```

[Senate Hearing 114-658, Part 1]
[From the U.S. Government Publishing Office]

                                                   S. Hrg. 114-658, Pt. 1

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                HEARINGS

                               BEFORE THE

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                                   ON

                                S. 2943

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2017 FOR MILITARY 
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND 
   FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE 
   MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER 
                                PURPOSES

                               ----------                              

                                 PART 1

                      THE FUTURE OF THE U.S. ARMY

               U.S. PACIFIC COMMAND AND U.S. FORCES KOREA

                           AIR FORCE POSTURE

           U.S. STRATEGIC COMMAND, U.S. NORTHERN COMMAND, AND
               U.S. SOUTHERN COMMAND PROGRAMS AND BUDGET

                              NAVY POSTURE

                  DEPARTMENT OF DEFENSE BUDGET POSTURE

                           U.S. CYBER COMMAND

                              ARMY POSTURE

                   F-35 JOINT STRIKE FIGHTER PROGRAM

                               ----------                              

       FEBRUARY 11, 23; MARCH 3, 10, 15, 17; APRIL 5, 7, 26, 2016

         Printed for the use of the Committee on Armed Services

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
26-098 PDF                  WASHINGTON : 2017                     
          
----------------------------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, 
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). 
E-mail, gpo@custhelp.com. 

                      COMMITTEE ON ARMED SERVICES

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

                                  (ii)

  
                            C O N T E N T S

                              ----------                              

                           February 11, 2016

                                                                   Page

The Future of the U.S. Army......................................     1

Ham, General Carter F., USA (RET.), Chairman, National Commission 
  on the Future of the Army; Honorable Thomas R. Lamont, Vice 
  Chairman, National Commission on the Future of the Army; 
  General James D. Thurman, USA (Ret.), Commissioner, National 
  Commission on the Future of the Army; and Sergeant Major of the 
  Army Raymond F. Chandler III, USA (Ret.), Commissioner, 
  National Commission on the Future of the Army..................     4

                           February 23, 2016

U.S. Pacific Command and U.S. Forces Korea.......................    39

Harris, Admiral Harry B., Jr., USN, Commander, United States 
  Pacific Command................................................    44
Scaparrotti, General Curtis M., USA, Commander, United Nations 
  Command, Combined Forces Command, United States Forces Korea...    61

Questions for the Record.........................................   106

                             March 3, 2016

Posture of the Department of the Air Force.......................   115

James, Honorable Deborah Lee, Secretary of the Air Force.........   119
Welsh, General Mark A., III, USAF, Chief of Staff of the Air 
  Force..........................................................   138

                             March 10, 2016

U.S. Strategic Command, U.S. Northern Command, and U.S. Southern 
  Command Programs and Budget....................................   169

Haney, Admiral Cecil E. D., USN, Commander, U.S. Strategic 
  Command........................................................   173
Gortney, Admiral William E., USN, Commander, U.S. Northern 
  Command and Commander, North American Aerospace Defense Command   184
Tidd, Admiral Kurt W., USN, Commander, U.S. Southern Command.....   196

Questions for the Record.........................................   247

                             March 15, 2016

Posture of the Department of the Navy............................   259

Mabus, Honorable Raymond E., Jr., Secretary of the Navy..........   263
Neller, General Robert B. USMC, Commandant of the Marine Corps...   281
Richardson, Admiral John M., USN, Chief of Naval Operations......   290

Questions for the Record.........................................   327

                                 (iii)

  

                             March 17, 2016

Department of Defense Budget Posture.............................   343

Carter, Honorable Ashton B., Secretary of Defense; Accompanied by 
  Honorable Michael J. McCord, Under Secretary of Defense 
  (Comptroller) and Chief Financial Officer......................   348
Dunford, General Joseph F., Jr., USMC, Chairman of the Joint 
  Chiefs of Staff................................................   377

Questions for the Record.........................................   425

                             April 5, 2016

U.S. Cyber Command...............................................   455

Rogers, Admiral Michael S., USN, Commander, U.S. Cyber Command; 
  Director, National Security Agency; Chief, Central Security 
  Services.......................................................   458

Questions for the Record.........................................   503

                             April 7, 2016

Posture of the Department of the Army............................   507

Murphy, Honorable Patrick J., Acting Secretary of the Army.......   510
Milley, General Mark A., USA, Chief of Staff of the Army.........   519

                             April 26, 2016

F-35 Joint Strike Fighter Program................................   561

Kendall, Honorable Frank, III, Under Secretary of Defense for 
  Acquisition, Technology, and Logistics.........................   565
Bogdan, Lieutenant General Christopher C., USAF, Program 
  Executive Officer for the F-35 Lightning II Joint Program......   567
Gilmore, Honorable J. Michael, Ph.D., Director of Operational 
  Test and Evaluation, Department of Defense.....................   577
Sullivan, Michael J., Director of Acquisition and Sourcing 
  Management, Government Accountability Office...................   592

Questions for the Record.........................................   623

 
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              

                      THURSDAY, FEBRUARY 11, 2016

                               U.S. Senate,
                       Committee on Armed Services,
                                                    Washington, DC.

                      THE FUTURE OF THE U.S. ARMY

    The committee met, pursuant to notice, at 9:53 a.m. in Room 
SD-G50, Dirksen Senate Office Building, Senator John McCain 
(chairman) presiding.
    Committee members present: Senators McCain, Inhofe, 
Sessions, Wicker, Ayotte, Fischer, Cotton, Ernst, Tillis, Lee, 
Reed, McCaskill, Manchin, Shaheen, Gillibrand, Blumenthal, 
Donnelly, Hirono, Kaine, King, and Heinrich.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. The Senate Armed Services Committee meets 
this morning to receive testimony on the findings and 
recommendations of the National Commission on the Future of the 
United States Army.
    I am pleased to welcome General Carter Ham, General James 
D. Thurman, the Honorable Thomas Lamont and Sergeant Major of 
the Army Raymond Chandler.
    Gentlemen, this committee is grateful to you for your many 
years of distinguished service and your leadership during the 
conduct of the National Commission's work. We are thankful for 
the comprehensive and timely report. Today, we hope to benefit 
from your recommendations.
    The focus of this hearing is our Army and our soldiers. 
Their mission is unequivocal. It is to fight and win our 
Nation's wars. As Army Chief of Staff General Mark Milley said 
eloquently, the Army's ``reason for being, our very reason for 
being, at the very core of what it means to have an Army is to 
win, and to win decisively, in ground combat against the 
enemies of our country so that American citizens can enjoy 
life, liberty, and the pursuit of happiness.''
    Through 15 years of war, our Army has been tested. Time and 
time again, our soldiers proved their commitment, courage, and 
determination. It is our duty to do our utmost to provide them 
with the support they need and deserve. That starts by 
recognizing that our Army is still at war.
    At this moment, 187,000 soldiers are deployed in 140 
locations around the globe. They're fighting terrorists and 
training our partners in Afghanistan and supporting the fight 
against ISIL, all the while defending South Korea and 
reassuring our allies in eastern Europe. Yet, as the demands on 
our Army continue to increase, our support for our soldiers has 
not kept pace. In short, our Army is confronting growing 
threats and increasing operational demands with shrinking and 
less-ready forces and aging equipment. By the end of the next 
fiscal year, the Army will be cut down to 450,000 Active Duty 
personnel soldiers, down from a wartime peak of 570,000. These 
budget-driven force reductions were decided before the rise of 
ISIL or Russia's invasion of Ukraine. As the Commission notes, 
a regular Army of 450,000 is the minimum sufficient force 
necessary. We must be clear that when we minimize our Army, we 
maximize the risk to our soldiers. Those risks will only grow 
worse if mindless sequestration cuts are allowed to return and 
the Army shrinks to 420,000 soldiers. On the present course, 
we're running the risk that, in a crisis, we'll have too few 
soldiers who will enter a fight without proper training or 
equipment.
    Given current operational demands, readiness must be the 
first priority of the Army. Yet, as our Army shrinks, readiness 
suffers. Just over one-third of the Army's Brigade Combat Teams 
are ready for deployment and decisive operations. I repeat, 
only just over one-third. The Army has no plan to return to 
full-spectrum readiness until 2021, at the very earliest. As 
the Commission's report makes clear, both the mission and the 
force are at risk.
    Meanwhile, the Army is woefully behind on modernization. 
The Army must modernize for the harsh realities of 21st century 
warfare. Our soldiers must be trained and equipped for an 
increasingly diverse and complex range of threats. They must be 
able to win against peers in highly lethal combined-arms 
maneuver, near-peer in hybrid warfare conditions, and 
determined unconventional insurgents. Yet, our Army is 
essentially organized and equipped as it was in the 1980s. The 
main difference is that it's smaller. In fact, many key 
enabling forces, like artillery, armored calvary, engineers, 
air defense, chemical, biological, radiological, and nuclear 
response, and theater transport have been reduced to levels 
that compromise the Army's ability to field campaign-quality 
forces. Put simply, our ground force is not in balance. We're 
not sized with the adequate capacity or with key capabilities 
to give our soldiers what they need to win decisively. Part of 
that is the legacy of the Army's acquisition record, which 
former Army Secretary McHugh said, quote, ``too often, a tale 
of failure, too many underperforming or canceled programs, too 
few successful fieldings of developmental designs, and far too 
many taxpayer dollars wasted.'' While we have struggled, 
adversaries such as Russia have been investing billions in 
modernizing their armies. The result is that America's 
capability advantage in ground combat weapons is not nearly as 
great as it once was.
    Another challenge to the Army's balance has been its 
failure to operate as a total force composed of the regular 
Army, the Guard, and the Reserve. Yet, while the Army is 
intended to operate as one force, the Commission identified 
major gaps, including a lack of focus on multi-component units, 
the absence of an integrated recruiting force, and the 
inability to manage pay and personnel across the entire Army 
with a single system. The Commission's recommendations for 
developing a total Army as well as those related to the 
critical issue of Army aviation are worthy of the committee's 
consideration.
    Our total Army needs a major change of direction. This will 
not be easy, but it's been done before. Army leaders like 
General Abrams transformed the Army before. They restored the 
discipline and morale of the force in the aftermath of the 
Vietnam War. They transitioned the Army to an All-Volunteer 
Force while revolutionizing training doctrine, and they built 
an Army that won the Cold War and removed Saddam Hussein from 
Kuwait. We need this kind of transformation again today, 
because, as the Commission has made clear, our Army is in 
trouble. The increasing velocity of instability, combined with 
continued reductions in defense spending, will inevitably lead 
to depleted readiness, chronic modernization problems, and 
deteriorating morale. We can and must do better.
    I'm grateful to the Commission for its important 
contribution to helping us find a better way forward.
    Senator Reed.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well thank you very much Mr. Chairman. Thank 
you for holding this hearing. It's--very important, as you 
pointed out.
    After nearly 15 years of continuous operations, it's 
critical we take a step back and assess the current state of 
the regular Army, the Army National Guard, and the Army 
Reserve. As such, our witnesses this morning each bring a 
unique and valuable perspective on these issues. I look forward 
to their testimony and exploring in greater detail the 
recommendations that the National Commission on the Future of 
the Army has put forth for consideration.
    First, let me begin by thanking the commissioners as well 
as your staff. You've done an extraordinary job. Your hard 
work, your willingness to take on this challenge is deeply 
appreciated. The comprehensive study that you have produced is 
thorough and thoughtful. In particular, I applaud your efforts 
to reach out to all stakeholders, including senior leadership 
in the Department of Defense, leadership within the regular 
Army, the Army National Guard, the Army Reserve, numerous 
elected officials both in Washington and in the states, and, 
most importantly, soldiers currently serving in uniform. I 
think you were guided in those efforts very effectively by the 
Sergeant Major.
    Thank you, Sergeant Major.
    Thank you for the process, and thank you for the great 
effort.
    As the final Commission report illustrates, the Army is 
faced with a number of challenges and tough choices for the 
foreseeable future. The threats facing our Nation are not 
diminishing, and it underscores our need for a well-trained and 
well-resourced, properly equipped military force that can 
deploy at a moment's notice. The Army has made increasing 
readiness levels a top priority; however, in a constrained 
budget environment, augmenting funding for readiness often 
comes at the expense of other Army priorities, including 
investment in modernization and recapitalization. Furthermore, 
the problem is compounded by the fact the Army has had a poor 
track record with the modernization efforts, resulting in 
programs that have been truncated or canceled. I look forward 
to hearing from our witnesses on their thoughts on how the Army 
can continue to improve readiness, as well as your views on how 
the Army can improve its acquisition process.
    Another issue the Commission considered was the Aviation 
Restructure Initiative, or the ARI, and the transfer of all 
Apache helicopters in the Army National Guard to regular Army. 
The Commission's recommended allowing the Active component to 
retain 20 battalions of Apaches, each equipped with 24 
aircraft, while providing the Army National Guard with four 
battalions of Apaches, each equipped with 18 aircraft. In light 
of the vigorous debate the ARI proposal has generated in 
Congress and the importance to the Army, I look forward to 
hearing our witnesses particularly with respect to this issue.
    Finally, the Army continues to draw down its end strength, 
as the Chairman has pointed out. The final goal is 450,000 in 
the Active Army, 335,000 in the Army National Guard, and 
195,000 in the Army Reserve. The Commission noted this level of 
uniformed military personnel, again, as the Chairman pointed 
out, provides the Army a minimally sufficient capability and 
capacity across the range of near-term challenges. In light of 
the evolving security environment and unanticipated global 
challenges, I welcome your comments on whether you believe the 
U.S. Army can continue to meet its commitment with this Army--
this size Army.
    Again, thank you, Mr. Chairman. Thank you, commissioners.
    Chairman McCain. I thank the witnesses. Whatever order you 
would like to begin, I think would be appropriate.
    General Ham, is that----

JOINT STATEMENT OF GENERAL CARTER F. HAM, USA (RET.), CHAIRMAN, 
NATIONAL COMMISSION ON THE FUTURE OF THE ARMY; HONORABLE THOMAS 
R. LAMONT, VICE CHAIRMAN, NATIONAL COMMISSION ON THE FUTURE OF 
 THE ARMY; GENERAL JAMES D. THURMAN, USA (RET.), COMMISSIONER, 
  NATIONAL COMMISSION ON THE FUTURE OF THE ARMY; AND SERGEANT 
    MAJOR OF THE ARMY RAYMOND F. CHANDLER III, USA (RET.), 
  COMMISSIONER, NATIONAL COMMISSION ON THE FUTURE OF THE ARMY

    General Ham. Thanks, Mr. Chairman. Mr. Chairman and Senator 
Reed, with your indulgence, I think, with the agreement of my 
partners here, we'll just have one opening statement, and then 
go to questions.
    Chairman McCain. Thank you.
    General Ham. Sir, on behalf of all of the fellow 
commissioners and the great staff that support us, thank you 
all for inviting us to testify before the committee on a report 
on the future of the Army. I'd especially thank you, Mr. 
Chairman, for having appointed General J.D. Thurman to the 
Commission, and, Senator Reed, for having appointed Sergeant 
Major of the Army Ray Chandler. It will be no surprise to those 
on this committee that both General Thurman and Sergeant Major 
of the Army Chandler offered characteristically direct and 
forceful insights to the Commission.
    Chairman McCain. Not surprising.
    General Ham. No, sir.
    The committee and staff have already received the 
Commission's report, so I won't spend a lot of time addressing 
specific issues, but I would like to give you a sense of how we 
approached the task that you gave to us in the Fiscal Year 2015 
National Defense Authorization Act. The Commission made every 
effort to be inclusive, accessible, and transparent. We visited 
17 states, interacted with over 320 different Army units of all 
three components. We interacted with all 54 adjutants general 
and 33 governors. About 80 Members of Congress engaged with the 
Commission. We've met with all six geographic combatant 
commanders, many of their service component commands, and many 
of our most important allies and foreign partners. That's 
certainly only a very partial list. We tried to pay strict 
attention to the law that you passed creating the Commission. 
Importantly, our recommendations were required to be consistent 
with acceptable levels of national risk and, importantly, 
anticipated future resources. In other words, this was not an 
unbounded effort.
    The result is a set of 63 specific recommendations that we 
believe are well researched based on realistic assumptions and 
backed by solid data. We found that America's Army is the best 
in the world, and those who have chosen to serve make it so and 
deserve our full and continued support and appreciation. Yet, 
as indicated, our Army faces some significant challenges, many 
of them budget driven.
    From fiscal years 2010 to 2015, for example, overall 
defense spending declined seven percent, but Army funding 
declined 14 percent. On the two main issues before the 
Commission--force size and mix and the Apache transfer--the 
Commission found the following:
    An Army of 980,000 is the minimally sufficient force to 
meet current and anticipated missions at an acceptable level of 
national risk. Within that 980,000, as indicated, the 
Commission finds the regular Army of 450,000, the Army National 
Guard of 335,000, and the Army Reserve of 195,000 present the 
right mix of forces; but, again, the absolute minimum levels to 
meet America's national security objectives. The numbers do not 
tell the full story. The Army of 980,000 must be resourced so 
that it is trained, ready, postured, and modernized to meet the 
Nation's demands.
    It's important to remember the mandate that you gave us. 
You told us to size the force in light of the two previously 
mentioned considerations: risk and resources. Adjust either, or 
both, particularly the level of anticipated resourcing, and you 
would reasonably arrive at very different conclusions. In our 
assessment, an Army of 980,000 is the absolute minimum--a 
floor, not a ceiling.
    On the Apache question, the Commission recommends the Army 
maintain 24 fully manned Apache battalions, 20 in the regular 
Army and four in the Army National Guard. The Commission 
recommendation has advantages over the Aviation Restructure 
Initiative in both wartime capacity and surge capacity, and has 
the added benefit of reducing peacetime deployment stress, and 
we believe it will better promote integration of the regular 
Army and the Army National Guard. It comes at added cost. To 
offset the added costs of having four Apache battalions in the 
Guard, we make some suggestions with regard to potential cost 
offsets, including adding only two Black Hawk battalions to the 
National Guard instead of the four that are currently planned, 
and suggest considering slowing Black Hawk modernization.
    The report also contains several prominent themes based on 
the Commission's factfinding and analysis. We consider 
sustaining the All-Volunteer Force, vital to the future of the 
Nation. A return to a draft or other model of compulsory 
Military Service will not yield the quality Army the Nation 
requires. An All-Volunteer Force is expensive to recruit and 
retain. We believe doing so is the right choice.
    The Commission believes it is critically important to 
develop a true total-force culture. While the regular Army, 
Army National Guard, and Army Reserve are distinct, essential, 
and interdependent, they are meant to operate as one force, 
with their efforts fully integrated. The Commission found gaps 
in seams in the implementation of the total-force policy, and 
our report highlights some of those and offers some remedies.
    The Commission recommends funding at least at the fiscal 
year 2016 President's Budget level, which would provide, in our 
opinion, the Army the minimum resources necessary to meet its 
requirement at acceptable risk. Given the evolving strategic 
environment and the potential for growing instability, even 
this level of funding may prove inadequate in the future.
    Additionally, Army funding must be predictable. Successive 
years of budget uncertainty and continuing resolutions have had 
significant negative consequences for the Army. In the 
Commission's view, even with budgets at the President's Budget 
2016 level, the Army would still have some significant 
shortfalls in aviation, short-range air defense, and other 
capabilities that we address in the report.
    Mr. Chairman, Senator Reed, that's a brief rundown of what 
we found. We recognize that certainly not everyone will agree 
with our recommendations. Indeed, many have already voiced 
their disagreement. What I do hope, though--and I think I speak 
for the Commission--is that our report will contribute to the 
important debate that the Congress and the administration--I 
would argue, indeed, the Nation--must have to determine how 
America's Army should be sized, trained, modernized, and 
postured.
    With that, my fellow commissioners and I are prepared to 
answer your questions.
    [The prepared statement of General Ham follows:]

                Prepared Statement by General Carter Ham
    Chairman McCain, Ranking Member Reed; on behalf of all my fellow 
commissioners thank you for inviting us to testify before the committee 
on our report on the future of the Army. We appreciate the opportunity 
discuss our findings and recommendations with the committee.
    The Committee and staff have already received the Commission's 
report, so I won't spend a lot of time addressing specific points. I 
would like to give you a sense of how comprehensive we were.
    The Commission made every effort to be inclusive, accessible, and 
transparent.
    We visited 17 states and interacted with:
      over 320 different Army units;
      all 54 adjutants general and 33 governors
      about 80 Members of Congress; and
      all six geographic combatant commands and many of our 
most important allies and foreign partners
    That is just a very partial list.
    I should also point out that we paid strict attention to the law 
you passed creating the Commission; you'll notice every chapter begins 
with a direct quote from the law as a way to frame the subsequent 
material.
    The result is a set of 63 specific recommendations that are 
unbiased, well researched, based on realistic assumptions, and backed 
by solid data. Importantly, our recommendations had to be consistent 
with ``acceptable levels of national risk'' and ``anticipated future 
resources.'' In other words, we were not unbounded in our work.
    What we found is that our Army is the best in the world. Those who 
wear the uniform deserve our gratitude every day.
    The Army faces severe challenges, most of them budget-driven. From 
fiscal years 2010-2015, overall defense funding declined 7 percent. 
Army funding declined 14 percent.
    On the two main issues before the Commission--force size and mix, 
and the Apache transfer--the Commission found the following.
    An Army of 980,000 is the minimally sufficient force to meet 
current and anticipated missions at an acceptable level of national 
risk. Within that 980,000, the Commission finds a Regular Army of 
450,000, an Army National Guard of 335,000, and an Army Reserve of 
195,000 represent the right mix of forces and, again, the absolute 
minimum levels to meet America's national security objectives.
    To fully understand this recommendation it is important to remember 
the mandate you gave us. We weren't asked to come up with an optimal 
force size based on the world situation and our best judgment. That 
would have been nice, but it would not have been realistic.
    Instead, we were asked to size the force in light of the two 
previously mentioned considerations--acceptable risk and anticipated 
resources. Adjust either or both and you can arrive at very different 
conclusions, and I'm sure you and the administration will have your own 
ideas on how to balance those considerations.
    However, in our assessment, an Army of 980,000 is the absolute 
minimum--a floor, not a ceiling.
    On the Apache question, the Commission recommends the Army maintain 
24 manned Apache battalions--20 in the Regular Army and four in the 
Army National Guard. The Commission recommendation has advantages over 
the Aviation Restructure Initiative in both wartime capacity and surge 
capacity, and will reduce peacetime deployment stress. It will also 
promote better integration of the Regular Army and National Guard.
    To offset the added cost of having four Apache battalions in the 
Guard, the Commission suggests the Army could add only two Black Hawk 
battalions to the Guard instead of the four currently planned, and slow 
Black Hawk modernization.
    The report also contains several prominent themes based on the 
Commission's fact-finding and analysis.
    First, the All-Volunteer Force is a national treasure. Since its 
inception, the quality and professionalism of the force has improved 
dramatically--but it is expensive. However, the Commission considers 
sustaining the All-Volunteer Force vital to the future of the nation. 
All budget and force management decisions must be made with this goal 
in mind.
    Second, the Commission believes it is critically important to 
develop a true ``one Army'' Total Force culture. While the Regular 
Army, Army National Guard, and Army Reserve are distinct, essential, 
and interdependent, they are meant to operate as one force--with their 
efforts fully integrated.
    The Commission found that gaps and seams exist in the 
implementation of the Total Force Policy. The report highlights some of 
those and offers remedies.
    For example, we recommend putting all Army marketing under one 
roof, fielding a consolidated pay and personnel system, and making 
changes to the existing 12304b authority that will make it easier for 
the Army to employ the Reserve components.
    Third, the Commission recommends funding at the president's fiscal 
year 2016 level, which would provide the Army with the minimum 
resources necessary to meet its requirements at acceptable risk. Given 
the strategic environment and potential for growing instability, even 
this funding level may prove inadequate.
    Furthermore, it should be understood that even with budgets at the 
PB16 level, the Army would still suffer from significant shortfalls, in 
aviation and short-range air defense as well as other capabilities we 
address in the report.
    That is a very brief rundown on what we found. Certainly, not 
everyone will agree with our recommendations. Indeed, many have already 
voiced their disagreement.
    What I do hope, though, is that our report will contribute to the 
important debate that the Congress and the Administration, indeed the 
Nation, must have to determine how America's Army should be sized, 
trained, modernized and postured.
    With that, we are prepared to answer your questions.

    Chairman McCain. Well, thank you very much. Thank--to the 
commissioners. We're very appreciative. This comes at a 
excellent time for us as we begin the markup for the 2017 
defense authorization bill.
    I guess I would like to start by saying: Obviously, end 
strength is only part of the answer, but, if you want to 
improve the missions and capabilities, end strength is a place 
to begin. Would--I think you would agree. We're now looking at 
a reduction for 2017 down to 420,000 Active component, as 
opposed to 450,000. What--I guess my first question is, how 
serious is that impact?
    General Ham. Mr. Chairman, in the Commission's work and in 
the analysis that we did, some of it in a classified realm--and 
I would certainly commend the classified annex to the members 
of the committee and to your staffs--it was our assessment that 
the regular Army force of 420,000 would be inadequate to meet 
the Nations' requirements at acceptable levels of risk.
    Chairman McCain. You were looking at the 2016 level of 
funding as a level that you think is barely acceptable, I guess 
is my interpretation. What if it's $17 billion less?
    General Ham. Sir, again, with any--any change to that--and 
we all--as you know, right now the Army is looking at budgets 
below the President's Budget for fiscal year 2016. We think 
that delta in funding just adds to the level of risk, makes it 
more difficult for the Army to sustain the levels of readiness 
that are required to meet the Nation's objectives, and further 
delay any effort to improve modernization.
    Chairman McCain. As you pointed out in your opening 
statement, as we lurch from one year to the next with total 
unpredictability as to the level of funding, no company or 
corporation could survive under that kind of uncertainty from--
as they lurch from year to year. How harmful is that, not only 
for planning, but--help me out on morale and retention and 
readiness, this OCO idea, which none of us like, but seems to 
be the only way that we're able to fund--but the impact of the 
year-to-year uncertainty of the ability they're going to be 
able to carry out their missions.
    General Ham. Mr. Chairman, let me start, and, if you'll 
allow me, maybe turn to Sergeant Major of the Army Chandler.
    I think, in my view, the biggest impact of the budget 
uncertainty manifests itself particularly in the area of 
modernization, but we also--in our site visits around the Army, 
also heard numerous reports from soldiers, noncommissioned 
officers, and officers of their training and leader development 
plans that were disrupted because of the uncertainty in the 
budget. For example, some leader development courses that were 
canceled or postponed early in the fiscal year because of 
funding challenges. Particularly in the Reserve components, if 
a young noncommissioned officer who is either employed or 
perhaps a college student had made plans to attend a leader 
development course, and then that was suddenly canceled because 
of budget challenges, it may be a couple of years before that 
Reserve-component noncommissioned officer may find another 
opportunity to attend important leader development.
    Sergeant Major?
    Mr. Chandler. Thanks, sir.
    Mr. Chairman, you know, one of my great privileges is to be 
able to talk with soldiers. It's what I did as the Sergeant 
Major of the Army, it's what I was able to do in great part as 
part--a member of the Commission. I will tell you, I think that 
the risk to soldiers in the long-term impact on areas like 
leader development and retention are huge if we're not able to 
sustain a budget over a period of time. I'll give you a quick 
example.
    We had the opportunity to go to the National Training 
Center and speak with the 116th Brigade from a number of 
states, primarily Idaho. One of the commanders that we had an 
opportunity to speak with, he was very concerned about being 
able to retain his mid-grade noncommissioned officers and 
officers. The challenge was, if I'm--got to make a choice 
between going on an annual training event or, as they did, 60 
or 70 days of annual training in order to prepare for a NTC 
[National Training Center] rotation, if they weren't going to 
be utilized after that and deployed someplace, then the issue 
became, ``Why am I doing this? I've deployed several times over 
the past 14 or 15 years, and now being in a place where I'm 
spending 2 or 3 years ramping up for a keystone event, go to 
the National Training Center, and then not be deployed to go do 
something. Why do I need to continue to do this?''
    I think you'll see that, if we're not able to sustain 
adequate funding, leader development programs, and the 
opportunity to go and train and deploy, this will have a huge 
impact on the Army's ability to generate readiness and fight 
and defend our Nation's wars.
    Chairman McCain. General Thurman.
    General Thurman. Mr. Chairman, one of the things that I've 
observed with the lack of predictable funding has been not 
being able to sustain Combat Training Center rotations. The 
crown jewel of the Army to be able to conduct decisive land 
combat is at our training centers. There were cases over the 
past few years where rotations were canceled. That is not a 
good ideal, particularly when we've got formations that have to 
be trained for land combat. I just used my past experience in 
Korea. That situation is very volatile over there, and it 
requires ground forces that are properly trained for decisive 
land combat. This has got to be sustained.
    That was one of the things that I saw a I looked in--over 
the course of funding is--if we don't have predictable funding 
and cannot sustain readiness, particularly on the high end, 
then we've got an Army that's not properly trained.
    What I've learned over my experience, a soldier must have 
confidence in themselves, they must have confidence in their 
leadership, and they must have confidence in their equipment. 
That--and if they don't have that, and have the opportunity to 
train on that, then we're headed for something that is not good 
for the country.
    Thank you.
    Chairman McCain. Sir, did you want to answer?
    Mr. Lamont. Just very quickly. I want to point out, when we 
made reference to and benchmarked FYPB16 [Fiscal Year 
Presidential Budget], that was really informed by the QDR 
[Quarterly Defense Review] of 2014. The strategic environment, 
as we all know, has changed fairly dramatically since then. 
We're quite concerned with those levels, particularly as we go 
into 2017.
    Chairman McCain. Senator Reed.
    Senator Reed. Well, thank you very much, Mr. Chairman.
    Once again, gentlemen, thank you and your colleagues for 
your extraordinary service.
    Let me go back to the issue of the Army Restructuring 
Initiative, the helicopters. I think, General Ham, your 
comments and also the report suggested that one of the reasons 
that you think it--there should be Apaches in the National 
Guard is to help integrate Army aviation across the whole 
spectrum--Active forces, National Guard forces, Reserve forces. 
I--you might comment on that. Also, in terms of the location of 
these residual National Guard units, was there any 
consideration to ensuring they are closely colocated with 
Active forces so they have access to training ranges, to--you 
know, to the things you need to do to stay proficient and 
current? Would that be part of your recommendations, or would 
you consider making further recommendations?
    General Ham and----
    General Ham. Yeah, Senator Reed, thanks. If you'll allow me 
to begin, then I'll turn to General Thurman----
    Senator Reed. Yes, sir.
    General Ham.--who served on the Aviation Subcommittee.
    We looked at four criteria in evaluating a number of 
alternatives for--with regard to the Apache issue. We looked, 
first and foremost, at wartime sufficiency. What was the proper 
structure to meet the stated wartime demands? That's 
articulated in the classified annex. We also looked for what 
alternative offered the best surge capability for unforeseen 
circumstances. Thirdly, we did look at, How do we best support 
the total force policy or the integration of the components? 
Lastly, importantly, looked at cost. In all of those, we came 
to the conclusion that we have stated. Cost, by the way, is 
one--is the reason why we recommend--while the battalions in 
the National Guard----
    Senator Reed. Right.
    General Ham.--be fully manned, they be equipped with only 
18, vice 24, aircraft, purely as a matter of cost. The National 
Guard Bureau and the Director of the Army National Guard told 
us that they are quite familiar and comfortable with cross-
leveling units when there is a need for operational employment.
    Before I turn to General Thurman, Senator Reed, just--we 
did not look specifically at where those battalions might be 
located. Certainly in the recommendation that addresses multi-
component units, which we think is important, it does work 
best, in our opinion, when those units are colocated--regular 
Army, Army National Guard, and Army Reserve.
    General Thurman?
    Senator Reed. General Thurman?
    General Thurman. Sir, Senator Reed, just to add to that. 
One of the things that I just would recommend is, we went into 
extensive analysis on wartime capacity that's in that 
classified annex that General Ham referred to. Bottom line, 
there's--if you put all of the AH-64 aircraft in the regular 
Army, you have no strategic depth to reach back to. That was a 
big driver.
    Here's the other fact, is--our aviation units today--Combat 
Aviation Brigades, Apache units--are inside the 1:2--1 year 
deployed to two years back home, the BOG Dwell that's referred 
to. That really drove us to come up with a alternative to the 
Aviation Restructure Initiative. Frankly, that initiative was 
budget-driven, when you really get inside that and look at it.
    The National Guard option, we looked at that, although a 
little more expensive. We used several of the analysis agencies 
to help us with this, with--inside of the Training and Doctrine 
Command. We settled that we--as a minimum, you need 20 
battalions in the regular Army so you can get them out the 
door. We learned a lot of lessons at the start of this war, 
with aircraft and aviation. Twenty-four is the right number in 
a Apache battalion to maintain the amount of combat power that 
you must have when these formations are deployed.
    For the Army National Guard, we see some opportunities also 
for them to work with combined-arms maneuver, particularly with 
the units that are closely located, whether it be Fort Bragg, 
Fort Hood, you name it. That's very important, because an 
aircraft not working with maneuver formations, sir, you know 
that's not very effective.
    In terms of cost, what we didn't want to do as a Commission 
is bring forth an option and not look in detail at this cost, 
and look at how we would offset those costs. Therefore, we 
looked, as an option, at the Black Hawk fleet. Not to say the 
Black Hawk fleet is not an important capability, because it is 
one of the capabilities that's requested all the time, whether 
it be inside the regular Army or for states and governors for 
what they do in the Homeland. The National Guard option said 
they could get by with only two battalions of Black Hawks, so 
we looked at a 3 percent reduction--modest reduction inside the 
Black Hawk multiyear to be able to offset that. The onetime 
cost to go from the AH-64 Delta aircraft to the Echo model, 
which we would recommend, is about $420 million. We thought we 
could offset that inside the aviation portfolio. The annual 
operating costs are about 165 million. Therefore, we brought 
forth a option that is really paid for out of that aviation 
portfolio, and that's what we tried to do.
    The other thing I think that's important inside of Army 
aviation and what the current environment shows is, we are 
rotating--or are going to begin to rotate the Combat Aviation 
Brigade out of Korea. Our professional judgment was to leave 
that permanently stationed in Korea. One, they've got to be 
ready to fight tonight. There's environment issues over there. 
You're in a combined environment over--with the Republic of 
Korea. That is very important, I think.
    The last point I would bring up--or two points--is, we also 
recommended retaining an 11th Combat Aviation Brigade. Now, we 
don't have--we would have to come, obviously, to the Congress 
to get additional funding for that. That's about $1.9 billion, 
because you'd have to buy additional aircraft to maintain 11 
Combat Aviation Brigades. The current environment says we need 
11 Combat Aviation Brigades in the regular Army.
    Then the other thing that I could talk about would be the 
increase in flying hours funding.
    Senator Reed. Thank you.
    Thank you very much, Mr. Chairman.
    Gentlemen, thank you for your service.
    Chairman McCain. Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    General Thurman, on the aviation question, it seems to me--
and you're recommending a stronger commitment to that, it seems 
like to me--what we learned in Iraq and Afghanistan was just 
how critical that aviation component is. Would you share your 
thoughts about the lessons learned and the shortages we found 
when we were trying to maintain operations in Afghanistan and 
Iraq?
    General Thurman. Yes, sir, Senator.
    As a division commander in Baghdad in 2006, the first call 
I always heard was, ``Troops in contact, requesting attack 
helicopters.'' The reason I bring that up, because this entity 
is one of the capabilities that changes dynamics on the 
battlefield. I would say aviation is going to continue to be a 
high-demand item in Afghanistan and also what--in Iraq or any 
other theater that we are going to get involved in. You see it 
when you review the war plans, and you see it when you review 
the requirements that are coming into the Joint Staff for Army 
aviation.
