```

[Senate Hearing 114-64]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 114-64
 
                      GLOBAL CHALLENGES AND U.S. NATIONAL 
                               SECURITY STRATEGY

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

                                HEARING

                              BEFORE THE

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 10, 2015

                               __________

         Printed for the use of the Committee on Armed Services
         
         
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        Available via the World Wide Web: http://www.fdsys.gov/

                               __________

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96-248 PDF                     WASHINGTON : 2015                         

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                      COMMITTEE ON ARMED SERVICES

                     JOHN McCAIN, Arizona, Chairman

JAMES M. INHOFE, Oklahoma            JACK REED, Rhode Island
JEFF SESSIONS, Alabama               BILL NELSON, Florida
ROGER F. WICKER, Mississippi         CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          JOE MANCHIN III, West Virginia
DEB FISCHER, Nebraska                JEANNE SHAHEEN, New Hampshire
TOM COTTON, Arkansas                 KIRSTEN E. GILLIBRAND, New York
MIKE ROUNDS, South Dakota            RICHARD BLUMENTHAL, Connecticut
JONI ERNST, Iowa                     JOE DONNELLY, Indiana
THOM TILLIS, North Carolina          MAZIE K. HIRONO, Hawaii
DAN SULLIVAN, Alaska                 TIM KAINE, Virginia
MIKE LEE, Utah                       ANGUS S. KING, JR., Maine
LINDSEY GRAHAM, South Carolina       MARTIN HEINRICH, New Mexico
TED CRUZ, Texas

                   Christian D. Brose, Staff Director

               Elizabeth L. King, Minority Staff Director

                                  (ii)

 

                            C O N T E N T S

                               __________

                           february 10, 2015

                                                                   Page

GLOBAL CHALLENGES AND U.S. NATIONAL SECURITY STRATEGY............     1

Edelman, Hon. Eric S., Panelist, National Defense Panel And 
  Former Under Secretary Of Defense For Policy...................     5
Flournoy, Hon. Michele A., Panelist, National Defense Panel And 
  Former Under Secretary Of Defense For Policy...................     7

                                 (iii)

         GLOBAL CHALLENGES AND U.S. NATIONAL SECURITY STRATEGY

                              ----------                              

                       TUESDAY, FEBRUARY 10, 2015

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:32 a.m. in room 
SH-216, Hart Senate Office Building, Senator John McCain 
(chairman) presiding.
    Committee members present: Senators McCain, Inhofe, 
Sessions, Wicker, Ayotte, Cotton, Rounds, Ernst, Tillis, 
Sullivan, Reed, Nelson, Manchin, Shaheen, Gillibrand, 
Blumenthal, Donnelly, Hirono, Kaine, King, and Heinrich.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. Good morning.
    Since a quorum is now present, I would ask the committee to 
consider the nomination of Dr. Ashton B. Carter to be Secretary 
of Defense, and if a roll call is requested, we would be glad 
to have a roll call. If not, is there a motion to--is there 
anyone who would like a roll call vote?
    Senator Manchin. Yes.
    Chairman McCain. You want a roll call vote?
    Senator Manchin. I want a roll call vote.
    Chairman McCain. Yes, I don't know if we need it.
    Senator Reed. We don't need it.
    Senator Wicker. Mr. Chairman, I would like to be recorded 
as voting aye.
    Chairman McCain. The clerk will call the roll.
    The Clerk. Mr. Inhofe?
    Senator Inhofe. Aye.
    The Clerk. Mr. Sessions?
    Senator Sessions. Aye.
    The Clerk. Mr. Wicker?
    Senator Wicker. Aye.
    The Clerk. Ms. Ayotte?
    Senator Ayotte. Aye.
    The Clerk. Mrs. Fischer?
    Chairman McCain. Aye, by proxy.
    The Clerk. Mr. Cotton?
    Senator Cotton. Aye.
    The Clerk. Mr. Rounds?
    Senator Rounds. Aye.
    The Clerk. Mrs. Ernst?
    Senator Ernst. Aye.
    The Clerk. Mr. Tillis?
    Senator Tillis. Aye.
    The Clerk. Mr. Sullivan?
    Chairman McCain. No instructions.
    The Clerk. Mr. Lee?
    Chairman McCain. Aye, by proxy.
    The Clerk. Mr. Graham?
    Chairman McCain. Aye, by proxy.
    The Clerk. Mr. Cruz?
    Chairman McCain. Aye, by proxy.
    The Clerk. Mr. Reed?
    Senator Reed. Aye.
    The Clerk. Mr. Nelson?
    Senator Reed. Aye, by proxy.
    The Clerk. Mrs. McCaskill?
    Senator Reed. Aye, by proxy.
    The Clerk. Mr. Manchin?
    Senator Manchin. Aye.
    The Clerk. Mrs. Shaheen?
    Senator Shaheen. Aye.
    The Clerk. Mrs. Gillibrand?
    Senator Gillibrand. Aye.
    The Clerk. Mr. Blumenthal?
    Senator Blumenthal. Aye.
    The Clerk. Mr. Donnelly?
    Senator Donnelly. Aye.
    The Clerk. Ms. Hirono?
    Senator Reed. Aye, by proxy.
    The Clerk. Mr. Kaine?
    Senator Reed. Aye, by proxy.
    The Clerk. Mr. King?
    Senator King. Aye.
    The Clerk. Mr. Heinrich?
    Senator Heinrich. Aye.
    The Clerk. Mr. Chairman?
    Chairman McCain. Aye.
    The Clerk. 25 ayes, 1 no instruction.
    Chairman McCain. Then the motion will be reported favorably 
of Dr. Carter's nomination to the Senate--to the floor of the 
Senate, and hopefully, we can get a vote perhaps even as early 
as tomorrow.
    Senator Reed. Do you want to keep it open for Senator 
Sullivan?
    Chairman McCain. For who?
    Senator Reed. Senator Sullivan.
    Chairman McCain. No.
    We will leave it open for Senator Sullivan to make his 
wishes known for a while.
    The Armed Services Committee meets today to receive 
testimony on our Nation's defense budget and priorities from 
the bipartisan National Defense Panel (NDP). This group of 
former military leaders, Members of Congress, and Pentagon 
officials who served under Republican and Democratic Presidents 
released their unanimous recommendations in a report on our 
Nation's defense strategy last year.
    We have with us today two distinguished members of the NDP, 
Eric Edelman and Michele Flournoy. Each served as Under 
Secretary of Defense for Policy and are among the most 
respected defense experts on both sides of the aisle. We are 
grateful for you to appear before us today.
    I would also like to thank the panel's co-chairmen, Dr. 
William Perry and General John Abizaid, for their leadership, 
as well as the panel's members and staff for their diligent 
work.
    The NDP's bipartisan and consensus report is a compelling 
statement of the daunting strategic realities America faces in 
the 21st century. The rules-based international order that has 
furthered global prosperity and security is not self-
sustaining. As challenges to that order multiply around the 
world, there is no substitute for robust American engagement to 
ensure its preservation. Though America has many effective 
tools of global influence, including diplomacy and economic 
engagement, the panel reminds us that all of these are 
critically intertwined with and dependent upon the perceived 
strength, presence, and commitment of U.S. Armed Forces.
    Yet through a combination of self-inflicted wounds and 
dangerous geopolitical and technological trends, America's 
military strength, ``the strategic foundation undergirding our 
global leadership'' as the report terms it, is eroding.
    $487 billion in cuts to our national defense under the 
Budget Control Act (BCA) of 2011 and billions more under 
sequestration constitute a serious strategic misstep, the 
report warns. These steep cuts have sharply reduced military 
readiness, led to dangerous investment shortfalls in present 
and future capabilities, and prompted our allies and 
adversaries alike to question our commitment and resolve.
    These cuts are not the product of any strategic assessment 
of the threats we face at a time of global upheaval. China's 
rapid military modernization is tilting the balance of power in 
the Asia-Pacific. Russia's aggression threatens Europe's 
regional security. Iran and North Korea continue the pursuit 
and development of tactical weapons, and violent Islamist 
extremists are destabilizing large swaths of the Middle East 
and North Africa while plotting attacks against the United 
States and our allies.
    In addition to regional threats, structural trends like the 
diffusion of certain advanced military technologies pose new 
operations challenges to America's Armed Forces. In the 
security environment of the future, the panel's report 
predicts, ``Conflicts are likely to unfold more rapidly. 
Battlefields will be more lethal. Operational sanctuary for 
U.S. forces will be scarce and often fleeting. Asymmetric 
conflict will be the norm.''
    The panel echoed Secretary of Defense, Charles T. Hagel, 
who has said that in such an era, American dominance on the 
seas and the skies and in space can no longer be taken for 
granted.
    The panel's report recommends the BCA's immediate repeal 
and a return to at least the funding baseline proposed in 
Secretary of Defense, Robert M. Gates' fiscal year 2012 defense 
budget. That budget, the panel concluded, represents the last 
time the Department was permitted to engage in the standard 
process of analyzing threats, estimating needs, and proposing a 
resource baseline that would permit it to carry out the 
national military strategy.
    If we had followed the budget path laid out by Secretary 
Gates, which he believed was the minimum to keep the country 
safe, the fiscal year 2016 budget for the Department of Defense 
(DOD), excluding war funding, would be $611 billion. That is 
$77 billion more than the President's fiscal year 2016 budget 
request, and $112 billion more than the budget caps under the 
BCA.
    It is also worth remembering that Secretary Gates suggested 
this minimum level before Russia's invasion of Ukraine posed a 
renewed threat to European security, before the rise of the 
Islamic State of Iraq and the Levant (ISIS) and the further 
spread of violent extremism across North Africa and the Middle 
East, before China's coercive behavior in the East and South 
China Seas had become dangerously commonplace.
    It is unacceptable to continue to ask the men and women of 
our military to put their lives at risk around the world while 
we cut back on their training and equipment to settle domestic 
political scores. Therefore, the overriding priority of this 
committee and Congress must be to return to a strategy-driven 
budget. I look forward to the testimony of our witnesses today 
as to what budget would look like.
    Senator Reed?

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman.
    I also want to welcome our witnesses. Mr. Ambassador, Madam 
Secretary, thank you for your service both in and out of 
Government. Thank you very much.
    Over the years, and especially since the initiation of 
hostilities in 2001, the Quadrennial Defense Review (QDR), like 
any strategy, has had to contend with the challenge of an 
unpredictable and constantly shifting nature of the world and 
threats that we face. As military leaders have pointed out, we 
have seldom predicted with great accuracy where or when the 
next crisis might occur.
    However, DOD's requirement to conduct security and defense 
analysis and planning means that assumptions must be made, 
objective threat assessments done, and guidance provided to our 
military leaders that prioritize our national security 
interests. Each QDR, regardless of administration, has had to 
make strategic or resource tradeoffs.
    The work of the current NDP, in its review of the 2014 QDR, 
provides an independent consideration of the department's 
assessment of the security environment, its defense strategy 
and priorities, and identification of the capabilities 
necessary to manage our strategic risk.
    In essence, the panel found that the 2014 QDR and defense 
strategy makes a reasonable strategic assessment. For example, 
the panel largely echoes the QDR's strategic assessment and 
highlights the challenges the Nation faces, with emphasis on 
China, Russia in Ukraine, proliferation in North Korea and 
Iran, insurgency in Iraq, civil war in Syria, and instability 
throughout the Middle East and Africa.
    The panel also acknowledges that the QDR calls for the 
right capabilities and capacities to address the many 
challenges we face today and into the future. However, the 
panel notes, those capabilities and capacities clearly exceed 
the budget resources available and, therefore, undermines the 
strategy. A point very accurately made by the chairman.
    It is no surprise, therefore, that the panel's overarching 
finding and recommendation is the BCA endangers the Nation's 
security and calls for its repeal. The panel also argues for 
increasing defense funding to 2012 levels, reining in personnel 
costs, and more budget predictability. In addition to the risks 
of sequestration, I would be interested to hear the witnesses' 
assessment of other risks to our national security, as well as 
well as risks to our military and their families.
    Finally, Mr. Chairman, I note that after nearly 20 years of 
QDRs and recurring questions about its value, last year's 
National Defense Authorization Act modified the requirements 
for this periodic defense review, now called the Defense 
Strategy Review. These changes include the development of a 
national defense strategy that addresses our security interest 
across the near, mid, and far terms, and focuses and 
streamlines the elements of a strategy Congress considers 
essential to a comprehensive defense review.
