff, who chairs the JROC 
and co-chairs the DAB. This would facilitate the Pentagon's efforts to 
ensure that the equipment needed to execute new concepts of operation 
are purchased and fielded in a timely manner.
    Finally, for these recommendations to have value, the flag officer 
designated to serve as Commander, JFCOM, must be carefully selected. 
People do make a difference, even in today's world. The world would 
likely be a very different place were it not for General von Seekct, 
Admiral Moffett, and Admiral Rickover. Given the stakes involved, the 
Commander, JFCOM, should be both a warrior and a scholar--and perhaps a 
bit of a salesman, to boot. The current Commander, JFCOM, clearly fits 
this description.

    2. Senator Levin. Dr. Krepinevich, would the goal of moving the 
Department toward joint requirements and capabilities that strike the 
balance you are seeking in addressing current and future threats be 
better served if the JFCOM commander were a member of the JROC?
    Dr. Krepinevich. See answer to question 1.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss
                                  c-5
    3. Senator Chambliss. Dr. Hamre, in an Office of the Secretary of 
Defense's (OSD) Acquisition, Technology, and Logistics (AT&L) memo 
dated February 14, 2008, on the C-5 Reliability Enhancement and 
Reengining Program (RERP) Acquisition Decision Memorandum (ADM), it 
indicated that OSD reviewed 14 different airlift alternatives as part 
of the C-5 RERP Nunn-McCurdy process and concluded that a mix of 205 C-
17s with 49 RERP'd production aircraft, and 59 C-5As provided the 
greatest military capability at the least cost. The memo also stated 
that retention and operation of the C-5A aircraft were required to meet 
JROC validated requirements and that procuring additional C-17s was 
rejected as not meeting requirements, as more costly to the taxpayer, 
and that additional C-17s were unaffordable in the Future Years Defense 
Program. Are you aware of this memo and its contents?
    Dr. Hamre. I would be happy to look at the memo. I don't doubt it 
may reflect a snapshot of today's situation, but are these conclusions 
valid for the next 20 years? I doubt it. The C-5A fleet reliability is 
low. It is well known that the Air Force avoids sending the C-5A on 
long missions because of the frequent break-down pattern. I would be 
happy to read the study and meet with the Air Force analysts who 
prepared it.

    4. Senator Chambliss. Dr. Hamre, Section 132 of the National 
Defense Authorization Act for Fiscal Year 2004 addresses the language 
regarding C-5A retirement restrictions. Section 132 clearly does not 
restrict the Air Force from budgeting for additional C-17s nor preclude 
Congress from adding additional C-17s. Do you believe that the 
Department should see the full results of C-5 RERP, including the 
modernized C-5A, to ensure it has all the information it needs to make 
fact-based and objective decisions for the future regarding the C-5 
fleet?
    Dr. Hamre. The Department should always have as much information 
available as possible. The Air Force should also insist that objective 
analysis guide its resource commitments.

    5. Senator Chambliss. Dr. Hamre, the Mobility Capabilities Study 
(MCS) identified a need for between 292 and 383 strategic airlift 
aircraft. At the time, the MCS coincided with the Air Force's program 
of record of 292 aircraft (180 C-17s and 112 C-5s with engine and 
avionics upgrades). The MCS recommended a strategic airlift force 
structure at the bottom of the range necessary to meet National 
Military Strategy (NMS) requirements with acceptable risk. 
Subsequently, the 2006 Quadrennial Defense Review endorsed a DOD goal 
of maintaining 292 strategic airlifters (180 C-17s and 112 C-5s). 
Subsequent to that, the JROC (codified in the February 2008 C-5 Nunn-
McCurdy ADM) stated that United States Transportation Command supported 
205 C-17s, 49 RERP production aircraft (+3 SDD aircraft), and 59 C-5As 
to meet the NMS requirements. Do you believe that the Air Force's 
planned strategic airlift fleet is adequate to meet the NMS of the 
Nation and the JROC validated requirements?
    Dr. Hamre. No. I suggest that the analysis may reflect a plausible 
condition today, but that in 20 years we will deeply regret depending 
on 52-year-old aircraft for long-range strategic lift.

    6. Senator Chambliss. Dr. Hamre, over the years, there have been 
multiple studies which have affirmed the long-term structural health of 
the C-5 fleet as well as the operational and economic benefits of C-5 
modernization. In fact, C-5 modernization consistently appears to be 
the most cost-effective solution. Do you know of any validated studies 
that suggest otherwise?
    Dr. Hamre. The original C-5 wing had to be rebuilt in the early 
1980s because weight problems in the original aircraft program caused 
the Air Force and the contractor to cut structure out of the center 
wing box, causing the wing to fail prematurely. An entirely new wing 
box was retrofitted into the C-5A aircraft 15 years after they were 
originally manufactured. This heavier wing was included in the C-5Bs. 
Therefore, the wing life of the aircraft is likely to carry us well 
into the years ahead. That is not the cause of the poor reliability of 
the C-5A.

    7. Senator Chambliss. Dr. Hamre, it is my understanding that the 
recently released Institute for Defense Analyses (IDA) study considered 
36 alternative mixes and sizes for airlift and compared them both in 
cost and effectiveness with the program of record. The study identified 
several relatively inexpensive ways of generating higher capability 
from the existing force without buying more planes and that purchasing 
additional C-17s were not needed to meet the MCS moderate-acceptable-
risk delivery rates used as a benchmark by the analyses conducted here. 
Are you aware of the IDA study and, if so, do you agree with its 
conclusions?
    Dr. Hamre. I would be pleased to review the study. Having worked 
for 6 years as an airlift analyst, I know how to evaluate studies.

    8. Senator Chambliss. Dr. Hamre, it is my understanding that C-5 
RERP is performing well, that Lockheed Martin is performing to cost and 
schedule, and that the Air Force has indicated that RERP meets or 
exceeds all key performance parameters specified by contract. Is this 
true?
    Dr. Hamre. I do not know. I have not been briefed by the Air Force 
on the C-5 RERP. I did not comment on it during my testimony.

    9. Senator Chambliss. Dr. Hamre, do you have any comments on how 
well the C-5 RERP is performing?
    Dr. Hamre. I would be happy to receive a briefing from the Air 
Force on the program.

    [Whereupon, at 12:08 p.m., the committee adjourned.]

                                 

```