    Senator Sessions. Well, I think that's true. I was talking 
to a young former helicopter pilot, and flew over a group of 
Sunnis that we were supporting. They were all standing up and 
cheering. They were facing combat, and they'd call for air--
aviation support, and, when it came, he could see them cheer 
when they flew into the battle. I think it's a big deal.
    With regard--I understand that the President's Budget zeros 
out the Lakota aircraft that's going to be used to replace the 
old TH-67 trainers. Any of you aware of that and have any 
comment on it? Do we--we're well in the process of replacing 
those. I think you--it's odd and concerning to me that it would 
just be stopped.
    General Thurman. Senator, first thing in regard to the 
Aviation Restructure Initiative, we did not look in detail at 
the entire ARI proposal. We looked at--the question the law 
directed us to look at was primarily on AH-64s. I have heard 
that the--there has been an adjustment of funding levels inside 
of Lakota aircraft. I can confirm what you've just said.
    Senator Sessions. Well, we'll need to examine that, I 
think, and make sure.
    With regard to the Aviation Restructure Initiative, it's--
there was a claim of 12 billion in savings. You believe your 
plan--that sort of strikes a compromise--maybe General Ham--I--
whoever would like to answer this--your plan tries to offset 
any cost of this area. You think that you've minimized the cost 
by leaving, what, four in the Guard?
    General Ham. Yes, Senator. Certainly the recommendation 
that the Commission made is more costly than the Aviation 
Restructure Initiative. Again, as General Thurman mentioned, 
Senator, we didn't look at the entirety of ARI, we looked 
specifically at Apache. We felt it was important for us, if we 
were going to recommend to you something different than the 
Aviation Restructure Initiative, that we at least offer some 
off--some alternative sources of funding offsets for you and 
for the Army to consider.
    Senator Sessions. Thank you.
    One of the things that's concerning me about this is that, 
as a--in reality, General Ham, maybe Sergeant Major Chandler, 
it's easier to fire, eliminate a Active Duty military uniformed 
soldier than a civilian. As a result, it seems to me we've 
drawn down dramatically our uniformed personnel since the peak 
of the war. A lot of that was natural. I mean, we expected some 
of that to happen. Have we done enough to focus on reduction of 
civilian personnel? It seems to me it would take fewer 
civilians to support 450,000 Active Duty than it does to 
support 570,000 Active Duty. Have you given any thought to 
that?
    General Ham. Senator, we didn't delve into that issue 
particularly, but I would say--and this is, in hindsight, 
probably an area that perhaps we could have dealt with more 
fully--Army civilians are also part of the total force. It's 
regular Army, Army National Guard, Army Reserve, and the Army 
civilians that are so essential to sustaining soldiers in all 
the components. Having said that, I think certainly a 
comprehensive review is warranted. I would say the other 
component of that is certainly the contract force that provides 
many services to the Army, as well. We simply, because of time 
and scope, did not spend a lot of effort in that area.
    Mr. Lamont. I might add something to that, having been the 
former Assistant Secretary of the Army for Manpower, which had 
the civilian component within that organization. We reached a 
peak also in civilians about the same time as we reached in the 
uniformed side, with roughly 570-, the number being anywhere 
from 275,000 civilian upwards almost to 300,000. I'm advised--
and I can't say this as being totally informed, but I'm advised 
we're roughly at 235,000 Army civilians now, or at least headed 
in that direction. Perhaps some of the staff can confirm that.
    We have to be a little bit careful as we refer to the 
generating force. There's the operational force and the 
generating force within the Army, and the generating force 
takes up roughly one-third. Within that generating force is 
over 60 percent civilian. We have to be a little bit careful. 
It's not always proportional when we cut those down. You--I 
think your point, though, was well taken, that there may be 
some need to see some reductions.
    Senator Sessions. Thank you.
    Chairman McCain. Senator McCaskill.
    Senator McCaskill. Thank you, Mr. Chairman.
    I particularly noticed in the report those areas that were 
cited as an unacceptable risk, because it seems to me that we 
need to really pay attention to where you have determined we 
have an unacceptable risk. Contained in those things were--that 
you characterized as an unacceptable risk was chemical, 
biological, radiological, and nuclear response, and also 
military police. Now, I obviously am aware that Fort Leonard 
Wood is incredibly important to all of the above, so I would 
like--General Ham, if you could, briefly talk about what are 
the potential consequences to our strength and our capabilities 
if we are not really drilling down on this unacceptable risk 
that you all reported on.
    General Ham. Thanks, Senator. I would, first, recommend the 
classified annex, which gets into some of the particulars, 
particularly with regard to the chemical, biological, 
radiological, and nuclear units of the Army. In general, I 
would say that both of those capabilities that the Army 
possesses in its various components reflect a structure that 
was based on a different operating environment than exists 
today, with the necessity that the Army and the likelihood that 
the Army will operate in a chemical, biological, radiological, 
or nuclear environment at home or overseas, I think, drives 
some added emphasis in that area. There is--I would note, we 
believe that there is a particular role for the Army National 
Guard for domestic response in that area.
    With regard to military police, as many parts of the world 
are increasingly urbanized and soldiers will be operating in 
and amongst populations, the military police provide a very 
special capability that facilitates the ability of other Army 
units to operate in that environment. Again, it was our general 
assessment, in both of those capabilities--CBRN [Chemical 
Biological Radiological Nuclear] and military police--that the 
capacity within the Army across the three components has not 
kept pace with the demand.
    Senator McCaskill. I assume, since engineers were not 
cited, that you all are comfortable with our capabilities in 
the--with the Army Corps and the engineering force?
    General Ham. Yeah, Senator. Two different things. We didn't 
spend a lot of time with the Army Corps of Engineers. An 
absolutely vital part of the Army and its contributions to many 
facets of American life and foundational for the economy are 
well known to you and the members of this committee.
    With regard to the operating force of the engineer corps, 
we didn't find significant shortfalls in engineers, themselves. 
We found significant shortfalls in tactical mobility, meaning 
that engineer units across the Army, all components, many of 
them have much of the equipment that they require, but they 
can't move it. In simple terms, I may have my bulldozer, but--
--
    Senator McCaskill. Don't know how to get it there.
    General Ham.--I have no way to move my bulldozer from where 
it gets off at a port to where it's needed to be. That's a 
needed area to be addressed.
    Senator McCaskill. I also looked at the report as it 
relates for the generating force. I know, Mr. Lamont, you just 
referenced the generating force. Does the Commission believe 
the Army has cut too much from the generating force? How much 
risk has been taken in the Army's ability to expand the 
generating force, if necessary? I mean, obviously, you know, if 
we don't have the folks in place to train up what we need, then 
we are really in trouble. If one of you would address the 
issues around the--what is the appropriate size of the 
generating force? Do we really even know?
    Mr. Lamont. Well, let me take a stab at that.
    One, we are quite concerned with the generating force, as I 
just mentioned, and the--although the Commission did not delve 
deeply into that, I think you hit a key point when you said, 
``What's our ability if we have to expand?'' Those--the 
generating force are our trainers, our schoolhouses, our 
medical, and things of that nature. As the war progressed in, I 
want to say, 2008, 2009, 2010, the demand for troops grew, and 
we moved any number of troops out of the generating force and 
sent them off to war. They were replaced, often, by civilians. 
I think that that ratio remains much the same.
    We are quite concerned with the size of the generating 
force. I don't know that there is an ideal number, an optimal 
number. We'd better have them when we need them.
    Senator McCaskill. Do you think the ratio of 60 civilian, 
40 military is appropriate for the generating force? That seems 
awfully high civilian, which I understand how it happened and 
why it happened, but shouldn't we try to reverse that?
    Mr. Lamont. Well, speaking as--personally and not as a 
member of the Commission, I agree that that's quite bad. In 
fact, when I left, it was over 62 percent were civilian. That 
seems dramatically small--or large.
    General Ham. Senator, would it be okay if Sergeant Major--
--
    Mr. Chandler. Senator, just--another item of information. 
The Army uses modeling to develop force structure----
    Senator McCaskill. Right.
    Mr. Chandler.--for operational forces, but we don't 
currently have a model for the generating force.
    Senator McCaskill. For generating?
    Mr. Chandler. There is a great deal of work that's going 
into developing a generating force model. When the Army 
achieves that, I think you'll be able to have better 
granularity on the questions that you're asking.
    One thing I would tell you, is that there is no 
proportional ratio, from my perspective, having been in the 
training and doctrine business for quite a bit of time, that 
says, ``Okay, if you cut this from the operational force, then 
you can see a reduction in--a similar reduction in the 
generating force.'' If you've got to train soldiers at basic 
combat training, it takes a certain amount of people. That 
ratio never changes.
    I applaud the Army's effort for the generating force model. 
I'd ask them to move on that as quickly as possible. Then I 
think you can get to the real--instead of throwing darts at a 
dartboard--to a real level of granularity on where the 
generating force should be. I think most of us are uneasy about 
the fact that we've cut it to--maybe into the bone.
    Senator McCaskill. Thank you, Sergeant Major.
    Thank all of you for your work on this.
    Thank you.
    Chairman McCain. Senator Ayotte.
    Senator Ayotte. I want to thank all of you for your 
distinguished service and work on this Commission.
    I know that the Chairman had asked you about the total 
force size and thinking about, What's the optimal size of the 
Army? That's what I would like to hear from you. Let's--given 
the threats we're facing around the world, given the challenges 
that we face--as I understand, General Ham, you also noted that 
the President's fiscal year 2016 plan does not take into 
account recent changes in strategic environment. Can you tell 
us what is the optimal size for our Army? Because I think it's 
important for us to understand what the optimal size is if we 
really want to protect the American people and not in a budget-
constrained environment. I understand we're in that, but we 
should understand--With the threats we're facing, what is the 
number, if you could decide that number today?
    General Ham. Yeah, Senator, it is--it's a great question, 
and a tough question--it is important to note that, of course, 
that was not the task that we had in the law. The task that we 
had in the law was constrained by resourcing. That's how we 
approached our work.
    I think I'm on a firm ground that I would speak for the 
Commission that said if you--if the law had not contained that 
constraint, if it didn't say you have to provide 
recommendations----
    Senator Ayotte. See, this is the great thing about 
hearings. We can sort of ask anything, even if we----
    General Ham. Right.
    Senator Ayotte.--said ``in the law.''
    General Ham. Right.
    Senator Ayotte.--I'm asking for your opinions today.
    General Ham. Yeah. The Commission--I think the Commission 
did not address that. I would offer you my personal opinion 
that would say--again, let me backtrack and speak one moment 
for the Commission.
    We were careful in the words that we chose. We chose 
``minimally sufficient'' at--of an Army of 980,000. Minimally 
sufficient. I think it's a real question to say, Is that the 
Army the Nation wants? Do--does America want a minimally 
sufficient Army? I think that's a discussion for many to have.
    I think if the--if additional funding were available, then 
certainly a larger force--again, let me speak personally--I 
would say, halt any further drawdown now, and make a more--much 
more comprehensive assessment of the operating environment, and 
then see what that cost may be, and then come back to this 
committee and others to say, ``Here's what we think the bill 
is.''
    Senator Ayotte. ``Minimally sufficient,'' to me, doesn't 
sound like protecting our national security interests. That's 
really--I'm not going to ask you to give me an opinion as a 
Commission, but you, given the breadth of experience on this 
panel, based on your experience, General Thurman, where do you 
think we need to be, versus putting aside the budget issue for 
a moment? Because this is an important, I think, understanding 
that we have to have of where we are versus where we should be.
    General Thurman. Yes, ma'am.
    Senator, I will tell you, I'm very concerned, because I 
think we've got major warning signs in front of us right now. 
Not speaking as a commissioner; I'm telling you what I see as I 
watch the resurgence of Russia--they're basically in Syria, 
they're conducting their own NTC rotation. They have gone to 
school on us, and, as I watch that unfold; and then I turn to 
Korea and I watch what's occurring over there in Korea today, 
it's probably more dangerous today than it's been in a long 
time, given we're dealing with a maniac over there, frankly. 
Those forces over there have got to be trained, ready to fight 
tonight, because it's a miscalculation on either side that 
could get us in a war.
    I think, if you look back what happened over the course of 
the last few years when we had the Budget Control Act go into 
effect, the assumptions have changed. One, we're not out of 
Afghanistan, probably putting more back in. We've got ISIS 
[Islamic State of Syria], ISIL [Islamic State of Iraq and the 
Levant], Iraq, Syria. We've got Africa, the--North Africa, that 
whole issue that's going on in there. One of the 
recommendations that we got in the report is to go back and 
review the national security strategy that we currently have in 
the budget, because I believe it's seriously out of balance 
and--as I look at this.
    The number--there needs to be another analysis, in my 
opinion, to go back and look at, What is the right size Army 
that this Nation needs? Frankly, it's going to be expensive, 
and we've got to, I believe, come to grips with that. The--
frankly, the assumptions that--when we reduce the force, 
they're not true anymore. We have a set of failed assumptions. 
That's my opinion.
    Mr. Chandler. Senator, if you don't mind, I'll add my two 
cents. I think I can be blunt. I don't think it's wise for us 
to consider growing the Army until we totally use the entire 
force and then determine from there what additional 
capabilities we may need. We've used the Active component, the 
regular Army, significantly, and the Guard and Reserve less. We 
need to use and execute the total-force policy to get the Guard 
and Reserve engaged on a predictable rotational basis----
    Senator Ayotte. Well----
    Mr. Chandler.--which will allow us----
    Senator Ayotte. I don't want to interrupt, here, because I 
know we have a vote, but I'm not sure, if I asked my Guard and 
Reserve members if they've been used less, given the nature of 
many of them holding down civilian jobs at the same time, they 
would necessarily agree with that calculation, especially with 
what we've had to do in Iraq and Afghanistan. We couldn't have 
done it without them.
    Mr. Chandler. I would tell you that the vast majority of 
guardsmen and reservists that we talked to want to be utilized 
more frequently, in a predictable manner.
    Mr. Lamont. I would concur with that, by the way, as a 
traditional guardsman for 26 years. We found this every visit 
we went, ``If you're going to train us up and then not use us, 
why are we here?'' It's much different than my years, back in 
the '80s and early 1990s.
    Senator Ayotte. Well, I have great confidence in our Guard 
and Reserve, but I don't think that gets to the fundamental 
question. Because they're asking--we're asking to downsize 
them, too, in terms--I mean, the decisions you're making at 
today are how much training, how much aviation assets they're 
going to get, what are they going to get for their readiness? 
To me, I think it's a total-force question for the Army, and 
it's one that we need to face, of: Where are we, versus the 
threats that we're facing? It seems to me that--as I hear some 
of these threats, that it's time for us to really think about 
not drawing down, but looking at, How do we make sure we can 
protect this Nation? Also that we don't drain our people. You 
know, the dwell-to-deploy ratio and really making sure our most 
precious resource, that they have what they need, and the 
support that they need.
    Senator Reed [presiding]. Well, thank you very much, 
Senator.
    I--the Chairman is voting. Most of my colleagues are 
voting. They shall return. I think someone famous once said 
something like that. I'm going to take the opportunity, and, as 
soon as one of my colleagues arrives, I'll recognize the 
person.
    Sergeant Major, what's the most interesting, insightful 
thing that some of the soldiers told you when you were out with 
your colleagues in the field that we should know?
    Mr. Chandler. Well, I think the one thing that I would ask 
the committee to take away is, the soldiers are extremely proud 
of what they do, regardless of what component they're in, and 
that they want to serve, they're proud to serve, their families 
are proud of what they do. They want to be ready to do what it 
is that the Nation asks us to do, asks them to do. You know, 
whether you're--you're dusty and sweaty and haven't taken a 
shower in 3 days at the National Training Center, you know, 
these kids were motivated. They were going to finish their 
final live-fire objective. They were excited about what they 
were doing. If you went to a drill and saw what some of these 
kids are doing, yeah, they don't want to do a lot of mandatory 
training, they don't want to look at PowerPoint slides, they 
want to get after it, they want to be what they came in the 
Army to be, which is a United States Army soldier of the proud 
tradition that wants to do the Nation's bidding.
    You can't--having been away from the Army for a year and 
coming back and trying to be objective, you can't but be filled 
with pride in the service that these kids--we--I spoke to a 
specialist in--at--and actually came to a hearing in 
Washington. This kid had tried to do many things before he 
entered the Army, but the Army gave him a sense of purpose and 
a desire to do and be a part of something bigger than himself. 
He was almost in tears, moved me to tears, about his sense of 
who he was and what he was about. That's the thing I'd ask you 
to take away. These kids are proud of what they do. They need 
the Nation's support.
    Senator Reed. Thank you very much, Sergeant Major.
    Again, thank you, gentlemen.
    On behalf of the Chairman, I would like to recognize 
Senator Ernst.
    Senator Ernst. Thank you.
    Thank you, gentlemen, so much for being here today and for 
your testimony. I certainly appreciate all the years of service 
that all of you have given.
    I'd like to start with some discussion about the State 
Partnership Program, which has been really important to Iowa 
and many of our other states. Throughout your report, you 
stress the need for the Army to enhance its total-force 
approach to ensure the Army can meet its mission requirements, 
and the importance of the National Guard in achieving that 
goal. I do appreciate the thoughtful analysis of the importance 
of the Guard, especially, since 9/11. In particular, I would 
like to talk about the State Partnership Program. I do think 
that this program is key in allowing our Army and our country 
to better partner with foreign countries and develop these 
nations and enhance our security and the security of our 
allies, and doing so at a low cost to American taxpayers.
    Last week, this committee had a hearing on the Asia 
Pacific, and the witnesses stressed the importance of SPP 
[State Partnership Program] and their belief that it should be 
expanded more into the Asia Pacific, in particular. Is this a 
program that was looked at during this study? If any of you 
could address that, or, General Ham, if you would like to take 
that. National--the impact to our Army with use of the Guard as 
well the State Partnership Program, was that looked at, at all?
    General Ham. Thanks, Senator. We heard, loud and clear, 
from all six geographic combatant commanders, their praise and 
reliance upon the State Partnership Program, and every one of 
them wants that program, not only to be sustained, but to be 
increased. They're looking for more and more opportunities to 
expand State Partnership into other nations, particularly new 
and nontraditional partners in some parts of the world. I would 
agree with you, and it's certainly what we found in our work, 
was the State Partnership is a very low-cost, high-payoff 
program for the Army and for the Nation.
    Senator Ernst. Thank you.
    Any other thoughts, gentlemen, on that? Yes, sir.
    Mr. Lamont. Yes, ma'am. Being from your neighboring State 
of Illinois and a guardsman, and our partner was Poland. In my 
previous life, as the Assistant Secretary of the Army, I 
happened be in Poland at the same time as the Illinois Adjutant 
General. I was absolutely irrelevant to the Polish army, 
because their connection was with the Illinois Guard. That 
partnership is so vital to our country partnerships; it is 
extremely important. They didn't care about me or anybody else, 
but they cared about the people they worked and served with, 
visited with, went to war with. Poland, as you probably know, 
have provided us, and maybe still provide us, with a brigade at 
least once a year when we were in Afghanistan and Iraq. What 
that saved United States taxpayers, for instance, and our 
soldiers, was enormous. It is vitally important, as you know.
    Senator Ernst. Very good. Well, I appreciate that. Iowa has 
a very strong partnership with Kosovo, and, through that, we've 
developed--even outside of our State Partnership Program, 
between our soldiers and Kosovo Security Forces, have developed 
now an economic relationship through our State with the nation 
of Kosovo. Just the last couple of weeks, we opened a brand new 
consulate in Des Moines. That's our State's first consulate. We 
were really excited about that. That started and grew out of 
the State Partnership Program. I appreciate your thoughts on 
that.
    I'd like to turn to a different topic just very briefly. 
One of the recommendations is to reduce mandatory training, as 
prescribed by the Army Training and Leader Development 
Regulation. While I agree with this recommendation, I can't 
tell you how many times I have spoken to Active-component 
commanders as well as Reserve-component commanders, and they 
have said that they are assuming risk rather than mitigating 
the risk due to the mandatory training requirements. The over-
burdensome requirements mean that commanders aren't able to use 
that time to train on their unit's mettle or their mission-
essential task list, which ultimately harms the readiness of 
their units and the Army as a whole. You know, we're in a 
politically correct environment. We seem to be very risk-
averse. Can you talk to that, maybe, a little bit more about--
and maybe, Sergeant Major, if you would address this--on how we 
get back to being soldiers, but also giving back some of that 
risk?
    Mr. Chandler. Well, thanks for the question, Senator.
    The--I would start off by saying that the Army is making 
inroads to reduce mandatory training, in line with the doctrine 
of mission command. The mitigation of risk is by the higher 
commander. It's--if I was in command of a unit, it would be my 
responsibility to tell my higher commander, ``These are the 
areas of risk that I am assuming, based off of what you told me 
to do.'' The challenge really is even exacerbated for Army 
National Guard and Army Reserve units because of the limited 
amount of time, as you well know, for IDT [Inactive Duty 
Training] weekends or battle assembly weekends. Where do you 
find that balance? I applaud the Army's effort. The Commission 
does, highly recommends that the Army move out a little bit 
quicker on reducing the overhead burden, so to speak, of the 
mandatory training requirements. Look, we ask these commanders 
to make life-and-death decisions on the battlefield. We should 
entrust and empower them to make those same decisions at some 
home station or IDT battle assembly weekend event. Same with 
Active component. We're not going to get to the level of 
readiness that we need to if we continue to add necessary, but 
mandated, requirements with a certain frequency. The commander 
knows the unit. They should be able to make the decisions on 
when and where they need to make the mandatory training occur 
and still maintain an acceptable level of readiness.
    Senator Ernst. Very good. I also agree with that, Sergeant 
Major. Our company commanders and first sergeants, our 
battalion commanders and sergeant majors know their soldiers 
best, and they know what they need to work on. I'm glad to see 
that we have a recommendation that moves us in that direction.
    Thank you much, Senator Reed.
    Senator Reed. On behalf of the Chairman, Senator Donnelly, 
please.
    Senator Donnelly. Thank you, Mr. Chairman. I will pass to 
Mr. King.
    Senator King. Thank you, Mr. Chairman.
    First, an observation. The budget control caps were set in 
2011. I was just making some notes. That's pre-ISIL, pre-Syria, 
pre-Ukraine, pre-South China Sea, pre-North Korea launch. Here 
we are, trying to fit the defense posture of this country, 
subsequent to all those events, within caps that were 
established five years ago. Now, they were adjusted somewhat 
last year, but not all that much. It just--it--I mean, I'm all 
for planning and thinking ahead and having constraints, but 
when the constraints keep you from responding to the threats 
that the country is facing, it's just not a rational or prudent 
policy, it seems to me.
    I wanted to start with a question. General Ham, when you 
made your recommendations, were you consciously or 
unconsciously operating under those caps? In other words, are 
your recommendations based upon those budget realities or were 
they based upon what your best judgment of what the Army needs 
to look like in order to meet the threats that this country 
faces?
    General Ham. Senator, a little bit of both. Certainly, the 
judgment of the eight commissioners--lots of experience in a 
lot of different fields represented there. Again, we were 
instructed in the law that we had to conduct our assessments 
and make our recommendations consistent with an anticipated 
level of future resource. It wasn't further defined. You could 
kind of pick and choose, What do you think the anticipated 
level of future resourcing would be? It was our general 
assessment that it's unlikely, at the time that we were doing 
our work, that there would be a significant increase in 
funding. We--that's why we--we've centered on this notion of 
the level of funding in the President's Budget for fiscal year 
2016 in the--and was kind of the--again, the floor of ceiling. 
Of course, as you know, Senator, we're not at that level yet. I 
think that's at least a start point. It was--I guess to 
summarize, it was a--looking at the anticipated security 
environment, but certainly informed by the level of funding we 
thought might be attained.
    Senator King. You understand the thrust of my concern.
    General Ham. I do, sir. One of our most important 
recommendations, already been referred to, is that, because the 
global security environment has changed so significantly from 
those days of budget and strategic plans, it is time for, we 
believe, new strategic guidance.
    Senator King. I certainly agree with that wholeheartedly. 
To put a point on this, you recommend going down to 30 Active 
BCTs [Brigade Combat Teams], which is actually less than we had 
before September 11th, and then perhaps a reduction to 28. 
Here's my question. How long does it take to recruit, train, 
and equip a BCT if we wanted to increase that number, from a 
standing start?
    General Ham. Senator, let me take a stab at it and maybe 
ask the Sergeant Major of the Army to comment.
    I actually had to do this when I was a division commander. 
A brand new infantry Brigade Combat Team was formed, stood up, 
equipped and deployed. With all of the very, very high 
priority--this was in the mid-2000s--it took about 18 months to 
be able to do that. I would say in a--on a more normal basis, 
it would probably take--and again, that was in a period of 
almost unconstrained resources--typically, I would say two to 
three years would be a more likely timeframe to start from 
scratch and build a Brigade Combat Team.
    Senator King. That reminds me of the old thing I learned in 
Driver's Ed, that your headlights only illuminate a certain 
distance down the road, and, if there's a wall 1 foot beyond 
that distance, you can't stop. We're not going to have the 
ability to respond to a threat if we're talking a minimum of 18 
months to two and a half to three years. I mean, that's the 
risk that we're undertaking as we make--as we're making these 
decisions.
    I--General, your reaction to that kind of----
    Mr. Chandler. Senator, I would say--and I agree with what 
General Ham said--the greatest challenge is the leader 
development in order to fill that brigade.
    Senator King. That's not something you can just turn off 
and on.
    Mr. Chandler. No, those--you know, it takes 20 years to 
make a battalion commander or a brigade commander. I mean, it 
takes 20 years to grow a sergeant major, 15 years to grow a 
first sergeant. Expansion will get the people into the Army, 
will get the equipment to where it needs to be, but to find the 
leadership in order to fill out that organization and make it 
effective takes time. There's just not a lot of them to spare.
    Senator King. Okay. I have the same concern about the end-
strength numbers, that those were numbers derived from a 
different strategic world, and that we really do need, as you 
say, a strategic reset to take account of the current 
challenges.
    Yes, sir.
    General Thurman. Senator, I was a G3 of the Army for three 
years, and I was there for the grow-the-Army piece, where we 
grew Brigade Combat Teams up to 43 Brigade Combat Teams. I was 
there for Iraq surge, Afghan surge, and watched what goes on 
inside the Army. The biggest issue is manpower because of what 
it takes to get the right people in these jobs. It varied on 
the length of time. Also, as division commander, my experience, 
just--much like General Ham, we deployed a brigade for a 
specific set of missions, and we were able to man, train, and 
equip that in 18 months. That's a stretch. That's a big 
stretch. Again, that's having all the resourcing you need, with 
the right levels of modernization.
    Senator King. Two----
    Mr. Chandler. That's something that's a concern. Yes, sir.
    Senator King. Two days ago in this committee--and I'll end 
my comments; I know I'm over time--two days ago, we had General 
Clapper here, who said that, in his 50 years of service to this 
country, he has never seen a more diverse or serious set of 
threats. At the same we're getting that testimony, we're 
talking about reducing end strength and developing a situation 
where it's going to be very difficult to respond to a crisis.
    Thank you, Mr. Chairman.
    Thank you, Senator Donnelly.
    Mr. Lamont. Senator, I just want to point out one thing. In 
that recommendation for perhaps removing two ICBTs--IBCTs, that 
was conditional. If there were no other alternatives inside the 
Army, the resourcing, or anyplace else, that's what we might 
have to look for. That was a big ``if.''
    Senator Reed. On behalf of the Chairman, Senator Tillis, 
please.
    Senator Tillis. Thank you, Senator Reed.
    Thank you all for being here, and thank you for your 
service.
    I have a question. How do--what are your opinions about the 
current balance between the number of general officers in the 
Army and the current force structure, overall end strength?
    General Ham. Senator, we did not assess that. I would offer 
a personal opinion, and--just from my own personal experience. 
That is a thing that's continually looked at to see if it's 
quite right, not only in terms of number, but in terms of grade 
structure--one, two, three, or four stars. The Army has made 
some adjustments over the past couple of years. It is a 
constant evaluative process.
    Senator Tillis. Any other comments?
    [No response.]
    Senator Tillis. Talk a little bit about acquisition and 
reform. To what extent have you all looked into some of the 
reforms that are detailed in the fiscal year 2016 NDA. Do you 
agree with them? Do you think that they make sense? Are there 
any concerns with them?
    General Ham. Senator, again, it got outside the mandate 
given to the Commission, so we didn't spend a lot of time on 
acquisition reform or, for that matter, for modernization. 
Clearly that's a--an issue--in order for the Army to keep apace 
with the technological advances, for our soldiers to be 
equipped so that they can go into battle, as we say, never into 
a fair fight, I think modernization and the acquisition reform 
that will lead to cost-effective modernization are clearly 
critical items for the Army and for the Nation to address.
    Senator Tillis. Yeah, it seems to me that we really need to 
have that considered in any kind of overall assessments of the 
Army or any branch, because we're--the money and the 
inefficiency that we have there is at the direct expense of 
other things that we need to spend our money. This is one area 
I would like for you all to touch on. In my time--I'm from 
North Carolina, and spend a lot of time down at Camp LeJeune 
and Fort Bragg. One consistent theme that I'm hearing down 
there is a concern that our readiness levels are at a very low 
point. If you take a look at Fort Bragg and you're talking 
about the number of jumps that they want to do now, at--we've 
had this discussion about Pope Air Field and little bit of a 
disagreement with the Air Force on what we should do with those 
assets down there. That stimulated a discussion about just how 
many jumps we should have. It's substantially higher than what 
they've been doing over the past 10, 15 years. My concern is, 
that points to, I think, a readiness deficiency. To what extent 
do you all agree with that?
    Sergeant Major, I see your shaking your head. We'll start 
with you.
    Mr. Chandler. Well, Senator, I think, you know, the Army 
developed a capability called a Rapid Equipping Force, which 
was able to generate and fill requirements much more quickly 
than I think the normal acquisition process takes. My only 
recommendation was, maybe there should be some look at how that 
process worked, and does it apply to the overall acquisition 
program. You know, I think there were some decisions made about 
how many jumps folks would make in airborne units, because of 
the necessity to get them prepared to do the directed mission 
they had in Iraq or Afghanistan. Getting those guys back, 
jumping of planes--guys and gals jumping out of planes is a 
great thing. Personally, I'm all for it. How that fits into the 
overall picture, I'm not aware of right now.
    General Thurman. I would add two points to your question. 
That has to do with acquisition. I think it is right to do 
acquisition reform. It takes too long to field equipment. Why 
does that happen? It happens because we never seem to get the 
requirements right. You have to lock down the requirements in a 
more timely manner. I mean, if you look at the Army, the Army's 
track record is not good. Ground combat vehicle, armed aerial 
Scout, all those were killed because, over time, it takes too 
long to field that equipment. Requirements change, threats 
change. That is right, in my opinion, to really take a good 
look at that.
    I think, in terms of readiness, there's always the question 
about proficiency verses currency. We need to be proficient. 
That comes to light in aviation. Because, right now, I believe 
aviation is on the ragged edge. That's our recommendation on 
increase in flying hours. That's flying hours to support 
combined arms maneuver with maneuver formations. It's one thing 
to go fly a helicopter, it's another thing to integrate it in a 
combined arms formation. That's what's missing.
    The recommendation we had, which is going to cost some 
money, was to increase flying hours, not only for the regular 
Army, but also for the Reserve components--Army National Guard, 
Army Reserve--to get their proficiency levels up. Because 
that's not happening out there, even today. That's what we 
found when we went around and visited units.
    Senator Tillis. Thank you.
    Well, in closing--and I know this is a theme that the Chair 
has struck many times in the year that I've been here--I'm 
trying to figure out how we have an--in any discussion about 
things that we can do to better prepare men and women, and 
better equip men and women, we have to talk about acquisition 
reform, we have to talk about why I've got in my office a 600 
page RFP for the new-generation handgun. It's got 39 pages 
that--and when I go back to the Department, they said, ``But, 
it's only 39 pages of specifications.'' I said, ``Great. Then 
that means we can delete everything else that doesn't speak to 
the complexity of the process and the selection process?'' Of 
course not. The reason that I try to bring these things up, 
even in things where we're talking about capability and 
readiness, that sort of behavior has a direct deleterious 
effect on our ability to provide men and women with training 
and the equipment they need to bring the fight to the enemy. We 
have to make sure that it's integrated and stay on the front 
stage. I know that--I know the Chair agrees.
    Thank you. I've gone over my time.
    Chairman McCain [presiding]. Well, I thank Senator Tillis.
    I know our panelists agree that it harms our credibility 
when we ask for more funding and we have a $2 billion cost 
overrun on an aircraft carrier and we have, starting with the 
FCS [Future Combat Systems], a long line of programs where 
billions of dollars were wasted, with no result. I appreciate 
the emphasis that you have given on this issue. We have to fix 
it.
    Senator Donnelly.
    Senator Donnelly. Thank you, Mr. Chairman.
    I want to thank all the witnesses.
    Indiana doesn't have a large Active Duty presence for many 
of the services, but it's home to our Nation's fourth-largest 
National Guard unit. Many of the 14,000 Hoosiers who serve in 
the Guard also have spent time on Active Duty. In your report, 
you write of how disheartening it was to hear the discord 
within the Army ranks, pitting the Army National Guard against 
the regular Army. I heard that same disheartened sentiment 
among our Hoosier Guard members. From the top down, their focus 
has been on serving our country, our State, and our local 
communities. I appreciate your call for leaders in the DOD and 
in Congress to do our part to keep these conversations 
professional and respectful while keeping in mind that there 
can be different viewpoints on how to best accomplish these 
objectives. As all of you know so well, one of our hopes in 
convening the Commission was to get objective input as to how 
to resolve this difference and others.
    General Ham, how do you believe the findings of the 
Commission will help support the reset in that relationship 
between the regular Army and the Guard?
    General Ham. Senator, I believe many of the recommendations 
that we make with regard to the total force, whether it be a 
legislative change that would allow for the assignment of 
regular Army soldiers into Army National Guard units, multi-
component units that bring soldiers from all three components 
together in common mission, in my view, also increased 
readiness within the Reserve components on the cyclical basis, 
called the Sustained Readiness Model, that the Army has 
developed, and in the operational employment of the Reserve 
components along with the regular Army. I think all of those 
tend to build this sense of one Army. The same would be true 
for leader development courses for noncommissioned officers and 
officers.
    General Milley, the Chief of Staff, who you all know very 
well, begins many of his addresses to soldiers of all 
components, he said, ``Look at your uniform. Over your breast 
pocket, it says U.S. Army. It doesn't say regular Army, doesn't 
say Army National Guard, doesn't say Army Reserve. It says U.S. 
Army.'' That common start point is--I think is a place to 
begin.
    Senator Donnelly. Just to follow up on that, in the 
recommendations, what do you see as the most vital in helping 
to create that one Army and to resolve that tension?
    General Ham. Senator, I'll offer two that I think are 
vitally important, and others may have some other views.
    The first and foremost, I think, is the overarching 
recommendation to sustain the All-Volunteer Force. I think, if 
we don't do that, the rest of it might not matter. Secondly, I 
think is this element of adequate funding, reliably and 
predictably developed and delivered to the Army in all of its 
components, I think will go a long way to removing some of the 
doubt and uncertainty that exists.
    Senator Donnelly. Well, I'd like to ask the panel a 
different question, which is--we have 63 different 
recommendations for the future of the Army, and we're in a 
resource-constrained environment. Of those 63, what would each 
of you prioritize as your most important recommendation, going 
forward.
    Mr. Lamont?
    Mr. Lamont. Manning and resourcing the total force. We're 
very concerned, as we've mentioned, about keeping our levels of 
manning such that we can respond to acceptable levels of risk. 
It's not just enough to have a larger Army. You'd better have 
them trained, equipped, and ready, or you don't gain a whole 
lot. It's going to be a resourcing--frankly, a resourcing 
picture for that manning and readiness level, as you mentioned.
    Senator Donnelly. Thank you.
    General Ham?
    General Ham. Senator, I think I would fall back to 
recommendation 6, the Congress and the administration should 
return to predictable and responsible budgeting processes that 
meet minimum funding requirements.