    I would be interested to know the witnesses' views on these 
changes and the prospects for a more timely, relevant, and 
useful national defense strategy process.
    Thank you, Mr. Chairman.
    Chairman McCain. Welcome to the witnesses. Secretary 
Flournoy?
    Ms. Flournoy. Sir, if I may, I am going to let Ambassador 
Edelman go first.

 STATEMENT OF HON. ERIC S. EDELMAN, PANELIST, NATIONAL DEFENSE 
     PANEL AND FORMER UNDER SECRETARY OF DEFENSE FOR POLICY

    Ambassador Edelman. Mr. Chairman, Senator Reed, thank you 
for giving my colleague, Secretary Flournoy, and me an 
opportunity to come before you to talk about the work of the 
NDP to review the QDR. The two of us have a prepared statement 
that we have submitted and hope that it will be printed for the 
record.
    Chairman McCain. Without objection, they are both in the 
record.
    Ambassador Edelman. I will just make some general 
introductory comments and then turn the floor over to Michele.
    When we began our work as a panel in August 2013, one of 
our co-chairmen, General John Abizaid, said that as we started 
our deliberations that he believed the Nation was running what 
he called accumulating strategic risk. I think all of the 
members of the panel assented to that judgment at the time.
    As you pointed out in your opening statement, Mr. Chairman, 
that was before President Putin had invaded and annexed Crimea 
and destabilized Eastern Ukraine, before the collapse of the 
Iraqi security forces and the seizure of Mosul and Anbar 
Province by ISIL and its approach to Baghdad. As we went 
through our deliberations, I think the panel became more and 
more convinced that the accumulating strategic risk that 
General Abizaid was describing at our outset was accumulating 
at a faster and faster pace.
    As you have heard as a committee from previous witnesses at 
other hearings--Secretary George P. Shultz, my former boss; 
Secretary Henry A. Kissinger, and Secretary Madeleine K. 
Albright--the United States probably faces the most volatile 
and complex security environment that we have faced as a nation 
in a very long time, if ever. It struck us as a panel that, 
given those growing challenges, to stay on the path of the BCA 
caps and sequestration made no sense.
    I had the experience of having been on the previous 
independent panel to review the 2010 QDR, and in that report 
looking at the budget trajectory, the cuts that were already 
being taken out of defense in 2010, the growing cost of keeping 
service men and women in the field over time, and the growing 
healthcare and other retirement costs that were built into the 
budget, we predicted that the Nation was facing a train wreck 
on defense. That was before the BCA passed and before the 
department had to cope with sequestration.
    One of the things that I think we were very focused on and 
I want draw some attention to is the charge that Secretary 
Hagel gave us as a panel at the outset of our deliberations. He 
said that as we discussed future capabilities, because many of 
these challenges that we as a panel were talking about--the 
rise of China and its very rapid growth in military power, the 
long struggle I think that we face with Islamic extremism, the 
rise potentially of new nuclear powers like North Korea, 
perhaps Iran--all of these things are challenges that, as 
President Dwight D. Eisenhower said, were for the long haul. We 
have to think now about how we are going to deal with these 
challenges 20 years out. That, in fact, is also one of the 
mandates of the QDR process itself. It is supposed to be a 20-
year-out look at the Nation's defense needs.
    So, Secretary Hagel raised the issue with us, the concern 
that is the program of record the program we are going to need 
20 years down the road? Are we going to be starting now to 
produce the weapons that 20 years from now we will be needing?
    Many of us, I think, were mindful of the fact that over the 
last decade we have been essentially eating the seed corn that 
was laid down in the President James E. Carter and President 
Ronald W. Reagan defense build-up of the late 1970s and early 
1980s. So, we need to be thinking now of what capabilities we 
can provide for service men and women who are going to be 
called upon in the future.
    So, I wanted to mention the specific areas that as a panel, 
in keeping with Secretary Hagel's charge, that we concluded we 
ought to be looking at down the road for the future. I hope, 
Mr. Chairman and Senator Reed, that you and the members of the 
committee will bearing some of those things in mind as you 
consider the program and budget review over the next few years.
    I will just tick them off. Armed intelligence surveillance 
and reconnaissance. Space, because of our critical dependence 
on it. Cyberspace. Maintenance of air superiority. Joint and 
coalition command and control, because of the partnerships we 
have and the fact we are going to be fighting with other 
people. Long-range strike, and electric and directed-energy 
weapons.
    These are areas that we felt had not been given sufficient 
attention by the department and need a further look in the 
future.
    Why don't I stop there, and I will be happy to turn it over 
to Michele.
    [The joint prepared statement of Ambassador Edelman and Ms. 
Flournoy follows:]

   STATEMENT OF HON. MICHELE A. FLOURNOY, PANELIST, NATIONAL 
 DEFENSE PANEL AND FORMER UNDER SECRETARY OF DEFENSE FOR POLICY

    Ms. Flournoy. Mr. Chairman, Senator Reed, I would just like 
to say how pleased and honored I am to join Ambassador Edelman 
here today to discuss the findings and recommendations of the 
NDP with you.
    This hearing really could not come at a more critical time 
for all the reasons you have described. The international 
security environment is more complex and volatile than we have 
seen, and I would emphasize it is only going to get more 
challenging in the future.
    It is a time when continued U.S. leadership and engagement 
globally to protect our national interests, to sustain the 
rules-based international order on which stability and 
prosperity depend, to lead the international community to 
address the most pressing challenges that you outline, U.S. 
leadership could not be at more of a premium right now.
    It is also a time that requires investment to ensure that 
we retain a strong and agile military to shape the 
international environment, to deter and defeat aggression when 
we must, to reassure allies and partners, and to ensure that 
this President and future Presidents have the options that they 
need for an increasingly dangerous world. Yet, we see a period 
where defense budget cuts and sequestration are undermining the 
department's ability to maintain a robust and ready force, to 
retain the best and brightest people, and to invest in the 
capabilities that are going to be necessary to keep our 
technological edge and our military superiority in a more 
challenging future.
    So, in this context, I just want to foot stomp and 
emphasize four points.
    First is, our number-one appeal to this committee and to 
Congress more broadly is to work to repeal the BCA and end 
sequestration. This is absolutely imperative. We cannot restore 
readiness and invest in our technological edge unless we do so.
    Sequestration not only sets budget levels too low, it also 
denies the Secretary of Defense the ability to protect 
resources for the highest priorities. It puts DOD in a constant 
state of budget uncertainty that prevents more strategic 
planning and investment for the future.
    Deficit reduction and getting our fiscal house in order are 
essential to U.S. national security. But sequestration is the 
wrong way to go about it. So the NDP does recommend restoring 
defense spending to fiscal year 2012 levels, as the chairman 
mentioned, and funding the President's budget request is at 
least a first step in that direction.
    Second, we would urge Congress to take immediate steps to 
restore readiness. The Service Chiefs have testified before 
this committee as to growing readiness problems. Only half of 
the Marine Corps home station units are at acceptable readiness 
levels. Less than half of the combat-coded units in the Air 
Force are fully ready for their missions. Navy deployments have 
been cancelled, and only a third of the Navy's contingency 
force is ready to deploy within the required 30 days.
    The list goes on. These readiness impacts are real, and the 
NDP recommended that Congress should make an immediate and 
special appropriation above and beyond the current budget 
levels and Overseas Contingency Operations to correct these 
readiness shortfalls.
    Third, as Ambassador Edelman emphasized, the NDP calls for 
protecting investment in future capabilities that will be 
critical to maintaining U.S. freedom of action and our military 
superiority in the coming decades. Our technological edge has 
long been an advantage, but it is not a given. In a world in 
which technology is proliferating, much of cutting-edge 
technology is commercial and off the shelf. DOD has to have a 
smart and determined investment strategy to maintain its edge.
    I would personally applaud the Department's efforts like 
the offset strategy, the Defense Innovation Initiative, but we 
have to have the investment dollars to pursue those 
initiatives, and Ambassador Edelman has laid out a number of 
the key areas that the NDP recommended should be a focus.
    Lastly, I would add the NDP also argues that we need to 
pursue an aggressive reform agenda inside DOD. We can and 
should reduce the costs of doing business. We note compensation 
reform and applauded the work of the Military Compensation and 
Retirement Modernization Commission.
    Many of these issues need to be addressed. Some of them 
need to be fundamentally reframed, and I will give you an 
example. Healthcare, for example, rather than debating whether 
we should reduce benefits and increase co-pays, we need to be 
debating how do we get better health outcomes for 
servicemembers and their families and reduce costs by applying 
better business practices.
    The NDP emphasizes the need for further acquisition reform, 
for another Defense Base Realignment and Closure round to take 
down the 20 percent excess infrastructure that the DOD is 
carrying, and to right-sizing the civilian workforce--
contractor, career, and so forth--so that we can have the 
workforce we need for the future.
    Let me just conclude by saying I think this report lays out 
an agenda, a very clear agenda, for action that had strong 
bipartisan and civil-military support across the panel. 
Nevertheless, there are some heavy lifts involved in what we 
recommend. But the risks of not pursuing this course are simply 
unacceptable. So I would look to this committee and applaud 
your leadership in this area, working with your colleagues to 
try to convince them that the time to act on these 
recommendations is now.
    Thank you.
     Joint Prepared Statement by Michele Flournoy and Eric Edelman
    Chairman McCain and Ranking Member Reed, thank you for this 
opportunity to appear before you and other members of this 
distinguished committee to discuss the final report of the 2014 
Quadrennial Defense Review (QDR) National Defense Panel.
    The 2014 QDR National Defense Panel, which included two appointees 
of the Secretary of Defense and eight appointees of Congress, and was 
facilitated by the U.S. Institute of Peace, had been asked to submit a 
written assessment of the QDR. We are here today as the designated 
representative of the co-chairs, former Secretary of Defense William J. 
Perry and General (Retired) John P Abizaid, to discuss with you the 
Panel's report which was released on July 31, 2014.
    Mr. Chairman, our panel observed recent events across the globe--
from the rise of the Islamic State, Russia's invasion of Ukraine, war 
between Hamas and Israel, violent confrontations and air strikes in 
Libya, and continued tensions on the Korean Peninsula and in the East 
and South China seas--and was reminded that the United States faces 
perhaps the most complex and volatile security environment since World 
War II.
    This realization has led to repeated calls for U.S. leadership to 
sustain the rules-based international order that underpins U.S. 
security and prosperity. But scant attention has been paid to ensuring 
that we have a robust and ready military, able to deter would-be 
aggressors, reassure allies and ensure that any president, current or 
future, has the options he or she will need in an increasingly 
dangerous world.
    The National Defense Panel concluded in its recent report that the 
Budget Control Act of 2011 was a ``serious strategic misstep'' that has 
dangerously tied the hands of the Pentagon leadership, forcing across-
the-board ``sequestration'' cuts in defense spending and subjecting the 
Nation to accumulating strategic risk. The commission's report 
concluded that, without budgetary relief, the U.S. Armed Forces soon 
will be at high risk of not being able to accomplish the national 
defense strategy. The panel also believes if the United States returns 
to sequestration-level cuts in fiscal year 2016, we will face 
significant risks across the board, and may have to reassess our 
defense strategy.
    The provisions of the Budget Control Act and sequestration have 
already precipitated a readiness crisis within our Armed Forces, with 
only a handful of Army brigades ready for crisis response, Air Force 
pilots unable to fly sufficient hours to keep up their skills and Navy 
ships unable to provide critical U.S. security presence in key regions. 
We also understand that the Department has reported that if 
sequestration returns in fiscal year 2016, the Navy would be unable to 
support its current force of 11 carriers. we note with grave concern 
the statement Dr. Ashton Carter, the nominee for secretary of defense, 
made at his hearing when he noted that sequestration threatens 
Department of Defense modernization and that in turn would threaten our 
Asia-Pacific rebalance strategy. Although last year's congressional 
budget deal has granted some temporary relief, the return to 
sequestration in fiscal year 2016 and beyond would result in a hollow 
force reminiscent of the late 1970s.
    The U.S. military is an indispensable instrument underpinning the 
diplomatic, economic and intelligence elements of our national power: 
It keeps key trade routes open, maintains stability in vital regions 
such as the Persian Gulf and sustains alliances that serve U.S. and 
global interests.
    That's why the National Defense Panel urged--and we reiterate 
today--that Congress and the President repeal the Budget Control Act 
immediately, end the threat of sequestration and return, at a minimum, 
to funding levels proposed by then-Defense Secretary Robert Gates in 
his fiscal year 2012 budget. That budget called for modest nominal-
dollar increases in defense spending through the remainder of the 
decade to stabilize the defense program.