    Senator Donnelly. General Thurman?
    General Thurman. Thanks, Senator.
    I would agree with General Ham on that. However, I would 
add that I believe readiness in maintaining the All-Volunteer 
Force is fundamental to this country. Why do I say that? I'm 
very worried about the declining population that is actually 
eligible in this country to serve in the United States 
military. Less than one-third is what can meet standards, in 
terms of the medical fitness, the aptitude, and--and that's 
declining. I think that's something that we've really got to 
pay attention to as we go down the road.
    Senator Donnelly. Thank you.
    Sergeant Major?
    Mr. Chandler. Senator, I think--it's hard for me to 
prioritize, because each one of these are interwoven in some 
aspect of preserving and sustaining the All-Volunteer Force in 
a total-force policy. If you're going to pin me down, budgetary 
stability, budgetary predictability is important.
    I want to give you one area that I think is a resounding 
theme throughout this. This is the Army culture, the culture 
that all three components are interwoven, that rely on one 
another, that we have to do some work in order to break that 
culture down. That are--where many of the recommendations come 
from, especially in multi-component units and leader 
development training. I mean, if people don't want to get 
along, one of the best ways you can solve that is, make them 
stay in the same room until they work it out. I'm sure you 
probably have had some experience with that here.
    Senator Donnelly. Indeed, I have.
    Mr. Chandler. I had the opportunity to serve with the Army 
National Guard unit in Mississippi for three years as a regular 
Army soldier, and that was probably the most important 
assignment for me in my military career culminating as the 
Sergeant Major of the Army, because I was forced to be in an 
environment, post-Desert Shield/Desert Storm, right after the 
brigade that I was assigned to had been declared unfit for 
deployment, to be a regular Army unit stationed in the same 
armory with the same persons. I was forced to change my view of 
what the Army National Guard does for the Nation. I've never 
forgotten it. I still stay in contact with some of those 
individuals that were in that brigade.
    That's the type of thing that, when we talk about the 
total-force policy and the questions that you asked us, that we 
really have to get after. It's not just a policy, but that the 
policy is executed at the grassroots lever. The questions that 
you had about, you know, some--what I think--very 
unprofessional and uncalled for comments in open media and so 
forth--will get resolved over time, but it's not going to get 
changed in one administration. It's going to take, you know, a 
commitment to a long-term vision to make this work for what's 
best for the Army and the Nation.
    Senator Donnelly. Thank you so much.
    Mr. Chairman, thank you.
    Chairman McCain. Senator Lee.
    Senator Lee. Thank you very much, Mr. Chairman.
    Thanks, to all of you, for your testimonies today and for 
devoting a year to this Commission and to the future of the 
Army.
    One of the key issues that Congress asked your Commission 
to report on was the Aviation Restructuring Initiative, or ARI, 
and the future of combat aviation in the Army. In 
recommendation number 57, the Commission recommended retaining 
four Apache battalions in the National Guard, each with 18 
aircraft, and committing to using the National Guard Apache 
battalions regularly. The report states that this would provide 
more wartime capacity than ARI, and would be more cost-
effective. Can you please discuss for us and explain to the 
committee, if you would, why you determined that the--that 
surge capacity and strategic depth were important factors in 
your recommendation--in developing and making your 
recommendation, and what problems would the Army face if it 
lost strategic depth, you know, provided by the National Guard, 
of Apache battalions.
    General Thurman. Senator, thank you.
    First off, we looked at four areas, after extensive 
analysis. We visited over 31 aviation units across all three 
components. The first thing we looked at was wartime capacity, 
the ability to respond and meet the war plan requirements, and 
then wartime surge capacity, and then to ease the burden on 
peacetime deployments, and then we factored in the cost, 
because we didn't want to come forward with a recommendation 
without some cost offsets. You mentioned strategic depth. There 
is no strategic depth if you move all of the AH-64 aircraft 
inside the regular Army. I would refer you to the classified 
annex. It has a lot of our work--analytical work in there that 
talks about the requirements for AH-64 attack aircraft, which, 
in a lot of cases, was very short as we looked at that.
    One--to get to your point--it takes time to train an Apache 
aviator. That's a very complex system. I am a rated AH-64 Alpha 
pilot, not a Echo or a Delta model. That is a very 
sophisticated aircraft. Not only do you have to master that 
skill of flying the platform, but, one, can you integrate it 
with combined arms maneuver? We felt there needed to be depth 
in the force with--and what the recommendation calls for, it 
would give you about 280 pilots inside the National Guard--Army 
National Guard.
    Now, the other point was, these formations need to be put 
on a rotational cycle, inside the force generation and actually 
utilized so it could offset the stress that's on the current 
peacetime deployments. That's what we tried to do. We offered 
up some cost, modest cost, in terms of reduction of Black Hawk, 
to offset what it would cost to put four battalions inside the 
Army National Guard. That is in the report. Again, a onetime 
cost for the Delta-model-to-Echo conversion, which would be 
required, is roughly a $420 million, and then another 165 
million, in terms of operating and sustainment cost, is what we 
did.
    Senator Lee. Right. Right. No, I'm pleased to hear the 
careful manner in which you've gone about it. I would--my staff 
and I have visited with members of the Utah National Guard's 
1st Battalion, 211th Aviation Regiment, and there's definitely 
a degree and quality of Apache experience in those Guard units 
that I don't think can be replaced or replicated or matched 
anywhere else.
    Last fall, Chief Warrant Officer Kent Jones, one our 
National Guard instructors, reached the milestone of 10,000 
flying hours in the Apache, which is a record. The past two 
years, I've been greatly concerned about using this type of 
experience. How and to what extent did the Commission view 
these issues of pilot and crew experience as you factored in--
those into this analysis?
    General Thurman. Senator, we looked at that as a--an 
investment, in terms of personnel. Absolutely you would want to 
retain some of that experience, because if you got into a major 
conflict, that's going to be required. If you go back to the 
Iraq War, we called a lot of our aviators to Active Duty that 
were retired, because we needed that experience back. Again, 
you don't build that overnight, and it takes time to do that.
    Senator Lee. Great. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Lamont. You might want to know that, in fact, one of 
the key members of our staff, on the aviation side, came from 
the Utah National Guard as an aviator instructor pilot.
    Senator Lee. Sounds like you know how to pick them. That's 
great.
    Thank you.
    Chairman McCain. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you----
    General Ham. Senator, may I--Mr. Chairman, if I may, just 
for a moment, correct the record. General Thurman said that 
he's a rated pilot. I would, for the record, note General 
Thurman ``was'' a rated pilot. I love him dearly, but I would 
not get in an aircraft with him today.
    [Laughter.]
    Chairman McCain. The airways are safe.
    [Laughter.]
    Chairman McCain. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you all very much for your past service and for your 
willingness to be part of this Commission and work on this 
report.
    A recent RAND report found that current NATO [North 
Atlantic Treaty Organization] force structure in Europe, and I 
quote, ``cannot successfully defend the territory of its most 
exposed members. In the worst-case scenarios for NATO, Russia 
would be able to conquer the capital of Estonia in 36 hours.'' 
The Commission recommends that the Army should forward-deploy 
an Armored Brigade Combat Team in Europe and convert the U.S. 
Army-Europe Administrative Aviation Headquarters to a 
warfighting mission. I wonder if you could elaborate. I don't 
know, General Ham, if you would like to do that or if there's 
someone else on the panel who would like to elaborate on these 
recommendations and our need to bolster United States Forces in 
Europe to deter Russian aggression.
    General Ham. Thanks, Senator.
    Let me begin, and I suspect a couple of others may want to 
weigh in.
    With regard to the Armored Brigade Combat Team, there are 
two issues at play here. The regular Army has nine Armored 
Brigade Combat Teams. They're presently all consumed in 
rotational assignments. There's an Armored Brigade Combat Team 
that rotates to Korea. Under the model that basically is 
``three to make one,'' there are three. Same for the Mideast, 
and the same for Europe. There's no excess capacity in the 
regular Army to meet an unforeseen contingency with Armored 
Brigade Combat Teams. We felt there was needed capacity.
    One way to get additional capacity would be to forward-
station an Armored Brigade Combat Team in Europe, thereby 
freeing up two other regular Army Armored Brigade Combat Teams 
for unforeseen contingencies, but it also has the significant 
effect--we believe, has a significant effect on both deterrence 
against Russian aggression and assurance of the NATO allies. 
They are sorely lacking in armored brigade--or armored 
capability, and we think a United States brigade would be 
helpful.
    Senator Shaheen. Does the National Guard have any role to 
play as we're looking at how we can cycle forces in and out?
    General Ham. Yes, ma'am, absolutely they do. The--in our 
discussions with the Chief of Staff-Army, Chief National Guard 
Bureau, they're already looking at, How can you, on a 
predictable basis, employ those Armored Brigade Combat Teams--
six, I believe, in the Army National Guard--how can you employ 
them on that rotational basis? I think, in the not-too-distant 
future, it might not at all be unusual to see an Army National 
Guard Armored Brigade Combat Team rotate for a year to Korea or 
to the Mideast.
    Senator Shaheen. Thank you.
    I think, given the challenges we're--that Europe is facing 
right now, that looking at how we can provide that kind of 
additional support is really important.
    I want to get parochial for a bit, because the New 
Hampshire National Guard has experienced a 32 percent decline 
in force structure since 2007. This percentage is ten times the 
decrease in the National Guard, as a whole, during the same 
period. There are seven states that are smaller than New 
Hampshire but have a larger Guard force structure. Does the 
Commission have any recommendations for how to address the 
right Guard force structure in a State?
    General Ham. We do, Senator. In fact, there's a chapter in 
the report dedicated to that. The law required us to conduct an 
assessment of the process by which Army National Guard forces 
are allocated amongst the States and territories. We made three 
recommendations. They are largely administrative. We found, in 
general, that the process that is used to determine the 
stationing of Army National Guard forces is largely sound, and 
there is an opportunity for all of the stakeholders, both 
Federal and State, to participate in the process. The one 
recommendation that we think was--that--or one part that was a 
shortcoming was that, with the establishment of the Chief of 
the National Guard Bureau as a four-star officer and a full 
member of the Joint Chiefs of Staff, that role had not been 
codified in that process, and particularly with relation to the 
Secretary of the Army and Chief of Staff of Army, who have 
significant responsibilities.
    We thought that the process was pretty sound for all--
again, for all stakeholders to weigh in when decisions were 
being made with regard to the allocation of Army National Guard 
forces.
    Senator Shaheen. I guess I'm not quite clear. How would 
that affect what's happening in New Hampshire, where you've had 
that decline? How would that helpful--be helpful in reversing 
that?
    General Ham. So--well, I'm not sure that--I'm not sure 
that--reversing might not be in the cards, but when there are--
when there are force-structure changes that are recommended. 
For example, as we see the Army National Guard go down from a--
I think, from 353,000, eventually stepping down, perhaps, to 
the 335,000, with the changes in aviation, there is a process 
by which all of the stakeholders--the adjutants general, the 
governors, the State legislators, the Army staff, the National 
Guard Bureau, indeed the--you know, there is a role for the 
Congress, here, in terms of funding--for all of those voices to 
be heard in that allocation process. There are a number of 
factors that are considered: ability to recruit and retain, 
access to training areas, the demographics of the particular 
State or territory that's being addressed. Again, we--while we 
didn't look at individual cases, we looked at the process, and 
it was our assessment that the process was largely found--and I 
think the--with the Chief of the National Guard Bureau, the 
Chief of Staff-Army, Secretary of the Army, and to include 
leadership at the Joint Staff and OSD [Office of the Secretary 
of Defense], I think there is a willingness to have those 
discussions, but albeit at some point there are some very, very 
difficult decisions that have to be made with regard to 
allocation of forces to the States and territories.
    Senator Shaheen. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Blumenthal.
    Senator Blumenthal. Thank you, Mr. Chairman.
    I want to come back to helicopters, specifically Black 
Hawks and the recommendations that have been made. The Army's 
proposed Aviation Restructuring Initiative would move all 
Apaches from the Army National Guard to the regular Army, 
leaving the regular Army with 20 battalions. The National Guard 
Bureau's alternative proposal asks for 24 battalions, six with 
the National Guard, and 18 with the regular Army. Your report 
seems to find a middle ground, recommending that the Army 
maintain 24 AH-64 Apache battalions, 20 battalions in the 
regular Army and four in the National Guard. My feeling is, we 
need a strong Army National Guard, which does not equate for it 
to have Apaches, helicopters that are designed solely for 
combat. The Army National Guard should have combat components, 
and Black Hawks have, again and again over our history, proved 
to be, in combat situations, a critical asset and should be--
should continue to be used by the National Guard, for all the 
reasons that you have set forth in your report, not the least 
of which is that an Army that trains together will fight 
together more effectively.
    Let me ask you, General Lamont, do you agree that Black 
Hawks are a vital component of the Army National Guard?
    Mr. Lamont. Absolutely. Not only for their ability to--as a 
lift force in a combat asset, but in your domestic responses. 
Particularly, as you know, the Guard makes very great use of 
Black Hawks throughout all the domestic response issues, be it 
floods, be it tornados, be it whatever is the situation. 
They're very, very important to the Guard.
    Senator Blumenthal. As a Senator from a State that has seen 
those Black Hawks used in those domestic situations, and a 
State that has experienced hurricanes, floods, tornados, I 
strongly agree with you.
    Let me ask, General Thurman. Do you see a specific need for 
the Army National Guard to have Apaches, rather than keeping 
them in the Active component under the total-force strategy?
    General Thurman. Yes, sir, Senator, for the purpose of 
having strategic depth for the Nation to meet emerging 
requirements and the--what we found was that we don't have that 
once you eliminate them out of the Army National Guard. Our 
analysis, inside the classified annex, will lead you to that 
conclusion, I believe.
    Senator Blumenthal. Thank you.
    General Thurman, you mentioned one of the elephants in the 
room, in my view, just a few moments ago, the rejection rate of 
Army volunteers for reasons relating to physical fitness and 
perhaps other reasons. That number that I've seen is two-thirds 
to three-quarters are rejected because they can't pass the 
physical test. I wonder how important you feel that issue is 
for our Army and our Marine Corps and other services that have 
to rely on a ready recruit force in an All-Volunteer Army.
    General Thurman. Senator, I feel very strong about that. I 
think fundamental to this country is maintaining the All-
Volunteer Force. That is something that is easily broken, in my 
view. Having available manpower to--that you can recruit from, 
I think, is very important, and it's something that we ought to 
take notice of in the country as we see this population 
decline.
    Senator Blumenthal. It really is an issue of national 
security. If we can't field the force, we can't send them into 
combat, and we can't protect our Nation. I would suggest, since 
my time is about to expire, that there be a very intense and 
aggressive focus on this issue of the readiness of our young 
men and women seeking to come into our Volunteer Force, and 
what can be done in our schools, our communities, and elsewhere 
to send that message.
    Thank you very much for your service and your excellent 
work on this report.
    Thanks, Mr. Chairman.
    Chairman McCain. Senator Hirono.
    Senator Hirono. Thank you, Mr. Chairman.
    Thank you for your service, all of you, and for your work 
on this Commission.
    I'd like to follow up on concern regarding recruiting 
people into our military branches. General Thurman, you 
mentioned once again how important it is. This is not the first 
time that this committee has heard those concerns. Do any of 
you have any specific suggestions on what we can do to change 
these outcomes, where so few people qualify to even join our 
military? I mean, for example, should we be looking to expand 
Junior ROTC [Recruit Office Training Course] or ROTC? I'm 
looking for specific suggestions that you may have.
    General Ham. Senator, I'll start, and perhaps Secretary 
Lamont, who lived in this world for a long time, may have some 
thoughts.
    My thought was the same that you just expressed. That is a 
continued emphasis, or perhaps renewed emphasis, on the Junior 
ROTC program. While that doesn't necessarily lead directly to 
enlistments or to service, I think it does, in terms of 
building character, physical fitness, and leadership amongst 
America's youth, I think is a very wise investment.
    Mr. Lamont. Specifically about JROTC, they are very, very 
important, although I will caution you that I think we are 
legislatively prohibited from actually recruiting from that 
base. The mayors of the cities in which those schools exist 
love them. I have had the opportunity to visit JROTC units in 
Chicago, under Mayor Daley. He said, ``Give me more. Give me 
more.'' We went to Philadelphia, we went to New Orleans. What 
they do to get these kids away from the gangs, away from 
inappropriate family situations--we have found that their 
graduate rates, their grade rates, their ability to go into 
higher education--far greater----
    Senator Hirono. Yes.
    Mr. Lamont.--than in our other schools. We'd love to have 
the ability to recruit from those people, but we're--we really 
can't do that. It--they're vitally important to us, let's put 
it that way.
    Senator Hirono. You would find that, generally, when young 
people are exposed to these programs, then they have an 
understanding--better understanding of the military and what it 
means, and that one would hope that there is a higher of 
enlistment as a result.
    If the other two gentlemen would like to add, but if you 
pretty much agree with ROTC--but, if you have any other 
suggestions.
    Mr. Chandler. Well, I think, first of all, we're limiting 
the conversation to what the military can do. This is not a 
military issue. This is a national issue, which is going to 
take a great deal of courage and commitment and a long-term 
vision to solve. By the time a person is in the JROTC program, 
fundamentally they're cooked. Okay? Their diet, their 
nutrition, the way that they exercise--although it can be 
adapted, their lifestyle, the way that they are brought up by 
their family, is going to determine whether or not they are 
going to be able to meet standards.
    You really have quite--the military has, really, two 
options. They can either extend--reduce the standard and bring 
a person in, accepting more risk and spending more time in the 
training base to get them to an acceptable level, or you're 
going to have to increase recruitment efforts--and that's 
primarily other options and dollars--to get people who are 
qualified at the current standard to come in. I mean, all of 
the services compete against one another. They also compete 
against colleges, universities, and businesses that are looking 
for the same type of person. The challenge will be, Where is 
it, once they come into the Military Service, and specifically 
the Army--what are we willing to accept that risk? You have to 
get ahead of the bang, so to speak. That----
    Senator Hirono. Thank you.
    Mr. Chandler.--starts at the pre-K----
    Senator Hirono. I----
    Mr. Chandler.--you know, and the----
    Senator Hirono.--completely agree.
    Mr. Chandler.--elementary school level of how you help 
adapt lifestyle choices.
    Senator Hirono. Thank you for recognizing that it's a 
continuity. This is one of the reasons that there are generals 
who have come forward to express how important it is for us to 
support quality early education as laying a foundation, the 
very kind of foundation you're talking about.
    Mr. Lamont, I understand that you had the opportunity to 
meet with Governor Ige and General Brooks and General Logan, 
our TAG [The Adjutant General]. You know that we have a huge 
military presence in Hawaii, of course. The rebalance to the 
Asia Pacific is a commitment that I have paid particular 
attention to, representing Hawaii as I do. It includes many 
seapower-related actions, but there is also a strong Army 
presence. Would an Army of 980,000 be able to support our 
rebalance to the Pacific, especially recognizing the 
provocative behavior of China and North Korea and other global 
requirements?
    Mr. Lamont. As General Ham mentioned, that was--wasn't 
within our task, but if you want a personal opinion, I'll be 
happy to address it.
    Senator Hirono. Yes.
    Mr. Lamont. By the way, my visit to Hawaii was--although 
quite short, it was very well informed, having dealt with all 
three components there, and it also helped us inform on how we 
push forward multi-component units, because the Reserves and 
the Army National Guard and PACOM--Pacific Command----
    Senator Hirono. Yeah, all the----
    Mr. Lamont.--work so well----
    Senator Hirono. Yes.
    Mr. Lamont.--together. Now, maybe that's----
    Senator Hirono. I think----
    Mr. Lamont.--brought together----
    Senator Hirono.--that's the perfect model.
    Mr. Lamont.--by geographic requirements, but they truly are 
a model in how they work together.
    To get to your question, if I can't avoid it--answering 
that----
    Senator Hirono. Thank you, Mr. Chairman.
    Mr. Lamont.--the situation, we're quite concerned with that 
level of force, quite frankly, to meet the challenge that we 
have in the Pacific.
    Senator Hirono. Thank you.
    Thank you, Mr. Chairman. My time is----
    Chairman McCain. Senator Kaine.
    Senator Kaine. Thank you, Mr. Chair.
    Thanks, to all of you, for your service on the Commission 
and your testimony today.
    I want to follow up in a way related to the question of 
Senator Hirono and other colleagues about, kind of, the young 
people's ability to meet standards, but sort of coming at it 
from a different direction, which is--Sergeant Major, your--you 
talked about the recruitment challenge. You know, as we're 
dealing with this workforce of tomorrow, the Millennials and 
those younger, they're a very different breed. I learn that all 
the time with my own kids, in terms of what they want to do. 
You're right that, you know, the best and the brightest at that 
period of life--say, high school--colleges are competing for 
them, and the private sector wants to get these folks. We had a 
military commission--Military Compensation Review Commission 
that reported back to us last year, and they looked at all the 
compensation and benefits. A lot of that analysis was about, 
sort of, the fiscal realities of the personnel side of the 
military budget, but it was also looking at it in terms of the 
recruiting and the retention side. Your all's first, kind of, 
pillar of your recommendations is, got to maintain the All-
Volunteer Force, and that assumes recruitment and retention. I 
would just like each of you, from your own experiences, talk 
about, you know, what is your sense, right now in the Army? Do 
we have the right recruiting and retention strategies with 
respect to the workforce of tomorrow, the talent pool that's 
out there that we want? Either as Commission members or from 
your own personal experiences, what things would you recommend 
to us that we think about to enhance the recruitment and 
retention ability into the Army?
    General Ham. Thanks, Senator. I'll start and then--and turn 
to the others.
    I think two elements I would highlight. In our engagements 
across the force, there's a lot of uncertainty. In the 
retention aspect, whether you're regular Army, Army National 
Guard, or Army Reserve, is my--they watch their numbers, they 
see what's happening--is my unit going to still be here in a 
year or two? Am I still going to be relevant? That uncertainty, 
I think, has certainly an effect on retention.
    From the recruiting and bleeding-into-retention aspect, we 
heard loudly and clearly from soldiers of all components. They 
would like the ability to move between components more 
seamlessly and more easily, depending how their life situation 
changes. You're 18, the regular Army might make all the sense 
in the world. You get married, want to go to college, the Army 
National Guard might make all the sense in the world to do 
that. Then perhaps you find attracted to civil affairs, and so 
the Army Reserve might be a good place for you. Right now, the 
policies are constraining with that kind of movement.
    Senator Kaine. Tom?
    Mr. Lamont. A couple of things, sir.
    Our recruiting cohort's primarily 18 to 25 years of age. As 
you've heard today, we're roughly at the ability to look at 
about 25 percent of the eligible population within that cohort. 
That's--it's narrowing down, particularly as our economy may 
continue to grow and they may have other opportunities outside 
of the military. Our--what we call the DEP [Delayed Entry 
Program], that's Delayed Entry Program--two years ago, we were 
roughly at 32,000 waiting to come in when the opportunity and 
the spaces became available. We're roughly around 10,000 now, 
which is considered very much a floor of where we need to be to 
be able to reach out.
    We've also mentioned today so much about the physical 
concerns of some of that cohort, but the behavioral aspect, as 
well. As we look at States, for instance, in the drug programs, 
where marijuana, for instance, is becoming quite common, the--
available in other States--well, we still have prohibitions 
against folks coming in, in that regard. We're narrowing, in 
many respects, the eligible cohort that we have to recruit 
from.
    We have 11,000 recruiters throughout the Army. Our 
marketing budget's 280 million a year. We're also making a 
recommendation that we look at how we can integrate the 
recruiting. They're all competitive--all three components are 
competitive here. The Army recruits for itself. The National 
Guard recruits for itself. The Army Reserve recruits for 
itself. How can we--that competition for that same eligible 
person is there, but we've got to bring them together so we can 
all recruit. I--it's not going to be easy, and there is 
cultural issues, and the universal recruiter isn't--this isn't 
a new concept. We have to make an effort and try.
    Senator Kaine. Thank you, Secretary.
    Other comments? If I may, Mr. Chair, just--if I could hear 
from the other two witnesses if they have additional comments?
    Mr. Chandler. Yeah, Senator. I agree with General Ham and 
Secretary Lamont's statements. I think that the Military 
Compensation and Reform Commission that made some 
recommendations--I was a signator of that while I was on Active 
Duty as part of the Department of Defense's recommendation. I 
think it's a very forward-looking approach. A lot of the folks 
that have questions are those that are currently in the current 
retirement system and are not going to be affected by these 
changes. I think it does look at a more future approach to what 
Millennials and others are interested in.
    I would also applaud the Army's efforts with trying to 
think about how we can maybe change some policies that prevent 
us from reaching our--the higher objective. I'll use Cyber 
Command as a--Army Cyber as an example. You know, a big 
struggle with, How do you get this very specialized and unique 
individual--and ``unique'' can mean many different things--how 
do you get them to want to be a part of the Army, which, in 
general terms--and I am generalizing--is a little bit different 
from their experiences either in college or in--working for 
some corporation--and to look at things? Like, maybe the tattoo 
policy needs to be loosened more for them, or that we provide 
an opportunity to move in and out of, not only the Army, but 
back into the--you know, the Microsofts and the Dells of the 
world, and bring them back. I think those are things that we 
should be patient with, we should allow some experimentation 
with, and that we should try and focus on the strategic 
objective. How do we find the best people that want to come in 
and serve the Nation, serve their state, and be productive 
members of the military? I think we're on a path. We've just 
got to be patient with it.
    Senator Kaine. General?
    General Thurman. Senator, I would add two things here to 
what's already been said, but I think there has to be a renewed 
emphasis on service to Nation in this country. That starts in 
the family and in the schoolhouse. We really need to get back 
to some of the basic values of what our principles are in the 
country. That's my personal opinion after watching my whole 
family serve throughout World War I, II, and so forth, into 
Vietnam.
    The second thing that we looked at was having--was 
implementing the one personnel and pay system for the Army. 
Right now, you have separate personnel databases between the 
Army National Guard and the regular Army. You've got to see 
your people enterprise. Right now, you can't. There's a program 
called the Integrated Pay and Personnel System that is out 
there being developed, and I'd highly recommend that that 
funding continue for that, because I think that will help what 
General Ham talked about, of how you can transition between 
components so you don't lose the talent. That would be one of 
my recommendations, sir.
    Senator Kaine. Thank you so much, to the witnesses.
    Thank you, Mr. Chair.
    Chairman McCain. Senator Cotton.
    Senator Cotton. Thank you, gentlemen, for your important 
work on this matter. I apologize that I have been detained at 
the Banking Committee, where we had Federal Reserve Chair 
Yellen in her semiannual testimony.
    I have reviewed the report carefully. I wanted just to get 
on the record a discussion about one particularly interesting 
idea, recommendation 22 from Appendix B on page 112, which I'll 
just read in full rather than asking you all to turn to it.
    ``The Congress should require the Secretary of Defense and 
Joint Staff to oversee the modeling of alternative Army design 
and operational concepts, including: (1) the Reconnaissance 
Strike Group, (2) Hybrid Battalion Task Force, (3) Striker 
Global Response Force, and (4) the Reconnaissance and Security 
Brigade Combat Team--and report on their findings within 1 
year. The report to Congress should explicitly address the 
value of follow-on pilot programs to test further any promising 
any alternate force design-and-concept approaches.''
    This seems to me like a far-reaching, maybe even radical, 
proposal, and I would like to hear more on the record about it 
and what might be necessary to undertake that kind of 
transformation. Maybe if we could start with General Ham and 
then go to General Thurman for your comments.
    General Ham. Good. Thanks, Senator.
    You asked us in the law to be comprehensive in our work, 
and so we did. We reached out to a lot of different agencies, 
to include some who have thought seriously about the size, 
structure, and capabilities that ought be resident in the Army. 
Some of those viewpoints have been controversial within the 
Army and from those outside. We felt, nonetheless, it was 
important to hear from them. We did hear from a number of those 
who have offered these kinds of recommendations.
    I guess I would say that, Senator, we didn't find any of 
those notions were sufficiently mature for us to make a 
recommendation to say we think the Army ought to adopt this 
model or that model, but we found elements of the four 
particular proposals that were mentioned, but several others, 
that we think certainly merit further evaluation by the Army, 
and indeed by the Joint Force, because recognizing that the 
Army is always a part of a Joint Force. Some of these 
implications would have--or some of these recommendations would 
have implications for the other services, so it's important to 
view this in a joint perspective.
    That's--that was the genesis of that recommendation. We 
think there's merit in looking at these things. There are 
systems within Army Training and Doctrine Command and other 
agencies, and we think they should take a serious evaluation of 
these proposals.
    Senator Cotton. General Thurman.
    General Thurman. Yes, sir, Senator.
    What I would say, in addition to that, I think it's 
important to look at these concepts and see what benefits that 
you can gain, in terms of overall capabilities, given the 
threats that we have today. There are emerging threats, as 
you're well aware of, out there that we may have a different 
look at how we may want to provide the capability to the joint 
force commander or the global combatant commander. I think 
these all warrant serious review and a look what can be used 
to--maybe to advance capabilities inside the Army for the 
future, really, is what you're looking at.
    Senator Cotton. Thank you.
    Mr. Lamont, Sergeant Major, anything to add to General Ham 
and General Thurman's comments?
    Mr. Chandler. I'd just concur with what they said. I mean, 
you know, you--the Army that I've been a part of is an evolving 
and learning organization; and another set of eyes on how to 
get after the challenges, I think, is important, and I highly 
recommend that they move forward.
    Senator Cotton. Yes. Well, sometimes evolutions can be 
slow, and lessons learned can be hard. I do think it's a very 
intriguing idea that we should take seriously as a committee 
and explore, going forward in the future.
    Again, thank you all for your service to the country, not 
just now, but in many iterations previously.
    Chairman McCain. I'd like to thank the panel again for 
their great work. I think it's given us some very valuable 
input. I know that Senator Reed and I will look seriously at 
some of your proposals and discuss them with the other members 
of the committee, who obviously, as you can see by the 
participation, are very interested. We appreciate your 
significant contribution.
    Senator Reed?
    Senator Reed. I'd just thank the commissioners, your 
colleagues that are not here, all of you, for--extraordinarily 
well done.
    Thank you, Mr. Chairman.
    Chairman McCain. Thank you.
    This hearing is adjourned.
    [Whereupon, at 11:56 a.m., the hearing was adjourned.]

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                       TUESDAY, FEBRUARY 23, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.

               U.S. PACIFIC COMMAND AND U.S. FORCES KOREA

    The committee met, pursuant to notice, at 9:33 a.m., in 
Room SD-G50, Dirksen Senate Office Building, Senator John 
McCain (chairman) presiding.
    Committee members present: Senators McCain, Inhofe, Ayotte, 
Fischer, Cotton, Rounds, Ernst, Tillis, Sullivan, Graham, 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 ask the committee to consider a list of 255 pending 
military nominations. All of these nominations have been before 
the committee the required length of time.
    Is there a motion to favorably report these 255 military 
nominations to the Senate?
    Senator Inhofe. So moved.
    Chairman McCain. Is there a second?
    Senator Reed. Second.
    Chairman McCain. All in favor, say aye.
    The motion carries.
    Good morning. The Senate Armed Services Committee meets 
this morning to receive testimony on U.S. Pacific Command and 
U.S. Forces Korea in review of the defense authorization 
request for fiscal year 2017 and the Future Years Defense 
Program.
    I am pleased to welcome Admiral Harris and General 
Scaparrotti back to this committee. I thank you both for your 
decades of distinguished service and for your leadership in an 
increasingly uncertain time.
    Over the past several years, China has acted less like a 
``responsible stakeholder'' of the rules-based order of the 
Asia-Pacific region and more like a bully. I note this 
morning's Wall Street Journal headline, ``China Appears to Have 
Built Radar Facilities on Disputed South China Sea Islands.''
    China's increasingly assertive pattern of behavior calls 
into serious question whether China's rise will, in fact, be 
peaceful. Despite United States efforts to rebalance to the 
Asia-Pacific, U.S. policy has failed to adapt to the scale of 
velocity and challenge we face.
    For example, the administration has insisted that China 
must cease its reclamation, construction, and militarization in 
the South China Sea, and that it will fly, sail, and operate 
wherever international law allows. But after more than a year 
of this rhetoric, China's reclamation infrastructure, 
construction, and militarization have all continued.
    The information referred to follows:
      
    
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
      
    Last week, we saw press reports that China had deployed the 
HQ-9 surface-to-air missile system to Woody Island in the 
Paracel Islands. As I mentioned yesterday, they show a high-
frequency, possibly over-the-horizon, radar on reclaimed land 
on Cuarteron Reef in the Spratly Islands.
    If true, this deployment would represent a blatant 
violation of Xi Jinping's September 2015 commitment to 
President Obama in the Rose Garden that China ``did not intend 
to pursue militarization.''
    Admiral Harris, I would like to ask today if you can 
confirm the reported militarization of Woody Island, the radar 
at Cuarteron Reef, and if you can reveal to this committee any 
further examples of militarization now occurring in the South 
China Sea that you are aware of.
    As China continues to use force and coercion to 
unilaterally change the status quo and challenge the rules-
based international order, the credibility of the 
administration's commitments to regional security is 
diminished. Indeed, China's reclamation and militarization in 
the South China Sea, together with China's rapid military 
modernization and expansion, are making it more difficult for 
the United States to defend our allies and our interests from 
military aggression.
    Simply put, the administration's policy has failed.
    Beijing has been willing to accept a high level of risk to 
achieve its strategic goals. Meanwhile, the White House's risk 
aversion has resulted in an indecisive and inadequate policy 
that has confused and alarmed our regional allies and partners. 
The United States must now consider fresh options to raise the 
cost on Beijing's behavior.
    Shaping rather than reacting to Beijing's actions will mean 
adopting policies with a level of risk that we have been 
unwilling to consider up to this point. The administration must 
initiate a robust freedom of the seas campaign, flying and 
sailing wherever international law allows. This should include 
freedom of navigation operations designed to challenge China's 
excessive maritime claims, as well as joint patrols and 
exercises with our allies and partners span the First Island 
Chain.
    We must also maintain our commitment to continued sensitive 
reconnaissance operations, which are critical for gathering 
military intelligence in the Western Pacific. Despite China's 
protests and growing ability to threaten our aircraft, the pace 
and scope of these operations must continue uninterrupted.
    Given the shifting military balance, we also need to take a 
hard look at what the future U.S. military posture in the 
region should look like. While the department has initiated a 
European Reassurance Initiative in Europe, it is clear to me 
that a similar Asian reassurance initiative should be 
considered.
    Building off the recent CSIS [the Center for Strategic and 
International Studies] report, we should consider further steps 
for enhancing posture, improving infrastructure, funding 
additional exercises, pre-positioning additional equipment and 
munitions, and building partner capacity throughout the Asia-
Pacific region.
    Beyond my concerns about sustaining freedom of the seas, I 
am concerned China may also attempt to expel another country 
from disputed territories, such as Second Thomas Shoal, or 
build new infrastructure at a location like Scarborough Shoal. 
Given this, we should consider clarifying how the United States 
will respond to an attack on the territory or Armed Forces of 
the Philippines under the United States-Philippines mutual 
defense.
    Finally, I believe it is time for the United States 
Government to explore the appropriateness of sanctions against 
Chinese companies involved in the reclamation that has 
destabilized the South China Sea and caused massive 
environmental destruction across this maritime domain.
    While China's assertiveness poses a major long-term 
challenge, North Korea's destabilizing behavior continues to 
present a real and rising risk of conflict.
    Over the past 2 months, it has defied the international 
community by testing a nuclear device and launching a long-
range missile. These calculated cycles of provocation continue 
to pose a risk of violent escalation on the Korean Peninsula. 
That is why I am thankful for the close cooperation with our 
partners in Seoul between United States Forces Korea [USFK] and 
the ROK [Republic of Korea] Armed Forces.
    I applaud the leadership of President Park for choosing to 
finally close the Kaesong Industrial Region, which has enriched 
the North with hundreds of millions of dollars in the last 
decade. I am also proud to have supported new congressional 
sanctions on North Korea.