    The report argues that, to meet the increasing challenges of the 
deteriorating international security environment, the U.S. military 
must be able to deter or stop aggression in multiple theaters, not just 
one, even when engaged in a large-scale war. This requires urgently 
addressing the size and shape of our Armed Forces so they can protect 
and advance our interests globally and provide the warfighting 
capabilities necessary to underwrite the credibility of the United 
States' leadership and national security strategy. But under 
sequestration, our forces would have to accept a much higher level of 
risk in order to implement our current strategies.
    Whether confronting the threat of the Islamic State or reassuring 
allies in Asia, the President must have options, and the Defense 
Department needs the flexibility to provide the best alternatives that 
secure our interests. In particular, the Pentagon needs relief from the 
budget cuts of the past few years and from limitations on its authority 
to make judicious cuts where they are most needed and least harmful to 
our security. This would allow further savings through modest cuts to 
the rate of growth in already generous military compensation and 
benefits, further reforms in the acquisition of equipment and materiel, 
elimination of an estimated 20 percent excess in military 
infrastructure such as bases, and reductions in overhead and the 
burgeoning civilian and contractor defense workforce.
    These savings and additional budgetary resources must go toward 
investment in critical capabilities, such as long-range strikes, armed 
unmanned aviation, intelligence surveillance and reconnaissance, 
undersea warfare, directed energy, cybersecurity, and others that will 
safeguard our continued military superiority.
    The threat of sequester was never meant to be carried out. It was 
supposed to be a ``sword of Damocles'' ensuring that lawmakers would 
reach an agreement on ways to cut the Federal deficit. Those efforts 
failed, putting the defense budget on the chopping block and holding 
our Nation's security hostage at a particularly dangerous moment in 
world affairs. As we enter another presidential election cycle, our 
Nation's leaders will need to examine
    the National Defense Panel report and explain to voters how they 
intend to address its recommendations. The stakes could not be higher.
    Mr. Chairman, thank you for the opportunity to appear before you 
today. We welcome your questions and input regarding the 2014 
Quadrennial Defense Review National Defense Panel.
    Chairman McCain. I thank both the witnesses, and I would 
point out to my colleagues that both witnesses have worked for 
both Republican and Democrat administrations, holding positions 
of responsibility in both. So there certainly is a total 
nonpartisanship in your reports, and that, in my view, makes 
you even more credible because of your many years of 
outstanding and dedicated service.
    My colleagues, I won't take very much time except to point 
out that one of the problems that we are trying to highlight on 
this committee is, as you just mentioned, Ms. Flournoy, on 
acquisition reform. We simply can't afford these cost overruns 
of billions of dollars and cancelled and delayed programs.
    It harms our credibility, and it is going to be one of the 
highest priorities of this committee to try and address that 
issue, and it has been tried many times in the past. So I am 
not confident as to the degree of success, but we have to work 
on it.
    I only have one additional question. Why did you use 
Secretary Gates' fiscal year 2012 budget levels as a baseline 
for your recommendations?
    Ambassador Edelman. Mr. Chairman, as I mentioned, in the 
2010 NDP, we spoke to Secretary Gates about what he thought the 
department needed to recapitalize after 10 years of war. He 
told us that he believed he needed about 1.5 to 2.5 percent 
real growth in the budget over the Future Years Defense Program 
in order to do that.
    I think the 2010 Panel believed that that was a minimum and 
that it might actually be a higher number. But when we met as a 
panel and tried to wrestle with this--and we had a smaller 
panel this time, only 10 members and limited staff--we 
concluded that recurring to Secretary Gates' top line made 
sense because it was really the last time the department had 
been trying to define its needs on the basis of something 
approaching a strategy, as opposed to being given arbitrary 
numbers by either the DOD Office of Management and Budget or 
because of the BCA caps.
    So there were differences of view, I think, among us on the 
panel as to what, how high the top line ought to go. But I 
think there was consensus that the Gates level, that sort of 
1.5, 2.5 percent real growth from the fiscal year 2011 and 
fiscal year 2012 levels, was the minimum, and all of us could 
agree on that.
    Chairman McCain. Unless we do something such as you are 
recommending, the Nation's security is at risk.
    Ambassador Edelman. I would say so, and I think--I think 
all the members of the panel believed that.
    Ms. Flournoy. Yes, sir, I think we talked about the force 
being at substantial risk in the near term if sequestration was 
not lifted and higher budget levels not restored.
    Chairman McCain. Thank you.
    Senator Reed?
    Senator Reed. Thank you very much, Mr. Chairman.
    Thank you, Ambassador and Madam Secretary, for your 
thoughtful testimony today and also for the work of your 
colleagues on this report.
    You were obviously tasked with focusing on the needs and 
responsibilities of DOD, but one of the realities I think we 
all recognize is that military forces don't operate alone, and 
they are a part of a spectrum of national security efforts. If 
there is not a sufficient State Department presence and 
capacity building in local communities, then our military 
efforts could dissipate quickly when we change or shift 
responsibility.
    So can I assume, or I won't assume, but I will just ask, 
when we talk about repealing the BCA, we also have to be 
conscious of the State Department, Homeland Security 
Department, every agency of the Government that essentially 
protects the security of the United States and could even go 
further than that.
    Is that fair, Mr. Ambassador?
    Ambassador Edelman. Senator Reed, I think that is certainly 
fair. Although we in our panel really were more focused on the 
department specifically, in the 2010 Panel, we actually had a 
chapter about the need for a better whole-of-government effort, 
really very much along the lines you are discussing.
    Because you are right, just solving DOD's problem is 
crucial and, I would say, a necessary condition for almost 
everything else. But it is not sufficient because we have other 
instruments of national power that we don't want to see 
withering on the vine without adequate funding.
    Senator Reed. Madam Secretary, your comment?
    Ms. Flournoy. I would agree. In just about every operation 
we conduct, every problem we try to solve, there has to be an 
integrated, balanced interagency approach. When one instrument 
is well funded and the others are on life support, that doesn't 
work so well. So I think our intention was to talk about the 
instruments of national security more broadly.
    Senator Reed. Let me shift to another topic that you talked 
about in your report, which is increasingly critical. That is 
cyber operations. It just, from afar, looking at some of the 
recent operations of the Russians in the Crimea, et cetera, 
that cyber seems to be the first act of any sort of military 
operation today. The line between a cyber incident and a 
military operation is getting less and less distinct.
    Your comments generally about the efforts we should 
undertake with respect to cyber through the DOD and others? 
Again, this touches the whole spectrum. Everything is cyber 
these days.
    Ambassador Edelman. Senator Reed, I am at something of a 
disadvantage because I have trouble booting up my own computer, 
and I am like many people of my age, very reliant on my younger 
sons to get me out of trouble.
    Senator Reed. Or grandkids.
    Ambassador Edelman. But the reality is we rely, our 
military forces rely, extensively on cyber and not only 
encrypted systems, but on the open Net. That is a huge problem 
for us whenever we are involved in an operation of any kind, 
and I think we are all painfully aware of the vulnerabilities 
that we face. We do cite cyber as one of the capabilities that 
needs further attention and a lot more work.
    But you have put your finger on one problem that I don't 
think we have completely resolved as a government. My colleague 
may have more recent experience with this. But as I said, DOD 
relies on the open Internet, and yet it doesn't really have the 
responsibility for defending it. It has the responsibility for 
defending dot-mil. So, we really have to--this is one area 
where the whole of government has to be involved, particularly 
for DOD.
    Senator Reed. Madam Secretary?
    Ms. Flournoy. I would just add I think it is a very 
important area of emphasis, and there are many dimensions to 
the challenge. One is building the human capital and the 
expertise that is needed within the Government, and access to 
it outside of Government. Figuring out how we are going to 
organize ourselves beyond DOD, across the whole of government, 
given that different agencies have different authorities and 
areas of expertise.
    How we are going to work with the private sector, which now 
holds so much of our critical infrastructure. Frankly, the 
legislative framework that deals with questions of liability 
and otherwise that would enable the kind of public-private 
cooperation that is needed to be effective in this area.
    Senator Reed. Thank you very much. Thank you for your great 
work.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Inhofe?
    Senator Inhofe. Thank you, Mr. Chairman.
    Ambassador, when you are my age, you will be depending on 
your grandchildren's advice, not just your children's.
    In the 20 years that I have been on this committee, we have 
talked about our--and you and I have talked about this, too, 
about the fact that we have the oldest nuclear arsenal in the 
world, that most of our warheads are 30, 40 years old, and our 
delivery systems, if you look at the Triad, you are looking at 
the B-52, maybe 50 years old. Then, of course, the 
intercontinental ballistic missiles and the nuclear submarines.
    Now we have talked about this for a long period of time, 
and I am looking now at the new situation, the new threat that 
is out there, the new threat that you have talked about, both 
of you, as well as our panel that we had last week that talked 
about this for quite some time--Kissinger, Albright, and 
Shultz. Now in light of the new threat, should more attention 
be given to this than we have in the past?
    I notice when you used the word, you ticked off five of the 
areas that have not been given proper attention. This wasn't 
one of those areas. Well, do you think it should be?
    Ambassador Edelman. Senator, as Under Secretary, I was a 
member of the Nuclear Weapons Council and followed the issues 
closely and was very, very concerned throughout my tenure about 
the state of our aging nuclear force. We haven't built a new 
nuclear weapon since 1988. We haven't tested one since 1991.
    There are lots of ways that we maintain the safety and 
surety of the stockpile. But as time goes on, and particularly 
not only as the inevitable corrosion and degradation of 
components goes on, but also the loss of human capital, because 
we are not able to get the best and brightest minds in the 
field the way we used to be able to do, I think it is a matter 
of really increasing concern.
    We are unfortunately, I think, living through a period 
where the risks of an increasingly proliferated world are 
growing. We already have North Korea testing, having tested 
nuclear weapons. Iran is moving very close to being a nuclear 
threshold state. Hopefully, there will be an agreement that 
will constrain that. But if there isn't or if Iran maintains a 
near-breakout capacity, there is a real prospect that we may 
get other states in the region who decide to develop their own 
nuclear capabilities.
    In the meantime, you have growing nuclear stockpiles in 
Pakistan and India. China's--the Chinese inventory is also 
growing in terms of weapons, although albeit more slowly. 
Russia is modernizing its nuclear force.
    I do worry. I think I applaud the administration for the 
very good work it has done and the B-61 modernization effort. 
But I do think there is much more that needs to be done in this 
area.
    Senator Inhofe. Well, Ambassador, that gets into what I was 
going to talk about because I have been concerned about Iran 
for ever since our unclassified intelligence came out in 2007 
talking about when they were going to have the capabilities, 
being 2015, which is where we are right now.
    I am concerned about the maligned activities. There have 
been several published reports talking about Sudan--this is all 
coming from Iran--Sudan, Gaza, Yemen, Bahrain, Iraq, Syria, and 
Lebanon. I don't think we can assume that our concern should be 
strictly with Iran. This is my concern that I have had for a 
long time.
    We are supposed to be, and historically have been, the 
nuclear umbrella. Our umbrella has holes in it. We have serious 
problems.
    When you look at countries like Saudi Arabia and Turkey and 
others, if they see what our capabilities aren't, then you 
know, or I would assume, they are going to be involved and we 
are going to have another arms race coming up. Does that 
concern the two of you?
    Ambassador Edelman. I think our strategic nuclear forces 
have been one of our huge strategic comparative advantages as a 
nation since 1945.
    Senator Inhofe. Yes.
    Ambassador Edelman. I think we cannot afford to let that 
advantage go by the wayside. Extended deterrence of our allies 
in Asia, in Europe, and now increasingly in the Middle East has 
always been a very difficult proposition. It was a difficult 
proposition when we had a much larger stockpile and inventory 
of nuclear weapons to make our willingness to use those weapons 
in defense of our allies. That was a very difficult proposition 
to convince people of.
    It is still going to be a difficult proposition to convince 
people about. But it will be much harder to do, as you say, 
Senator Inhofe, if the appearance is that we are not paying 
sufficient attention to the stockpile and to the modernization 
of our forces.
    Senator Inhofe. All right. Well, thank you.
    My time is expired, but just as I did for the panel of 
Kissinger, Albright, and Shultz, I would like to have you 
submit, for the record, something talking about the fact that 
for the 20 years that we were--I was involved with this 
committee, before we had the policy of being able to fight two 
wars or two major theater conflicts, and that policy seemingly 
changing now, and your analysis of the new policy for the 
record.
    Thank you, Mr. Chairman.
    [The information referred to follows:]

    Ambassador Edelman did not respond in time for printing. When 
received, answer will be retained in committee files.

    Chairman McCain. Senator Sullivan, do you wish to be 
recorded as voting aye for Ash Carter to be Secretary of 
Defense?
    Senator Sullivan. Yes, Mr. Chairman.
    Chairman McCain. Great. Senator Gillibrand?
    Senator Gillibrand. Thank you, Mr. Chairman. Thank you, 
Senator Reed.
    Thank you for your testimony today. It is very instructive 
and something that obviously this committee is really focused 
on.
    I want to continue the conversation about your 
recommendations with regard to cyber. Obviously, the 2014 QDR 
reports that cyber threats come from a diverse range of 
countries, organizations, individuals and are posing 
significant risks to U.S. national interests. Some threats seek 
to undercut DOD's near- and long-term military effectiveness by 
gaining unauthorized access to the DOD and industry networks 
and infrastructure on a routine basis.
    Further, our potential adversaries are actively probing 
critical infrastructure, whether they are chemical plants, 
nuclear plants, stock exchanges, any type of important 
infrastructure, and our partner countries, which could inflict 
significant damage to the global economy as well as exacerbate 
instability in the security environment.
    What are your specific recommendations with regard to 
increasing cyber capability, and specifically, how do we 
compete with the private sector to get the brightest minds, the 
best engineers, the best mathematicians to want to serve as 
cyber warriors to enhance our cyber defense?
    Have you thought about ways to not only recruit and retain 
the best and brightest in these fields, but also to perhaps 
develop resources throughout National Guard and other sources?
    Ms. Flournoy. As a panel, Senator, we did not go into that 
level of detail. We noted the importance of this area, the 
importance of investing in both defensive and offensive 
capabilities. Urged the department to move forward with 
modernization and improving cooperation with the private 
sector. So I will give you my personal views on your question. 
I think attracting talent is one of the biggest challenges, and 
there are a couple of ways to go at it.
    One is to use different incentives and pay schedules for 
cyber experts than the normal GS kind of schedule.
    A second is to develop contract relationships and surge 
capacity with the private sector.
    A third is, as you mentioned, actually leveraging some of 
the strength of our Guard and Reserves. There are a lot of 
these folks who have this expertise out in the commercial 
sector who are patriots and who might want to contribute to our 
national defense, but they are not going to leave Silicon 
Valley to join full time. So finding a way to leverage them on 
the weekends and for their annual training and to be available 
to be mobilized in a national emergency, I think we need to be 
thinking creatively about those kinds of arrangements.
    A couple of the Services have some pilot programs that you 
may be aware of, experimenting with exactly that construct. But 
the human capital dimension is probably the long pole in the 
tent here.
    Ambassador Edelman. Senator Gillibrand, the only thing that 
I would to add to that, I am aware of some efforts in the 
private sector to do something which I think is in this context 
a terrific idea, which is to help train some of our wounded 
warriors to become cyber warriors. There are a lot of our 
wounded warriors who would love to get back into the field, but 
because of their injuries cannot. But this is a way for them to 
continue the fight with a little bit of training.
    Senator Gillibrand. Well, would you recommend, for example, 
our cyber defenders or our cyber fighters to not have the same 
basic training? Meaning, you might be the best person behind a 
computer, but you are not the best guy behind a gun, and so 
train specifically for their requirements. But that would be 
the first for the military. They have not done that previously.
    Ms. Flournoy. My understanding is that at least one of the 
pilots that is using a Reserve unit, one of the things they 
have done is exempt people from the physical training 
requirements, from cutting their hair, wearing uniforms. But 
really let them come as they are, bring their expertise to the 
table without having to meet the traditional requirements.
    Senator Gillibrand. Then, in your opening remarks, 
Ambassador, you mentioned five various technology areas where 
you felt we need to develop more weapons expertise. Does your 
report expand on that, or do you just list them?
    Ambassador Edelman. We don't go into great detail, Senator 
Gillibrand, about them. We basically highlight them as areas 
where we clearly think there needs to be more attention, and 
there hasn't been sufficient attention. Directed-energy weapons 
for one. But as you said, there is a list of them. We give them 
about a paragraph treatment in each one, not in any detail.
    Senator Gillibrand. Well, I would love for the record 
further development to the extent you have it.
    Thank you.
    Thank you, Mr. Chairman.
    [The information referred to follows:]

    Ambassador Edelman did not respond in time for printing. When 
received, answer will be retained in committee files.

    Chairman McCain. Senator Sessions?
    Senator Sessions. Thank you, Mr. Chairman.
    Thank both of you for your leadership and your wisdom that 
you are sharing with us.
    We do have a problem with defense spending. It is causing 
me great concern as a member of the U.S. Senate Committee on 
Budget for a couple of years. I have been digging into those 
numbers, and I have felt all along that the one area of our 
budget that needs to be examined with most care for spending 
more money is the Defense Department. So, we have to justify 
that. The Defense Department has to tell us what they are going 
to spend the money on and how much it is.
    But we don't have a lot of money. Matter of fact, we don't 
have enough money to run this government, and the deficits will 
continue to rise even though we have had a slowing on the 
annual deficits. They are going to start rising again, 
according to the Congressional Budget Office (CBO), and they 
project that by 2019, interest on the debt will exceed the 
entire defense budget. So this is a grim thing.
    Ambassador Edelman, do you think--you have suggested that 
the Defense Department needs more money, do you think that 
increase above the BCA totals should be matched by the same 
increases of non-defense discretionary spending?
    Ambassador Edelman. The panel did not take a position on 
that. So just as I represent the panel, I want to make sure it 
is clear that what I am about to say is my personal opinion and 
not representing, I suspect, either my colleague or other 
members of the panel.
    I think the issue in defense is absolutely crucial. I 
think, overall, Federal spending needs to be under better 
control. I think the biggest problem, though, is frankly not 
the discretionary part of the budget. It is the 
nondiscretionary part.
    The CBO long-range budget forecasts have made that clear 
for some time. That is the real driver of the long-term debt, 
three programs. Those have to be taken off.
    Senator Sessions. Well, so is your answer yes or no?
    Ambassador Edelman. My answer is that the defense budget 
needs to go up, and I don't think necessarily 
nondiscretionary--or rather, discretionary, non-defense 
spending needs to go up.
    Senator Sessions. Well, look. The President is insisting 
that it does. His budget increases defense about $34 billion 
this year over the BCA level, and he increased his non-defense 
discretionary by the same.
    Senator McCain, I think, was correct to suggest that the 
Gates plan would add, if it were enacted in 2012 and we were 
following it, it would be a $100 billion more this year than 
the BCA levels. Well, $100 billion more for defense over a 
decade is more than $1 trillion. Non-defense, if it is matched, 
that is another trillion dollars. The budget of the United 
States is $4 trillion.
    So these are huge numbers, and all of us, you don't have 
the stress every day that we do about every other agency and 
department that comes to us and wants more money. I am just 
saying that is the difficult time we are in.
    Ms. Flournoy. Senator, may I just add one thought on this?
    Senator Sessions. Yes.
    Ms. Flournoy. I think that sequestration needs to be lifted 
across the board so that Secretaries are able to manage to the 
priorities for the Government. But I don't think you can solve 
the Nation's budget problems on the back of discretionary 
spending. The big moving muscles are tax reform and entitlement 
reform. So, that is where I think we need to focus.
    Senator Sessions. Well, under the BCA, beginning 2017, for 
the rest of, what, 7 years of the BCA, spending would increase 
at 2.5 percent a year. So it is not--these are the tough years. 
We are in the tough years right now. In fact, the Defense 
Department took a heavy, damaging demand to reduce spending so 
rapidly.
    I thoroughly understand how hard they have had to work and 
the difficulties they are working with right now. But I don't 
know that we have to have these kind of increases in non-
defense discretionary. It shows up, yes, the fastest-growing 
part of the budget is entitlements, and we all know that. But 
we can also make a difference with discretionary spending.
    Ambassador Edelman, you have questioned, I think, the 
negotiations with Iran and the nuclear program they have. Dr. 
Henry Kissinger was pretty animated, really, when he expressed 
concern over our negotiating posture that basically allows 
Iran, as he understands it and public reports suggest, could be 
within months of having a nuclear weapon.
    Our goal has gone from no nuclear program in Iran to 
allowing a nuclear program that would leave them within months 
of a nuclear weapon, causing, he says--Dr. Kissinger--other 
nations in the world and the region, like other nations, to 
plan to have nuclear weapons. How do you evaluate that?
    Ambassador Edelman. Senator, I am a little concerned about 
the trajectory of these negotiations.
    When you look at the full sweep of them going back to 2003, 
2004, when it began as the European Union plus three before it 
became the sort of the P5+1, we started with what was 
essentially a multilateral negotiation with the objective of 
preventing Iran from developing a nuclear capability.
    We now increasingly are in a bilateral negotiation between 
the United States and Iran that is aimed, as Secretary of State 
John F. Kerry has said, to limit the breakout or sneak-out time 
that Iran has to develop a nuclear weapon to 1 year. That seems 
to me to be an enormous retreat.
    I don't know exactly what the state of the negotiation is. 
The press reports indicating that Iran might be allowed to keep 
thousands and thousands of centrifuges without taking them down 
is very, very concerning to me because I think because there is 
a time limit in the negotiation. That was agreed to in the 
joint plan of action. It will be time limited, whatever that 
date is, whether it is 20 years or 3 years or 10 years.
    At some point, that time limit runs out. All the sanctions 
are gone. Iran is treated as a ``normal nation'' under the 
treaty on the Nonproliferation of Nuclear Weapons (NPT), 
despite its serial prevarication and violations of the NPT, and 
then they have an industrial-scale enrichment capability, which 
I think leaves them as a kind of threshold nuclear state. So I 
am very concerned about the way the negotiations have 
proceeded.
    Chairman McCain. Senator Manchin?
    Senator Manchin. Thank you, Mr. Chairman.
    I want to thank both of our witnesses for their testimony 
before our committee today, and also your outstanding services, 
and the success you have had and the careers you have had with 
our Government.
    In your opening statement, you both discussed the problems 
that sequestration is causing the Department. We have talked 
about that, and I am concerned the Department is not doing 
enough to streamline and reduce costs. That has been my 
concern.
    In your panel's review of the 2014 QDR, you noted that 
additional changes are required to right-size the civilian 
Defense Department and Federal contracting workforces. The 
panel cited that Pentagon civilians continue to grow, even 
after, even after our Active-Duty Forces had been shrinking. 
Additionally, the panel noted that by 2012 the number of 
contractors working for the DOD had grown to approximately 
670,000.
    At a time when the Services have dramatically reduced the 
number of servicemembers in the military, I have a hard time 
with the growth of staff sizes, and I think you mentioned, Ms. 
Flournoy, the staff sizes. For example, just at the Army, 
headquarters staff grew by 60 percent to 3,639 in fiscal year 
2013 from 2,272 just 10 years earlier. That doesn't even 
include the contractors.
    Because of that, I was shocked, but perhaps not surprised, 
when the Government Accountability Office (GAO) recently 
reported that the DOD had yet to produce a realistic plan to 
meet Secretary Hagel's 2013 goal of reducing DOD headquarters 
budgets by 20 percent through fiscal year 2019. Can't even come 
to an agreement on that.
    Additionally, the GAO found that the DOD headquarters they 
interviewed cannot determine how many people they actually 
needed. Couldn't even tell you what they needed and what 
positions they would have and what they would do.
    Senators before this committee have heard time and again 
about the need to fully fund servicemembers in the field, and 
we are very concerned about that readiness of force. But when 
you have a bloat on the other side that is taking away from the 
readiness force, you are not utilizing the National Guard, you 
are basically not utilizing your reservists to the point that 
any sensible person would say, I have people ready, willing, 
and able to do the job, but yet I am hiring all these high-
priced contractors.
    There is no auditing going on. We don't really know where 
we stand. We can't get weapons to the front in time. We have 
concerns, and if either one of you want to address any of that 
to whatever specifics, I would appreciate it.
    But it is a challenging thing to say, and I think all the 
Senators have touched on this, ``We need more money. We need 
more money.'' We understand that. What are you doing with the 
money we give you?