    Despite the deficit of leadership from Beijing on this 
issue, these two steps will bring increased pressure on the 
North Korean regime and its supporters.
    I am very encouraged by the joint United States-Republic of 
Korea statement that our two countries will begin the process 
of consultation for deploying the Terminal High-Altitude Area 
Defense, THAAD, system to the Korean Peninsula. The deployment 
of this system by the alliance is a critical step to providing 
a further layer of defenses against North Korea provocations.
    I look forward to hearing General Scaparrotti's perspective 
on the utility of the THAAD system and other ideas to enhance 
the United States-ROK relationship and deterrence on the 
peninsula.
    I would call my colleagues' reminiscence to an occasion 
here the last time Secretary Ash Carter was here, after it had 
been in all of the newspapers and television and radio that the 
United States had finally decided to sail a ship into the areas 
around the disputed islands. The Secretary of Defense, in front 
of this committee, refused to confirm that--refused to confirm 
what was in the media and well-known to everyone, according to 
the New York Times the next day, for fear of upsetting climate 
talks with China. That cannot be made up. Of the 30 years that 
I have been on this committee, I have never seen a performance 
like that.
    Senator Reed?

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Thank you very much, Mr. Chairman. I want to 
join you in welcoming the witnesses.
    Gentlemen, we appreciate your long and distinguished 
service to the Nation, and also the service of your families 
throughout many, many years.
    General Scaparrotti, this might be your last United States 
Forces Korea posture hearing. We are hearing rumors that you 
are being moved to a different command. But thank you for your 
friendship and your service over many, many years.
    It is clear from the events of the last few months that we 
are facing a challenge of increasing complexity and instability 
in the region. Given North Korea's recent nuclear test and 
China's militarization of land features in the South China Sea, 
the security situation in the region seems more precarious than 
in many recent years. The United States has historically 
underwritten the peaceful development of the Asia-Pacific 
region with strategic alliances and a forward presence that has 
allowed all the countries in the region, including China, to 
make extraordinary economic developments in relative peace.
    One of the pillars of our strategy is to provide stability 
and security in the region by maintaining close partnerships 
and alliances. From the new defense cooperation agreement with 
the Philippines and our rotational Marine presence in 
Australia, to our growing defense relationship with Vietnam, 
there has been great progress on implementing the 
administration's rebalance to Asia, despite competing resource 
demands from other regions. We must continue to build on these 
strategic partnerships and demonstrate our commitment to the 
region by investing sufficiently in our presence and partner 
capacity-building programs.
    Admiral Harris, I am deeply concerned, as we all are, about 
China's violation of its commitment to President Obama in 
November not to militarize the South China Sea.
    Just yesterday, CSIS released an image that appears to show 
that China has placed an advanced radar system on Cuarteron 
Reef, a land feature that China has reclaimed in the Spratly 
Islands. This is in addition to the HQ-9 surface-to-air 
missiles that it added to Woody Island in the Paracels 
recently.
    It seems clear that China does not intend to be a 
responsible stakeholder in the region. I would appreciate your 
views on how China's recent actions affect the stability of the 
region.
    General Scaparrotti, it seems that as Kim Jong-un has 
consolidated his power in North Korea, he is more and more 
willing to tolerate risk, as evidenced by his recent nuclear 
test and rocket launch. I would like to hear about how you 
believe the security situation on the peninsula will evolve 
over the next year.
    Again, we appreciate you joining us this morning, look 
forward to your testimony, and salute your service. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. General Scaparrotti, this is perhaps your 
last appearance before this committee. I want to thank you for 
your outstanding service and your great work, particularly in 
these times of heightened tension. We thank you for your 
service to the country.
    Admiral Harris, do you want to begin?

STATEMENT OF ADMIRAL HARRY B. HARRIS, JR., USN, COMMANDER, U.S. 
                        PACIFIC COMMAND

    Admiral Harris. Thank you, sir. I would.
    Thank you, Chairman McCain, Senator Reed, and distinguished 
members. It is my honor to once again appear before this 
committee.
    Before I begin, on behalf of all the men and women of 
United States Pacific Command [PACOM], I would like to wish 
Senator McCaskill a speedy and full recovery.
    I am pleased to be here with General Scaparrotti to discuss 
how PACOM is advancing America's interests across the vast 
Indo-Asia-Pacific.
    I request, sir, that my written posture statement be 
submitted for the record.
    Chairman McCain. Without objection.
    Admiral Harris. Since taking command of PACOM last May, I 
have had the extraordinary privilege of leading the 400,000 
soldiers, sailors, airmen, marines, guardsmen, and civilians 
serving our Nation. These dedicated men and women and their 
families are doing an amazing job, and I am proud to serve 
alongside them.
    I would like to briefly highlight a few regional issues 
since I last testified before this committee 5 months ago.
    As China continues its pattern of destabilizing 
militarization of the South China Sea, we resumed our freedom 
of navigation operations there, a waterway vital to America's 
prosperity, where $5.3 trillion in trade traverses each year.
    General Scaparrotti and I remain fully aligned in dealing 
with North Korea's recent underground nuclear test followed by 
a ballistic missile launch.
    A revanchist Russia is revitalizing its ability to execute 
long-range strategic patrols in the Pacific, to include the 
basing of its newest strategic ballistic missile submarine and 
last month's bomber flights around Japan.
    Recent terrorist attacks in Bangladesh and Indonesia 
underscore the fact that violent Islamic extremism is a global 
concern that must be crushed.
    We continue to strengthen our alliances and partnerships. 
Japan's peace and security legislation authorizing limited 
collective self-defense will take effect this year. This 
legislation, and the revised guidelines for United States-Japan 
defense cooperation, will significantly increase Japan's 
ability to work with us.
    Thanks to the great leadership of General Scaparrotti, 
South Korea and the United States have taken a strong and 
unified stance to maintain peace and stability on the Korean 
Peninsula. In the face of recent North Korean aggression, PACOM 
hosted a trilateral meeting between the United States Chairman 
of the Joint Chiefs General Dunford, Japanese Chairman Admiral 
Kawano, and South Korean Chairman General Lee. Trilateral 
cooperation between Japan, Korea, and the United States is a 
priority, and I am doing everything I can to enhance it.
    Our alliance with the Philippines took an important step 
forward when the Philippines Supreme Court recently upheld the 
Enhanced Defense Cooperation Agreement, or EDCA, which will 
provide significant partnership and access benefits.
    I am also excited about our burgeoning relationship with 
India, where I will visit next week. As the world's two largest 
democracies, we are uniquely poised to help bring greater 
security and prosperity to the entire region.
    Two visionary policies are now coinciding as the United 
States rebalances west of the Indo-Asia-Pacific and India 
implements its Act East policy.
    Last October's Malabar exercise between India, Japan, and 
the United States shows the security interconnectedness of the 
Indian Ocean, Asia, and the Pacific Ocean. I rely heavily on 
Australia, not only for its advanced military capabilities 
across all domains, but importantly for Australia's warfighting 
experience and leadership in operations around the world.
    These examples clearly demonstrate to me that the United 
States is a security partner of choice in the Indo-Asia-
Pacific. It is also why I believe that our strategic rebalance 
has taken hold. Given that four of the five strategic problem 
sets identified by Secretary Carter--China, North Korea, 
Russia, and ISIL [the Islamic State of Iraq and the Levant]--
are in our region, I would say that we cannot rebalance fast 
enough.
    But there is more work to do, and we must not lose the 
momentum, so I ask this committee to support continued 
investment in the future capabilities. I need weapon systems of 
increased lethality that go faster, go further, and are more 
survivable.
    If funding uncertainties continue, the U.S. will experience 
reduced warfighting capabilities, so I urge Congress to repeal 
sequestration.
    Finally, I would like to thank this committee and Congress 
for your enduring support to PACOM, and the men and women in 
uniform, our civilian teammates, and our families. Thank you, 
and I look forward to your questions, sir.
    [The prepared statement of Admiral Harris follows:]
           Prepared Statement by Admiral Harry B. Harris Jr.
    Chairman McCain, Senator Reed, and distinguished members of the 
committee, thank you for the opportunity to appear before you today. 
This is my first posture assessment since taking command of U.S. 
Pacific Command (USPACOM) in May 2015. Over the past 9 months, I've had 
the extraordinary privilege to lead 378,000 Soldiers, Sailors, Airmen, 
Marines, Coast Guardsmen, and civilians selflessly serving our nation. 
These dedicated men and women and their families are doing an amazing 
job, and I'm proud to serve alongside them.
    USPACOM protects and defends, in concert with other U.S. Government 
agencies, the territory of the U.S., its people, and its interests. 
With allies and partners, USPACOM enhances stability in the Indo-Asia-
Pacific region by promoting security cooperation, encouraging peaceful 
development, responding to contingencies, deterring aggression, and, 
when necessary, fighting to win. This approach is based on military 
preparedness, partnership, and presence.
    The strategic importance of the Indo-Asia-Pacific region cannot be 
overstated. Recognition of clear military, economic, and demographic 
trends inspired President Obama to undertake a ``Rebalance'' strategy 
in 2011. The Rebalance, a strategic whole of government effort, guides 
and reinforces our military efforts, integrating with diplomatic, 
political, and economic initiatives.
    In August of 2015, Secretary of Defense Carter described four 
elements of the military component of the Asia-Pacific Rebalance:
    1)  investing in future capabilities relevant to the challenges in 
the Asia-Pacific;
    2)  fielding the right numbers of existing capabilities to the 
Asia-Pacific;
    3)  adapting our regional force posture; and
    4)  reinforcing alliances and partnerships.
    Despite other pressing challenges around the world, and because of 
the legislative and budgetary support of Congress, we achieved momentum 
in each element above. I believe we must continue, and even increase, 
this momentum, as the strategic imperative behind the Rebalance remains 
valid.
    What follows is my assessment of the Indo-Asia-Pacific and 
USPACOM's part of the Rebalance. I will describe the security 
challenges and highlight regional opportunities with strategic value. I 
will discuss the value of U.S. strategic force posture and forward 
presence to the Rebalance--how it improves our readiness to fight 
tonight, enhances our ability to reassure allies and partners, and 
maintain stability. I will then explain how USPACOM strengthens our 
alliances and builds critical regional partnerships that deliver 
strategic benefit while enhancing U.S. readiness to protect and defend 
U.S. interests. Finally, I will highlight critical needs and seek your 
support for budgetary and legislative actions in the coming weeks and 
months.
                          security environment
    The Indo-Asia-Pacific has been a largely peaceful region for over 
70 years, in large part, because of the system of rules and norms 
established and underpinned by robust U.S. presence and anchored by a 
series of treaty alliances and bilateral relationships with countries 
in the region. Regional nations, including and perhaps especially 
China, have benefited because of the security architecture provided by 
the United States and our allies. The Indo-Asia-Pacific is critically 
important to United States commerce, diplomacy, and security. Estimates 
predict up to 70 percent of the world's population will reside in the 
region by the middle of this century. Within the region are the world's 
two largest economies after the United States (China and Japan), and 
five of the smallest economies. The region contains the world's most 
populous nation (China), largest democracy (India), largest Muslim-
majority state (Indonesia), and smallest republic (Nauru). It contains 
seven of the ten largest standing militaries in the world, five nuclear 
nations, and five of the U.S.' seven mutual defense treaty alliances.
    The region's environment, history, cultural and political 
diversity, and robust military capabilities present dynamic strategic 
challenges. Self-interested actors challenge the existing international 
rules-based order that helped underwrite peace and prosperity in the 
region for over 70 years. North Korea continues its provocative, 
coercive behavior and weapons development. Chinese coercion, artificial 
island construction, and militarization in the South China Sea threaten 
the most fundamental aspect of global prosperity--freedom of 
navigation. Other challenges include the movement and facilitation of 
violent extremists to and from the Middle East, transnational criminal 
activity (including human trafficking and illicit drugs), and an 
increasingly revanchist and assertive Russia. USPACOM enhances U.S. 
Force posture, presence, and resiliency in the region, modernizing U.S. 
Force capability to ensure forces are ready to fight and win any 
contingency. USPACOM is working with allies and partners on a 
bilateral--and increasingly multilateral--basis to address these 
challenges. Together, we enhance capability and capacity to respond to 
the range of threats endemic to the region. We are stronger together.
                                overview
    A number of challenges has emerged over the past year that place 
stability and security at risk. In July 2015, China largely completed 
land reclamation at seven sites in the South China Sea and is finishing 
runways, infrastructure, and systems to militarize what are, in effect, 
man-made bases, significantly raising regional tensions. China views 
the South China Sea as a strategic frontline in their quest to dominate 
East Asia out to the Second Island Chain. I view their thinking as 
approaching a new ``Great Game.'' Last month, North Korea conducted its 
fourth nuclear test in ten years and last August, raised tensions with 
a land-mine attack in the Demilitarized Zone (DMZ). Russia continues 
modernizing its military forces, homeporting its newest Dolgurukiy-
class ballistic missile submarine in Petropavlovsk, and revitalizing 
its ability to execute long range strategic patrols, highlighted by 
last July's deployment of Tu-95 Bear bombers near Alaska and 
California, and last month's bomber flights around Japan. Terrorist 
attacks in Bangladesh and Indonesia underscore the fact that violent 
Islamic extremism is a global problem.
    While these events threaten the region's peace and prosperity, 
there was positive progress as well. Last September, Japan passed its 
Peace and Security Legislation which authorizes collective self-defense 
in limited circumstances. The Philippines remained committed to solving 
its maritime dispute with China peacefully through arbitration under 
the Law of the Sea Convention. The Philippine Supreme Court upheld the 
Philippine's domestic approval of the Enhanced Defense Cooperation 
Agreement (EDCA), which will provide significant partnership and access 
benefits. India underscored its ``Act East'' policy by crafting a Joint 
Strategic Vision of the Asia-Pacific and Indian Ocean Region with the 
United States and is progressing toward signing essential foundational 
agreements that will enable deeper ties, improve interoperability, and 
increase cooperation. Singapore has increased routine access to United 
States military assets such as Littoral Combat Ships and P-3/P-8 
aircraft. Trilateral cooperation among allies is increasing and 
multilateral forums such as the Association of South East Nations 
(ASEAN) are focusing on shared security challenges in the region. These 
events demonstrate that Indo-Asia-Pacific countries are increasingly 
viewing the United States as their security partner of choice. That 
said, significant challenges remain.
                             key challenges
    North Korea:  Though North Korea is not yet an existential threat 
to the United States, it remains the most dangerous and unpredictable 
actor in the Indo-Asia-Pacific. Kim Jung Un regularly conducts 
provocative and escalatory actions. Just last month, North Korea 
conducted an underground nuclear test, the fourth since 2006, which 
violated its obligations and commitments under international law, 
including several UN Security Council Resolutions. Additionally, this 
month, North Korea conducted a ballistic missile test under the guise 
of launching a satellite. These tests, coupled with the unprovoked mine 
attack on Republic of Korea (ROK) soldiers in the DMZ last August, are 
the latest in a series of actions intended to destabilize the 
Peninsula, challenge ROK President Park's leadership, and raise 
tensions.
    While the international community urges North Korea to live up to 
its international obligations and return to credible negotiations under 
the Six-Party Talks framework, Pyongyang has shown no willingness to 
seriously discuss denuclearization. Kim Jung Un is on a quest for 
nuclear weapons, and the technology to miniaturize them and deliver 
them intercontinentally. Additional nuclear tests are likely to occur. 
North Korea will also likely test and field improved mobile 
intercontinental ballistic missiles and intermediate range ballistic 
missiles (MUSUDAN) capable of reaching Japan, and actively pursue its 
submarine launched ballistic missile development program. On 6 
February, North Korea launched its second space vehicle in direct 
violation of several United Nations Security Council Resolutions, 
firing a complex, multi-stage rocket that also forms the basis of an 
intercontinental ballistic missile. North Korea announced its intent to 
conduct ``annual and regular'' drills to advance this prohibited 
capability. I have no doubt they will do so.
    North Korea refuses to abide by the rules and norms of the 
international community and represents a clear danger to regional 
peace, prosperity, and stability. In the cyber domain, North Korea has 
lesser cyber technical capabilities than other states, but has already 
demonstrated them as a way to impose costly damage to commercial 
entities. This was demonstrated in the high-profile attack on Sony 
Pictures Entertainment. North Korea sells weapons and weapons-related 
technologies in conflict with United Nation Security Council Resolution 
restrictions.
    Chinese Military Modernization and Strategic Intent:  China's 
military modernization program is transforming its forces into a high-
tech military to achieve its dream of regional dominance, with growing 
aspirations of global reach and influence. Given China's economic rise, 
the goal may be natural; however, the lack of transparency on China's 
overall strategic intent behind its military investments and activities 
creates instability and regional anxiety.
    China's navy and air forces are rapidly fielding advanced warships 
and planes. Over the past decade, the Chinese navy has significantly 
increased in size and is much more capable in every way. Chinese forces 
are operating at a higher tempo, in more places, and with greater 
sophistication than ever before. Chinese shipyards are constructing 
China's first cruiser-sized warship, their first indigenous aircraft 
carrier, and many classes of patrol boats, frigates, and destroyers. 
Newer, more capable submarines continue replacing older ones. New 
fighters (including the ``Gen-5'' J-31), bombers, special mission 
aircraft, and unmanned systems give China greater air capabilities, 
lethality, and flexibility. These advances have been aided and 
accelerated by systemic technology theft, enabling China to skip 
decades of research and development and go straight into production. 
Finally, the People's Liberation Army (PLA) is undergoing dramatic 
reorganization to improve its command and control of joint forces.
    China's strategic capabilities are significant. The Jin-class 
ballistic missile submarine (Type 094) carries the JL-2 submarine 
launched ballistic missile capable of reaching parts of the continental 
United States and represents China's first credible sea-based nuclear 
deterrent. New road-mobile intercontinental ballistic missiles provide 
more strike options and greater survivability.
    In the maritime domain, China's Navy (PLA(N)) is increasing its 
routine operations in the Indian Ocean, expanding the area and duration 
of operations and exercises in the Western and Central Pacific Ocean, 
and is beginning to act as a global navy--venturing into other areas, 
including Europe, North America, South America, Africa, and the Middle 
East.
    While China's actions are causing concern among neighbors in the 
region, there are potential opportunities. Its small but growing number 
of bilateral and multinational exercises suggests Beijing's greater 
willingness to interact with partners. Support for UN Peace Keeping 
missions is an encouraging sign of Chinese willingness to play a more 
active and constructive role in international affairs. My goal is to 
convince China that the best way ahead is through peaceful cooperation, 
participation and conformance in a rules-based order, and by honoring 
agreements made in good faith.
    Territorial Disputes:  The political and military dynamic in the 
East and South China Seas is changing, and tactical miscalculations 
between claimants present threats to stability and security.
    In the East China Sea, tensions between Japan and China over the 
Senkaku Islands continue. China seeks to challenge Japan's 
administrative control over the islands by deploying warships into the 
area, sailing coast guard ships inside the territorial waters 
surrounding the Senkakus, and intercepting Japanese reconnaissance 
flights. In April of 2014, President Obama affirmed that Article V of 
the United States-Japan Security Treaty includes the Senkaku Islands. I 
am bound to protect that promise.
    In the South China Sea, the situation is more complex. There are 
six claimants to disputed features: Brunei, China, Malaysia, the 
Philippines, Taiwan, and Vietnam, and there are three notable disputes 
over territorial sovereignty. The first dispute is between China, 
Taiwan, and Vietnam over the sovereignty of the Paracel Islands, which 
China took by force from Vietnam and has occupied since 1974. The 
second dispute is between China, Taiwan, and the Philippines over 
Scarborough Reef, of which China seized control in 2012. The third 
dispute involves multiple claimants within the Spratly Islands where 
China, Taiwan, Vietnam, Brunei, Malaysia, and the Philippines each 
claim sovereignty over various features.
    The United States takes no position on competing sovereignty claims 
in the South China Sea, but we encourage all countries to uphold 
international law, as reflected in the Law of the Sea Convention, which 
ensures unimpeded lawful commerce, freedom of navigation and 
overflight, and peaceful dispute resolution.
    While China has not clearly defined the scope of its maritime 
claims in the South China Sea, China has unilaterally changed the 
status quo. Chinese leaders seem to believe that, through coercion, 
intimidation, and force, they can bypass accepted methods of dispute 
resolution. They have demonstrated this through aggressive artificial 
island building, and by growing a fleet of ``white hull'' ships and 
fishing vessels whose purpose is to dominate the area without the 
appearance of overt military force. China is now turning its artificial 
island projects into operating bases for forward-staging military 
capabilities--under the rubric of being civilian facilities. For 
example in January 2016, China landed civilian aircraft on its man-made 
airbase at Fiery Cross Reef. The PLA is installing new or improved 
radars, communications systems, and other military capabilities at 
seven separate reclaimed bases. The scale and scope of these projects 
are inconsistent with the China's stated purpose of supporting 
fishermen, commercial shipping, and search and rescue. Although 
Vietnam, Malaysia, the Philippines, and Taiwan have also conducted land 
reclamation in the South China Sea, their total--approximately 115 
acres over 45 years--is dwarfed by the size, scope, speed, and scale of 
China's massive buildup. In a little over two years, China has 
constructed more than 3,000 acres of artificial land--heightening 
environmental concerns by destroying the fragile ecosystem of the South 
China Sea. Professor John McManus of the University of Miami has called 
this the most rapid rate of permanent loss of coral reef area in human 
history. Equally concerning is Beijing's repeated pronouncements that 
it will not accept any decision issued by the arbitral tribunal in the 
case filed by the Philippines under the Law of the Sea Convention..
    China's actions undermine the international rules-based order. 
Furthermore, these actions have driven China's South China Sea 
neighbors to expand their own military capabilities and seek stronger 
relationships with the United States and one another. The result is a 
situation that is ripe for miscalculation that could escalate to 
conflicts that no one wants, in an area vital to global prosperity.
    While preventing conflict in South China Sea requires patience and 
transparency among all parties, time favors the Chinese. For the United 
States to continue to play a constructive role in preventing conflict 
and supporting peaceful dispute resolution requires national resolve 
and a willingness to apply all elements of national power in the right 
measure to influence all claimants to use international dispute 
resolution mechanisms. For example, USPACOM recently conducted freedom 
of navigation operations in the South China Sea--the continuation of a 
longstanding United States practice. These operations are an important 
military tool to demonstrate America's commitment to the rule of law, 
including the fundamental concept of freedom of navigation. The U.S. 
will sail, fly, and operate wherever international law allows.
    Russian Assertiveness:  Though focused on Europe and the Middle 
East, Russia is engaged politically and militarily in the Indo-Asia-
Pacific. Russian activity is assertive, but not confrontational. Ships 
and submarines of the Russian Pacific Fleet and long range aircraft 
routinely demonstrate Russia's message that it is a Pacific power.
    Russian ballistic missile and attack submarines remain especially 
active in the region. The arrival in late 2015 of Russia's newest class 
of nuclear ballistic missile submarine (DOLGORUKIY SSBN) in the Far 
East is part of a modernization program for the Russian Pacific Fleet 
and signals the seriousness with which Moscow views this region.
    Violent Extremism / Foreign Fighters:  The Indo-Asia-Pacific has 
the largest Muslim population on the planet and extremism is a rising 
challenge. Of the many extremist groups in the Indo-Asia-Pacific, those 
connected to Islamic State of Iraq and the Levant (ISIL) or al Qaeda 
(AQ) are of greatest concern. Foreign fighters from the Indo-Asia-
Pacific have contributed to violence in Syria and Iraq and pose a 
growing threat to security in their home countries upon their return. 
Attacks in Australia and Bangladesh underscore regional concerns about 
self-radicalized actors. Small but growing numbers of Bangladeshi, 
Indonesian, and Philippine extremists have pledged fealty to ISIL, and 
threats to host nation and Western interests are rising. USPACOM--in 
coordination with USSOCOM--and partner nations are focused on 
disrupting these extremist networks.
    Transnational Crime:  Transnational Criminal Organizations (TCOs), 
many operating sophisticated global enterprises that traffic in human 
beings, weapons, drugs, and other illicit substances, exist throughout 
the Indo-Asia-Pacific. The revenue from criminal endeavors threatens 
stability and undermines human rights. Corruption follows wherever 
these organizations flourish, weakening governments and contributing to 
regional instability.
    Methamphetamine and amphetamine-type stimulants continue to be the 
primary drug threat in the region. Joint Interagency Task Force-West 
(JIATF-W) reports that at least 90 percent of the precursor chemical 
seizures potentially destined for illicit methamphetamine production 
originates in China. Maritime container shipments of China-sourced 
chemicals are diverted for methamphetamine and heroin/opioid production 
in Mexico--a direct threat to the United States Homeland. The Asia-
Pacific is also a growing, lucrative market for illicit narcotics 
produced in the Western Hemisphere. Just last week, JIATF-W coordinated 
with French authorities in French Polynesia to apprehend a sailing 
vessel located with almost 750 kilograms of cocaine.
    Nearly 36 million victims of human trafficking are estimated 
worldwide and nearly two-thirds are from Asia. Women and children--
especially those from the lowest socioeconomic sectors--are the most 
vulnerable. Roughly half of those 36 million victims end up in the 
commercial sex trade, while others are forced into difficult and 
dangerous positions in factories, farms, as child soldiers, or as 
domestic servants. While much remains to be done, USPACOM forces, 
including JIATF-W, are building partner capacity and sharing 
intelligence in order to combat these transnational threats.
    Proliferation Issues:  The Indo-Asia-Pacific region has the busiest 
maritime and air ports in the world. Developing technology has outpaced 
many nations' ability to effectively manage export controls. Trade 
includes dual-use technology--commercial items controlled by the 
nuclear, ballistic missile, and chemical/biological weapons control 
regimes, including manufactured or re-exported materials from other 
nations with limited export control enforcement.
    USPACOM's Countering Weapons of Mass Destruction (CWMD) community 
supports counter-proliferation operations throughout the Indo-Asia-
Pacific region. USPACOM addresses concerns through key leader 
engagements, combined and joint exercises, and international security 
exchanges focused on counter proliferation activities. Recent success 
stories include Vietnam joining 104 nations as an endorsee of the 
Proliferation Security Initiative (PSI). The PSI rotational exercise 
series provides a framework for partner nations to improve legal 
authorities and operational capabilities to interdict WMD, delivery 
systems, and other related materials. Proactive dialogue under PSI is 
vital to reducing WMD proliferation.
    USPACOM works with the Armed Forces of the Philippines to enhance 
military to military interoperability and provide assistance to 
military first responders' capability to respond to a WMD. Under 
section 1204 of the fiscal year 2014 National Defense Authorization Act 
(NDAA), the primary objective of USPACOM's WMD assistance is to train 
and equip first responders. In Aug 2015, USPACOM, Service Components, 
and combat support agencies such as the Defense Threat Reduction Agency 
provided the Armed Forces of the Philippines (AFP) a ``first class'' 
Chemical, Biological, Radiation, Nuclear (CBRN) Defense capability. 
Under these section 1204 authorities, USPACOM will begin to work with 
Thailand, Vietnam, and Malaysia to enhance their capacity to respond to 
a WMD event.
    Natural Disasters:  The Indo-Asia-Pacific remains the world's most 
disaster-prone region, experiencing over 2,700 disasters that affected 
nearly 1.6 billion people in the past decade alone. In addition to 
seismic and weather disasters, areas of large populations, dense living 
conditions, and poor sanitation in the region create optimal conditions 
for the rapid spread of diseases. U.S. Forces regularly train with 
allies and partners in disaster relief operations and are called upon 
often to respond to tragic events.
    USPACOM's Center for Excellence for Disaster Management (CFE-DM) 
increases regional governments' readiness to respond to natural 
disasters by developing lessons learned and providing best practices. 
Many of the lessons learned and preparedness measures implemented after 
Typhoon Haiyan (Operation Damayan, November 2013) reduced damage and 
loss of life when Typhoon Hagupit struck the Philippines in 2014. To 
help USPACOM rapidly respond to future natural disasters, Vietnam is 
allowing sets of vehicles, equipment, and supplies to be prepositioned 
within its borders for disaster preparedness purposes. USPACOM will 
continue improving pre-crisis preparedness and working with allies and 
partners to improve responses whenever disasters strike, but it is 
important to note that disaster preparedness cannot overtake 
traditional military readiness as our focus.
            strategic force posture in the indo-asia-pacific
    The tyranny of distance and short indications and warnings 
timelines place a premium on robust, modern, and agile forward-
stationed forces at high levels of readiness. USPACOM requires a force 
posture that credibly communicates U.S. resolve, strengthens alliances 
and partnerships, prevents conflict, and in the event of crisis, 
responds rapidly across the full range of military operations. 
USPACOM's strategic force posture is also supported by the deployment 
of rotational forces and the fielding of new capabilities and concepts 
that address operational shortfalls and critical gaps.
    Global Force Management (GFM):  In support of the Rebalance, the 
Department has undertaken GFM initiatives that include the deployment 
of Littoral Combat Ships to Singapore, replacing the aircraft carrier 
USS George Washington in Japan with the more capable USS Ronald Reagan, 
the deployment of two additional ballistic missile defense-capable 
surface ships to Japan, and the stationing of additional submarines and 
a submarine tender in Guam. The Air Force deploys a broad range of 
aircraft as part of its Theater Force Package model including B-52s, F-
22s, F-16s, E-8s, and RC-135s. The Army forward deployed a second 
ballistic missile defense radar in Japan, maintained a THAAD battery in 
Guam, and delivered training and presence across the region through 
Pacific Pathways, enhancing partnership opportunities without permanent 
basing. The Army also continues updating Prepositioned Stocks (APS) and 
advocating for the placement of Disaster Response activity sets across 
Southeast Asia. The Marine Corps continues to execute the Defense 
Policy Review Initiatives (DPRI), which will reduce the Marine Corps 
footprint in Japan and distribute Marine Air Ground Task Force (MAGTF) 
capability across the region. The Marine Corps is also expanding 
rotational presence in Australia through its Marine Rotational Force-
Darwin initiative. USPACOM plans to improve rotational force presence 
in the Philippines via the Enhanced Defense Cooperation Agreement 
(EDCA) and establishing USAF dispersal capabilities in the Commonwealth 
of the Northern Mariana Islands (CNMI) and in the Northern Territory of 
Australia. Rotational forces west of the International Date Line are 
positioned to deter and defeat potential aggressors in the region. 
Finally, we are beginning consultations with the government of South 
Korea for the placement of a Terminal High Altitude Air Defense 
capability on the Korean Peninsula.
    Posture Initiatives:  The size and scope of forward stationed 
forces and the challenges within the security environment require 
recapitalization and improvement to infrastructure in theater. To that 
end, fiscal year 2016 military construction projects largely reflect 
requirements that support fielding new capabilities in the region, to 
include the F-35 Joint Strike Fighter, CV-22 Osprey, C-130J Hercules, 
and F-22 Raptor. Additional investments support resiliency initiatives 
and infrastructure recapitalization in Australia, Guam, CNMI, Hawaii, 
and Japan; critical munitions throughput recapitalization in California 
(Military Ocean Terminal Concord); and quality of life investments for 
our forces in South Korea and Japan.
    Additionally, USPACOM's force posture strategy seeks to provide the 
correct level of capital investment to support established posture 
initiatives and commitments, including efforts in Korea (Yongsan 
Relocation Plan and Land Partnership Plan) and Japan (Okinawa 
Consolidation and the Defense Policy Review Initiative). In support of 
these initiatives, the Government of Japan committed up to $3.1 billion 
to help realign United States Marines from Okinawa to Guam and other 
locations, and $4.5 billion to expand the airfield and associated 
facilities at Marine Corps Air Station Iwakuni. Korea and Japan 
maintain robust host nation funded construction programs, which play 
vital roles in supporting United States presence and enduring 
capabilities in the region. These vital partner contributions require 
the Services to program Planning and Design funds to ensure our allies 
deliver facilities that meet our requirements.
    Furthermore, USPACOM is expanding its presence in various parts of 
the region to include completing the permanent stationing of THAAD on 
Guam, the addition of a submarine and sub tender in Guam, additional 
Aegis BMD capable ships to Japan, and seeking the assignment of 
additional Intelligence, Surveillance, and Reconnaissance (ISR) assets 
in the region. In support of the Rebalance, USPACOM is in the midst of 
executing four major Force Posture initiatives: (1) United States-Japan 
Defense Policy Review Initiative (DPRI) / USMC Distributed Laydown, (2) 
United States Forces Korea Realignment, (3) Resiliency Efforts, and (4) 
Agile Logistics.
      DPRI:  USPACOM is making progress on DPRI/USMC 
Distributed Laydown initiatives; however, significant Japanese 
political challenges remain. Consolidation of United States Marines in 
Japan is dependent upon completion of Okinawa construction efforts to 
include the Futenma Replacement Facility (FRF). In spite of the 
Government of Japan (GOJ) political resolve and dedication of 
resources, progress on relocating Marines from Futenma to Camp Schwab 
is slow going. GOJ budgeted $258M in fiscal year 2015 for 200 projects, 
but only 9 facilities have been completed with an additional 8 under 
construction. GOJ faces challenges in several areas, including 
overcoming Nago City obstruction impacting construction and controlling 
protester interference. The central government has dispatched police 
officers from the mainland to Okinawa to assist the Okinawa Prefectural 
Police in managing protest activity in and around United States bases 
in Okinawa. However, as of this writing, very little progress has been 
made in improving the situation and protests continue to escalate. 
While the issues in Okinawa continue, USPACOM made progress in laying 
the groundwork for relocating 5,000 Marines to Guam. Tied to the Guam 
effort, DOD is aggressively pursuing the establishment of the CNMI 
Joint Military Training (JMT) Area to mitigate joint training 
deficiencies in the region.
      USFK Realignment:  The consolidation of United States 
forces in Korea via the Land Partnership Program (LPP) and Yongsan 
Relocation Program (YRP) is moving ahead at full-speed. Construction 
will triple the size of Camp Humphreys and increase the base's 
population to 36,000 troops and family members. The ROK is bearing the 
majority of the relocation's cost, committing over $7.5 billion to the 
project. USPACOM appreciates Congress' continued support of DOD's 
largest peace-time relocation project.
      Resiliency Efforts:  USPACOM resiliency efforts include 
investment in a more robust transportation infrastructure in ally and 
partner countries, mitigation of single points of failure via the 
dispersal and optimization of critical enablers, such as communication 
nodes, fuel, medical, and logistic support equipment, and hardening 
facilities. For example, USPACOM is hardening facilities in Guam and 
CNMI as well as enhancing airfields at dispersed sites throughout the 
theater.
      Agile Logistics:  Due to time and distance required to 
move assets within the USPACOM region, it is imperative to invest in 
infrastructure to ensure logistics commodities--munitions, fuel, and 
other war materiel--are properly prepositioned, secured, and available 
to meet requirements. USPACOM continues to build capacity for pre-
positioned war reserve fuel stocks and invest in munitions, fuel, and 
other war materiel facilities and infrastructure throughout the 
theater. For example, critical munitions throughput recapitalization in 
California (Military Ocean Terminal Concord) is necessary to support 
USPACOM plans and operations.
    Readiness:  USPACOM is a ``fight tonight'' theater with short 
timelines across vast spaces. Threats such as North Korea--which has 
over a hundred thousand rockets aimed at Seoul--require United States 
military forces in the region maintain a high level of readiness to 
respond rapidly to a crisis. USPACOM's readiness is evaluated against 
its ability to execute operational and contingency plans, which place a 
premium on forward-stationed, ready forces that can exercise, train, 
and operate with our partner nations' militaries and follow-on forces 
able to respond to operational contingencies.
    Forward-stationed forces west of the International Date Line 
increase decision space and decrease response time, bolster the 
confidence of allies and partners, and reduce the chance of 
miscalculation by potential adversaries.
    The ability of the U.S. to surge and globally maneuver ready forces 
is an asymmetric advantage that must be maintained. Over the past two 
decades of war, the U.S. has of necessity prioritized the readiness of 
deploying forces at the expense of follow-on-forces and critical 
investments needed to outpace emerging threats. A shortage of ready 
surge forces resulting from high operational demands, delayed 
maintenance periods due to sequestration, and training pipeline 
shortfalls limit responsiveness to emergent contingencies and greatly 
increase risk. These challenges grow each year as our forces downsize 
while continuing to deploy at unprecedented rates.