    Why are you throwing money away from the standpoint, or the 
appearance of it, spending it on needless stuff, when we want 
to make sure our readiness force is ready to do? They have the 
weapons, they can do the job for us.
    Ms. Flournoy. Senator, I think this is a really important 
area of focus.
    It is understandable at one level why the civilian 
workforce, the contract workforce grew over 15 years of war. 
But now I think it is time to sort of go back to first 
principles and try to right-size that force, examining exactly 
how contractors are being used, looking for efficiencies there, 
and really looking at the civilian organization. There is no 
overall plan, but there are some components that are taking 
some interesting approaches that may lead the way for others.
    There are some that are looking at the concept of 
delayering, of reducing the number of layers and optimizing 
spans of control to take fat out of organizations. There are 
others who are looking at streamlining business processes, and 
so forth. So I think this is an area of focus.
    One of the things I would highlight for you, although, is 
that currently the Secretary of Defense does not have the kind 
of authorities that his predecessors have used to manage 
drawdowns in this area. Secretary of Defense William J. Perry, 
for example, at the end of the Cold War, was given reduction-
in-force authority to right-size the civilian workforce. He was 
given meaningful levels of voluntary separation incentive pays 
that can be used to incentivize early retirement.
    The current Secretary does not have those authorities, and 
that is very much a constraint on----
    Senator Manchin. So, legislative?
    Ms. Flournoy. Yes, it is an opportunity for you to give the 
Secretary some additional tools to right-size that civilian 
workforce.
    Senator Manchin. Let me ask you this. Does it not bother 
you that DOD can't even identify the types of jobs and the 
people they need for those jobs? Who reviews that? Who reviews 
that?
    Ms. Flournoy. Yes. I think that is something that you need 
to ask of them and that we all need to ask of them.
    Senator Manchin. Ambassador?
    Ambassador Edelman. Senator Manchin, if I could just make a 
point to respond to I think the excellent question you have 
asked, but also the earlier question that Senator Sessions 
posed to us, which is we are coming here saying that DOD needs 
a lot of money, but everybody can cite horror stories about 
different procurements that have gone bad, different problems 
in DOD. You all, as stewards of the taxpayers' money, are right 
to be asking the department how to justify all this.
    One of the things we do talk about in the report, and which 
my colleague has been very active, far more than I have, is on 
the entire reform agenda. There has just been a report by the 
Defense Business Board about trying to reap even more savings 
out of the department. This is a priority area, and I hope the 
chairman and the rest of you will have the Defense Business 
Board up and talk about that report and try and push the 
department and Secretary Carter, once he has gone to the floor 
and been confirmed, as well on all of these things. I know he 
has them very much on his mind from his previous service.
    Senator Manchin. Thank you very much. My time is up.
    Chairman McCain. Senator Ernst?
    Senator Ernst. Thank you, Mr. Chair.
    Thank you, Ms. Flournoy and Ambassador Edelman, for being 
here today. I appreciate it very much.
    Ambassador, I appreciated when you said that we have been 
eating the seed corn. That comes home for me. But I truly do 
believe we have been degrading the very source of any future 
strength and readiness and prosperity that we have.
    I do agree, Ms. Flournoy, you stated that we do need to end 
sequestration. I believe that. We do have to restore readiness 
and also aggressive reform within the DOD. We have to do that. 
I understand that.
    But another component beyond looking internally, we have to 
look externally also. Anytime that the United States is 
engaging their military forces elsewhere, we do rely on other 
partners. I believe we do need to engage other partners in 
whatever region we are operating in to the fullest extent that 
we possibly can.
    Over the last 12 years, military cooperation between the 
United States and Turkey has faltered. I can give specific 
examples at critical moments. Back in 2003, my own unit, the 
1168th Transportation Company, the 4th Infantry Division, and 
many other units were denied access to Turkey as a projection 
platform into Iraq. So that is one example. We couldn't use 
their Turkish ports for Operation Iraqi Freedom.
    Then just a few months ago, we saw Turkey deny our Kurdish 
allies from heading into Syria to break ISIL's siege of Kobane. 
I believe that led to many deaths for those that were trying to 
defend Kobane very early on when we were very uncertain whether 
Kobane was going to fall or not.
    Then Turkey has also continuously denied our country the 
use of an air base, which would be close to use for search and 
rescue missions for those that might have issues if they fall 
behind enemy lines. Just recently, we saw a Wall Street 
Journal, too, that went into further detail how Turkey had 
denied us using their areas for Osprey, which could be used in 
those search and rescue missions and providing cover for men 
and women on the ground.
    So time and time and time again, Turkey has denied use of 
their facilities, denied use of their grounds. They are a North 
Atlantic Treaty Organization (NATO) ally. A NATO ally, and they 
are very unapologetic when it comes to denying the resources we 
believe is necessary in their region.
    So what I would like to hear from you is that as we are 
looking at constrained budgets here, lack of resources, and of 
course the reduced readiness, we really do need to engage our 
other partners, specifically Turkey. In your opinion, what 
impact has Turkey's actions or, in this case, lack of action, 
how has that affected other coalition partnership in that 
region, and what can we do to encourage Turkey to take on more 
ownership of the issues in the Middle East?
    Ambassador Edelman. Senator Ernst, much as I would like to 
turn that question over to my colleague, I think as a former 
U.S. Ambassador to Turkey, I think I probably need to take it 
on.
    First of all, all the things that you cited are painfully 
part of my past experience. There is just no question that 
Turkey under Prime Minister and now President Erdogan has 
become a very problematic and difficult ally. There are a lot 
of reasons for that.
    I think Turkey is headed domestically on a very, very 
dangerous trajectory of increasing authoritarianism and a lot 
of degradation of democratic practice in Turkey, which I think 
contributes to some of this. I think it is going to require a 
lot of attention from senior U.S. leadership in the next few 
years to try and manage that relationship because I agree with 
you, we need partners when we operate overseas.
    Now I will say in fairness to the Turks, a lot of their 
anger and unhappiness and some of the reason that they have 
denied us access is because their view of what is going on in 
Syria, with which they share a very long border, is that 
President Bashar al-Assad must go and that the United States is 
not doing enough to try and promote the departure of President 
Assad. It is their belief, and I think there is some merit in 
it, that you cannot just take on the problem in Syria by only 
taking on ISIL. Because as long as Assad is there, he is 
generating more recruitment and more support for ISIL with his 
assault on the Syrian people, use of barrel bombs, chlorine, et 
cetera.
    I think that is a very large part of the Turkish 
frustration that has led them to deny us use of Incirlik, to 
not cooperate with us on combat search and rescue, and things 
like that. I am not saying that is an excuse, by the way. 
Because I think allies have disagreements, they don't then say 
we are not going to help you rescue your downed pilots. So I 
think that is not an excuse for Turkey's behavior in this 
instance, but just an explanation.
    The broader point, though, on allies and partnerships that 
I think we have to wrestle with is we are at a junction because 
of where we are in our own budget and because the international 
order is fraying so badly, where we need our allies, our treaty 
allies in Asia and in Europe, but also our partners who are 
parts of special relationships, who may not be formally allies 
but clearly are partnered with us in various efforts in the 
Middle East, like Israel, like the Kingdom of Saudi Arabia, 
United Arab Emirates, et cetera.
    In most cases, however, our allies are spending less and 
less and less on defense themselves, and so they have less and 
less capability for us to draw on. That is a sort of paradox.
    I think one--I mean, it is a little bit beyond the work of 
our panel, but I do think one of the things we need to think 
about more is actually being much more forthright with our 
allies about where we want them to spend their money on defense 
and developing capabilities that will complement, supplement 
ours, replace areas where we may have less capabilities, so 
that there is a better division of labor between us and our 
allies. I think that is true in both Europe and in East Asia, 
as you see defense-spending declining in most of those 
countries. We need to do that so that we don't have them 
wasting money and not being able to be there when we need them.
    Chairman McCain. Senator Donnelly?
    Senator Donnelly. Thank you, Mr. Chairman.
    Thank you both for being here.
    When you look at Syria and you look at ISIS, what would be 
your recommendation as to the next step for the coalition to 
take to move ISIS out of Syria?
    We are making progress in Iraq. Do you wait in Syria until 
Iraq is done, or do you begin to take action right now to move 
them out, and does that action also include Assad?
    Ambassador Edelman. I can answer that. This is again 
something that the panel, Senator Donnelly, did not look at.
    Senator Donnelly. I understand. But this is also about 
global strategy and national security.
    Ambassador Edelman. Right. So, I am just--yes. No, I just 
want to make it clear that this is my personal opinion.
    Senator Donnelly. That is all I am asking.
    Ambassador Edelman. It doesn't reflect the other members of 
the panel.
    Senator Donnelly. We have your presence here. I want to 
take advantage of it.
    Ambassador Edelman. My own view is we should have been 
doing much more, much earlier. Again, the President has said 
long ago Assad must go. I agree with that. I don't think that 
there is any way this problem can be resolved as long as Assad 
is there.
    Senator Donnelly. What do you think we do now, moving 
forward?
    Ambassador Edelman. I think we need--the problem in Syria 
is we are relying almost totally on air power. We have not very 
good intelligence because we have no presence on the ground. We 
have to find some kind of surrogate, as the Peshmerga have been 
to some degree in Iraq and, unfortunately, sometimes Shia 
militias in Iraq. We have to find a surrogate on the ground in 
Syria with whom we can work. That, I think, goes to the issue 
of arming of the moderate Syrian opposition and getting them 
into a position where they can actually do something.
    We would have been much better off had we been doing this 
going back to 2011, rather than having to face this problem 
now. Bad news never gets better, in my experience.
    Senator Donnelly. Ms. Flournoy?
    Ms. Flournoy. I would agree that we--I wish we would have 
begun arming of the moderate opposition when they were far 
stronger and in greater numbers a while back. But we are where 
we are, and I think building up a credible surrogate force is 
key.
    I think the air campaign could be used in a more robust 
manner to put more pressure on ISIL and in some areas on the 
regime. I mean, the key is, eventually, you have to put 
pressure on the Assad regime if you expect them to come to the 
table.
    If we were to do that and bring it to a culmination point 
right now, unfortunately, the main benefactor in Syria would be 
ISIL because they are the strongest force on the ground. So we 
have to focus on building up alternatives to ISIL and more 
moderate surrogates before we get to that point.
    Senator Donnelly. Let me ask you another question that is 
more about national security strategy, global strategy. That is 
Vladimir Putin. What do you think his endgame is? If you can go 
one after the other, and where his plan ends here?
    Ambassador Edelman. I don't think that President Putin is 
solely interested in the Donbass in Ukraine. I think he has a 
broader agenda. I think his agenda is first to destabilize 
Ukraine to the point that he can impose regime change in Kiev 
and dominate Ukraine and prevent it from associating itself 
with the European Union and moving in the direction of the 
West.
    I think he fundamentally rejects the post-Cold War security 
order in Europe, and I think it has taken a while for a lot of 
our friends in Europe to recognize this. I think some of them 
are still in a bit of denial about it. They still seem to hope 
that there is some way to negotiate a limit with him on 
Ukraine.
    But I think this is just the beginning. I think after 
Ukraine, he is going to--he is going to be pursuing this in 
Moldova, and I think we are likely to see efforts to create 
problems and drive wedges between the United States and its 
allies, and particularly its Baltic allies.
    Senator Donnelly. Would you agree that if NATO doesn't live 
up to its obligations in Latvia, that would be the end of NATO?
    Ambassador Edelman. Absolutely.
    Senator Donnelly. Ms. Flournoy?
    Ms. Flournoy. Yes, I don't disagree with anything that 
Ambassador Edelman said. But my sense is that Putin may not 
have a clear strategic endgame. He is a very tactical thinker, 
and he is sitting on top of a former great power that is 
unquestionably in decline demographically, economically, 
plagued by corruption, poor governance. But that doesn't make 
it any less dangerous, because I think he will lash out along 
the way, trying to reestablish his sphere of influence.
    Senator Donnelly. Do you think he takes a chance wherever 
he sees a weakness?
    Ms. Flournoy. I do. I think that is why it is so important 
that we follow through on the reassurance initiatives for NATO, 
on our posture, bolstering our posture, underwriting Article 5 
[of the Washington Treaty]. My own belief is that we should be 
doing more to help the Ukrainians defend themselves.
    Senator Donnelly. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Sullivan?
    Senator Sullivan. Thank you, Mr. Chairman.
    Again, I want to thank the panelists. Appreciate your great 
service to our country, and the joint statement, it is very 
helpful when we get those kind of joint statements.