    Fiscal uncertainty requires the Department to accept risk in long-
term engagement opportunities with strategic consequences to U.S. 
relations and prestige. Continued budget uncertainty and changes in 
fiscal assumptions in the Future Years Defense Program (FYDP) degrade 
USPACOM's ability to plan and program, leading to sub-optimal 
utilization of resources. Services must be able to develop and execute 
long-term programs for modernization while meeting current readiness 
needs. Much of the supporting infrastructure in the Pacific and on the 
West Coast of the U.S. mainland was established during World War II and 
during the early years of the Cold War. The infrastructure requires 
investment to extend its service life but the Services struggle to 
maintain infrastructure sustainment, restoration, and modernization 
accounts at appropriate levels. If funding uncertainties continue, the 
U.S. will experience reduced warfighting capabilities and increased 
challenges in pacing maturing adversary threats.
                          allies and partners
    USPACOM's forward presence, posture, and readiness reassure allies 
and partners of United States commitment to security in the Indo-Asia-
Pacific. Strengthening these relationships is critical to meeting the 
challenges and seizing opportunities. Through bi-lateral and multi-
lateral relationships and activities, USPACOM is building a community 
of like-minded nations that are committed to maintaining of the 
international rules-based order. The United States's five Indo-Asia-
Pacific treaty allies are Australia, Japan, Republic of Korea, 
Philippines, and Thailand. In addition, the United States continues to 
strengthen partnerships with New Zealand, India, and Singapore, and 
build new relationships that advance common interests with Vietnam, 
Mongolia, Malaysia and Indonesia. This year, USPACOM plans to leverage 
Fiscal Year 2016 National Defense Authorization Act, Public Law 114-92, 
section 1263, ``South China Sea Initiative'' (section 1263) authority, 
to begin implementing the Secretary's Southeast Asia Maritime Security 
Initiative (MSI)--an initiative Secretary Carter announced at the 
Shangri-La Dialogue that will increase the maritime security and 
maritime domain awareness capacity of the Philippines, Vietnam, 
Malaysia, Indonesia, and Thailand. The Secretary has made available $50 
million in fiscal year 2016 funding and announced an additional $375 
million from fiscal year 2017-2020 to conduct MSI activities pursuant 
to this authority. MSI takes a regional approach to help our partners 
better sense activity within their sovereign territorial domain, share 
information with domestic joint and international combined forces, and 
contribute to regional peace and stability operations. I'm also looking 
forward to improving military-to-military relationships with Burma and 
Sri Lanka, once political conditions permit. Strengthening and 
modernizing alliances and partnerships is a top USPACOM priority.
                                 allies
    Japan:  The US-Japan alliance remains strong and operational 
cooperation between USPACOM and the Japan Joint Staff continues to 
increase. Our relationship is a cornerstone of regional stability. On 
September 19th, 2015 Japan's Peace and Security Legislation authorizing 
limited collective self-defense passed into law and will take effect 
this year. Japan's Peace and Security Legislation and the revised 
Guidelines for United States-Japan Defense Cooperation will 
significantly increase Japan's ability to contribute to peace and 
security. Japan's leadership has worked toward lessoning historical 
tensions and improving cooperation and collaboration with the Republic 
of Korea (ROK) in areas such as information sharing and disaster 
response The Government of Japan supports USPACOM activities to 
maintain freedom of navigation in the South China Sea. In another 
growing relationship, a Japanese destroyer participated in the United 
States-India-Japan trilateral exercise MALABAR in October and then 
transited the South China Sea in company with the USS Theodore 
Roosevelt in early November. Japanese P-3s exercised with the 
Philippines and operated in the South China Sea while returning to 
Japan from Southwest Asia.
    Republic of Korea:  The ROK alliance remains strong, and I am 
optimistic that the Japan-ROK relationship will continue to improve, 
which I hold as a top priority. The United States and ROK agreed to 
delay wartime operational control (OPCON) transfer and adopt a 
conditions-based approach, rather than following a calendar-based 
deadline. Secretary of Defense Carter and his counter-part, Minister 
Han, signed the Conditions Based OPCON Transition Plan (COTP) in 
November 2015 at the annual Security Consultative Meeting in Seoul. 
This is part of American and ROK efforts to modernize the alliance to 
better address continued threats and provocations from North Korea such 
as January's nuclear test and February's space launch. Trilateral 
cooperation with Japan is the next logical step to ensure both 
countries' mutual security.
    Australia:  The United States-Australia alliance anchors peace and 
stability in the region. Australia plays a leading role in regional 
security and capacity-building efforts and addressing disaster 
response. Australia is a key contributor to global security, 
contributing to counter-ISIL efforts in Iraq and the Resolute Support 
mission in Afghanistan. With the implementation of force posture 
initiatives, the Marine Rotational Force-Darwin successfully completed 
its third rotation while increasing its presence from 250 to 1,177 U.S. 
Marines. The fourth rotation begins in April 2016. The United States 
and Australia are increasing collaboration in counter-terrorism, space, 
cyber, integrated air missile defense, and regional capacity building. 
Australia is procuring high-tech U.S. platforms that will increase 
interoperability. These include the F-35A Lightning II, P-8 Poseidon, 
C-17 Globemaster III, EA-18G Growler, Global Hawk UAVs, and MH-60R 
helicopters. To enhance synchronization and integration, the Australian 
Government provides a Flag Officer and a Senior Executive (civilian) to 
USPACOM and a General Officer to U.S. Army Pacific staffs on a full-
time basis.
    Philippines:  The alliance between the Philippines and the United 
States has been important for more than 65 years. The Philippines 
Supreme Court recently upheld the Philippine's domestic approval of the 
Enhanced Defense Cooperation Agreement (EDCA) which will improve United 
States access and build Philippine military capacity by addressing 
capability gaps, long-term modernization, Maritime Security (MARSEC), 
Maritime Domain Awareness (MDA), and disaster response capabilities. 
USPACOM is exploring way to use MSI to realize Philippines MARSEC and 
MDA capability development. The Philippine Navy has made good use of 
two previously awarded Excess Defense Article (EDA) U.S. Coast Guard 
Cutters. During the 2015 Cooperation Readiness Afloat and Training 
(CARAT) exercise, one of the EDA cutters (BRP RAMON A. ALCARAZ PF-16) 
operated with the USS Fort Worth, enhancing our shared security 
concerns. During the 2015 Asia-Pacific Economic Cooperation summit, 
President Obama announced the award of a third former United States 
Coast Guard cutter through the EDA program, which will significantly 
enhance the Philippine Navy's maritime security capabilities, and, 
through MSI, we are exploring ways to ensure that this vessel is 
delivered fully mission capable. U.S. P-3s and P-8s already operate 
from Clark Air Base on a rotational basis, and the EDCA will increase 
United States access in crisis to Philippine facilities that are 
important strategic locations. USPACOM provides information sharing and 
training for the Armed Forces of the Philippines in the areas of MARSEC 
and MDA, Additionally, USPACOM provided $3.5 million in Chemical, 
Biological, Radiological, and Nuclear (CBRN) equipment and two years of 
sustainment training to the Armed Forces Philippines Defense Initiative 
through the CBRN Defense programs. USPACOM appreciates the continued 
support of the Defense Threat Reduction Agency, Joint Program Executive 
Office, and Joint Requirements Office in providing CBRN equipment and 
training to partners in the region.
    Thailand:  The United States and Thailand's long relationship began 
with a Treaty of Amity and Commerce in 1833, now 183 years old; that 
relationship expanded into a defense treaty in 1954, and the U.S. 
continues to value our alliance and friendship. Unfortunately, the Thai 
military's ongoing control of the civilian government since May 2014 
undermines this important relationship. The U.S. encourages a return to 
democracy that will fully restore our bond; until then, military 
engagements and exercises will continue in reduced form. USPACOM will 
continue demonstrating commitment to our oldest ally while also 
reinforcing democratic values and ideals. Moving forward, it would be 
my hope that we use MSI to more fully support Thailand's maritime 
security and maritime domain awareness capability as an important 
member of the region. Moving forward, it would be my hope that we use 
MSI to more fully support Thailand's maritime security and maritime 
domain awareness capability as an important member of the region.
                                partners
    Singapore:  Singapore is our most important partner in Southeast 
Asia. It has been a major security cooperation partner for over a 
decade and provides invaluable access for U.S. Forces. The rotational 
deployment of Littoral Combat Ships to Changi Naval Base has been 
productive, and P-8s now operate out of Paya Lebar Air Base on a 
regular basis. USPACOM conducts dozens of military exercises each year 
with Singapore's Armed Forces, Singaporean military officers regularly 
attend United States professional military education, and Singaporean 
military personnel participate in advanced military training that is 
conducted throughout the United States. Singapore hosts the annual 
Shangri-La Dialogue, a Secretary of Defense-level event that deepens 
regional ties and tables important issues for discussion. The 
combination of forward deployed forces and deep training relationships 
contribute to readiness, build deeper ties, and allow the U.S. to 
promote maritime security and stability with regional partners.
    India:  The new found momentum in our bilateral relationship with 
India represents USPACOM's most promising strategic opportunity. In 
January 2015, President Obama and Prime Minister Modi signed a Joint 
Strategic Vision of the Asia-Pacific and Indian Ocean Region. This 
landmark document presents shared views and interests for the region. 
The United States / India military-to-military relationship deepens as 
forces increasingly train and operate together. USPACOM intends to add 
momentum to an important relationship. Through this end, I have made 
improving the military-to-military with India a formal Line of Effort 
at USPACOM. In June 2015, during Secretary of Defense Carter's visit to 
India, the United States and India renewed the ten-year Defense 
Framework Agreement. In 2015, United States and India militaries 
participated together in three major exercises and 62 other military 
exchanges covering scenarios ranging from high-end warfare to 
humanitarian assistance and disaster response. The US-India Defense 
Technology and Trade Initiative (DTTI) further expands opportunities. 
Defense sales are at an all-time high and U.S.-sourced airframes, such 
as P-8s, C-130Js, C-17s, AH-64s and CH-47s, increase interoperability. 
USPACOM will advance the partnership with India by expanding the scope 
of military-to-military interactions.
    New Zealand:  Despite differences over nuclear policy, our 
military-to-military relationship with New Zealand, underpinned by the 
Wellington and Washington Declarations, is on solid footing. The New 
Zealand military has fought, flown, and sailed with United States 
forces since the beginning of Operation Enduring Freedom. New Zealand 
continues to be a respected voice in international politics and a 
recognized leader in the South Pacific that shares common security 
concerns with the U.S., including terrorism, transnational crime, and 
maritime security. Military-to-military relations and defense 
engagements with New Zealand remain strong.
    Vietnam:  Vietnam's growing economy and their concerns over Chinese 
coercion presents a strategic opportunity for the United States to add 
another regional partner. USPACOM is moving forward with Vietnam to 
improve Vietnam's capacity and capability in maritime security, 
disaster response. We are also exploring ways to use MSI to support 
Vietnam's maritime security modernization efforts, including in the 
area of search and rescue. In addition, Vietnam has agreed to allow 
U.S. prepositioning humanitarian stocks and supplies for disaster 
preparedness purposes.
    Indonesia:  Indonesia is an important security partner in Southeast 
Asia. President Joko Widodo's initiative to transform Indonesia into a 
global maritime ``Fulcrum'' demonstrates Indonesia's desire to play a 
larger role in international diplomatic, economic, and security issues. 
Again, USPACOM is developing ways to partner with Indonesian security 
forces through MSI and other U.S. security cooperation programs to 
improve Indonesia's maritime security capacity and encouraging a 
collaborative regional maritime security architecture. Indonesia is not 
a claimant to territory in South China Sea maritime dispute, but it is 
reinforcing security on and around its Natuna Islands. Indonesia will 
maintain relationships with other influential nations such as Russia 
and China, but security cooperation with the United States is a top 
priority for Jakarta. As a tangible sign of this, the United States and 
Indonesia signed a ministerial-level Joint Statement on Comprehensive 
Defense Cooperation in October.
    Malaysia:  Malaysia is another important contributor to regional 
peace and security. Through the Comprehensive Partnership with 
Malaysia, the United States and Malaysia promote regional stability. 
Malaysia's regional leadership role, technologically advanced industry, 
stable economy, and capable military make it an important partner in 
securing peace and prosperity in Southeast Asia. USPACOM continues to 
assist Malaysia in building an amphibious force to address non-
traditional threats in and around Malaysia's territorial waters. 
Malaysia seeks United States support in developing a more capable Coast 
Guard through the Malaysia Maritime Enforcement Agency. These 
capabilities and engagements demonstrate Malaysia's capacity and 
resolve to ensure regional and domestic security, and Malaysia develops 
opportunities for multilateral security cooperation through Cooperation 
Afloat Readiness and Training (CARAT) exercises. Like other section 
1263-designated countries, we are exploring ways that MSI can support 
Malaysia's maritime security requirements in each of these areas.
    Sri Lanka:  President Sirisena, elected in January, is serious 
about addressing Sri Lanka's human rights issues. We have an 
opportunity to expand United States interests with Sri Lanka--Asia's 
oldest democracy--and will proceed deliberately as progress is made. 
Given Sri Lanka's strategic location, it is in America's interest to 
increase military collaboration and cooperation. As conditions permit, 
USPACOM will expand military leadership discussions, increase naval 
engagement, and focus on defense institution building in areas such as 
demobilizing and military professionalism.
                                 others
    In addition to Indo-Asia-Pacific allies and partners, USPACOM has 
many other unique relationships throughout the region with countries, 
jurisdictions, and international governmental organizations. These 
relationships are important parts of our overall strategy.
    Taiwan:  Free and fair democratic elections in January on the 
island of Taiwan reflect shared values with the United States The 
United States maintains its unofficial relations with Taiwan through 
the American Institute in Taiwan and we continue supporting Taiwan's 
security. USPACOM will continue to fulfill United States commitments 
under the Taiwan Relations Act; continued arms sales to Taiwan are an 
important part of that policy and help ensure the preservation of 
democratic government institutions.
    The United Kingdom (UK), Canada, and France:  Staunch NATO allies, 
the UK, Canada, and France are also Indo-Asia-Pacific nations, each 
with significant interests in the Pacific and Indian Oceans, including 
territories, allies, partners, and trade. Each participates in PACFLT's 
RIMPAC and other major exercises, and deploy ships, submarines, and 
other forces to the region for operational, partner capacity, law 
enforcement and disaster response missions. Canada has a General 
Officer serving as a Deputy Director for Operations at USPACOM; the UK 
will assign a similar grade officer to serve as Director of USPACOM's 
Theater Security Cooperation effort. Each nations' leadership expressed 
renewed commitment to the region, and USPACOM welcomes and supports 
their efforts.
    The Association of Southeast Asian Nations (ASEAN):  While not a 
military alliance, ASEAN is among the most important multilateral 
forums in the region. The ten ASEAN member states, under the 
chairmanship of Malaysia last year and Laos this year, seek to improve 
multilateral security engagements and advance stability in the Indo-
Asia-Pacific. ASEAN-centered political-security fora such as the ASEAN 
Defense Minister's Meeting Plus (ADMM-Plus) and ASEAN Regional Forum 
(ARF) have encouraged ASEAN members and China to conclude a meaningful, 
substantive Code of Conduct for the South China Sea. USPACOM investment 
in the ADMM-Plus, ARF and other U.S. ASEAN defense engagements improve 
multilateral defense cooperation and promote regional norms. 
Facilitating capacity building through incrementally increasing the 
complexity of ASEAN's recurring multilateral exercises is a priority. 
In 2016, USPACOM will participate in the second series of ADMM-Plus' 
three major exercises.
    China:  The United States-China relationship remains complex. While 
Chinese actions and provocations create tension in the region, there 
are also opportunities for cooperation. The United States approach to 
China encourages a dialogue between the armed forces of both countries 
to expand practical cooperation where national interests converge and 
to constructively manage differences through sustained and substantive 
consultations. USPACOM's engagements with China, governed by section 
1201 of the fiscal year 2000 NDAA, improve transparency and reduce risk 
of unintended incidents, enhancing regional stability.
    USPACOM executed over 50 bilateral and numerous multilateral 
engagements last year with China. USPACOM supports our national effort 
to encourage China to support the existing security architecture; 
however, China's base-building and militarization in the South China 
Sea, its lack of transparency regarding military modernization efforts, 
and continued malicious cyber activity raise regional tension and 
greatly hinder United States-China cooperation. Instead of jointly 
working toward reinforcing international rules and law to promote 
regional peace and stability, United States-China engagements are often 
focused on reducing friction and avoiding miscalculation.
    USPACOM hosted a United States-China Military Maritime Consultative 
Agreement plenary and working group focused on operational safety in 
November 2015. USPACOM also provided significant support to the 
development of the Rules of Behavior memorandum of understanding on 
safety in the air and maritime domain. Ongoing dialogues led to 
improved communications and safer encounters at sea and in the air.
    There are areas where United States and Chinese militaries 
cooperate in areas of common interest, such as counter piracy, military 
medicine, and disaster response. The most successful engagements 
focused on military medical cooperation and shared health concerns. For 
example, in January 2015, the PLA hosted the USPACOM Surgeon and 
component surgeons in Beijing, Xi'an and Shanghai focused on Disaster 
Response, Pandemic and Emerging Infectious Diseases, and Soldier Care. 
In September, the USPACOM Surgeon sponsored the third acupuncture 
subject matter expert exchange between United States and PLA 
acupuncturists in Beijing, leading to collaborative research on 
acupuncture treatment for post-traumatic stress disorder. USPACOM 
encourages China's participation in international efforts to address 
shared challenges in a manner consistent with international law and 
standards.
    Bilateral and Multilateral Approaches:  USPACOM is directly 
connected to regional leaders. I am in frequent communication with my 
regional counterparts and appreciate the ability to reach out at any 
time to share perspectives. USPACOM maintains a close link with allies 
and partners through staff exchange and liaison officers, in addition 
to a series of formal bilateral mechanisms. In Australia, key 
engagements stem from the ANZUS treaty obligations, guided by USPACOM's 
principle bilateral event with Australia, the Military Representatives 
Meeting. Similarly, USPACOM's military to military relationship with 
Japan is guided by the annual Japan Senior Leader Seminar. Military 
Committee and Security Consultative Meetings are the preeminent 
bilateral mechanisms that guide the ROK and U.S. alliance. Each year, 
USPACOM co-hosts the Mutual Defense Board and Security Engagement Board 
with the Armed Forces of the Philippines to deal with 21st-century 
challenges. USPACOM conducts annual Senior Staff Talks with Thailand to 
address security concerns and reinforce U.S. commitment to democratic 
principles. Bilateral mechanisms also exist with non-alliance partners 
throughout the region, including India, Indonesia, and Vietnam.
    The future lies in multilateral security mechanisms. USPACOM is 
evolving key bilateral relationships into multilateral ones that will 
more effectively address shared security concerns. For example, US-
Japan-ROK trilateral coordination in response to North Korean 
provocative behavior is improving. The ROK and Japan each recognize 
that provocative actions by North Korea will not be isolated to the 
peninsula and greater coordination and cooperation are required. The 
December 2014 signing of the US-Japan-ROK Trilateral Information 
Sharing Arrangement is an important step toward greater information 
sharing. This arrangement was first exercised in early January 
following the nuclear test in North Korea.
    To encourage multilateral cooperation, USPACOM hosts the Chief of 
Defense Conference (CHODs) annually. The CHODs conference location 
rotates between Hawaii and a regional partner. In 2015, 31 countries 
attended the CHODs conference in Hawaii. USPACOM also participates in 
Australia-Japan-United States trilateral defense dialogues, including 
the Security and Defense Cooperation Forum (SDCF). The trilateral 
relationship between the United States, Japan, and India is growing, as 
evidenced by the first trilateral ministerial meeting held last year. 
The United States, Japan, and India share democratic values, interests 
in protecting sea lanes of commerce, and promoting adherence to 
international laws and norms. Next, USPACOM aims to build a powerful 
quadrilateral partnership framework of the most powerful democracies in 
the Indo-Asia-Pacific. India, Japan, Australia, and the United States 
working together will be a force for the maintenance of the regional 
rules-based order, counterbalancing and deterring coercion or 
unrestrained national ambitions.
                               activities
    Security Cooperation and Capacity Building:  USPACOM's Security 
Cooperation approach focuses on building partner readiness, reducing 
partner capability gaps, and building partner capacity. One of the more 
powerful engagement resource tools is Foreign Military Financing (FMF). 
Favorable consideration for continued funding of FMF enables USPACOM to 
meet regional challenges to include border security issues, disaster 
response, counterterrorism, and in particular, maritime security.
    As I mentioned, USPACOM will leverage the fiscal year 2016 NDAA 
section 1263 ``South China Sea Initiative'' authority to execute the 
Secretary's Southeast Asia Maritime Security Initiative to build 
maritime security and maritime domain awareness of partners in the 
South China Sea region, through assistance to, and training of, partner 
nation maritime security forces. USPACOM will continue to rely on FMF 
as a source of providing major end items to eligible countries. MSI 
support notified pursuant to the new section 1263 authority should be 
viewed as complementary and additive in nature to these FMF plans. 
Under MSI, PACOM plans to provide niche capabilities, more multi-
mission type of equipment, and connective tissue that will help 
partners better deploy and employ these maritime security capabilities, 
both domestically to protect their sovereign territory, but also as a 
means of fostering greater regional interoperability.
    Maritime Domain Awareness:  Southeast Asian partners have expressed 
strong enthusiasm and support for United States security cooperation 
efforts in the area of maritime domain awareness (MDA). USPACOM will 
leverage MSI and the new section 1263 authority to develop multilateral 
approaches to information sharing toward a regional common operating 
picture. This year, the Philippines, Australia and the United States 
are co-hosting a workshop to discuss regional best practices. This 
civilian-military workshop will facilitate whole-of-government 
discussions on maritime challenges that support creation of a regional 
maritime domain awareness network to share information across Southeast 
Asian partners--another multilateral approach to addressing security 
challenges in the region.
    Global Peace Operations Initiative (GPOI):  Indo-Asia-Pacific 
countries provide over 40% of the world's uniformed peacekeepers to 
United Nations (UN) peacekeeping operations worldwide; half of those 
countries that provide UN peacekeepers are GPOI program partners. GPOI 
builds and maintains the capability, capacity, and effectiveness of 
partners to deploy professional forces to meet the UN's needs in peace 
and security operations. Partners are meeting program goals achieving, 
or making progress towards achieving, self-sustaining, indigenous 
training capability. In 2016, USPACOM and Mongolia will cohost a 
multinational peacekeeping exercise called KHAAN QUEST, training 
personnel from 37 nations for deployment to UN peacekeeping missions. 
USPACOM expects 28 regional GPOI partners in KHAAN QUEST. USPACOM will 
continue improving partner military peacekeeping skills and operational 
readiness and provide limited training facility refurbishment. 
Indonesia's plan to provide 4,000 deployable Peacekeeping Forces by 
2020 is another opportunity for USPACOM to engage with Indonesian 
military forces.
    Pacific Pathways:  As an innovative way to overcome the Indo-Asia-
Pacific's vast time-distance challenges, United States Army Pacific 
(USARPAC) created Pacific Pathways which sequentially deploys small 
units to multiple countries for training. Their forward presence also 
enables rapid response to humanitarian emergencies or regional crises. 
This cost-effective program ensures that our regionally aligned Army 
elements know how to deploy and fight in the Indo-Asia-Pacific 
alongside our allies and partners. I support and encourage this kind of 
innovative thinking, and it pays major dividends in both relationships 
and readiness.
    Joint Exercise Program:  USPACOM's Joint Exercise Program 
intentionally synchronizes frequent, relevant, and meaningful 
engagements across the Indo-Asia-Pacific region. This important 
program, funded through the Combatant Commander Exercise Engagement 
Training Transformation (CE2T2), improves readiness of forward deployed 
assigned forces. Exercises and training strengthen USPACOM's military 
preeminence and enhance relationships. USPACOM appreciates Congress' 
support for continued progress.
    Pacific Partnership:  United States Pacific Fleet's (PACFLT) 
Pacific Partnership is an annual disaster response preparedness mission 
to Southeast Asia and Oceania regions. Pacific Partnership includes 
participation from U.S. allies and partners to improve cooperation and 
understanding between partner and host nations ahead of major natural 
disasters that require a multinational response. Last year, USNS Mercy 
conducted a four-month deployment to Fiji, Papua New Guinea, the 
Philippines, and Vietnam and provided healthcare and surgical 
procedures, community health engagements, and engineering projects 
including nearly 700 surgeries, 3,800 dental exams, and 10 renovation 
and new construction projects.
    Joint Enabling Capabilities Command:  One organization that 
supports USPACOM's ability to respond rapidly and effectively to events 
in theater is TRANSCOM's Joint Enabling Capabilities Command (JECC). 
The JECC is critical to USPACOM's ability to facilitate rapid 
establishment of joint force headquarters, fulfill Global Response 
Force (GRF) execution, and bridge joint operational requirements by 
providing mission-tailored, ready joint capability packages.
    Counter-Narcotics:  The drug trade continues to grow and threaten 
stability across the region. It has become a massive business, with 
sophisticated global networks. USPACOM combats drug trafficking in the 
region through Joint Interagency Task Force-West (JIATF-W). Building 
partner capacity to counter illicit trafficking of narcotics continues 
in areas such as the tri-border area of the Philippines, Malaysia and 
Indonesia, the coastal areas of Vietnam and Cambodia, and the border 
regions of Bangladesh. USPACOM is also fighting illicit trafficking 
across the Northern Thai border in the historic ``Golden Triangle'' 
area and beginning new partnerships with France to combat trafficking 
in and through French Polynesia and the Southern Pacific. Counter-
narcotics programs support law enforcement and security forces, enhance 
relationships with partner nation law enforcement agencies, and impede 
the flow of narcotics and other illicit commodities.
    JIATF-W engagements with China are an essential part of the counter 
narcotics effort. Maritime container shipments of China-sourced 
chemicals are often diverted for methamphetamine and heroin/opioid 
production in Mexico--a direct threat to the United States Homeland. As 
much as 90 percent of the precursor chemicals used in methamphetamine 
production originates in China. Further, the annual volume of 
methamphetamine seizures going into the U.S. exceeded cocaine seizures 
on the southwest border of the U.S. in recent years. Through a 
partnership with the Internal Revenue Service, JIATF-W leveraged 
Department of Defense counternarcotic authorities to open an additional 
avenue of cooperation with Chinese officials by providing anti-money 
laundering training to counterdrug efforts. These efforts show promise 
in improving communication, cooperation, and information sharing on 
significant criminal enterprises operating in the United States and 
China.
    The Daniel K. Inouye Asia-Pacific Center for Security Studies (DKI 
APCSS):  DKI APCSS serves as a truly unique venue to empower regional 
security practitioners to more effectively and collaboratively 
contribute to regional security and stability. This center is one of 
our asymmetric capabilities. No other country has anything quite like 
it. Through its academic exchanges, workshops, and sustained alumni 
engagement activities, DKI APCSS helps build partner nation capacities 
and affirm U.S. interests in the region. DKI APCSS provides added 
support to the USPACOM mission in several uniquely focused areas: as 
one of the few organizations authorized to conduct carefully measured 
engagement with Burma defense officials; as the primary tool of 
security cooperation engagement with the Pacific Island region; and as 
USPACOM's lead in implementing the U.S. National Action Plan mandate to 
increase inclusion of women in the security sector under the Women, 
Peace, and Security program. Recent successes include development and 
implementation of a successful country-wide security plan for 2015 
elections in Burma; building the capacity of government officials in 
preparation for the Lao 2016 chairmanship of ASEAN; enhancing the 
cybercrime investigation capability of the Bangladesh Police; 
developing rules of engagement for the Timor Leste police during 
peacetime; building a data system for collection of counterterrorism 
information in Vietnam; and improving coordination among Philippine 
national agencies, local government units, NGOs, and other stakeholders 
in disaster response.
    Center for Excellence-Disaster Management (CFE-DM):  The CFE-DM is 
USPACOM's executive agent for collecting lessons learned and developing 
and sharing best practices to prepare U.S. and partner governments for 
disaster response. CFE-DM recently completed a Joint After-Action 
Review of USPACOM's disaster response to the April 2015 Nepal 
Earthquake (Operation SAHAYOGI HAAT). The success of the response is a 
testament to Nepali preparation and disaster risk reduction efforts 
that were enhanced by our ongoing training assistance. The civilian 
national disaster management structures functioned, and the initial 
international response coalesced around the Nepal Army's Multinational 
Military Coordination Center (MNMCC). Five years of USPACOM Theater 
Security Cooperation initiatives with regional partners, organizations, 
and international agencies facilitated this collaborative foreign 
disaster response. CFE-DM supports USPACOM's efforts to increase 
resilience and more effective disaster response capabilities.
                         critical capabilities
    The most technical, high-end military challenges in the region are 
growing. While many improvements to posture, forward deployed forces, 
and our relationships help address these challenges, USPACOM requires 
the best, high-end warfighting capabilities available now and in the 
future. As Secretary Carter recently said about deterring our most 
advanced competitors, ``We must have, and be seen to have, the ability 
to impose unacceptable costs on an advanced aggressor that will either 
dissuade them from taking provocative action or make them deeply regret 
it if they do.'' There are a number of mission sets and enablers that 
requires continuous focus and attention. These include undersea 
warfare, munitions, ISR, cyber, space, and Integrated Air and Missile 
Defense (IAMD) systems. We must preserve our asymmetric advantages in 
undersea- and anti-submarine warfare, and we must regain and retain 
fading abilities to counter anti-access / area-denial (A2/AD) 
strategies.
    Today, China is ``out-sticking'' United States air and maritime 
forces in the Indo-Asia-Pacific region in terms of ranges of anti-ship 
weapons. I need increased lethality, specifically ships and aircraft 
equipped with faster, more lethal, and more survivable weapons systems. 
We must have longer range offensive weapons on every platform. Finally, 
we must have a networked force that provides greater options for action 
or response.
    We face a significant A2/AD challenge in this region. Pacing the 
threat is not an option in my playbook. We must outpace the competition 
which requires continued investment in development and deployment of 
the latest technology to USPACOM. Examples include Navy Integrated 
Fires and the AEGIS Flight III destroyer and its Air and Missile 
Defense Radar (AMDR)--essential tools in the complex A2/AD battlespace 
in which our young men and women operate today. The arrival of the USS 
Barry, USS Benfold and USS Chancellorsville in the Western Pacific 
represent forward deploying cutting edge technology where it is needed.
    Undersea Warfare:  Of the world's 300 foreign submarines, roughly 
200 are in the Indo-Asia-Pacific region; of which 150 belong to China, 
North Korea, and Russia. China is improving the lethality and 
survivability of its attack submarines and building quieter high-end, 
diesel- and nuclear-powered submarines. China has four operational Jin-
class ballistic missile submarines (SSBNs) and at least one more may 
enter service by the end of this decade. When armed, a Jin-class SSBN 
will give China an important strategic capability that must be 
countered. Russia is a Pacific threat, modernizing its existing fleet 
of Oscar-class multi-purpose attack nuclear submarines (SSGNs) and 
producing their next generation Yasen-class SSGNs. Russia has also 
homeported their newest Dolgorukiy-class SSBN in the Pacific, 
significantly enhancing their strategic deterrence posture. USPACOM 
must maintain its asymmetric advantage in undersea warfare capability 
including our attack submarines, their munitions, and other anti-
submarine warfare systems like the P-8 Poseidon and ship-borne systems.
    Critical Munitions:  Critical munitions shortfalls are a top 
priority and concern. USPACOM advocates for continued investment, 
additional procurement, and improved munitions technologies to better 
deter and defeat aggression. Munitions are a major component of combat 
readiness. USPACOM forces need improvements in munitions technologies, 
production, and pre-positioning, but fiscal pressure places this at 
risk.
    USPACOM weapon improvement priorities include long-range and stand-
off strike weapons, longer-range anti-ship weapons (ship and aircraft-
based), advanced air-to-air munitions, theater ballistic/cruise missile 
defense, torpedoes, naval mines, and a cluster munitions replacement. 
Our subsonic ship-to-ship munition, the Harpoon, is essentially the 
same missile we had in 1978, when I was a newly-commissioned Ensign. 
Nearly forty years later, competitors have developed supersonic ship-
to-ship and land-based weapons that reach much farther, punch harder, 
and fly faster. USPACOM welcomes efforts to turn the tables back in our 
favor--quickly. In the air-to air realm, USPACOM welcomes advancements 
in munitions that will provide an advantage in a complex air-to-air 
environment. Additionally, modernization and improvement to U.S. 
torpedo and naval mine capabilities and inventories are required to 
maintain U.S. undersea advantage. Continued improvements in the 
capability and capacity of ballistic/cruise missile defense 
interceptors will further enhance Homeland defense capabilities and 
protect key regional nodes from aggressive action. In support of Korea, 
USPACOM supports efforts to acquire a replacement for aging cluster 
munitions.
    Intelligence/Surveillance/Reconnaissance:  The challenge of 
gathering credible ISR cannot be overstated, and it is a constantly 
evolving problem. The Indo-Asia-Pacific presents a dynamic security 
environment requiring flexible, reliable, survivable deep-look and 
persistent ISR to provide indications and warning and situational 
awareness across a vast geographic area. As previously noted, USPACOM 
faces a variety of challenges and potential flashpoints to include 
threats from North Korea, a resurgent Russia, an expanding China, 
terrorism, and territorial disputes. Several hundred thousand Americans 
live under a constant threat of attack by North Korea, with over a 
hundred thousand rockets able to range Seoul on little to no notice. 
These challenges require ISR to prevent strategic surprise and 
accurately assess the security environment and, if necessary, defeat 
potential adversaries. The Rebalance to the Asia-Pacific has increased 
USPACOM allocation of ISR resources. USPACOM will continue to require 
additional advanced ISR to avoid long-term risk.
    Cyber and Space:  The cyber domain, coupled with space, is the most 
likely ``first salvo'' in a future conflict. Increased cyber capacity 
and nefarious activity, especially by China, North Korea, and Russia 
underscore the growing requirement to evolve command, control, and 
operational authorities. I support a separate CYBERCOM functional 
combatant command that retains its ``double-hatting'' with the National 
Security Agency. I also believe that in order to fully leverage the 
cyber domain, USPACOM requires an enduring theater cyber capability 
able to provide cyber planning, integration, synchronization, and 
direction of cyber forces.
    USPACOM relies on space based assets for satellite communications 
(SATCOM) and ISR across the range of military operations. The USPACOM 
region spans over half the globe and space based assets are high-
demand, low-density resources. As the shared domain of space grows 
increasingly congested and contested, our adversaries are developing 
means to attack our space-enabled capabilities. USPACOM requires 
resilient SATCOM capability to support operations. China is pursuing a 
broad and robust array of counterspace capabilities, which includes 
direct-ascent anti-satellite missiles, co-orbital anti-satellite 
systems, computer network operations, ground-based satellite jammers 
and directed energy weapons.
    Integrated Air and Missile Defense (IAMD):  TPY-2 radars in Japan, 
the THAAD system on Guam, and the Sea-Based X-band Radar (SBX) based in 
Hawaii defend the U.S. Homeland and our allies. USPACOM's IAMD priority 
is maintaining a credible, sustainable ballistic missile defense by 
forward deploying the latest in ballistic missile defense technologies 
to the Pacific. For example, the U.S. Seventh Fleet is increasing its 
Ballistic Missile Defense (BMD) capability with the addition of the USS 
Benfold, which arrived in Japan last year, and USS Barry scheduled to 
arrive in early 2016. These ships received a midlife modernization, 
making them the most capable BMD ships in the world. The addition of 
these modernized ships enables the U.S. Seventh Fleet to better support 
the United States-Japan alliance with a credible ballistic missile 
defense capability. USPACOM continues to work with Japan, the Republic 
of Korea, and Australia to improve coordination and information sharing 
with the goal of creating a fully-integrated BMD architecture.