    We have been discussing a lot of the challenges, certainly, 
that we have as a country in terms of national security. We 
also have a lot of strengths. To me, the ultimate strength that 
we have is the men and women in uniform who continue to 
volunteer, raise their right hand, post-September 11 so they 
know what the risks are, to serve our country.
    I have had the great honor, I get to spend a lot of time 
with our troops. I am sure that was a great part of both of 
your jobs. Just in the last 2 weekends, I was at the National 
Training Center a couple of weekends ago with thousands of 
young Alaskan soldiers training out there. This past weekend, I 
was with a smaller group of Air Naval, Gunfire Liaison Company 
marines, reservists, and this time with the troops for me 
raises a very interesting question I would like the two of you 
to maybe comment on.
    What we hear from our civilian leaders a lot, President 
included, is that we consistently hear that we are a war-weary 
nation. There is a subtle element to that, I think, that it 
kind of is used as an excuse in some ways that we are not going 
to be taking any kind of action because we are weary.
    But when you spend time with the troops, and they have 
sacrificed a lot in the last 12 years, we all know that. But 
one of the concerns that they raised, at least with me--and 
these are just anecdotal, but I am throwing them out there--is 
they want to deploy. They joined the military to serve their 
country. They don't want to be sitting around.
    So I want you to help us think through this conventional 
wisdom that somehow we are a war-weary nation. We can't take on 
global commitments. When the truth is that less than 1 percent 
of Americans have actually been doing the fighting, and the 
ones that I am associated with certainly seem to be ready, not 
necessarily to fight, but certainly be ready to deploy.
    How can we think through that? Because I think it is this 
issue that we are weary has become conventional wisdom in such 
a way that nobody seems to challenge it. When you talk to the 
people who are actually really at the pointy tip of the spear, 
God love them, they seem ready to go.
    Ms. Flournoy. First of all, Senator, it is a great 
question, and I would agree that our men and women in uniform 
are one of the greatest strengths we have as a nation. They are 
remarkable.
    I think that when the American people--when it is explained 
to the American people what the nature of a threat is, why we 
have to meet it, what it means for the Nation, what are the 
risks of not going after it, as the President did recently with 
regard to ISIL, I think the American people rally, and they may 
shed whatever weariness they have and support a cause when it 
is well articulated and explained, and the sacrifice or the 
risk seems commensurate with the importance of the interest.
    So, I don't think we are generally war weary. I think, yes, 
we have spent--had a lot of blood and treasure that we have 
spent over the last 15 years. But when I think when--and that 
is something that weighs heavily on everyone, as it should.
    But I think, again, when the interests are clear, the 
objectives are clear, the mission is clear, and it is well 
explained and people are mobilized, I think they are very 
willing to follow that strong instinct that you described in 
the troops of we have a mission, and we need to get it done.
    Senator Sullivan. Yes.
    Ms. Flournoy. So I think that is the challenge for everyone 
who is in a leadership--public leadership position to be making 
that case when it is necessary.
    Senator Sullivan. Ambassador?
    Ambassador Edelman. General George C. Marshall, I think, 
once said that he thought it was difficult, if not impossible, 
for the United States to fight a war for more than 4 years.
    I think what that reflects is that Americans tend to want 
to see--they tend to want to see a decisive outcome to a 
conflict. I think inconclusive wars and long, difficult fights 
sometimes can be a bit exhausting to the public, and 
particularly if, as my colleague suggested, they are not being 
explained properly to the American public.
    I agree with everything you said, Senator Sullivan, about 
being credible, the comparative advantage with have with our 
people. It was always incredibly inspiring to go to either Iraq 
or Afghanistan and see our young folks out there. They are 
truly incredible and doing incredible things.
    I would frequently, when I talked to folks, particularly 
enlisted, and say do you think people out here--do you think 
people back home know what you are doing out here? The answer I 
used to get was, no, they think all we do is step on improvised 
explosive devices out here. They have no clue what we are 
doing.
    So I do think it is important to explain exactly what the 
stakes are, as my colleague just said. I would also note one 
other thing. Americans are war weary until they are not.
    If you look at the poll data about how the public felt 
after the videotapes of the beheadings this summer came out, it 
was a very different set of numbers than what you had seen 
previously because Americans feel these things very deeply and 
see them as a sign of disrespect to the Nation, which they 
don't appreciate.
    Senator Sullivan. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator King?
    Senator King. Thank you, Mr. Chairman.
    Just to put into perspective the numbers that we were 
talking about at the beginning and looking back on the history. 
If we had the Gates budget of 2012, the defense budget this 
year would be somewhere around $612 billion, 3.4 percent of 
gross domestic product (GDP). Instead, under the sequester 
level, we are at $492 billion, 2.8 percent of GDP, which is 
just about the lowest level of GDP since World War II.
    It is also--it is the lowest level of Federal spending, 
lowest percentage of Federal spending for defense since World 
War II. Four percent, which is a kind of post-World War II 
average, would be $700 billion, almost $100 billion more.
    So we are definitely at a very low point in terms of 
funding of defense at a time of escalating challenge on 
multiple fronts. So I just--I think putting it in percentage of 
GDP is a sort of good way to look at it, because it really puts 
it in historical perspective.
    A question for both of you. Ambassador, you have mentioned 
about arming the Ukrainians, and that seems to be a developing 
consensus here in Washington that that is something we ought to 
do. I understand that, and I understand the precedent of the 
Sudetenland, and if there had been force in 1939, we might have 
avoided the catastrophe of World War II. On the other hand, I 
also understand the precedent of the guns of August and 
stumbling into a catastrophic world war.
    We are playing chess with a Russian here. Now if you play 
chess with a Russian, you better think two and three moves 
ahead. My concern is: (A) Russia has a historic paranoia about 
encroachment from the west; and (B) Putin probably wouldn't 
mind a manageable little war in Ukraine right now to take the 
people's minds off of the domestic problems.
    Margaret Thatcher's approval rating the day before the 
Falklands War was 23 percent. Two weeks later, it was 70 
percent. I suspect Putin may not know those numbers, but he 
knows the phenomenon.
    Persuade me that the escalation by arming the Ukrainians 
would not lead to a matching escalation and, in fact, an 
increase. We don't live in a static world. We can't assume that 
we arm the Ukrainians. Putin says, ``Oh, this is tough. I am 
going home.'' He is not responsive to bodies in bags or 
tightening sanctions.
    Give me your thoughts.
    Ambassador Edelman. Well, a couple of things. I know my 
colleague will want to speak to this because she, with some 
other colleagues, has just been a signatory to a very good 
paper on this subject that Brookings Institution, Atlantic 
Council, and the Chicago Council on World Affairs, I guess, or 
Foreign Affairs, has put out.
    I think your question is a good one, Senator King, and it 
has to be answered, I would say, at multiple levels.
    First, it is true that in some sense President Putin has 
what we used to call in the Cold War escalation dominance in 
Ukraine. The stakes are higher for him. The region is closer. 
He has more force.
    Senator King. He has more chips.
    Ambassador Edelman. He has more chips, exactly.
    Having said that, he is also signatory, his country is 
signatory, to a number of agreements that make it clear that 
countries have a right to belong to whatever alliance or 
multilateral organizations like the European Union that they 
would like to associate with. So----
    Senator King. Do you seriously believe Putin cares about 
agreements?
    Ambassador Edelman. No. But we should. We should care about 
it. The point is that he doesn't have a legitimate way to 
protest that we are helping a legitimate government defend 
itself against his aggression. I think we have to think about 
it in terms of the moral obligation to do that. When people 
want to defend themselves, we have an obligation, I think, to 
try to help them if we can.
    I think, second, we need to raise the cost for him of what 
he is doing. He, I think, is perhaps a little bit more 
sensitive to some of these things than you were suggesting. The 
body bags coming home. The protesting Russian mothers. The 
capital flight. The amount of money that has been expended 
defending the ruble. These are real costs, and they are costs 
that are hitting his base of support, which is the oligarchs. 
They are suffering from this, and so he has to respond to that 
in some way.
    But I think it is also important to remember that while 
there are potentially costs to action, there are very serious 
costs to inaction here.
    Senator King. Sure. There are risks either way.
    Ambassador Edelman. The cost to inaction could be, I would 
suggest, a catastrophic miscalculation. We need to make him 
understand that if we are willing to provide this kind of 
assistance to a country with whom we have no treaty legal 
obligation, that he ought to think twice then about doing 
something with a NATO member state like Latvia, as Mr. Donnelly 
asked me about earlier, with whom we do have a legal treaty 
obligation.
    It is the importance of underscoring our commitment to 
defend our NATO allies in Europe that really is at stake here, 
I think. If we don't do this, the risk that he will 
miscalculate in a place like Latvia or Estonia I think will go 
up dramatically. I think that is something in terms of regret 
that we will feel very seriously later on.
    Senator King. My father used to say, there lies the body of 
Jonathan Gray, who died defending his right of way. But in any 
case.
    Ms. Flournoy. I would just add that I think one of the 
things that we have learned since the collapse of the ceasefire 
is that Putin is going to continue to escalate because he wants 
to keep destabilizing Ukraine and eventually cause the regime 
to change. So he is on an escalatory path anyway.
    The question is whether we can provide Ukraine, Ukrainians 
with the weapons they need to impose a level of cost on the 
separatists and their Russian backers that might make him think 
twice. Particularly counter-battery radars that could locate 
where the artillery and rocket fire is coming from. That is 
what is responsible for 70 percent of the casualties in 
Ukraine. Anti-tank systems that could stop armored or heavy-
armored vehicles from taking further territory.
    So I think he has demonstrated he is on an escalatory path. 
The question is whether there is anything that we can do to 
help Ukraine impose costs to make him stop and actually come to 
the negotiation seriously.
    I think it is worth seeing what happens on Wednesday in 
Minsk and seeing if by some miracle an agreement is forged. But 
barring that, I think it is very important that we help the 
Ukrainians defend themselves and impose greater costs on the 
separatists and the Russians for their aggression.
    Senator King. Thank you. Very helpful.
    Chairman McCain. Senator Ayotte?
    Senator Ayotte. I want to thank both of you for being here.
    Secretary Flournoy, I wanted to ask you about Afghanistan. 
I know that last June you were quoted in the New York Times 
about the administration's timeline for withdrawal from 
Afghanistan. And one of the things you said was, ``If it was a 
timeline with a strong statement that said, hey, this is our 
plan, but no plan survives contact with reality, and of course, 
we are going to adjust based on conditions on the ground, then 
no problem.'' In reference to their withdrawal plan.
    "Are the Afghans on the path we had planned for? Are they 
not? Is the insurgency as we expected or is it worse? All those 
things have to be factored in. What I am hearing out of the 
White House is that it is hell or high water. This is what we 
are going to do.''
    I'm hoping that you have a different sense of this now, and 
I wanted to get your thoughts on Afghanistan because many of 
us, I think, who have had the opportunity to visit Afghanistan, 
and then this weekend, we had obviously the opportunity to sit 
down with President Ghani and hear his perspective, to really 
understand their plan right now as it stands. President Ghani 
seemed very concerned that we not reduce our forces in 2015, in 
particular. Then many of us are very concerned that by the end 
of 2016 under the current plan, it will really be 1,000 people 
based in Kabul.
    So I wanted to get your perspective on Afghanistan and what 
you think we should be doing.
    Ms. Flournoy. So that is a great question. Thank you, 
Senator, for asking.
    I think at this point we need to change the frame of 
discussion on Afghanistan. Rather than debating the fine points 
of the final phases of the drawdown and the end of the U.S. 
combat role and so forth, we need to stop and say, okay, we 
need to look forward.
    We have an Afghan Government that is trying--has a good 
chance of pulling it together and going forward as a 
democratically-elected coalition government. We have an Afghan 
National Security Force (ANSF) that is continuing to develop 
its capabilities that is in the fight, that is taking risk, 
that is trying to hold their ground.
    But we also see continued challenge from an insurgency that 
remains able to contest a lot of areas. We see continued 
activity from al Qaeda moving across, back and forth across the 
border.
    So now is the time to stop debating whether we can change 
the drawdown timeline, and we need to stop and say, okay, 
looking forward, what kind of posture does the United States 
need, both intelligence and military, in the Armed Forces 
Pacific region to protect ourselves against future terrorist 
threats and prevent Afghanistan or the border region from 
becoming a serious safe haven once again for al-Qaeda and 
associated groups?