    Innovation:  Innovation is critical to addressing USPACOM's 
capability gaps and maintaining our military advantage. USPACOM 
partners with DOD-wide organizations, national laboratories, and 
industry to provide innovative solutions to fill capability 
requirements. In particular, USPACOM maintains a strong relationship 
with the OSD Strategic Capabilities Office (SCO), which is developing 
game-changing technologies for the Indo-Asia-Pacific. USPACOM strongly 
supports Deputy Secretary Work's Third Offset Strategy and the 
associated effort to strategically advance areas where the U.S. can 
maintain dominance. The ability to quickly and adaptively change joint 
operational concepts and innovatively employ current capabilities in a 
high-end fight is critical.
                               conclusion
    It has been over four years since the President announced the 
United States Rebalance to the Indo-Asia-Pacific. There is much more to 
the Rebalance than military activity and the success of this strategic 
concept depends as much on our economic and diplomatic efforts as it 
does on our military efforts. From the military perspective, I believe 
the Rebalance is working. This success is due in no small part to the 
support of this committee and the Congress. But we are not done, and we 
must not lose momentum. USPACOM appreciates your continued support. I 
ask this committee to support continued investment in future 
capabilities that meet the challenges in the Indo-Asia-Pacific. I 
appreciate your help in continuing to field the right numbers of 
existing capabilities. I ask for your support to our plans to adapt our 
regional force posture. Finally, I ask your continued support for our 
efforts to reinforce and enhance alliances and partnerships. Thank you 
for your enduring support to USPACOM and our men and women in uniform, 
and their families, who live and work in the vast Indo-Asia-Pacific.

    Chairman McCain. General Scaparrotti?

  STATEMENT OF GENERAL CURTIS M. SCAPARROTTI, USA, COMMANDER, 
 UNITED NATIONS COMMAND, COMBINED FORCES COMMAND, U.S. FORCES 
                             KOREA

    General Scaparrotti. Chairman McCain, Ranking Member Reed, 
and distinguished members of the committee, I am honored to 
testify today as the commander of the United Nations Command 
[UNC], Combined Forces Command [CFC], and the United States 
Forces Korea [USFK].
    Sir, I would like to add to Admiral Harris's comment that 
we wish Senator McCaskill a speedy recovery as well.
    On behalf of the American soldiers, sailors, airmen, and 
marines, and our civilians, serving in the Republic of Korea, 
thank you for your support.
    Admiral Harris, thank you for your vision and professional 
support of the entire PACOM team for USFK.
    I have prepared brief opening remarks, and I ask that my 
written posture statement be entered into the record.
    Chairman McCain. Without objection.
    General Scaparrotti. Since my last testimony, our United 
States-ROK alliance has continued to focus on advancing our 
combined capabilities. Some of these advanced capabilities 
include the establishment of the first United States-ROK 
combined division, the rotation of additional U.S. Forces to 
the peninsula, the execution of our annual combined training 
exercises, and steady progress on our $10.7 billion plan to 
relocate United States forces in Korea.
    Furthermore, the Republic of Korea has improved its 
capabilities with the recent establishment of the Korean Air 
and Missile Defense System and center, and the Allied Korea 
Joint Command and Control System. The Republic of Korea has 
also invested in modern equipment with the purchase of the F-35 
Joint Strike Fighter, Global Hawk, Patriot Advanced Capability 
3 missile upgrades, as well as AH-64 Apache helicopters.
    These alliance advances help counter the real and proximate 
North Korean threat. North Korea continues to conduct 
provocations and to resource its large conventional force. Of 
greater significance, North Korea continues to aggressively 
develop nuclear weapons and ballistic missiles in direct 
violation of the U.N. Security Council resolutions, as 
demonstrated with its fourth nuclear test and its fifth TD-2 
launch in January and February.
    In regards to this threat, my top concern remains the 
potential for a North Korean provocation to start a cycle of 
action and counteraction, which could quickly escalate, similar 
to what we experienced this past August.
    While I am proud to report that our alliance stood 
shoulder-to-shoulder and de-escalated the situation, it could 
have spiraled out of control and demonstrates why we must be 
ready to fight tonight on the peninsula.
    To maintain this level of readiness, we will continue to 
focus on sustaining, strengthening, and transforming the 
alliance with an emphasis on our combined readiness in four 
critical areas.
    First, ISR [intelligence, surveillance, and reconnaissance] 
remains my top readiness challenge. CFC/USFK requires 
additional persistent, all-weather ISR capabilities, as well as 
dependable moving target indicator support, to maintain 
situational awareness and provide adequate decision space.
    Second, it is critical for the alliance to establish a 
layered and interoperable ballistic missile defense. To advance 
this goal, we will soon begin bilateral consultations regarding 
the feasibility of deploying the THAAD system to the Republic 
of Korea, which would complement the Patriot system 
capabilities.
    Third, we must maintain an adequate quantity of critical 
munitions to ensure alliance supremacy in the early days of any 
conflict on the peninsula. This requirement is further 
amplified by the approaching loss of cluster munitions due to 
the shelf-life expiration and the impending ban.
    Fourth, we must focus on command and control, 
communications, computers, and intelligence, or what we call 
C4I. Both the United States and the Republic of Korea are 
investing in new tactical equipment that will comprise a 
reliable C4I architecture, but much more is required.
    In closing, I would like to express how proud I am of the 
servicemembers, civilians, and their families serving in the 
Republic of Korea who never lose sight of the fact that we are 
on freedom's frontier. I also would like to recognize 
Ambassador Mark Lippert and Admiral Harry Harris and the United 
States and ROK senior leaders for their enduring commitment to 
our mission on the peninsula. Thank you, and I look forward to 
your questions.
    [The prepared statement of General Scaparrotti follows:]

          Prepared Statement by General Curtis M. Scaparrotti
                            1. introduction
    Mr. Chairman and distinguished members of the Committee, I am 
honored to testify as the Commander of the United Nations Command 
(UNC), the United States-Republic of Korea (United States-ROK) Combined 
Forces Command (CFC), and United States Forces Korea (USFK). Thank you 
for your continued support to our servicemembers, civilians, 
contractors, and their families, whose service each day on ``Freedom's 
Frontier'' advances vital U.S. interests, strengthens the Alliance 
between the United States and the Republic of Korea, and makes a 
critical contribution to the stability of Northeast Asia. In my third 
year as the Commander, I have witnessed the U.S.-ROK Alliance grow 
stronger, as the Alliance has improved its capabilities, planning, and 
cooperation to counter evolving threats from North Korea and to advance 
our four priorities:
      Sustain and Strengthen the Alliance.
      Maintain the Armistice. Be Ready to ``Fight Tonight'' to 
Deter and Defeat Aggression.
      Transform the Alliance.
      Sustain the Force and Enhance the UNC/CFC/USFK Team.
    Through this past August's land mine attack, North Korea's fourth 
nuclear test in January, and the TD-2 missile launch earlier this 
month, the United States and Republic of Korea stood united and 
resolute against North Korea's provocative actions. Our strength and 
combined actions are the product of established ROK-U.S. bilateral 
processes, the Alliance's shared commitment to remain ready to ``Fight 
Tonight,'' and the alignment of American and Korean values and goals.
    While the Command focuses on these core priorities, we are also 
looking to the future. The Alliance took concrete steps over this past 
year to enhance our ability to respond to North Korea's evolving 
asymmetric capabilities, strengthen ROK forces to lead the combined 
defense of the Republic of South Korea, and relocate United States 
forces to two enduring hubs south of Seoul.
 2. america's future in korea--securing vital interests and advancing 
                           regional stability
    The UNC/CFC/USFK mission is vital to the broader effort to expand 
security and prosperity in the Asia-Pacific region. As a sub-unified 
Command of U.S. Pacific Command (PACOM), USFK's core responsibility is 
to deter and defeat external aggression against the Republic of Korea, 
which enhances stability in the Asia-Pacific region and affirms our 
commitment to the United States-ROK Mutual Defense Treaty. We cooperate 
closely with PACOM in its mission to promote security cooperation, 
encourage peaceful development, respond to contingencies, deter 
aggression, and, when necessary, fight to win.
    From my perspective, the level of U.S. engagement demonstrated by 
USFK in Korea and PACOM in the broader region is critical in this time 
of opportunity and challenge in Asia. Expanding ties among Asian 
countries and across the Pacific have helped facilitate an era of 
robust economic growth and military advances. While these advances 
promote global expansion and interdependent stability, international 
tensions have risen from the actions of several regional nations' 
military modernization and the use of national power. In this context 
of significant and rapid change, the Republic of Korea's neighbors are 
adjusting their strategies to shape the region's future.
    China's continued pursuit of its military modernization program and 
land reclamation activities have prompted concerns among many nations 
in the region. Even as China's relations with North Korea remain 
strained, Beijing continues to support the North Korean regime, remains 
its largest trading partner, and seeks to prevent spillover of North 
Korean issues.
    Japan's decisions to take a more active role in its defense and to 
advance global security are viewed by many nations around the world as 
a positive development. Yet, some in China, the Republic of Korea, and 
North Korea have been critical, as historical issues continue to 
influence views on Japan's international role. In this complex setting, 
USFK continues to look for opportunities to advance trilateral military 
cooperation among the United States, Japan, and the Republic of Korea.
    Over the past year, Russia has continued to expand its military 
presence, economic investment, and diplomatic engagement to reassert 
its strategic interests in the region. Russia conducted combined 
military drills with China in August, conducted multiple air patrols by 
its bombers throughout the region and into the Korean Air Defense 
Identification Zone, and named 2015 as a ``Year of Friendship'' between 
Russia and North Korea.
    Unfortunately, North Korea has chosen not to embrace this era of 
change and prosperity, and has been omitted from many of the 
opportunities in 21st century Asia. Kim Jong Un, North Korea's singular 
leader and the third generation of the Kim Family, exercises complete 
control over the state and military decision-making process focused on 
preserving the survival of his regime. He maintains an extensive 
internal security apparatus that addresses any challenges to his rule 
and he has openly replaced several top military leaders to solidify his 
authority. Kim also perceives that the regime's survival relies on the 
domestic and international recognition of North Korea as a global and 
nuclear power. This January's fourth nuclear test and February's launch 
of a TD-2 missile configured as a satellite launch vehicle--its fifth 
long-range missile launch since 2006--further demonstrate that North 
Korea will continue to defy UN Security Council resolutions and 
international norms in its attempts to seek the regime's desired 
recognition.
    Similar to his father and grandfather, Kim has likewise 
demonstrated that violent provocations remain central to North Korea's 
strategy. For example, this past August, North Korea carried out a 
heinous landmine attack in the DMZ that grievously wounded two Korean 
Soldiers. Later in the month, tensions rapidly intensified with the 
deployment of additional forces to the DMZ, psychological operations, 
and hostile rhetoric which required a strong, yet measured Alliance 
response. Even though our combined actions enabled national leaders 
from the two Koreas to resolve the situation diplomatically, it 
demonstrated North Korea remains a credible and dangerous threat on the 
Peninsula.
    We continue to assess that North Korea recognizes it cannot reunify 
the Korean Peninsula by force with its large, but aging, conventional 
military. While it continues to train and man its conventional force, 
North Korea remains focused on improving its asymmetric capabilities: 
nuclear weapons, long-range ballistic missiles, and cyber programs. In 
addition to its fourth nuclear test, the regime conducted a multitude 
of multiple rocket launch system tests, as well as no-notice Scud and 
No Dong missile tests from a variety of locations throughout North 
Korea. Upgrades continued on the Taepodong Inter-Continental Ballistic 
Missile (ICBM) launch facility and development of a submarine-launched 
ballistic missile and vessel. Lastly, North Korea continued to improve 
its capabilities in the cyber domain which build on the regime's 
success of past cyberattacks.
    Even as North Korea is investing heavily in asymmetric 
capabilities, its conventional military threats are still formidable. 
The KPA is the fourth-largest military in the world with several 
hundred ballistic missiles, the largest artillery force in the world 
with over 13,000 long-range and other artillery pieces, one of the 
largest chemical weapons stockpiles in the world, a biological weapons 
research program, and the world's largest special operations force. 
About three-quarters of its ground forces and half of its air and naval 
assets are within 60 miles of the Demilitarized Zone (DMZ). In the 
contested waters around the Northwest Islands and beyond the western 
end of the DMZ, North Korea has taken deliberate steps to strengthen 
its awareness and posture with additional navigation buoys, coastal 
observation posts, and naval patrols. These steps even include 
beginning construction of troop and weapon emplacements on Kal Do, an 
island less than three miles from Yeonpyeong Do, site of the 2010 North 
Korean shelling of the Republic of Korean military and civilian 
targets.
    Due to these enduring and proximate threats, our Command must 
continue to deter North Korea's aggression as the risks and costs of a 
Korean conflict would be immense to the Republic of Korea, Northeast 
Asia, and the world. The region accounts for one-fifth of the world's 
economic output, 19% of global trade, four of the 13 largest economies, 
and four of the six largest militaries in the world. If deterrence 
fails, full-scale conflict in Korea would more closely parallel the 
high intensity combat of the Korean War than the recent wars in Iraq 
and Afghanistan. Furthermore, any conflict with North Korea would 
significantly increase the threat of the use of weapons of mass 
destruction.
        3. the command's four priorities--progress and prospects
    In the context of this unique strategic environment, the Command 
advances vital U.S. interests, strengthens the ROK-U.S. Alliance, and 
makes a critical contribution to security in the Asia-Pacific. This 
year, we have made progress on each of our four priorities--first, to 
sustain and strengthen the Alliance; second, to maintain the Armistice, 
while remaining ready to ``Fight Tonight'' to deter and defeat 
aggression; third, to transform the Alliance; and, finally, to sustain 
the force and enhance the UNC/CFC/USFK Team.
    A. Sustain and Strengthen the Alliance.  Three key innovations this 
year have led to substantive improvements in the ability of United 
States and ROK forces to operate together as integrated and capable 
allies.
    1. A new ROK-United States Combined Division improves 
interoperability. For more than 60 years, the Soldiers of the U.S. 2nd 
Infantry Division (2ID) have stood shoulder-to-shoulder with our ROK 
allies. This year, that enduring commitment was taken one step further 
through the transformation of 2ID into a Combined ROK-United States 
Division. This new organization integrates over 40 ROK Army officers 
into the 2ID headquarters, fostering mutual trust, combined decision-
making, and open communications. In addition, a ROK Army mechanized 
brigade will habitually train with the Combined Division's units to 
develop shared capabilities. If conflict comes to the Peninsula, this 
brigade will be under the operational control of the Combined Division 
to create a seamless capability.
    2. Rotational forces improve readiness. In order to increase the 
effectiveness and readiness of U.S. Forces on the Peninsula, USFK 
rotates specifically selected unit capabilities instead of maintaining 
permanently stationed units with servicemembers on individual one-year 
tours. Fully manned, trained, and mission-ready rotational forces also 
provide the Alliance elevated capabilities over time by introducing a 
greater number of the United States servicemembers to the unique 
aspects of contingency operations in Korea.
    In the summer of 2015, the United States Army began rotating 
Brigade Combat Teams (BCTs) into the Republic of Korea for the first 
time, on nine-month tours as the 2nd Heavy Brigade Combat Team (HBCT) 
of the 1st Cavalry Division arrived from Fort Hood, Texas. Just two 
months after the unit arrived, the BCT was able to integrate with the 
ROK Army to conduct a combined and joint exercise. 2ID's Combat 
Aviation Brigade has also increased its capabilities through the 
rotation of Aerial Reconnaissance Squadrons and the Counter Fire Task 
Force expanded it combat power by adding a rotational Multiple Launch 
Rocket System (MLRS) battalion.
    Rotation of fully-trained and resourced forces to the Korean 
Peninsula is not just an Army commitment. The United States Navy's 
Pacific Fleet ships and aircraft routinely exercise in the waters 
surrounding the Korean Peninsula as part of their regular rotation 
throughout the Pacific. Furthermore, the United States Air Force 
rotates both Active and Reserve Component fighter squadrons to Korea, 
while the United States Marines deploy air-ground teams to exercise and 
practice interoperability with the ROK Marine Corps.
    3. New capabilities improve the Alliance's defense and deterrence. 
The ROK government has continued to invest approximately 2.5% of its 
Gross Domestic Product in its national defense--one of the highest 
rates among U.S. allies. During this past year, the Republic of Korea 
made progress in enhancing future interoperable-warfighting 
capabilities by procuring upgrades such as PAC-3 missiles for the 
Patriot Weapon System, multi-role tanker-transport aircraft, and the 
AEGIS command and control and weapons system. These follow previous 
investments in F-35 Joint Strike Fighters, Global Hawk high-altitude 
unmanned aerial vehicles, and other important assets. Once integrated 
into our Alliance force structure, these systems will further enhance 
our readiness and capability. Additionally, we announced this month 
that we will begin bilateral consultations regarding the viability of 
deploying the Terminal High-Altitude Area Defense (THAAD) system to the 
Republic of Korea to upgrade our combined missile defense posture.
    B. Maintain the Armistice. Be Ready to ``Fight Tonight'' to Deter 
and Defeat Aggression. The Command's focus on readiness proved critical 
to answering North Korean provocations this past year. Our cooperation 
affirmed both countries' pledge to develop Alliance solutions to 
Alliance challenges.
    1. The Command deters and defends against aggression to foster 
stability on the Peninsula. President Obama noted at his October 
meeting with President Park that, from the events of this August, 
``North Korea was reminded that any provocation or aggression will be 
met by a strong, united response by the Republic of Korea and the 
United States.'' When crisis came, we were prepared. A constant focus 
on readiness and open communication enabled the Alliance to act 
deliberately and prudently. The Alliance's actions deterred broader 
North Korean provocations and set the stage for a peaceful resolution 
of the crisis.
    2. Three successful exercises enhance the Command's readiness. UNC/
CFC/USFK enhanced its readiness through its three annual multinational, 
combined, and joint exercises--Key Resolve, Foal Eagle, and Ulchi 
Freedom Guardian. Key Resolve and Ulchi Freedom Guardian are annual, 
computer-simulated command post exercises that focus on crisis 
management and the defense of the Republic of Korea. Foal Eagle is an 
annual field training exercise to ensure operational and tactical 
readiness. All three exercises provide realistic scenarios that prepare 
our forces, to include additional participants from the UNC, to deter 
and defeat North Korean aggression and potential instability in the 
region. They are essential in improving ROK-U.S. crisis management, 
combat readiness, and interoperability.
    We also aligned USFK's readiness program on the Korean Peninsula 
with PACOM's regional efforts. In August 2015, USFK and PACOM 
integrated for the first time the Korea-based Ulchi Freedom Guardian 
exercise and PACOM's Pacific Sentry command and control exercise. This 
coordination allowed the Alliance to test effective decision-making and 
mutual support with PACOM.
    3. A revitalizing UNC strengthens the international contribution to 
Korea's defense. Last year, we increased our efforts to further 
strengthen the engagement of the United Nations Command's 17 Sending 
States in our day-to-day operations. When North Korean aggression 
raises tensions, the Sending States provide credible and multinational 
support for the defense of the Republic of Korea.
    To revitalize the UNC, we will continue to engage all of the 
Sending States to leverage their many capabilities for Korea's defense. 
A senior Australian officer on our staff leads a sustained effort to 
enhance Sending State engagement in UNC's work. The representatives of 
the UNC Sending States participate in our exercises, train with us, 
meet monthly with the Command's senior leadership, and assign top-
quality officers to work in the Command. During the Ulchi Freedom 
Guardian 2015 exercise, the Command greatly appreciated the 89 
participants from seven UNC Sending States (Australia, Great Britain, 
Canada, New Zealand, Colombia, Denmark, and France).
    C. Transform the Alliance. In 2015, the Command and the Alliance 
continued to adapt to face both emerging and evolving challenges.
    1. The MCM and SCM reaffirms ROK and U.S. commitment to defense 
cooperation. Following the October meeting between President Obama and 
President Park, in which our two countries recommitted to a 
comprehensive and global Alliance, our senior defense officials met in 
November at the 40th ROK-U.S. Military Committee Meeting (MCM) and the 
47th ROK-U.S. Security Consultative Meeting (SCM). They approved and 
agreed to implement a new concept to detect, disrupt, destroy, and 
defend (the ``4Ds'') against North Korean missile threats; pledged to 
address global security challenges of mutual interest; strengthened 
cooperation in the space and cyberspace domains; reaffirmed a timely 
completion of the Yongsan Relocation Plan and Land Partnership Plan; 
identified critical military capabilities that the Republic of Korean 
military must develop to meet the conditions of OPCON transition; and 
endorsed the Conditions-based Operational Control (OPCON) Transition 
Plan, or COT-P.
    2. The plan for conditions-based OPCON transition (COT-P) defines 
an effective way forward. COT-P creates a well-designed pathway to 
implement a stable transfer of wartime OPCON of combined forces from 
the United States to the ROK. This Plan provides a road map for the 
Republic of Korea to develop the capabilities that will allow it to 
assume wartime Operational Control (OPCON) when the security 
environment on the Korean Peninsula and in the region is conducive to a 
stable transition.
    3. Effective military planning positions the Alliance to respond to 
a changing threat environment. USFK regularly reviews and updates 
operations plans to ensure our readiness to respond to regional threats 
and crises. The combined ROK-United States operations plan has and will 
continue to evolve to enhance readiness and strengthen the ROK-United 
States Alliance's ability to defend the Republic of Korea and maintain 
stability on the Korean Peninsula.
    D. Sustain the Force & Enhance the UNC/CFC/USFK Team. Our 
Multinational-Combined-Joint Force continues to foster a positive 
Command Climate and focus on the welfare of our team.
    1. The Command fosters a positive Command Climate through trust and 
team-building. The foundations of our organization and a positive 
Command Climate consist of effective communication, trust, and 
teamwork. Regular training on prevention of sexual harassment, sexual 
assault, and suicides continues to be a priority. The result is a 
strong record of servicemember discipline in the Republic of Korea. 
Over 99.4 percent of our servicemembers demonstrate their discipline 
and desire to be law-abiding, good neighbors in Korea.
    2. Cohesive communities and new facilities promote Korea as an 
``Assignment of Choice.'' This attention to the welfare of our entire 
team has been an important driver in making Korea an ``Assignment of 
Choice.'' Our realistic training against a real North Korean threat, 
cohesive community, the safety of our host country, and the brand-new 
facilities at Camp Humphreys welcome members of our military to serve 
on ``Freedom's Frontier.''
               4. critical near-term alliance transitions
    Northeast Asia is one of the world's most dynamic regions. As a 
result, the Command's success is not only contingent on our ability to 
meet our immediate requirements, but also on our flexibility to adapt 
in the strategic environment to new opportunities and challenges. While 
we focus our efforts on our four Command priorities, we are also making 
decisions and taking actions now that shape the future of our Command 
and Alliance. Longer-term success requires both steadfast advancement 
of the Command's priority to maintain readiness to ``Fight Tonight'' 
and the agility to transform in the future.
    A. Enhance the Alliance's capabilities. As the North Korean threat 
evolves, its extensive asymmetric arsenal could be used at a time and 
location of its choosing. This creates indications and warning 
challenges for the Alliance which require the United States and the 
Republic of Korea to develop new capabilities to detect and defend 
against this threat.
    1. Advance ISR, BMD, and critical munitions to sharpen our tools of 
deterrence. Together, both countries must constantly improve their 
intelligence, surveillance, and reconnaissance capacity; develop a 
robust, tiered ballistic missile defense; field appropriate command and 
control assets; acquire necessary inventories of critical munitions; 
and enhance the tools to prevent, deter, and respond to cyber-attacks.
    2. The Tailored deterrence strategy underscores the U.S. commitment 
to the Peninsula. We have developed and refined a Tailored Deterrence 
Strategy, which serves as a strategic framework for tailoring 
deterrence against North Korean nuclear and ballistic missile threat 
scenarios. By providing a full range of ready military capabilities, 
including the U.S. nuclear umbrella, conventional strike, and missile 
defense capabilities, this strategy supports deterrence and represents 
the U.S. commitment to provide and strengthen extended deterrence.
    3. The Combined Counter-Provocation Plan manages the risks of 
miscalculation. We also have confidence in our Combined Counter-
Provocation Plan. This plan improves our ability to respond to North 
Korean provocations as an Alliance, while managing the risks of 
miscalculation and escalation. The events of this August underscore how 
strong, yet measured responses set the conditions for diplomatic 
efforts to work.
    B. Relocate the United States force in Korea. The Command made 
progress towards relocating the majority of United States forces in 
Korea to two enduring hubs south of Seoul--a Central Hub around the 
cities of Osan and Pyeongtaek, and a Southern Hub around the city of 
Daegu. The $10.7 billion program is the largest single construction 
program in the Department of Defense and is well on its way to 
realizing its goal of modernizing the warfighting Command in Korea, 
improving the Command's effectiveness in deterring North Korea, and 
defending the Republic of Korea.
    1. Construction peaks as workers build facilities to triple the 
size of Camp Humphreys. At the end of 2015, approximately 65% of the 
program was completed. Currently, at the peak of production, workers 
are constructing 655 new buildings, and remodeling or demolishing 340 
existing buildings to accommodate the increase in population from 
approximately 12,000 to more than 36,000 servicemembers, families, 
civilians, and other members of our community. The majority of new 
facility construction at Humphreys will be completed in 2016, and the 
majority of unit relocations will occur through 2018. During these 
transitions, we are committed to making relocation decisions with the 
effective defense of the Republic of Korea as our most important 
priority.
    2. United States Naval Forces Korea moves its headquarters to 
Busan, collocated with the ROK Navy. The project at Camp Humphreys is 
not the Command's only move. This year, United States Naval Forces in 
Korea relocated the majority of headquarters staff from Yongsan 
Garrison in Seoul to the ROK Navy base in Busan, to enable the two navy 
staffs to work closer on a daily basis. This is the first United States 
headquarters located on a ROK base.
                        5. usfk's critical needs
    My top concern remains that we could have very little warning of a 
North Korean asymmetric provocation, which could start a cycle of 
action and counter-action, leading to unintended escalation. To remain 
effective as the threat evolves, we seek four critical capabilities:
    First, Intelligence, Surveillance, and Reconnaissance, or ISR. ISR 
remains my top readiness challenge and resourcing priority as CFC/USFK 
requires increased, multi-discipline, persistent ISR capabilities to 
maintain situational awareness and provide adequate decision space for 
USFK, PACOM, and National senior leaders. Therefore, among various 
spectrum, deep look, and full-motion video (FMV) capabilities, I also 
request dependable Moving Target Indicator (MTI) support combined with 
an airborne command and control and battle management capability. The 
ability to correlate MTI with other airborne sensor data in near-real-
time, with a robust on-board communications ability, contributes to a 
deeper understanding of the North Korean threat and intent.
    Second, Command, Control, Communications, Computers, and 
Intelligence, or C4I. Both the United States and the Republic of Korea 
are investing in new tactical equipment that will comprise a reliable 
C4I architecture. We must maintain this momentum in improving C4I 
capabilities and interoperability, so we can communicate from tactical 
to strategic levels and between units in the field.
    Third, Ballistic Missile Defense, or BMD. North Korea's missile 
program continues to develop, so it is critical for the Alliance to 
continue to build a layered and interoperable BMD capability. The U.S. 
PATRIOT system provides important defensive capabilities, and I have 
previously recommended to both governments that they consider a high-
altitude missile defense capability. Meanwhile, the Republic of Korea 
is moving forward in the development of its Korea Air and Missile 
Defense (KAMD) and ``Kill Chain.'' We have also made progress in 
advancing the interoperability of Alliance BMD capabilities, but there 
remains work to do in this area, particularly to further refine 
interoperability between systems.
    Fourth, Critical Munitions. The Command has identified specific 
munitions that it must have on hand in the early days of any conflict 
on the Peninsula. In this phase, the Alliance relies on the United 
States and ROK Air Forces air superiority to provide time for ready 
forces to flow into the Republic of Korea. In order to ensure this 
supremacy through immediate Alliance capability and interoperability, 
we must have sufficient critical munitions on hand. Therefore, we will 
continue to work closely with the Republic of Korea to ensure it 
procures the appropriate types and numbers of critical munitions for 
the early phases of hostilities. Of note, the potential ban on cluster 
munitions could have a significant impact on our ability to defend the 
Republic of Korea.
    With these capabilities, our Alliance will greatly improve its 
posture in Korea. If we continue to act together, with the consistent 
support we have experienced in both Washington and Seoul, I believe the 
Command and the Alliance will strengthen and ensure our capability to 
deter North Korea and defend the Republic of Korea and United States 
interests.
                             6. conclusion
    Over the past two-and-a-half years, I have seen steady progress in 
the United States-ROK Alliance. Last year, we were tested, and we found 
ourselves ready. Through annual exercises that rehearse United States-
ROK cooperation, the commitment to readiness of United States and ROK 
armed forces, and our peoples' shared values and goals, UNC/CFC/USFK 
and the ROK-United States Alliance have successfully advanced our 
priorities and realization of our combined vision.
    We are deeply thankful for the support of our Korean partners and 
the UNC Sending States. We appreciate and value the continued support 
of Congress and the American people, as it is your support that allows 
us to undertake this critical mission.
    It is my honor to serve with the American Soldiers, Sailors, 
Airmen, and Marines and our government civilians who serve in the 
Republic of Korea. Their presence and actions ensure freedom and the 
success of our objectives. Finally, we would like to recognize the 
leadership and support of senior United States and ROK civilian and 
military leaders, Ambassador Mark Lippert, and Admiral Harry Harris, as 
we support vital United States interests, strengthen the Alliance 
between the United States and the Republic of Korea, and make a 
critical contribution to security and prosperity in the Asia-Pacific.
    Thank you, and I look forward to our discussion.

    Chairman McCain. Thank you.
    I thank the witnesses for the kind words about Senator 
McCaskill. You reflect the views of all of us in wishing her 
well and a speedy recovery.
    General Scaparrotti, you have the benefit of now 4 years of 
service as commander of forces in Korea. Have you ever seen 
tensions this high?
    General Scaparrotti. No, sir, I have not, particularly in 
August. I think the tensions then with North Korea to ``semi-
war'' status was the highest tension that we have seen, 
probably since 1994.
    Chairman McCain. In your testimony, you said the situation 
``could spiral out of control.''
    General Scaparrotti. Yes, sir. My concern is that, in a 
provocation, much like we had in August, both sides at a very 
high alert status, there could be a miscalculation. Then with 
the response, it would be hard to control that situation.
    Chairman McCain. You do support THAAD deployment?
    General Scaparrotti. I do, sir.
    Chairman McCain. Admiral Harris, do you think it should be 
seriously considered, an option of a second carrier based in 
Japan?
    Admiral Harris. Senator, I believe that, as a COCOM 
[Combatant Command], I want as much capability as close to the 
fight as I can. I think with regard to the second carrier 
strike group in Japan, there are some problems with that, with 
the political piece with Japan, the costs, and all that. I will 
defer to the Navy to sort that out.
    But, again, as a COCOM, I would welcome as much forces 
forward as possible.
    Chairman McCain. You have been in your job for how long 
now?
    Admiral Harris. Just a little over 7 months. I took over 
last May.
    Chairman McCain. You have had extensive experience with the 
Chinese issue, with the issue of China?
    Admiral Harris. Yes, sir, I have. Before this job, I was 
the Pacific Fleet Commander.
    Chairman McCain. Has any of this escalation, the latest, 
this HQ-9 surface-to-air missile system, surprised you?
    Admiral Harris. No, sir. It does not surprise me. In my 
opinion, China is clearly militarizing the South China Sea, and 
you have to believe in the flat earth to think otherwise.
    Chairman McCain. One of the responses is to regularly sail 
into and fly over international waters?
    Admiral Harris. Yes, sir. As I testified last September----
    Chairman McCain. Not as a one-off, but as just a regular, 
routine use of international airspace and waters?
    Admiral Harris. Yes, sir. I agree with you.
    Chairman McCain. The situation vis-a-vis China continues to 
escalate, in your view?
    Admiral Harris. Yes, sir. It does. I think China's SSM, 
surface-to-surface missiles, surface-to-air missiles, on Woody 
Island; its new radars on Cuarteron Reef over here; the 10,000-
foot runway on Subi Reef over here and on Fire Cross Reef and 
other places; these are actions that are changing, in my 
opinion, the operational landscape in the South China Sea.
    Chairman McCain. The weapons they have developed could pose 
a direct threat to our carrier capabilities?
    Admiral Harris. Yes, Senator. They could. The DF-21, which 
they have developed, and the DF-26, which they are developing, 
could pose a threat to our carriers. I think, though, that our 
carriers are resilient, and we have the capability to do what 
has to be done, if it comes to that.
    Chairman McCain. I note you mentioned in your remarks that 
the United States-Philippines alliance is important. Do you 
think it is important for us to lift restrictions on the sale 
of weapons to Vietnam?
    Admiral Harris. Yes, Senator. I believe that we should 
improve our relationship with Vietnam. I think it is a great 
strategic opportunity for us, and I think the Vietnamese people 
would welcome an opportunity to work closer with us, as their 
security partner of choice.
    Chairman McCain. That also means port visits?
    Admiral Harris. Yes, sir. We do port visits in Vietnam. I 
advocate for more, and I believe that we will be able to do 
more this year.
    Chairman McCain. If you were asked for your top two or 
three priorities of what we should do, in light of this 
compelling information concerning the militarization by China, 
what would you recommend?
    Admiral Harris. Sir, I believe that we should maintain our 
credible combat power. We should maintain a network of like-
minded allies and partners. We should continue to exercise our 
rights on the high seas and in the airspace above it. We should 
encourage our friends, partners, and allies to do the same.
    Chairman McCain. Thank you.
    Senator Reed?
    Senator Reed. Thank you very much, Mr. Chairman.
    Thank you, gentlemen, for your testimony.
    Admiral Harris, you pointed out that there is a growing 
alliance in the Pacific, including India, the Philippines, 
Vietnam, potentially. Some of this, ironically, might be a 
result of some of these contested actions of the Chinese. Is 
that accurate?
    Admiral Harris. Yes, Senator. It is accurate. I believe 
that China's actions are provocative, increases tensions, and 
it causes the nations in the region to look to the United 
States as their security partner of choice and away from China.
    Senator Reed. Do you feel that we are fulfilling that role 
adequately, that we are engaging, and that we are cooperating 
and leading as we should in the Pacific?
    Admiral Harris. I believe we are. Across the Indo-Asia-
Pacific, from India through Southeast Asia and East Asia and 
Japan and Korea, we are improving our treaty alliances, our 
bilateral partnerships.
    In turn, we are getting increased access throughout the 
region. Singapore comes to mind. The EDCA that I spoke about in 
the Philippines comes to mind.
    This is an exciting time, in terms of access and agreements 
and relationships with countries throughout the Indo-Asia-
Pacific region.
    Senator Reed. One of the consequences of their buildout 
into the islands is that they have very accurate surface-to-
surface missiles, they have accurate radars, which would seem 
to put an even higher premium on underwater operations by U.S. 
submarines or autonomous vehicles. Is that your view? Are they 
becoming more important, submarines?
    Admiral Harris. It is, though I would not say it is 
becoming more important, because submarine and undersea warfare 
has always been important to the joint force. I view the 
submarine as the original stealth platform, and the 
capabilities that we have is a true asymmetric advantage over 
any other adversary or potential adversary on the planet. That 
is our capability in the undersea realm.
    Senator Reed. Thank you.
    Let me pose a question to both of you. China and North 
Korea is a very complicated relationship. The Chinese I think 
are nervous, not perhaps as much as the South Koreans and the 
United States, but, certainly, a little bit nervous. Yet they 
are the major funder in terms of the banking system, all of the 
infiltrating and exfiltrating monies in and out of North Korea, 
equipment, et cetera.
    Why, in your view, have we not been able to convince the 
Chinese of the danger that they face, and that their efforts 
and our efforts together could be effective in preventing 
potential catastrophes? Admiral Harris?
    Admiral Harris. Sir, I wish I knew the answer to that 
question. But I will say, adding on to what General Scaparrotti 
mentioned about THAAD, I find it preposterous that China would 
try to wedge itself between South Korea and the United States 
for a missile defense system designed to defend Americans and 
Koreans on the peninsula. If they were truly concerned, if they 
were truly interested, I believe China would and should 
intervene with North Korea and convince them to quit their 
cycle the provocations.
    Senator Reed. General Scaparrotti?
    General Scaparrotti. Sir, first, I agree with Admiral 
Harris. I think that they state that they are concerned about 
stability on the border, and I believe that they place that 
value above the risk that they believe they are taking with Kim 
Jong-un. We, certainly, hope that they will reconsider that 
calculus, because they, certainly, could have a greater 
influence in North Korea, given that 80 percent of their trade 
and a good deal of North Korea's banking is with China.
    Senator Reed. Thank you.
    Admiral Harris, you urged us all to repeal sequestration, 
which is, I think, the logical and obvious thing that must be 
done. Looking at your budget for this year, do you think you 
have adequate resources for the challenges, and they are 
significant, that you face?
    Admiral Harris. Senator, thanks to the Congress, I am in 
good shape in Pacific Command in fiscal year 2016, and the 
budget for 2017 looks good for me. I am grateful for that.
    There is always more, of course, and I will just mention a 
couple areas: munitions; submarines--my submarine requirement, 
as a combatant commander in the Pacific, is not being met, and 
that is solely because of numbers--ISR, intelligence, 
surveillance, and reconnaissance, that General Scaparrotti 
mentioned; and long-range antisurface missiles, weapons, which, 
I am pleased to note, is in the fiscal year 2017 budget.
    Senator Reed. I presume you would agree, General 
Scaparrotti?
    General Scaparrotti. Yes, Senator. I agree. I enjoy a 
priority within PACOM and DOD [the Department of Defense] as 
well to ensure that my forces can fight tonight. The four needs 
that I noted are the primary ones.
    Senator Reed. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Inhofe?
    Senator Inhofe. Thank you, Mr. Chairman.
    First of all, last week, we appreciate very much, Admiral 
Harris, your giving us the time that you gave us. I led a 
delegation of House and Senate members, and you were very nice 
to spend time with us when we visited you there.
    Since that time, we had a personal visit with the 
Australian Minister of Defense; with our Marines in Darwin, in 
the northern part of Australia; the Singapore Minister of 
Defense; and the commander of COMLOG WESTPAC [Commander 
Logistics Group, Western Pacific]; as well as Diego Garcia. We 
went a long ways around.
    But going back to our visit with you, we thank you very 
much for that.
    Just a minute ago, when we were also there visiting with 
you--and this would have been the 13th, last Saturday--we asked 
you a question about the budget. You were not forecasting any 
shortfalls at that time in the fiscal year 2017 projected PACOM 
budget, in the current threats in the Pacific. Is that what you 
just restated a minute ago?
    Admiral Harris. Yes, sir. It is.
    Senator Inhofe. Generally speaking, the forward forces are 
in pretty good shape when you get a hostile environment like we 
have right now. We talked about that when we were in your shop 
there. But it is usually at the expense of somebody else, in 
this case, the follow-on forces. Do you feel confident that 
they are being treated in a way that, should they be called 
upon, they have had adequate training that they would need to 
make this happen?
    Admiral Harris. Yes, Senator. I am confident that the 
follow-on forces are in good position today.
    Senator Inhofe. We do not hear that very often. I am glad 
to hear that.
    General Scaparrotti, there are currently nine ongoing 
operations and exercises within PACOM, all vital to our 
international interests. I will not list those. You know what 
those nine are.
    According to the Army budget overview, PACOM's combined 
operations consist of over 75,000 U.S. soldiers. How many of 
these strategic enablers are sustainable under the proposed 
Army budget now? Have you looked at that?
    General Scaparrotti. Yes, Senator. I think that we can 
actually sustain the pace and operations that we have today for 
2016 and 2017, in PACOM. Pacific Pathways has been very helpful 
throughout the Pacific. I think that is probably the one where 
we would adjust tempo, or perhaps pace, if there was budget 
pressure on that. But I am pretty confident we can maintain the 
exercises, and, in particular, those that we do on the 
peninsula.
    Senator Inhofe. Yes, Pacific Pathways is the number two 
here. If something happened there, does that have an effect on 
any of the others?
    General Scaparrotti. Well, sir, I think it would affect 
others in the sense that Pacific Pathways is very important to 
partner development. It brings a lot of capability within the 
Pacific, not only to the peninsula itself.
    Senator Inhofe. All right. The international standoff 
deepened earlier this month when North Korea, of course, 
ignored repeated warnings by the regional powers.
    Do they pay any attention to the regional powers? We have 
been talking about this for a long time.
    Admiral Harris, do you think, when they have all these 
warnings by us and by others that are out there, does that mean 
anything to them, North Korea?
    Admiral Harris. I am not sure what means anything to North 
Korea, Senator. But I have to think that the pressure brought 
on by our alliance with South Korea and other nations in the 
region, they do take note of that. If they did not take note of 
it, I am not sure where we would be.
    I believe that they also listen to China, though I think 
the Chinese influence on the North is waning compared to what 
it has been in the past.
    Senator Inhofe. On the 9th of February, we had a hearing 
with James Clapper, and he expressed very much of a concern 
with the acceleration that is taking place.
    A minute ago, you said that we are probably in pretty good 
shape in PACOM. That is what you said when we were there last 
Saturday. Since that time, you have all these--and I will 
submit these three for the record, Mr. Chairman. You actually 
talked about the Wall Street Journal but also the Washington 
Post; and, just yesterday, Japan's Foreign Minister canceling a 
visit to China; and then the tensions that came out in an AP 
[Associated Press] story just a few hours ago.
    I would like to submit those for the record.
    Chairman McCain. Without objection, they will be included.
    [The information referred to follows:]
      
    
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
      
    Senator Inhofe. Then I would like to have you, for the 
record, maybe, Admiral Harris, kind of explain that if it 
seemed at the time of our visit on Saturday that things were 
under a level of control in terms of the budget concern and the 
resources that would be allocated to you, why there would not 
be an insufficiency now since these things happened since our 
last Saturday visit. Just looking at it very honestly with 
acceleration as to what those resources are, are they really 
adequate, for the record?
    Admiral Harris. Thanks, Senator. I believe, for the record, 
that PACOM is adequately resourced in fiscal year 2016 and in 
the 2017 budget.
    Senator Inhofe. Okay, that is fine. I just wanted you to 
elaborate on that for the record, after this meeting is over.
    The information referred to follows:

    I support the President's fiscal year 2017 budget and feel it 
addresses many of the Indo-Asia-Pacific Theater priority programs and 
requirements. I believe the budget allows me to meet the strategy in 
the USPACOM area of responsibility. USPACOM worked closely with the 
Office of the Secretary of Defense (OSD) and the Services to ensure the 
final President's Budget was adjusted to fund key weapon systems and 
modernization efforts which address adversary high-end capabilities and 
provides adequate force structure needed in the Pacific Theater. 
Critical investments include: Upgrading fourth generation fighters and 
procuring sufficient fifth generation aircraft; investing in precision 
munitions (i.e. AIM-9X, AIM-120D, SM-6, MK-48); sustaining Long Range 
Anti-Ship Missile (LRASM) procurement; procuring Virginia-class 
submarines, enhancing other undersea capabilities, and resourcing 
advanced Intelligence, Surveillance, and Reconnaissance (ISR) and 
Command and Control (C2) systems (i.e. E-2D Advanced Hawkeye and P-8 
Poseidon).
    If additional resources were to become available, I would 
prioritize additional investments in the following areas: accelerate 
Virginia-class submarine procurement, procure additional F-35 Joint 
Strike Fighters, and procure additional critical munitions (AIM-9X, 
AIM-120D, SM-6, MK-48).
    However, as I testified during my confirmation hearing and have 
discussed publically elsewhere, I believe that sequestration, if it 
continues in force after 2017, will significantly harm USPACOM forces 
and my ability to meet my strategic objectives.

    Admiral Harris. Yes, sir. I am happy to do that.
    Senator Inhofe. Thank you, Mr. Chairman.
    Chairman McCain. Senator Gillibrand?
    Senator Gillibrand. Thank you, Mr. Chairman. Thank you both 
for your service and this hearing.
    I am concerned about cyber threats from this region, in 
particular. How do you assess these threats? How are forward-
deployed forces vulnerable to them? What can we do to address 
them better?
    Admiral Harris. Thank you, Senator. I will start.
    Cyber is the new frontier. It is the new threat vector. We 
are expending enormous resources across the department in 
getting after cyber. In the Pacific, we have stood up an 
organization called CYBERPAC, Cyber Forces Pacific, within 
Pacific Command. They look at DOD information systems defense 
or defensive cyber operations and offensive cyber operations.
    I have assigned to me at PACOM cyber mission teams and we 
are learning how to use those teams. Again, this is new, but it 
is a very real threat not only to U.S. military forces, but to 
America in general, in my opinion.
    General Scaparrotti. Senator, I thank you for the question.
    As Admiral Harris said, this is a domain that we are 
learning that is very challenging and in particular in the 
peninsula, because North Korea also has a very deliberate goal 
of increasing their cyber capability. As you know, they have 
demonstrated that both here with the Sony attack in the United 
States and also in Korea against their banking and media 
industry in 2013.
    It is a great concern to me. We have increased our joint 
cyber center capabilities over the past year. We continuously 
work at that. I also now have been deployed a cyber mission 
team, and I work also with the teams and am supported by the 
teams in PACOM.
    I would just make one other comment. It is important within 
the alliance that I and the Republic of Korea's cyber teams 
develop a much closer relationship, because we do have a unique 
vulnerability in that we have systems that are ROK-United 
States that support the alliance specifically centric.
    We are working hard as an alliance as well to ensure that 
we have a proper defense and a capability that we require 
within the domain.
    Senator Gillibrand. I also have concerns specifically about 
China. I think China is making significant progress in its 
military modernization initiatives. In fact, it is currently 
testing the J-20, its fifth-generation competitor to the F-35. 
How effective is our current defense posture and network of 
regional partners in deterring Chinese expansion? In which 
areas are we lacking depth of strategic operations or tactical 
levels? What do you think are the most effective ways to ensure 
China's rise is peaceful? Last, are there any particular United 
States military capabilities with which you see China closing 
the gap?
    Admiral Harris. I will start, Senator.
    I think that, in the capability realm, I asked for 
increased surface-to-surface weapons. When I started flying P-
3s back in the late 1970s, we had the Harpoon missile. That is 
the same missile we have today.
    We need to have an increased lethality and reach and speed 
that I talked about before. I am grateful that the Services 
responded to that request, and in fiscal year 2017 budget, 
there is increased funding for programs to increase that 
lethality of surface-to-surface missiles.
    I think Deputy Secretary of Defense Work just recently 
spoke of the SM-6 missile and its capability in the surface-to-
surface mode or against surface targets.
    The LRASM, the Long-Range Anti-Ship Missile, which is air-
launched now, is another great capability that we need to bring 
online fast, and I am grateful for that.
    I wrote also about the need for increasing the buy, and 
rate of buy, of F-35s, the Joint Strike Fighters. I am pleased 
that in the fiscal year 2017 budget, that is in there. I am 
glad about all of that.
    As I mentioned before, we have a shortage in submarines. My 
submarine requirement is not met in PACOM, and I am just one of 
many COCOMs that will tell you that. That is our principal 
asymmetric advantage over China and any other adversary, and I 
think we have to keep after it. I think it is important in the 
long run to modernize our force for the future.
    To get at your last question about what we can do, I think 
diplomacy is probably the key. We have to have a strong defense 
backed up by active diplomacy. I think we need to use diplomacy 
to influence China toward an acceptable behavior in the 
international space.
    General Scaparrotti. Senator, I would just add, and 
emphasize the last point.
    On the peninsula, one of my concerns is that, if there is 
conflict, what are China's actions? We plan for those 
possibilities. I am sure they do as well. I think diplomacy and 
engagement, which PACOM engages with them regularly to have 
these conversations, is very important, so that they understand 
our intent, and we have those communications, if we should have 
a conflict on the peninsula.
    Chairman McCain. Senator Ayotte?
    Senator Ayotte. I want to thank both of you for your 
service to the country.
    Admiral Harris, I want to thank you for also visiting the 
Portsmouth Naval Shipyard. We are really appreciative of that 
visit.
    To follow up on what I have heard you say today, in terms 
of the gap of our attack submarine fleet and the needs that you 
have in PACOM, what role, first of all, does the Virginia-class 
submarine play in the importance of our supremacy undersea? How 
big is this gap? We actually asked the Navy this morning about 
all of the combatant commands, and the Navy told us that only 
62 percent of the requests for attack submarine support are 
being met right now. What is the gap like in PACOM as well?
    Admiral Harris. The gap is about 62 percent. The exact 
numbers are classified. I would be happy to have that 
discussion with you. But we experience an attack submarine 
shortfall in the Pacific, and I would maintain that the Pacific 
is the principal space where submarines are the most important 
warfighting capability we have.
    As far as Virginia-class submarines, it is the best thing 
we have. It is the best thing we have. I cannot get enough of 
them, and I cannot get enough of them fast enough.
    Senator Ayotte. Great. Thank you. I think this is the issue 
that you raised as we think about sequestration, the long-term 
impact on our investment in our attack submarine fleet, which 
is so critical to the defense of the Nation and, obviously, an 
area where we have very important supremacy undersea with the 
challenges that we are facing in the region.
    But if we do not have presence, then we obviously cannot 
address our security needs. Our presence in the region is 
probably as important as anything else. Would you agree with 
that?
    Admiral Harris. I do. If you do not have presence, then you 
better have reach. That reach comes from submarines and 
aircraft and the like. We need the new SSBN [ballistic missile 
submarine], SSBN-X [Ohio-class replacement submarine], in the 
2020s, and we need the new long-range bomber as well.
    Senator Ayotte. I also wanted to ask you about unmanned 
underwater vehicle R&D [research and development] and what you 
think we should be doing in terms of conducting research, 
development, and fielding advanced unmanned underwater 
vehicles. Is that something we need to invest in and focus on 
going forward?
    Admiral Harris. I think we must invest, Senator, in 
advanced underwater vehicles and go forward with it, not only 
in antisubmarine warfare and all of the things that UAVs can 
provide us in that regard, but also in mine warfare to get 
after the mine threat that we will face.
    Senator Ayotte. How are we doing on that, compared to, for 
example, China or other countries?
    Admiral Harris. I think we are doing okay in it, but we 
need to do a lot more.
    Senator Ayotte. Okay, thank you.
    I wanted to also ask, General Scaparrotti, as we look at 
the actions of North Korea that have been discussed today--
recently, obviously, the underground nuclear tests, the 
ballistic missile launching--how do you assess what they are 
doing right now? I know there is always a pattern of escalation 
and looking for an international response, but it strikes me 
that Kim Jong-un is even less reliable, obviously, than his 
father.
    Where do you assess this situation, and what more should we 
be doing to respond?
    Secondly, what is your prediction in terms of what we might 
see next from the North Koreans? Or is it just so unpredictable 
from your perspective?
    General Scaparrotti. Thank you, Senator.
    First of all, I think Kim Jong-un has been clear that he 
intends to establish himself and wants to be accepted as a 
nuclear nation with a valid missile capability to deliver those 
assets. Of course, he claims he can do that today. He wants to 
be recognized as such.
    He said, despite international sanctions, that he will 
continue to develop his nuclear and his missile capabilities. 
Despite our deterrence, as you have seen, he has continued to 
do so.
    I think his calculus is, at this point, that those tests 
that he just conducted in January and February, that they were 
within his risk tolerance; that he could conduct those; and at 
some point in the future, in the next 3 or 4 months, move 
beyond it, just as he has done in cycle of provocation and 
relaxation over time, which has been their norm.
    I do worry about his calculation being wrong, at some 
point. I state that is what I worry most about.
    His view of the world is a very isolated one. Given the way 
that he leads, in terms of the brutal nature of his leadership, 
I am not sure that he gets a lot of good advice or at least 
critical advice from those around him.
    Senator Ayotte. I think you are pretty hesitant when you 
are around him to give any contrary advice also. That is the 
problem.
    General Scaparrotti. I think we will see increasing tension 
as we go into this training period coming up here in February 
and March. I think what we should do, to ensure that our 
alliance is strong, is that we maintain our deterrence 
activities that we have there, particularly our large exercises 
here. There is no doubt in my mind that he knows of our 
capability and believes that he cannot defeat it.
    I think stronger sanctions are very important for the 
international community.
    Senator Ayotte. Excellent. We recently passed very strong 
legislation.
    General Scaparrotti. I appreciate that.
    Senator Ayotte. I think that sets the stage for the 
sanctions piece. Thank you.
    General Scaparrotti. Yes, ma'am.
    Chairman McCain. Senator King?
    Senator King. Thank you, Mr. Chairman.
    General Scaparrotti, I think your analysis is exactly 
right. Almost all wars in history are started from a 
miscalculation. I think, for that reason, it seems to me that 
part of our strategy should be very clear about what our 
capabilities are, what our red lines are, and when we will act, 
so that there is not a miscalculation or misunderstanding or an 
underestimation of our capacity. Would you agree?
    General Scaparrotti. Yes, sir, I would agree.
    Senator King. Admiral Harris, what are the strategic 
implications for the United States strategy in the Pacific of 
the Chinese Anti-Access/Area Denial, so-called A2/AD, strategy?
    It seems to me that forces us to question the strategy of 
the carrier as the primary instrument, the development of the 
standoff cruise missiles by the Chinese. This, it seems to me, 
is a moment of inflection, in terms of what our strategy is in 
that region.
    Admiral Harris. Thanks, Senator.
    We have predicted the demise of the carrier since I have 
been in the Navy. We had the Soviets with their submarines, 
carriers, and all their capability, and we questioned the 
survivability of the carrier then, and then the Soviets went 
out and tried to build their own. Then they sold it to China, 
and China is using it, and they are building their own now.
    If the carrier were really irrelevant, then I question why 
these competitors and peer competitors are trying to build 
their own at the rate they are building them.
    I think the A2/AD strategies that China imposes are 
serious, and we have to seriously consider them and work around 
them.
    Senator King. It seems to me that we need to think about 
the range of our weapons.
    Admiral Harris. We do. Yes, sir. That is one of the issues 
that I spoke about earlier.
    In our regular ship surface-to-surface weapons, we are out-
stuck by the Chinese today. But because of this committee and 
Congress, we are going to be in good shape in 2017, as we put 
money into those systems.
    I think, again, the original stealth platform is the 
submarine, and we will be able to win in any conflict at sea 
when we apply the joint force to that.
    I am comfortable with the carrier operating in those 
waters, but we have to consider it. We have to consider the 
threat.
    But the Chinese A2/AD threat is not 10-feet tall. It is not 
even 6-feet tall, in my opinion.
    Senator King. You mentioned the importance of diplomacy as 
part of the overall strategy. Would part of that be the 
advisability of the U.S. acceding to the U.N. Law of the Sea 
Treaty?
    Admiral Harris. In my opinion, Senator, yes.
    Senator King. That would help us in dealing with some of 
these fuzzy claims in the South China Sea?
    Admiral Harris. I believe that U.S. accession to UNCLOS is 
a positive.
    Senator King. I have looked at the map. We ought to call 
the South Atlantic the South American Sea or something, because 
just the name, it is nowhere near China.
    Admiral Harris. Yes, sir. We do call the Gulf of Mexico the 
Gulf of Mexico.
    Senator King. Not the Gulf of Florida, interestingly.
    Admiral Harris. That is right.
    Senator King. Just yesterday, there was a report of the 
fastest sea level rise in 28 centuries, and a projection that, 
by the end of this century, sea level could rise 3 to 4 feet. 
Are you looking at the strategic implications of that, both in 
terms of our infrastructure that is on the coast, but also the 
stability of areas within your command, Bangladesh, low-lying 
coastal cities throughout the region?
    Admiral Harris. I look at it in a capability way, because 
it will be PACOM forces or U.S. military forces that respond to 
disasters caused by flooding or tornadoes or typhoons or 
whatever, so I look at it in that way. But, frankly, I am not 
looking at rise in sea levels and its effect globally toward 
the end of century. That is just too far out for me.
    I worry about what is happening in the near term and what I 
can do about it, and how I can be helpful.
    Senator King. Would it not be prudent though to analyze our 
infrastructure, just to do a tabletop on what would happen if 
sea level went up a couple feet in San Diego or Guam or Hawaii?
    Admiral Harris. Certainly. Yes, sir. It clearly would.
    Senator King. Finally, what is China's goal? What are their 
strategic goals? Is it purely defensive? Is it offensive? Do 
they want to take territory? What is behind this buildup that 
they are engaged in?
    Admiral Harris. Senator, this is my opinion. I believe 
China seeks hegemony in East Asia.
    Senator King. Simple as that?
    Admiral Harris. Simple as that.
    Senator King. Regional control?
    Admiral Harris. Yes, sir.
    Senator King. Thank you, Admiral.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Ernst?
    Senator Ernst. Thank you, gentlemen, for being here today. 
We, certainly, appreciate your service.
    Admiral Harris, in 2014, the Marine Corps announced its 
Expeditionary Force 21 doctrine, which stated that, after over 
a decade of land-based combat operations, the Marines were 
going to start returning to their amphibious roots. I believe 
the success of this effort is vital in order to respond to a 
rising China and to assist our allies in that region.
    Are you comfortable with the Navy and Marine Corps forces 
that are postured to provide expeditionary capabilities to meet 
your PACOM requirements?
    Admiral Harris. Senator, I am, but I will be the first to 
say that 14 years of fighting in Iraq and Afghanistan land 
wars, there are majors in the Marine Corps, O-4s, that have 
never served at sea in the Fleet Marine Force.
    Senator Ernst. Correct.
    Admiral Harris. I welcome their return to amphibiosity. But 
it is not just the Marines. The Marines are involved in 
training our allies and partners, as they see the benefits of 
having an amphibious capability for their areas, for example, 
Indonesia and all of the archaeological islands that comprise 
that country, Japan and their interest in amphibious warfare, 
and on and on.
    I am pleased with the work that we are doing and especially 
pleased with the work that the Marines and the Army are doing 
to increase the amphibious capability of our friends, allies, 
and partners in the region.
    Senator Ernst. Very good. You have a strategy for closing 
that gap, like you said, the O4s mostly have land-based combat 
operations?
    Admiral Harris. Right. I had a strategy when I was the 
Pacific Fleet commander, and now I get to task the Pacific 
Fleet and the Marine Forces specific to come up with that 
strategy and work it.
    Senator Ernst. Very good. I am very excited about that. We 
are getting back to the basics, I think, for all of our forces 
out there.
    Do you agree with the Navy-Marine Corps Joint Forcible 
Entry capability with a validated ship requirement of 38?
    Admiral Harris. I do. The forcible entry requirement is 
critical not just for the Marines but for the Army as well.
    Senator Ernst. Do you think that that will be able to be 
maintained, then, moving into the future?
    Admiral Harris. I do not know. I hope so. I hope that we 
will be able to get our amphibious ship levels to that 
standard.
    Senator Ernst. Okay, thank you, Admiral.
    Over the past several weeks, just a slightly different 
topic, but over the past couple weeks, we have had a number of 
very distinguished witnesses, such as Lieutenant General Thomas 
Conant, a former PACOM deputy commander, and General Carter 
Ham, the former commander of AFRICOM [United States Africa 
Command] and United States Army Europe. They have spoken very 
highly of our National Guard State Partnership Program.
    I do believe that this program is key in working with our 
allies, and developing our allies and their capabilities. But I 
am concerned because in the PACOM or in the Asia-Pacific area, 
there are very few State Partnership Programs out of 70 
different unique programs that we have worldwide. I think it is 
important that we exercise these types of programs and develop 
those relationships with those countries.
    Could you speak to that a little bit, sir?
    Admiral Harris. I can. I am a huge fan of the State 
Partnership Program. I have seen it work in the Pacific. 
General Grass and I have talked about it, and I have asked for 
an increase in state partner relationships out there.
    But for the countries in the region, their state partners, 
our Guard forces, are often their principal training 
relationship. It is critical for all the reasons you mentioned. 
General Grass and I are in lockstep on the way forward in the 
Pacific.
    Senator Ernst. Are there certain countries that we should 
be working more with, with a state partnership relationship?
    Admiral Harris. Sure. Mongolia comes to mind in, and we 
have asked for that.
    Mongolia is a perfect case in point of a country that would 
benefit greatly from our State Partnership Program.
    Senator Ernst. That is very good. We have many States that 
already have developed relationships, and sometimes look for 
second partnerships as well, so thank you.
    General Scaparrotti, do you have any thoughts on the State 
Partnership Program?
    General Scaparrotti. I, too, am a big fan of that. The 
relationships that are built over time, the trust that is 
built, are very important. That is really the glue that helps 
us improve not only that relationship, but, importantly, to 
develop capacity within our partners.
    Senator Ernst. Fantastic. Thank you.
    Thank you very much.
    Chairman McCain. Some of that depends on the attractiveness 
of the State. Don't you think that has a lot to do with it?
    Senator Nelson?
    Senator Nelson. Thank you, Mr. Chairman.
    General, when does China yank North Korea's chain? What is 
the point at which they really get serious that North Korea is 
getting out of control with the nuclear weapons capability?
    General Scaparrotti. Sir, I wish I knew the answer, because 
we have been trying to find that spot, frankly. I think they 
have underestimated the danger of KJU [Kim Jong-un], at this 
point. He is clearly confident in his ability to provocate and 
control a situation, so I would encourage them to reconsider 
that at this time.
    But, obviously, they still, despite these recent events, 
appear to be reluctant to take some serious steps, which they 
certainly could.
    Senator Nelson. Do they seem to be, certainly, the one 
applying economic pressure, and so forth. I mean, do they fear 
a united Korean Peninsula so much, and/or do they fear too many 
refugees coming in, that this nuclear threat is not enough for 
them to pull that chain?
    General Scaparrotti. Well, I think first they fear 
instability on their border, if that were to occur, the refugee 
problem it would create for them along the border, and then 
also the security of the WMD [weapons of mass destruction]. 
North Korea not only has nuclear but they have probably one of 
largest chemical and bio stockpiles--chemical, in particular, 
but bio capability--around the world.
    That is their first concern, getting control of that, if it 
were to be an unstable country.
    Secondly, I believe, too, that it provides them a buffer, 
and they would fear a unified Korea, particularly with a United 
States ally. They would be concerned where our forces would be 
stationed.
    Senator Nelson. As you all wargame this, what is China's 
position, if the young gentleman goes off his rocker and 
launches an attack against us, an attempted attack, because 
presumably we would have the capability of knocking it down? In 
a wargame like that, what do you expect for China's reaction?
    General Scaparrotti. Sir, we actually have that as a part 
of our wargaming and planning. I think our first thing, as I 
mentioned earlier, is that we count on engagement with them. We 
work on engagement, particularly with PACOM, on a regular basis 
in order to give us that relationship. If and when there is 
any, even a provocation on the peninsula today, we make contact 
to make sure they understand our intent.
    This is my personal opinion. I think that China is also 
looking at those possibilities in their calculation, and 
probably are more inclined lately to intervene potentially, at 
least in the border areas and to the extent that they would be 
concerned about control of those WMDs as well.
    I think intervention is more of a likelihood, in my mind, 
in the few years that I have been in command now, than it was, 
say, 2 years or 3 years ago.
    Senator Nelson. It may be one of the areas that China would 
suddenly see that it has its interests aligned with the 
interests of the United States.
    Admiral, it is great to see you.
    Mr. Chairman, he is a great product of Pensacola, Florida. 
As a native Floridian, you can hear it in the lilting tone of 
his voice.
    Admiral, share with us your thought of the importance, from 
a national military perspective, of the Trans-Pacific 
Partnership [TPP].
    Admiral Harris. Sir, I am just going to bask a little bit 
in that lilting-ness just for second here.
    The Trans-Pacific Partnership, I believe, is an important 
component of the economic part of the rebalance. I have spoken 
of the rebalance being comprised of the military, diplomatic, 
political, and economic parts. In the economic sphere, which I 
have said is the most important component of the rebalance--the 
most visible piece is the military piece, because you can see 
an aircraft carrier or Joint Strike Fighter or Stryker vehicle 
and all that.
    But the most important part of the rebalance, to America, 
is really the economic component. In that economic component, 
you have energy and you have TPP. I think that TPP binds us to 
the 11 other nations that are part of TPP.
    The standards that it takes for a country to enter TPP is 
helpful. It is helpful to the global trade piece, and it is 
helpful to those things that we view as important as conditions 
of entry.
    I think the fact that there are countries waiting in line 
to figure out how to get in, I think that is important as well, 
and indicative of how TPP is viewed now in the Pacific.
    Senator Nelson. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Sullivan?
    Senator Sullivan. Thank you, Mr. Chairman.
    Thank you, gentlemen, for your testimony. I appreciate the 
opportunity to get caught up yesterday.
    Admiral, I appreciate you talking about the TPP, not only 
in terms of economics, but energy. As we discussed yesterday, 
the United States has an enormous opportunity now, in terms of 
our competitive advantages in energy, LNG, oil exports to our 
allies and even other countries in the region. I think it is 
something we need to be taking advantage of.
    I want to follow up on the chairman's questions on the 
South China Sea. Secretary Carter was testifying here a few 
months back when we had done the first FONOPs [Freedom of 
Navigation Operations]. I am a big supporter of Secretary 
Carter, but I think there was some concern here on the 
committee that an opportunity to actually announce in a robust, 
articulate way what we were doing was missed, because we 
literally had to press it out of him just to get any details on 
what the heck was going on.
    From your perspective, what exactly is our policy with 
regard to the South China Sea, our freedom of navigation 
operations? What is the purpose? What is the goal? Should we be 
doing this on a regular basis, as the chairman said, also with 
our allies?
    Admiral Harris. Thanks, Senator.
    I believe the purpose of freedom of navigation operations, 
and the other operations we do in the South China Sea, is to 
exercise our rights on the high seas and in the airspace above 
it on a regular basis.
    Senator Sullivan. To what end? What is the goal?
    Admiral Harris. The goal is international rules and norms. 
This is international water and international airspace. If we 
do not exercise our rights, or if those rights are not 
routinely exercised by someone, then we stand a chance of 
abdicating those rights to someone else.
    The regular exercise of freedom of navigation, in my 
opinion, is critical. It is important, and it is something that 
we must continue to do.
    Senator Sullivan. Do we have allies who are interested in 
doing that with us for the same reasons? Are we looking to 
coordinate with them in terms of future FONOP operations?
    Admiral Harris. We have allies, friends, and partners, 
Senator, that are very supportive of our freedom of navigation 
operations. There are some of those who are willing to consider 
doing them with us, but there are others that are unable to, 
either because of their own military capability or lack 
thereof, or of their internal politics, I guess, and of their 
relationship with China.
    Senator Sullivan. Do you think that it would be helpful to 
have additional allies, whether they are from the region or 
maybe some of our NATO [North Atlantic Treaty Organization] 
partners?
    Admiral Harris. It would be helpful. I have encouraged 
other countries to conduct operations in the South China Sea, 
because, at the end of the day, South China Sea is 
international waters, in my view.
    Senator Sullivan. We talked about Okinawa yesterday. Can 
you just give us an update on what more we should be looking at 
doing? We are helping our allies, particularly with regard to 
Japan, in terms of the Marine redeployment there.
    Admiral Harris. We have this relationship with Japan in 
Okinawa. We have an obligation to defend Japan, and they have 
an obligation to provide us a place from which to defend them. 
Okinawa is one of those critical places where we must be in 
order to meet our treaty obligations to defend Japan.
    A few years ago, through a lot of increasing tensions over 
the years, Japan asked us to move our forces out of Futenma to 
someplace else. Our response to that is, sure, you build a new 
place and we will move our forces there. That is a simplistic 
view, but that is how we agreed to move from Futenma to the 
Futenma Replacement Facility, Camp Schwab, Henoko.
    In that process, we agreed also to relocate 8,000 to 10,000 
Marines out of Okinawa. For that, you have the Guam piece, the 
Hawaii piece, and part of the Marine rotation forces in Darwin. 
You have all of that, which is a follow-on to once we start 
moving Marines from Futenma to the Futenma Replacement 
Facility.
    The challenge we have is to get the build done on the 
Futenma Replacement Facility, which is Japan's responsibility. 
That is their obligation to us.
    Right now, it is slowed. It is a little over 2 years late. 
It was going to be done by 2023, and now we are looking at 2025 
before that is done. That is when the big movement of Marines 
from Okinawa to Guam and Hawaii would take place, in the 2020s.
    I believe we have to continue to fly and operate out of 
Futenma and continue to work with the Japanese, as they start 
to build the replacement facility at Henoko, Camp Schwab.
    Senator Sullivan. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Hirono?
    Senator Hirono. Thank you, Mr. Chairman.
    I would like to thank both Admiral Harris and General 
Scaparrotti for the time you spent with me yesterday. I 
appreciate that very much, and for your service.
    General Scaparrotti, our very best wishes to you, as you go 
forward.
    Admiral Harris, I am happy to see in your written testimony 
that you raise the Daniel K. Inouye Asia-Pacific Center for 
Strategic Studies, DKI APCSS, and the Center for Excellence in 
Disaster Management.
    Can you talk briefly about the importance and the benefits 
that these two organizations provide to you as the commander of 
PACOM?
    Admiral Harris. Yes, Senator. I believe the Daniel K. 
Inouye Asia-Pacific Center for Strategic Studies, DKI APCSS, is 
a true force multiplier for my operations in the Pacific. DKI 
APCSS is able to bring countries to Hawaii that I cannot go to. 
They enjoy special ability to link together students from all 
over the region in very positive ways.
    In building those relationships, it helps me in the region, 
and it also helps those countries to realize the benefits of a 
relationship with the United States.
    I cannot say enough about DKI APCSS and retired Lieutenant 
General Dan Leaf, who directs that. I am pleased to be able to 
work closely with him and the center. I am pleased that the 
center is a direct report to PACOM.
    So, too, CFEDM, the Center for Excellence in Disaster 
Management, I think that that center has the capability and the 
potential to be a true storehouse of knowledge and lessons 
learned on how we do disaster management, not only in the 
region, but that can be shared globally for people who would 
seek that information.
    Senator Hirono. I think particularly as we natural 
disasters occurring more and more, that the center is very 
important. I have been visited the center a number of times. I 
totally agree with you that that is a really important 
resource. It is a resource for you as well as our country.
    I want to turn to the relationship, the trilateral 
relationship, among Japan, United States, South Korean. This is 
for General Scaparrotti.
    The tensions, as you say, are higher than ever, and there 
are some historical issues between Japan and South Korea that 
make the relationship between these two countries particularly 
challenging. From your perspective, how do you see this 
relationship currently and moving forward? Perhaps with the 
tensions between South and North Korea now, perhaps South Korea 
will be moving more closely to Japan. How do you see this 
developing?
    General Scaparrotti. Senator, thank you. It is an important 
question and an important relationship for us.
    I see it positive, and I see it moving in a positive 
direction. A year ago, we were having difficulty with 
trilateral relationships, encouraging mil-to-mil relationships, 
et cetera. Over this past year, there has been, I think, a 
concerted effort with both parties, with the U.S. as a partner 
to both, to improve that relationship.
    As you know, Japan and Korea recently had high-level 
discussions, as well as a meeting between the Prime Minister 
and the President Park that resolved the comfort women issue. I 
think that was significant, as well as the pressures from North 
Korea. I think both have encouraged them to increase the 
trilateral relationship.
    Admiral Harris just hosted a conference with the two 
chairmen from each of those countries, as well as General 
Dunford. I think we have the foundation now to move forward in 
the future with greater mil-to-mil exercises, as well as 
probably an encouraging environment for increasing information 
flow between the three countries.
    Senator Hirono. Thank you.
    This is for Admiral Harris. The actions of North Korea have 
been particularly troubling, especially with their so-called 
hydrogen bomb test and their rocket launch into space. Do you 
see North Korea as a nuclear state? If so, what does this mean 
for the United States and the U.N. [United Nations]?