    With that fresh sheet of paper, look at what is the 
intelligence posture we need, what is the military posture we 
need to support that and to continue to help the Afghan 
national forces to develop. I think that shift in the 
conversation is very, very important.
    My sense is that it is starting to happen inside, certainly 
inside the Intelligence Community. But hopefully, that is a 
conversation we need to have over the next year.
    Senator Ayotte. Could you give, I think, thinking about our 
constituents, the importance of really looking forward there 
and frankly, in terms of our own interests, the importance of 
Afghanistan and the intelligence that we might need from 
Afghanistan for protecting our own interests?
    Ms. Flournoy. This is an area where we need to continue to 
be able to have a sense of what the remnants of al Qaeda that 
remain there, their Taliban supporters, the Haqqani network. We 
need to still have eyes and ears. It is not something you can 
do from Kabul alone or from Bagram alone.
    That intelligence posture will require some supporting 
military posture. It will be far less than what we have had in 
previous years. It is a small continued investment, relatively 
speaking, to try to support the Afghan Government in continuing 
on the path of progress and continuing to hold their country 
and not allow the insurgency to regain any kind of foothold in 
terms of actually governing or leading the country.
    Senator Ayotte. Thank you.
    I also wanted to follow up briefly with the size of the 
naval fleet, including the attack submarines. As I understand 
it, with sequester we are on a path really to reduce our fleet 
size to 260 ships or less overall. Having worked on the QDR, 
the Navy's current fleet size is around 285. As I look at the 
attack submarine fleet size, this is something that we have 
even greater need for now, especially as we want to have a 
presence in the Asia-Pacific region.
    So I wanted to get your assessment of, as we go forward, 
where we are--it looks like a dramatic decline if we continue 
on sequester--the importance of the attack submarine fleet, and 
this investment and why it is important for us.
    Ms. Flournoy. I think, overall, the fleet is on a path to 
becoming too small for what we will need in the future. I agree 
with you that undersea warfare is an area of American advantage 
that we want to do everything in our power to keep.
    I think that will require continued investment in the 
attack submarine fleet, but it is also going to require 
investment in new technologies, such as unmanned undersea 
vehicles and how we network manned submarines and unmanned 
systems to leverage that capability to have much greater 
impact. So I think this is an area very ripe for some new 
thinking and development of--both leveraging of new 
technologies and developing of new operational concepts.
    But your core premise about the importance of the attack 
submarine fleet, I think it is a very important advantage area 
that we want to maintain.
    Senator Ayotte. Thank you.
    Ambassador Edelman. Senator, if I could just add, we did 
not have the kind of staffing that would have enabled us to do 
a real fine-grain analysis of this. But we did conclude, as you 
have suggested in your question, as my colleague just suggested 
in her answer, that we are on a path towards a fleet that is 
much too small and that we ought to--we tried to bracket the 
problem for you and your colleagues by saying, somewhere 
between the number that Secretary Gates requested in the fiscal 
year 2012 budget, which I think was 320 something, and the 
number Secretary Perry identified in the bottom-up review, 
which was in the 340s, was the place where we ought to be 
looking to try and get.
    Senator Ayotte. Thank you.
    Chairman McCain. Senator Shaheen?
    Senator Shaheen. Thank you, Mr. Chairman, and again thank 
you for holding this series of rather strategic looks at what 
our defense capabilities should be going forward.
    I want to thank both of our panelists for being here and 
for your long service to this country.
    Follow up--first, I should apologize for missing your 
statements and the earlier questions. I was at a briefing on 
Iran and those negotiations. But I wanted to follow up on 
Senator Ayotte's question because I am not sure if she asked 
very directly if, in your assessment, should we be drawing down 
troops, the remaining troops, in Afghanistan as rapidly as we 
are this year?
    Or do you think that sends the wrong message to both the 
Afghans, who are trying to make a new start with a new 
president and address their internal issues, as well as the 
Taliban and the other enemies who are fighting them in 
Afghanistan?
    Ms. Flournoy. My sense is that the delay in the government 
formation process that we have seen post-elections in 
Afghanistan should put some more time on the clock in terms of 
the drawdown, and we need to re-examine that.
    But most fundamentally, what I was trying to say before is 
that we need to re-examine the pace and scope of the drawdown 
in light what we are going to need in the future. I don't 
believe a zero posture in Afghanistan is going to serve our 
interests in the long term, given the continued terrorism 
threats that we face, given the continued importance of our 
support to the development of the ANSF.
    So figuring out, instead of from looking back and drawing 
down, looking forward and saying what are we going to need in 
the next 5 to 10 years? It will be more modest than what it has 
been, certainly, but it won't be zero. So, figuring out what 
that look like and having that inform the pace and scope of the 
final stages of the drawdown, I think, is very important.
    Senator Shaheen. Ambassador Edelman, did you agree?
    Ambassador Edelman. Senator Shaheen, you have asked a very 
good question, and I am very concerned that we are going to go 
down too low. I mean, I think it is a source of great regret, I 
think, to most of us that we left Iraq without any residual 
presence. The consequences, I think, are staring us in the 
face, with the rise of ISIL, collapse of the Iraqi security 
forces. I worry that we may be putting ourselves on the same 
path in Afghanistan, and I hope we won't do that.
    Senator Shaheen. Well, thank you both.
    With respect to Europe and what is happening in Ukraine, 
how important is the effort to beef up NATO, to encourage the 
European countries to actually follow through on their 
commitment to provide 2 percent of GDP for support for NATO?
    To what extent do you think actually doing that, actually 
taking some of these steps with NATO to put more visible 
operations on the borders of Eastern Europe, will be helpful in 
deterring Russia from future aggression?
    Ms. Flournoy. I think it is absolutely critical. There is a 
clear plan to bolster our posture, exercise activity, our 
cooperation, our pre-positioning, with our NATO allies, 
particularly the front-line states, Baltics, Poland, and so 
forth. I think doing that consistently, reliably, visibly is 
extremely important to bolstering deterrence and to reassuring 
our allies.
    I also think that getting more of our allies to meet the 2 
percent of GDP defense spending target is essential, as is 
engaging them as partners in developing capabilities for the 
future. We talk about an offset strategy and innovation agenda. 
We need to have that on a transatlantic basis as well, with 
some great opportunities for pooling resources, sharing, having 
a clearer division of labor, and so forth.
    Senator Shaheen. I know that you both were in Munich this 
past weekend. To what extent did you hear NATO members, 
countries who were there, talking about their appreciation that 
this is important for them as well, if at all?
    Ambassador Edelman. Well, Senator Shaheen, there was 
actually, I thought, not very much of that. I heard a lot of 
discussion about how there is no military solution to the 
problem in Ukraine. That is, I think, demonstrably false. If we 
do nothing, there will be military solution in Ukraine, and it 
is going to be the one that is imposed by Vladimir Putin.
    I think the importance of all the things, and I agree with 
everything that my colleague said about the importance of the 
NATO reassurance effort and all of that, in terms of 
deterrence. I think we also need to remember it is an important 
part of diplomacy.
    I always carry around with me a quotation from George 
Kennan, who says, you have no idea--this was a lecture he gave 
to the National War College in 1946--how much it contributes to 
the general politeness and pleasantness of diplomacy when you 
have a little quiet armed force in the background. I think that 
we tend to lose track of that.
    I mean, what is now going on, and I hope maybe there will 
be some success to it on Wednesday, but we should be clear 
about what is happening. The Europeans are discussing this and 
calling it ``Minsk Plus.'' But it is really ``Ukraine Minus'' 
because what it does is it reaffirms the principles of the 
Minsk Agreement in September but makes adjustment for the 
reality of the continued aggression by the Donbass separatists.
    We should have no illusions about what is happening here, 
and it is the reason why I think I--I am not going to speak for 
my colleague, but why I believe we do need to, on the Ukrainian 
Government, to raise the cost to President Putin.
    I will say, and Senator King has raised this and raised 
rightly the question of how do we respond to further escalation 
by President Putin? One thing I think is absolutely important 
to bear in mind, which is if we do this, we have to do this 
seriously.
    We cannot arm the Ukrainian Government the way we have been 
arming the Syrian moderate opposition for the last 3 years. 
Because if we do that, we will end up with all the effective 
provocation of President Putin, with none of the benefit of 
increased deterrence or military capability for Ukraine.
    Senator Shaheen. Thank you both.
    Chairman McCain. Senator Hirono?
    Senator Hirono. Thank you, Mr. Chairman.
    I would like to be noted as voting in person for Dr. 
Carter.
    Chairman McCain. Without objection.
    Senator Hirono. Thank you.
    Thank you both for your testimony and your service.
    Secretary Flournoy, I do appreciate your noting that there 
is a shift in the conversation that is beginning regarding what 
we need to do in Afghanistan, and certainly in the Intelligence 
Community that this shift is happening. I think that moves us 
forward, as opposed to talking about what we should have done, 
et cetera.
    I also would like to thank both of you for stressing the 
important of maintaining our sea power and your concerns about 
our decreasing size of our fleet. Dr. Carter was asked at his 
confirmation, and I would like to paraphrase the question he 
was asked. He was asked how do we respond to the threats in the 
Middle East and Africa, Ukraine, and still be committed to the 
rebalance to the Asia-Pacific?
    I would like to ask both of you the same question, but 
first, why you believe that the rebalance is important to our 
national security.
    Ms. Flournoy. Well, let me start it since I can be blamed 
for part of that--part of that initiative.
    When you look long term at what region of the world will 
have the greatest impact on U.S. economic prosperity and, I 
think, our security, Asia-Pacific is undeniably sort of the 
most important. So, it speaks to even though we obviously have 
to deal with crises in the Middle East, we have to deal with 
Russian aggression in Europe, over the arc of the long term we 
want to be ensuring that we are adequately investing in Asia, 
in the foundations of continued economic growth, in the 
maintenance of the rules-based international order that has 
been underwriting stability there, in our alliances, in our 
partnerships.
    So I think it is very important that the rebalance continue 
not only militarily shifting more of our assets there and 
becoming--investing more with our partnerships and alliances 
there, but also in economic terms. I think this is why the 
Trans-Pacific Partnership is such an important initiative, to 
signal U.S. commitment to the region, U.S. staying power, that 
the United States will remain a critical economic partner as 
well as a security partner going forward.
    Senator Hirono. Mr. Ambassador?
    Ambassador Edelman. The region obviously is growing in 
wealth and importance in the world, and obviously America's 
future is very much tied up. We have always been an Atlantic 
and a Pacific nation, but the impact of the Pacific is much 
greater now and will be in the future for some time to come.
    I think it is for that reason that all the members of the 
panel agreed that the general direction that the President 
announced in the Defense Strategic Guidance in January 2012 was 
the right direction. I think what we expressed in the report is 
some concern about whether at current budget levels this will 
be sustainable, and that is why we talked about the importance 
of growing both naval and air capability because this is a 
theater where largely we are going to be operating in and 
because of the tyranny of distance and geography over water and 
air.
    So I think the need is clear. I think it is important that 
we move ahead on the rebalance. I am concerned that what we 
have done already is fairly limited. On the military side, it 
is--and I am not saying that we shouldn't do it, but it is 
basically 2,500 marines rotationally deployed to Darwin, 4 
littoral combat ships home ported in Singapore, and some 
rebalancing of a shrinking fleet.
    I think we need to do more, and it is one of the reasons I 
think we believe we have to lift the BCA caps and 
sequestration.
    Senator Hirono. Thank you.
    Mr. Ambassador, you noted in a response to one of the 
questions earlier asked that other nations are decreasing the 
amount of resources they are putting into the military.
    Would you say that that is where Japan is also?
    Ambassador Edelman. Under Prime Minister Shinzo Abe, Japan 
has obviously done a bit to increase its defense capabilities. 
I don't think they have done enough, and we need to make sure 
that the money they spend--I mean, Japan spends about 1 percent 
of its GDP on defense, which is, given the size of the Japanese 
economy, a considerable amount of money.
    I think where we need to help our allies in Japan is 
working with them, as I said earlier in response to one of the 
questions, to focus on the capabilities we think they can 
provide that will really be additive and help complement what 
we are doing. That is what I think we ought to be doing with 
Japan.
    I think Prime Minister Abe has done a lot to change the 
direction in Japan in a more positive direction.
    Senator Hirono. Mr. Chairman, may I just ask the Secretary 
to respond to that, too?
    Ms. Flournoy. I would agree that I think Japan is moving in 
the right direction. I think Prime Minister Abe is seeking to 
have an internal discussion that will allow the Japanese 
military to play a more fulsome role as a full partner in our 
alliance.
    I think that the depth of the alliance relationship is 
really unprecedented now, and we are deeply engaged in looking 
at the region, developing common understandings of the 
environment, the threats we see, the capabilities that are 
needed, how we will invest together, and so forth. So I 
actually think the alliance is on a very strong footing and 
moving in the right direction.
    But the question really is the internal debate within Japan 
about the proper role of the military and what the Japanese 
people are comfortable with moving forward.
    Senator Hirono. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Kaine?
    Senator Kaine. Thank you, Mr. Chairman, and thank you to 
the witnesses.
    I also want to be noticed. I was a proxy `yes' for Ash 
Carter, but I am a proud `yes' now that I am here from my 
Foreign Relations meeting.
    Thank you for your testimony, especially your strong 
testimony with respect to the foolishness of the sequester in 
today's global environment.
    Big picture strategic question, since you are both good 
strategic thinkers. I know questions have been asked earlier 
about Afghanistan. We are grappling with--and we will have 
hearing on Afghanistan later in the week--should our activities 
be based on a calendar or based on conditions on the ground? 
Those questions have been asked already.
    But from a strategic standpoint, talk about what failure in 
Afghanistan would mean. If we were to pull out precipitously, 
for example, and then the gains that we have achieved are lost, 
what would that mean to U.S. credibility? What would it mean to 
the people of Afghanistan? What would it mean in the region 
from a security standpoint?
    Ms. Flournoy. Well I can start. I think, if history is any 
guide, it could be very dangerous for the Afghan Government and 
Afghan society.
    Recall that when the Soviets ended their aid to the Afghan 
Government, the government collapsed. I think if the United 
States were to have and the international community were to 
have no follow-on mission in NATO, that international 
assistance would quickly dry up, and you could see a sort of 
accelerated decline of the Afghan Government's hold over 
territory and the country. So I think it would be very, very 
dangerous.
    On the opportunity side, I think with continued modest, but 
consistent international support, I think the Afghan Government 
has an opportunity to hold the key urban centers, the ring 
road, the strategic territory inside Afghanistan, and keep 
governing without having the government and the overall control 
of the country being threatened by a continued insurgency.
    Given that this region remains a home to various terrorist 
elements that still harbor very dire intentions, dangerous 
intentions against the United States, it is some place we have 
to keep an eye on and keep investing in to make sure those 
threats are kept at bay.
    So I think the stakes are very high. I also think it would 
be very damaging for U.S. credibility to have put so much into 
getting Afghanistan to the point where it is today and then to 
pull the carpet out from underneath their feet. I think it 
would also be very damaging in terms of civil-military 
relations, given the degree of sacrifice that our men and women 
have been asked to make, to create the possibility for 
Afghanistan to succeed and then to walk away from that before 
we complete the job I think would be very, very damaging.
    Senator Kaine. Ambassador Edelman, quickly, I have one more 
question, but would there be something you would want to add to 
that?
    Ambassador Edelman. I agree. The reputational risk. The 
homeland risk because it will become ungoverned space again. I 
would add one other thing. It will reduce our strategic 
leverage on Pakistan, and we should not lose sight of the large 
number of nuclear weapons that Pakistan presides over.
    Senator Kaine. One other question. The big picture strategy 
sense. I was a mayor worrying about my police force. I was a 
governor worrying about economic development. But you guys have 
been doing national security for your whole career, so I want 
to hear your thoughts on this.
    We often hear questions in these hearings about where is 
the strategy? And I am kind of sympathetic to those questions. 
As I look kind of quickly at what we have been up to, we had a 
national security strategy, like it or not. The Truman Doctrine 
from 1946 until the Soviet Union collapsed. I think we then 
went into kind of an ad hoc-ism period. That may not be a bad 
thing, but we kind of dealt with challenges as they arose and 
often not in consistent ways.
    September 11 began. Our policy was the war on terror. That 
is not a big enough national security policy for a nation as 
great as the United States, as magnanimous as the United 
States. And so, I think we are probably now recognizing the 
ongoing battle with terror, still looking for a broader 
definition of what is a big picture national strategy.
    Are we back to a sort of ad hoc-ism? Or as folks who have 
done this for a lifetime professionally, what would you suggest 
to us the big picture national security strategy should be?
    Ms. Flournoy. To me? This is the $64,000 question. I think 
that it is something, we have to rise above the crisis of the 
day and get back to having a strategic framework, a sense of 
American purpose in the world that can garner bipartisan 
support.
    I personally believe that one of the key elements of it is 
to defend the international rules-based order that we put into 
place, we architected after World War II, that has been the 
basis for stability in so many regions, and it has been the 
basis for our economic growth and our security.
    We have a lot riding on that, and it is being challenged in 
Asia with the rise of China that is questioning that order and 
challenging and trying to unilaterally change the status quo. 
It is being challenged in the Middle East as the boundaries of 
nation-states start to fray, and you have Sunni-Shia conflict, 
the rise of extremist terrorist elements. Now it is being 
challenged in the heart of Europe with Russian aggression 
across an international border.
    So I think sustaining that rules-based international order 
is something that has to be at the heart of any strategic 
framework we develop.
    Senator Kaine. Mr. Chair, could I ask Ambassador Edelman 
just to answer that question as well?
    Ambassador Edelman. Well, I agree with everything that my 
colleague said, Senator Kaine. So that makes it a little bit 
easier.
    A few years ago, there was an article in the journal 
International Security that had the provocative title of 
``Strategy is an Illusion.'' I teach a course in American grand 
strategy at Johns Hopkins University, School of Advanced 
International Studies, and my students at the end of it, some 
of them say, ``well, yes, it was easy to have a strategy when 
you had a bipolar world and one adversary. Now it is just so 
complicated. It is too hard.''
    As Secretary Flournoy and I said in our opening statement 
that we are dealing with a volatile and complex security 
environment, and therefore, maybe you might just say, well, it 
is too hard to do.
    My view is that as hard as it may be, marrying objectives 
to ways and means is just the essence of good governance, and 
if you don't try to do it, it just becomes an excuse for going, 
taking any road that will lead you where you think you might 
want to go, but you won't have a road map. So I think it is a 
necessity. I think we have to do it.
    I think there is a lot of merit in what Secretary Kissinger 
has suggested, that we need to--we are faced by primarily 
regional challengers now, not a global peer competitor. We need 
to develop regional strategies, but strategies that are 
interconnected with an overarching global vision, and I think 
that is the beginning of wisdom on that subject.
    Senator Kaine. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. I do recall a thing called the Reagan 
Doctrine, which in the words of Margaret Thatcher, won the Cold 
War without firing a shot. But maybe there are some of us who 
have different views of history.
    Senator Sullivan, did you have an additional question?
    Senator Sullivan. Thank you, Mr. Chairman.
    I just had one quick follow-up question, and it relates to 
some of the broader issues that we are struggling with here. I 
would like your views on just some of the--your thoughts on 
what is going to be looks like an upcoming debate in Congress 
on the authorization for use of military force (AUMF).
    Secretary Flournoy, you mentioned a fresh start looking 
forward. How would you advise Members of Congress to look at 
that, whether it is years, troops, geographic scope? There is a 
lot that can go into something like that. It is going to be 
important, and I would just appreciate your views on that.
    Thank you, Mr. Chairman.
    Ms. Flournoy. First of all, I would say I think it is 
important to have the discussion. The debate about the AUMF 
will be a good surrogate for what should our strategy be with 
regard to counterterrorism and with regard to the Middle East.
    I think that as you have that discussion, it is very 
important to remember something that was said earlier, which is 
we are very bad at predicting exactly how conflicts are going 
to unfold, how enemies are going to act, how things are going 
to morph and change. So, being overly restrictive, saying 
categorically no boots on the ground, or don't do this. Being 
overly restrictive, I think, could become a problem over time.
    That said, I think it is very, very important to recognize 
that the AUMF that we have from 2001, a lot of realities have 
moved beyond that, and we do need to update it and recognize 
that there are groups who have distanced themselves from al 
Qaeda but, nevertheless, now pose a similar threat to us. We 
need to have an authorization to deal with them.
    But again, I would just caution against being overly 
predictive or specific in restrictions because we don't exactly 
know how the threat will evolve, how our response will need to 
evolve.
    Ambassador Edelman. Senator Sullivan, I agree with that. I 
agree with everything that Michele just said.
    I would just add that the other element here is I know that 
there is lots of interest in some kind of timeline. We 
frequently talk about this. I think that to do that is to set 
up potentially a very divisive and a difficult debate later on 
down the road.
    Things don't always work out in war. There are mistakes, 
and you have problems. You have to let the people who are 
fighting the war fight the war. I think you also don't want to 
signal lack of resolve to the other side and tell them how long 
they have to wait you out.
    Senator Sullivan. Thank you, Mr. Chairman.
    Chairman McCain. Well, I thank you, the witnesses, and we 
have covered a wide range of issues today.
    Senator Shaheen. Mr. Chairman, can I ask another question 
before we close?
    Chairman McCain. The Senator from New Hampshire.
    Senator Shaheen. Thank you.
    I wanted to follow up on Senator Kaine's question about 
strategy because there have been a number of high-profile 
articles in the last few months about the lessons learned in 
Afghanistan and Iraq, and there has been the DOD-commissioned 
report from the RAND Corporation about those lessons learned 
that have suggested that we ought to also take a look at our 
decisionmaking structures and think about how we can better 
make some of those decisions.
    I wonder if I could get each of you to comment on whether 
you think that is an accurate analysis of some of the 
challenges that we face and what we should do better as we are 
thinking about how to make these decisions in the future.
    Ms. Flournoy. I think it is really important to try to 
pause and catalogue what lessons we should be learning. There 
is kind of a desire to get all of this in the rearview mirror 
and just move on. But it is very, very important to understand 
what we should take away from this and capture some of the best 
practices that were developed on the ground. So I think it is 
an important exercise.
    I do think that the decisionmaking element, particularly at 
the interagency level, is something that bears study. It is 
something that actually the Center for New American Security is 
looking at going forward because I think you can look at 
different models of National Security Councils, different ways 
in which they have operated, different results over time and 
history, and you can draw some conclusions about what works 
better and what doesn't.
    Similarly, I think in the field, some of the innovations 
for fusing intelligence and operations and having all of the 
interagency players in one operations center, sharing 
authorities, information, and conducting truly joint whole-of-
government operations, that is something we don't want to lose, 
the next time we may have to face an operational challenge.
    So I think it is a really important line of inquiry.
    Ambassador Edelman. Senator Shaheen, I have to confess to a 
certain degree of skepticism about reforming the interagency 
process. It is a little bit like the weather. People are always 
talking about it, and then it doesn't ever change.
    The National Security Act of 1947 is an incredibly 
flexible--has created an incredibly flexible system. The 
reality is that it is flexible enough that each President that 
we have had has developed a system that suits their management 
style best and for better or for worse.
    Our system is so presidential-centric in terms of national 
security decisionmaking that I think unless you really want to 
tinker with the Constitution, I am not sure that anything else 
that you do is going to be more than moving kind of boxes 
around on a wiring diagram. So I think it is certainly worth 
looking at lessons learned, and there are always better or 
worse ways to do it.
    But I am struck by the fact that the relationship between 
process and outcome is not always clear and direct. If you read 
through, for instance, the transcripts of the Executive 
Committee of the National Security Council during the Cuban 
missile crisis and were graded on process, you would give it an 
F, because there are no agendas. They are not talking from 
common papers. They are not doing anything that they teach you 
to do at the Kennedy School of Government, for instance.
    But President Kennedy came roughly to the right decision, 
obviously, somehow. I think that is just testimony to what I 
was saying. This is a system that really ultimately revolves 
around the President, and he or she, I think, should not 
necessarily be constrained by efforts to tinker with the 
machinery.
    Senator Shaheen. Thank you both.
    Thank you, Mr. Chairman.
    Chairman McCain. Your testimony has been very helpful. We 
began our conversations about your work on a commission, and 
now we have branched out and covered a lot of very important 
areas that I think that needs to be an important part of the 
discussion and dialogue that we have on both sides of the aisle 
and both ends of Pennsylvania Avenue.
    So you have contributed a great deal to our knowledge and 
our thought process, and I thank you for it.
    Jack?
    Senator Reed. I simply want to express the same feeling of 
appreciation for your efforts not just today, but for many, 
many years. Thank you very much.
    Chairman McCain. Thank you.
    The hearing is adjourned.
    [Whereupon, at 11:31 a.m., the committee adjourned.]

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