    Admiral Harris. They clearly have some nuclear 
capabilities. I am not convinced that the bomb that went off 
was a hydrogen bomb, but they clearly have some degree of 
nuclear capability.
    I think they pose a very distinct and real threat, not only 
to peace and stability on the Korean Peninsula, but globally. 
As they develop their nuclear capability--and as I said before, 
they are on a quest for nuclear weapons, the means to 
miniaturize them, and the means to deliver them 
intercontinentally. They pose a real threat to Hawaii and to 
the West Coast, to the mainland of the United States, and soon 
to the entire U.S.
    They pose a threat today, with their hundreds of thousands 
of rockets within rocket range of Seoul, to the 28,500 American 
troops that are posted there, their families, the hundreds of 
thousands of Americans who work in Korea, and our Korean ally 
and Japan.
    They are a real threat today, and I encourage China, for 
example, to be helpful and to try to bring North Korea to the 
negotiating table and to do the right thing.
    Senator Hirono. Well, our best wishes on your continuing 
efforts on that score, because I know it is quite the challenge 
to have China step up and deal with North Korea in a way that 
would be helpful to stabilizing that region. Thank you very 
much.
    Chairman McCain. Senator Rounds?
    Senator Rounds. Thank you, Mr. Chairman.
    Admiral, first of all, let me say how much I appreciated 
the opportunity to visit with you at PACOM headquarters this 
last week on the Inhofe codel. Your message was striking. At 
the same time, I came away a little bit puzzled with one part.
    We have been working on the issues surrounding rebalance or 
a rebalance strategy since 2011. The rebalance, a strategic 
whole-of-government effort, guides and reinforces our military 
efforts, integrating with diplomatic, political, and economic 
initiatives. In August 2015, Secretary of Defense Carter 
described four elements of the military component of the Asia-
Pacific rebalance.
    Have you seen a doctrine that you put your strategy around, 
which is the rebalance? Or is it a series of concepts that are 
still being developed?
    Admiral Harris. I believe that we have a strategy now, and 
it is the East Asia military strategy that was put out by OSD 
[the Office of the Secretary of Defense] last December, 
November or December. I think it captures it well. There are 
probably other things that will come out on that, but I am 
satisfied, in reading the East Asia military strategy piece--
the Asia-Pacific strategy piece, rather, that it is captured in 
there.
    But I think all the elements that I spoke about earlier on 
the rebalance are in play in the Indo-Asia-Pacific region. Just 
in the diplomatic and political spheres, for example, we now 
have the EDCA, the Enhanced Defense Cooperation Agreement, with 
the Philippines, which gives us access to their bases. We have 
the new defense guidelines with Japan, which is the follow-on 
to their peace and security legislation, which allows them some 
limited collective self-defense, which moves that relationship 
forward. We have access agreements with Singapore, which allows 
us to put our LCS, littoral combat ships, there, and P-8, P-3 
aircraft there on a routine basis.
    Of course, all the agreements we have with Australia, which 
is the cornerstone of our MRF-D deployment, the Marine 
Rotational Force Darwin deployment.
    I am very pleased with those initiatives, which are in that 
diplomatic, political sphere part of the rebalance.
    The military piece is, as I said, the most visible piece. 
You can see that. Then we have the economic piece, which is the 
most important part to the United States, in my opinion.
    Senator Rounds. With regard to A2/AD, there seems to be 
considerable movement, a very quick movement, on the part of 
China in this area. Do you have the appropriate intelligence-
gathering information? Do you need more tools than what you 
have right now?
    Admiral Harris. I can always use more tools, Senator. I 
would like to know more about China's intent. But in that 
regard, what I need more than anything else is persistent ISR 
to keep that never-blinking eye on Korea.
    Senator Rounds. Specific platforms that are not available 
to you now that you need?
    Admiral Harris. There are platforms that are not available 
now that I have asked for.
    Senator Rounds. Okay. They are coming?
    Admiral Harris. It is being considered. It is part of the 
global allocation of forces. I compete with platforms along 
with Central Command, EUCOM, European Command, and the like.
    Senator Rounds. In the current posture, the Chinese have 
clearly put us in a position where they are moving us, in terms 
of our safety zones, farther out, farther away. The LRS-B 
[Long-Range Strike Bombers] is being proposed right now.
    Is the LRS-B an asset that you would consider critical, 
with regard to our future capabilities in the South China area? 
Seeing how they could be deployed out of North America, they 
basically would be in a position to make the strikes necessary 
at that time that perhaps some of our other carrier-based units 
might not be able to maintain, just based upon size and 
capabilities.
    Admiral Harris. Senator, I am sorry. I do not know the 
acronym.
    Senator Rounds. Long-range strike bomber.
    Admiral Harris. Yes. It would be helpful. As I mentioned 
before, in talking about the next-generation bomber, all of 
that capability is important, not only the next-generation 
bomber, but the next-generation SSBN.
    We need those to maintain a position of strength into the 
2020s.
    Senator Rounds. Mr. Chairman, thank you.
    Senator Reed. [Presiding.] On behalf of Chairman McCain, 
Senator Shaheen?
    Senator Shaheen. Thank you, Mr. Chairman.
    Admiral Harris, I am so glad to hear someone in your 
position who does not know one of the acronyms that is being 
used. It makes me feel so much better.
    [Laughter.]
    Admiral Harris. Acronyms kill, ma'am.
    Senator Shaheen. Yes, they do. That was a very good pun.
    I want to thank you both for your service. I want to start, 
I assume it should be with you, Admiral Harris.
    There was a report that was just given to Congress this 
week that suggests that Chinese investments in the national 
security sector in the United States are growing. Is there any 
reason why we should be concerned about that?
    Admiral Harris. Sure. I think that, depending on the area 
that they invest in, there is every reason to be concerned. We 
need to look at each one of these investments carefully. We 
have a process called CFIUS [Committee on Foreign Investment in 
the United States], another acronym. I could not begin to tell 
you what it stands for.
    Senator Shaheen. That one I know.
    Admiral Harris. All right. But that allows us a mechanism, 
a legal mechanism, to perhaps prevent China from buying or 
investing in certain areas. I have used it before, when I was 
at Pacific Fleet, to prevent the purchase of some facilities, 
which were near our key military facilities.
    Senator Shaheen. Does the economic reliance on China by 
some of our American allies create complications for our 
security strategy, as we are thinking about Chinese investments 
in our national security sector and what is happening with some 
of our allies with respect to their reliance on what is 
happening in the Chinese economy?
    Admiral Harris. Clearly, Senator, it does.
    China is the principal trading partner of many of our 
friends, allies, and partners, not only in the Indo-Asia-
Pacific, but globally. That is a factor that each country has 
to make, and it is a factor in how we regard their reliability 
in certain cases.
    I am often asked, well, we have this size of the Chinese 
military and we have this size of the United States military 
west of the dateline, but surely, if you added to that all of 
our capability resident in our friends, allies, and partners, 
they would match the Chinese, in terms of numbers. You cannot 
always count on that in every case, because each country will 
make their independent, sovereign decision on whether to 
participate in a given operation or whatever.
    China's investment in those countries, in those countries' 
trade relationships with China, is important. It matters, just 
as it matters to us.
    Senator Shaheen. Thank you.
    General Scaparrotti, in your testimony, you mentioned North 
Korea's recent actions that suggest that it will do whatever it 
wants to defy U.N. Security Council resolutions and other 
norms.
    A couple weeks ago, we passed additional sanctions on North 
Korea here. To what extent do those help or hurt, as we are 
trying to influence North Korea's actions?
    General Scaparrotti. Senator, thank you. I appreciate the 
action that Congress took here in terms of sanctions, because I 
do believe they have an impact. We know that we have slowed his 
capability to develop his munitions, missiles, et cetera. He is 
somewhat cash-strapped. I think additional sanctions, which 
there are steps we have not taken yet, I think the more that we 
do, the more pressure we then put on Kim Jong-un.
    He has a fairly shaky economy, not a good hand. These 
sanctions, I think, could create a big problem for him, 
certainly to someone who puts 30 percent of his economy into 
his military.
    Senator Shaheen. Thank you. I am, certainly, a big 
proponent of our having passed those sanctions.
    I would like to say for the record, Mr. Chairman, that one 
of the things that I am very concerned about, with respect to 
the sanctions and their enforcement, is the fact that we have 
still have sitting in the Banking Committee the nomination of 
Adam Szubin to be the person at the Department of the Treasury 
who is charged with enforcing those sanctions. He has not yet 
been officially approved.
    I would hope that we could enter that into the record, and 
I would urge that we see some action on his nomination.
    I am out of time, Mr. Chairman, but can I ask one more 
question?
    Senator Reed. Yes.
    Senator Shaheen. Given the recent action by North Korea, 
have we seen that affect that Chinese thinking or support for 
North Korea and their willingness to try and encourage them to 
pull back on their nuclear efforts? For either of you, both of 
you.
    General Scaparrotti. As you know, they denounced the 
actions as well. They stated their concern with them. I think 
they are in active conversations with us now.
    But to this point, we have not seen the steps we would like 
them to take, in my opinion, and that they could take.
    Senator Shaheen. Thank you. Thank you both very much. Thank 
you for your service.
    Senator Reed. On behalf of Chairman McCain, Senator Graham?
    Senator Graham. Thank you, Senator Reed.
    General, let's pick up with what you just said.
    Are we overly relying on China to discipline and regulate 
North Korea? Every time somebody mentions North Korea, the 
first thing out of their mouth is, ``Well, we have to have the 
Chinese help us.''
    General Scaparrotti. Sir, in my opinion, I do not know that 
we are overly reliant. But, certainly, there are actions--for 
instance, unilateral actions that this body just took--that we 
could, certainly, apply as well.
    Senator Graham. Could you give me a list of things that we 
could do that we have not done regarding North Korea? Not right 
now, but later.
    General Scaparrotti. Yes, I could.
    Senator Graham. Okay. Have you ever found a situation in 
military history, modern military history, where sanctions 
stopped a dictator from acquiring weapons?
    General Scaparrotti. I am not aware. I would have to look 
at that, Senator, to be honest with you.
    Senator Graham. Do you think he cares how his people live?
    General Scaparrotti. No, he does not.
    Senator Graham. Do you think if he had a missile that could 
reach the United States, he would actually use it against us?
    General Scaparrotti. I think that his stated purpose is to 
protect his regime. If he thought his regime was challenged, he 
states that he would use WMD.
    Senator Graham. Is it in our national security interests to 
allow the North Koreans to develop missile technology that 
could hit the Homeland?
    General Scaparrotti. No, sir.
    Senator Graham. Would you suggest we use military force, if 
necessary, to stop that?
    General Scaparrotti. If military force was necessary, yes, 
sir. But I think there should be----
    Senator Graham. But that should be on the table? But that 
should be one of the options?
    General Scaparrotti. Yes, sir.
    Senator Graham. Do you agree with that, Admiral?
    Admiral Harris. I do.
    Senator Graham. I just want the committee to understand 
that we are about to have to cross a road here eventually.
    Don't you think that, in the coming few years, we are going 
to have to make a decision about this?
    Does that make sense to you, admiral?
    Admiral Harris. It does, Senator, in my opinion.
    Senator Graham. Say in the next 5 years--I am just picking 
a date out of thin air here--the United States is going to have 
to make a tough decision regarding North Korea, whether or not 
to let them know that if you continue down the missile 
development road, we will attack that program?
    Admiral Harris. At some point, it may come to that.
    Senator Graham. Do you think it would be good for North 
Korea to understand that is the consequence of what they are 
doing?
    Admiral Harris. I think they do understand it, Senator.
    Senator Graham. Do you think they really believe we would 
use military force to stop their missile program?
    Admiral Harris. I do not know what they believe.
    Senator Graham. Okay.
    What about you, General?
    General Scaparrotti. Sir, I would say the same. Our 
difficulty is really understanding their----
    Senator Graham. Could we make it more clear to them? Is it 
possible to make it more clear to them?
    General Scaparrotti. I think it is possible to make it more 
clear to them.
    The second thing I would add, Senator, is that, as you look 
to the future, I am concerned as well not only about his 
nuclear missile capabilities, developing cyber capability. He 
is developing a strategic-launch ballistic missile, and he is 
developing his air defense capabilities.
    All of those things, in about 5 or 6 years, are going to be 
a more formidable problem.
    Senator Graham. In light of the threat that could emerge 
over the next 5 years from North Korea, if sequestration goes 
back into effect, does that affect the Army's ability to 
participate in South Korea effectively?
    General Scaparrotti. Yes, sir, it does.
    Senator Graham. If sequestration goes into full effect, 
Admiral, what does that do to your ability in your theater?
    Admiral Harris. I think it hurts me greatly, not only for 
forces that are forward-deployed, but also follow-on forces. I 
worry most about those follow-on forces.
    Senator Graham. We have a 5 year window here of where North 
Korea is advancing missile technology and cyber capability. 
They are becoming more of a threat in the next 5 years, unless 
something changes. Is that correct? Is that what you are 
telling the committee? In the next 5 years?
    Admiral Harris. You said 5 years. I did not.
    Senator Graham. Okay. I am just picking 5 years.
    Admiral Harris. Right.
    Senator Graham. Let's just say in the next 5 years, if 
nothing changes, they are going to be a bigger threat to the 
United States?
    Admiral Harris. Clearly. Clearly.
    Senator Graham. Is that true of you, General?
    General Scaparrotti. Yes, I agree.
    Senator Graham. We have that dynamic. The Congress' 
response is to reduce your capabilities in the next 5 years.
    Is that what Congress is doing to you?
    Admiral Harris. If sequestration remains the law of the 
land, as I testified during my confirmation hearing, I think it 
will hurt us significantly in the 2021, 2022 time frame.
    Senator Graham. From a policymaker point of view, your 
military advice to us would be to change that construct?
    Admiral Harris. My military request of you, Senator, would 
be to end sequestration.
    Senator Graham. Yes, because what we are doing is we are 
having the enemy increasing capability, and we are decreasing 
your ability to confront the enemy. That is a bad combination.
    Admiral Harris. It is not just North Korea.
    Senator Graham. In your theater.
    Admiral Harris. In my theater. It is globally.
    Senator Graham. What does North Korea want, General? Just 
survivability?
    General Scaparrotti. Sir, he wants to protect his regime, 
the Kim family regime. He wants to establish himself as a 
recognized nuclear state.
    Senator Graham. Okay.
    Admiral, would the TPP be helpful, if passed, in your 
region?
    Admiral Harris. It would be helpful to pass.
    Senator Graham. What if we failed to pass it?
    Admiral Harris. Then the countries in the region will 
question the seriousness of our commitment to the rebalance, 
one. Two, they will turn somewhere else.
    Senator Graham. Will that likely be China?
    Admiral Harris. It will be China.
    Senator Graham. Thank you, both, for your extraordinary 
careers. Thank you, both.
    Chairman McCain. [Presiding.] Senator Kaine?
    Senator Kaine. Thank you, Mr. Chair.
    Thanks to the witnesses. I appreciate this testimony much. 
Some of us are running back and forth to a Foreign Relations 
Committee hearing with Secretary Kerry, where many of the same 
issues are being discussed. We apologize for that.
    Admiral Harris, I enjoyed our visit in Halifax at the 
security conference there in November. One of the issues we 
talked about I know was raised by Senator King in a question 
when I was gone, but I think it was raised pretty briefly. He 
asked you whether you thought the United States should ratify 
the U.N. Convention on Law of the Sea [UNCLOS], and you said 
yes. I want to dig into that a little bit more.
    A lot of the testimony and discussion this morning has been 
about the Chinese island-building and other activities in the 
South China Sea. A lot of the testimony that is going on 
upstairs with Secretary Kerry is about the same thing.
    Admiral, you said a few minutes ago, and I quote, you were 
asked about China and what our posture is vis-a-vis China's 
activities. ``The goal is international rules and norms.'' I 
think that ought to be the goal.
    We should be an enforcer of international rules and norms, 
but I just find it fascinating that as much as we talk about 
the Chinese activities in the South China Sea that we are 
against, because they violate international rules and norms, we 
are the only major power in the world that has not ratified the 
U.N. Convention on Law of the Sea.
    Now, as a practical matter, in terms of our own activities, 
we act as if that is law. We act in accord with it. But our 
refusal--and it is a refusal, and it is a refusal by this body, 
the Senate, to ratify--means that we really lack standing to 
hold it up against the actions of anybody else and complain 
about their failure to follow the requirements of that 
convention.
    This is not only a matter with respect to China in the 
South China Sea. It is also increasingly becoming an issue with 
Russia in the Arctic.
    If you could, Admiral Harris, instead of just saying, ``I 
support it,'' talk to me a little bit about, from the security 
standpoint, the safety of the United States and the mission 
that we have in the Indo-Asia-Pacific, what would ratification 
of that U.N. convention do for the United States?
    Admiral Harris. Thanks, Senator, for the opportunity.
    Let me begin in response by saying that I have talked to 
quite a few folks who are opposed to UNCLOS, the United Nations 
Commission on Law of the Sea, and I have been informed by them, 
and I appreciate their position, and I understand the position. 
I do not agree with it, but I want to acknowledge that there 
are good reasons--there are reasons to oppose UNCLOS.
    My personal opinion is, first and foremost, UNCLOS gives us 
credibility. It gives us credibility in the international space 
that we lack today simply because we are not a signatory to 
UNCLOS.
    In a purely military sense, in a projection of power, 
whether we sign on to UNCLOS or not is not going to affect 
that. But I think, by not signing onto it, we lose the 
credibility for the very same thing that we are arguing for, 
which is following accepted rules and norms in the 
international arena.
    The United States is a beacon, and we are a beacon on a 
hill. But I think that light is brighter if we sign onto 
UNCLOS.
    We are going to find ourselves in this odd situation here 
in a few months if--if--the International Tribunal for the Law 
of the Sea agrees with the Philippines' position with regard to 
their claim against China's nine-dash line.
    We are going to find ourselves supporting that outcome and 
yet not be a signatory to it. That puts us in an awkward 
position vis-a-vis the other countries in the region.
    You raise Russia. Russia is going to reap the benefits of 
almost half of the Arctic Circle, because of this theory of 
extended continental shelf, which is afforded by UNCLOS. On the 
other hand, we are not going to reap those great benefits, 
because we are not a signatory to UNCLOS.
    I think it affects us in our commerce, in our trade, which 
is part of that rebalance. It is part of those four big spheres 
in the rebalance.
    Senator Kaine. The absence of ratification does not only 
deprive us of an argument against activities of others that we 
would argue are not lawful, but it also deprives us of some 
positive, upside benefits, for example, with respect to the 
extended continental shelf argument.
    Admiral Harris. Right. In my opinion, that is true.
    Senator Kaine. I have no further questions. Thank you, Mr. 
Chair.
    Senator Reed. [Presiding.] Thank you.
    On behalf of Chairman McCain, Senator Cotton, please?
    Senator Cotton. Thank you. I apologize for my absence. I 
have had presiding officer duty on the Senate floor.
    General Scaparrotti, that is the equivalent of staff duty 
for a junior officer at the regiment, if you are not aware.
    I want to address something specifically that you stated in 
your testimony on page 12. ``We will continue to work closely 
with the Republic of Korea to ensure it procures the 
appropriate types and numbers of critical munitions for the 
early phases of hostilities. Of note, the potential ban on 
cluster munitions could have a significant impact on our 
ability to defend the Republic of Korea.''
    Could you say a little bit more about that significant 
impact, General Scaparrotti?
    General Scaparrotti. Yes, sir. Thank you.
    There is presently a policy that in 2019 will go into 
effect that states, basically, the use of cluster munitions 
that have a dud rate of greater than 1 percent can no longer be 
a part of our inventory or be employed. I rely on cluster 
munitions in a very large way to affect operations, if we go to 
crisis on the peninsula.
    My concern is that we will not be able to replace those 
cluster munitions with proper munitions, or we will use unitary 
rounds, which, to have the same effect, I have to fire three to 
five rounds for each one of those cluster munitions.
    My point is that we need to work now to both develop 
munitions that are acceptable with less than 1 percent dud 
rate, so that we can replace them in due time. Until we do, I 
need to be able to use those cluster munitions that I have in 
storage now in the peninsula in the interim.
    Senator Cotton. Is the rationale for this policy a 
humanitarian concern, based on the nature of cluster munitions?
    General Scaparrotti. Yes, sir.
    Senator Cotton. Do you think it is more humanitarian to 
preserve these munitions in our arsenal and, hopefully, deter 
them or any other munitions from ever having to be used, or to 
remove them from the arsenal and perhaps increase the 
likelihood of a conflict in which thousands could die?
    General Scaparrotti. No, I think, particularly in this 
case, if we were not to use cluster munitions in a crisis on 
the peninsula, it will result in greater both military and 
civilian casualties in the long run, because extension of the 
campaign and also the effect it would have tactically on our 
forces.
    We have done some modeling on this. We have done some 
testing on it. I am quite confident of that opinion.
    Senator Cotton. Have your predecessors relied on these 
types of munitions going back to the 1950s?
    General Scaparrotti. We have used cluster munitions in the 
past. They are being used today. For instance, the Russians 
have used them in a devastating way in Ukraine.
    Senator Cotton. I have noticed.
    Admiral Harris, I would like to turn to your testimony on a 
related topic. Page 20, under the heading ``Critical 
Munitions,'' you state, ``Critical munitions shortfalls are a 
top priority and concern.''
    Do you mean to say there that you actually are facing 
actual shortfalls now in critical munitions?
    Admiral Harris. That is true, Senator. I have called for 
increased munitions. There is a shortfall in General 
Scaparrotti's arena. Part of that shortfall should be paid for 
by the Korean ally. That is a subject of discussions that we 
have with Korea.
    Senator Cotton. Not just in Korea, though, but theater-
wide, do you face this kind of shortfall?
    Admiral Harris. I do, but the focus of that part of my 
written testimony centered on Korea.
    Senator Cotton. Okay. In this kind of unclassified setting, 
is it something that you get into in more detail, about the 
kind of shortfalls you are facing?
    Admiral Harris. I prefer not to in this setting, but I 
would be happy to come back to you in a closed session to talk 
about it, or come to your office.
    Senator Cotton. I understand. We might submit questions for 
the record. I think it would be the height of irresponsibility 
for civilian and military leaders in this country not to, at a 
minimum, have sufficient munitions to fight and, hopefully, 
deter the wars that we might face. Whatever we might disagree 
about on longer term, large-ticket budget items, I think we 
need to have the rounds for our soldiers, sailors, airmen, and 
marines.
    Admiral Harris, I would like to turn to the United States-
Philippines alliance, something to which Senator McCain alluded 
about our Mutual Defense Treaty.
    CSIS has recommended that we should consider offering an 
explicit guarantee to the Philippines that the U.S. will 
respond under the Mutual Defense Treaty to an attack on the 
Philippines military in disputed water or territory. Do think 
this option should be considered?
    Admiral Harris. I think we should consider it, and we 
should have a discussion of it in the policy arena. Our 
obligations under the treaty with the Philippines is pretty 
clear. Whether we extend that to Second Thomas Shoal, which we 
do not hold as Philippines' sovereign territory, because we do 
not take a position on sovereignty, we should have that 
discussion, I believe.
    Senator Cotton. Thank you. I think we should have that 
discussion as well. I think deterrence works best when 
deterrence is clear, as with relationships that we have with 
NATO, Taiwan, and so forth.
    My time has expired.
    Senator Reed. Senator, if you would like to take additional 
time, because we have until Senator Blumenthal and Senator 
Sullivan return.
    Your timing is exquisite. Thank you, Senator Cotton.
    On behalf of Chairman McCain, let me recognize Senator 
Blumenthal, as he is seated. Thank you.
    Senator Blumenthal. Thank you, Mr. Chairman. I appreciate 
your great work on behalf of our country and the work that you 
have done, particularly in the theaters that you have covered.
    General Scaparrotti, I want to come back to one of the 
points that was raised by my colleague, Senator Gillibrand, 
about soft targets, in terms of cyber. How vulnerable do you 
think those targets are in the area under your command?
    General Scaparrotti. I think, first of all, I am confident 
in our military systems, my command and control systems. We red 
team that. We exercise it. I think we have a good defense. But 
with promise cyber is, it is very dynamic. It changes every 
day, so it is something we have to stay focused on.
    I am concerned about, obviously, the civilian cyber network 
that we are all connected to and has an influence on us 
militarily as well in the peninsula. That requires ROK-United 
States work, and it requires ROK work with their civilian 
counterparts, as well.
    Senator Blumenthal. Is there, in your view, any action we 
could take with respect to North Korea that would deter their 
invasive action, such as we saw with Sony, such as we have seen 
and you see in your theater?
    General Scaparrotti. Yes, I believe there are some actions 
we could take. I would prefer to provide that to you in either 
a closed session or a classified document.
    Senator Blumenthal. I understand that point. Without 
speaking to them specifically, have you made recommendations 
about them? Do you think there is the prospect of imminent 
action that will widen and increase the effectiveness of what 
we are doing?
    General Scaparrotti. Well, in terms of the recommendations, 
we are actively discussing some operations, in terms of their 
effectiveness, et cetera. But that is presently just a part of 
planning.
    Senator Blumenthal. Admiral Harris, in terms of the 
submarine capability of this country, we face no shortage of 
challenges in the Asia-Pacific. Also, I think many of us have 
no doubt about the importance of submarines.
    I know that my colleague, Senator Ayotte, asked you about 
the sufficiency of the funding that we have in prospect.
    If you were to talk to the American public, how would you 
put it so that they could understand the importance of our 
submarine capability in the Asia-Pacific?
    General Scaparrotti. Senator, I would say that the 
submarine force has been our principal asymmetric advantage 
over all the adversaries we faced in the 100 years of the 
submarine service. It is such an asymmetric advantage that 
every country who can builds their own submarine force.
    Those countries that are building those submarine forces 
are building some very capable vessels. The Russians, the 
Chinese lead that effort. The Japanese make a great submarine.
    But I am concerned about the Russian and Chinese 
submarines, as they increase in their capability. The Russian 
submarine force, in my opinion, did not take a hiatus when the 
Cold War ended. Now we have the Dolgorukiy-class SSBN. Their 
newest ballistic missile submarine is now in their Far East 
fleet in the Pacific.
    The Chinese are building Jin-class SSBNs, which has the 
capability, if mated with the right missile, to threaten the 
entire United States.
    These are submarines that we have to, we must keep them at 
risk whenever they are underway and on patrol.
    I face a submarine shortage in the Pacific. My requirements 
are not being met, and that is a function of numbers and global 
demand. I get all that. But I am also worried about that delta, 
that shortfall between requirement and presence.
    Senator Blumenthal. Thank you.
    Thank you both. My time has expired.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you very much.
    On behalf of Chairman McCain, Senator Tillis, please?
    Senator Tillis. Thank you, Mr. Chair.
    Gentlemen, I am sorry I was not here for a lot of the 
committee meeting. I have Judiciary and Veterans' Affairs going 
on at the same time. But thank you for coming before the 
committee, and thank you and your family for your service, and 
all the folks that back you up.
    I have a question that I hope it has not been asked, but it 
has to do with the buildup that we see in China.
    Admiral, when you and I had a briefing, you made the 
comment that we have a qualitative advantage, but quantity has 
a quality of its own. As China continues to expand either its 
geographic footprint or it continues to build ships and other 
assets, has there been any modeling or any focus on what it is 
going to take to continue to operate these things, in terms of 
fiscal sustainability? Is there anything in your analysis to 
say, at some point, you have to maintain them, you have to 
operate them, and with their financial woes? Is there is any 
thought on that or analysis being done?
    Admiral Harris. It is a great point, Senator. I have not 
done that analysis, nor have I seen analysis of China's fiscal 
sustainability of their military out beyond--pick a date, 2020, 
2025 or whatever.
    But what I have seen is an increased number of frontline-
capable ships, submarines, and aircraft well into the 2020s. I 
am worried about that.
    But I have not looked at their ability to fiscally sustain 
that force.
    Senator Tillis. Another point that you made that really 
struck me was the difference when you talk about our 
qualitative advantage. It is not only our technological and our 
power projection capability, but it also has to do with 
important things like survivability.
    We are clearly going to have to spend more and sometimes 
take longer to increase the assets that we have in the area, 
because of the premium that we place on force protection and 
survivability.
    I just think that is important for people to understand. We 
would never feel like, given China's priorities today, that we 
need to match them ship for ship. But we need to figure out 
when those ratios--I think your concern is that, even with our 
advantage, the ratios are getting to a point where you 
expressed some concern. Is that correct?
    Admiral Harris. It is correct. But I am less concerned 
about managing the Chinese ship for ship than I am matching 
them missile for missile. Their missile ranges far exceed ours 
ship to ship.
    Senator Tillis. That is a very good point.
    Admiral Harris. But I am pleased that in the 2017 budget, 
we are going to put some funding against improving our surface-
to-surface missile capability.
    Senator Tillis. Now, if I can flip it for a minute, we are 
viewing China as a kind of emerging threat or growing that in 
that area of the world. What sort of work can we do to identify 
instances, particularly as it relates to North Korea, to find 
partnerships and common interests? What kinds of things, either 
General Scaparrotti or Admiral Harris, are we working on that 
you think could potentially bear fruit?
    Admiral Harris. I have talked in public before about--there 
are more things that bind and link China with the United States 
than separate us. The things that separate us are not 
insignificant. But let me talk now about those things that we 
can do together in shared security spaces.
    We have a military consultative working group with China 
where we meet with them on a regular basis to discuss incidents 
at sea and in the air. We have our rules of behavior working 
group. We have all of these positive fora where we can engage 
in discussions with our Chinese counterparts.
    They are active globally in positive areas, and we should 
talk about those and commend them for it. They were involved in 
the removal of chemical weapons from Syria. They were involved 
in an evacuation of noncombatants from Yemen. They have been 
involved in counterpiracy operations off the Horn of Africa now 
for years. They are on the 22nd iteration of that. They had the 
largest number of ships off the west coast of Australia in the 
search for the missing Malaysian airliner.
    These are all positive things, and they are doing good 
things in that international space.
    It is just those provocative things that they are doing in 
Southeast Asia and the South China Sea, which raises tensions 
and provocations, which causes problems in that area that we 
have to work with them on.
    Senator Tillis. Thank you.
    In closing, two things. I suspect that my colleague here is 
going to bring up the 425. I would associate myself with any 
concerns that he may have with that. I will be sticking around 
for his questions. But I think it is also to continue to 
communicate back to us how the current budget request helps 
you, what the priorities should be, communicating those back to 
our office, and continue, I think, to pound the table to say, 
at all costs, avoid sequestration.
    I look forward to working with you, and thank you for your 
service.
    Senator Reed. On behalf of the chairman, Senator Sullivan, 
please?
    Senator Sullivan. Thank you, Mr. Chairman. My colleague, 
Senator Tillis, is wise in terms of his ability to anticipate 
questions. I did want talk a little bit about some of the force 
posture.
    Admiral Harris, in your testimony, you talked about the 
tyranny of distance and the importance of forward station 
forces at high levels of readiness that can rapidly respond to 
a crisis in terms of a full range of military options. The 
President, when he announced the rebalance, which I think has 
broad support here on this committee, bipartisan support, he 
talked about no force reduction in the Asia-Pacific theater.
    Despite that, as you may be aware, and we talked about a 
little bit yesterday, the Army has decided to essentially get 
rid of the only airborne brigade combat team in the Asia-
Pacific, the 425, also the only Arctic trained and mountain 
trained. They are, certainly, a brigade combat team that brings 
a lot of onlies to the fight. Although it is an Army decision, 
it certainly impacts the two of you.
    I know, General Scaparrotti, you view the 425 as an 
important strategic reserve that can get to Korea within 7 
hours. We have a huge strategic lift capability coupled with 
the 425.
    Admiral Harris, you actually own those forces, in terms of 
operational command.
    General Milley, to his credit, has said he is going to take 
a look at this decision. He has actually put the decision on 
hold. I was up in Alaska with him. He was on a fact-finding 
mission just a couple days ago.
    If he were to reverse that decision, would you support his 
decision to do that, if he were? Both of you?
    General Scaparrotti. Yes, sir. I would. It brings a very 
specific set of capabilities to the theater, as you just 
stated. I would just say that General Milley, as you know, with 
the downsizing of our force, has to make a decision to take 
that someplace.
    With that comment, I would just say my personal opinion is 
that we need to reconsider the downsizing of the Army at this 
point, given the challenges that we have around the globe. We 
have a mismatch between the requirements and our strategy and 
the force that we have today.
    Senator Sullivan. I could not agree more with you on that, 
General.
    General Milley, again, to his credit, is looking hard at 
the tooth-to-tail ratio. If he has to cut anybody, the 
infantry, armor, tooth element of our forces--but I think your 
broader point on not drawing down the 425 is a really good one.
    Admiral Harris, do you have any thoughts on the?
    Admiral Harris. Sure, Senator. I will be the first to say 
it is much more fun to be an insatiable COCOM than it is to be 
a Service Chief, so I do not envy the position that General 
Milley or Admiral Richardson or any other Service Chiefs are 
in, as they have to make these difficult decisions.
    But I would say that our Nation has an insatiable desire 
for security, and rightfully so. I welcome General Milley's 
decision to reconsider the reduction of the 425 and that great 
capacity that is resident in Alaska. Now, these are follow-on 
surge forces that, without them, I do not know where we would 
be, if we had a major fight on the Korean Peninsula.
    Senator Sullivan. Thank you for that. I was just out at 
Fort Polk at the JRTC [Joint Readiness Training Center]. The 
425 is actually doing their month-long training out there. To 
watch close to 1,000 airborne soldiers drop out of the sky in 
the middle of the night on a forcible entry military exercise 
shows you what an awesome instrument of American power this 
unit is. I certainly think it is a strategic mistake for the 
country to be getting rid of them.
    Let me ask one final question, just switching gears here. 
CSIS, in their report--I know both of you have reviewed it--
recommended that we should consider offering an explicit 
guarantee to the Philippines that the United States will 
respond under the United States-Philippines Mutual Defense 
Treaty to an attack on the Philippines military in the disputed 
waters or territory.
    I think, to the President's credit, he did this with regard 
to one of the islands, with regard to our treaty obligations to 
Japan recently.
    Should this option be considered? What do you think the 
effect of such a declaration would be? What do you think the 
effect of the President's previous statement vis-a-vis Japan 
and our treaty obligations to Japan on one of the islands, what 
do you think the impact of that was?
    Admiral Harris. I am trying to decide which question to 
answer first. I will start backwards.
    I think the Secretary of Defense and the President's 
unequivocal declaration that the Senkaku Islands fall under the 
protections afforded by the mutual security treaty with Japan 
had a positive effect on the situation in the East China Sea.
    I responded to a question earlier about CSIS's 
recommendation about the Philippines.
    Senator Sullivan. I am sorry. I was----
    Admiral Harris. No, no.
    I believe that our obligations to the Philippines under 
that treaty, which every treaty is different, is clear, and I 
understand my obligations. I think we should consider it, for 
sure.
    We should consider clarifying our position on the 
Philippines marines that are on the Second Thomas Shoal. We 
have maintained as a Nation that Second Thomas Shoal, that 
territorial maritime dispute there, we do not take a position 
on that. We are going to have to study this and get into it. 
But I think it clearly should be considered.
    Senator Sullivan. Your first statement about the 
President's statement, you said you thought it was positive. 
Why? Why do you think so? What did it do?
    Admiral Harris. It sent a clear signal to China that we 
would defend the Senkakus just as we would defend Tokyo.
    Senator Sullivan. Thank you.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you, Senator Sullivan.
    Admiral Harris, General Scaparrotti, on behalf of Chairman 
McCain, thank you for your testimony and your continued 
service.
    Again, on behalf of the chairman, let me adjourn the 
hearing. Thank you.
    [Whereupon, at 11:35 a.m., the hearing was adjourned.]

    [Questions for the record with answers supplied follow:]

              Questions Submitted by Senator Kelly Ayotte
                         nuclear proliferation
    Admiral Harris and General Scaparrotti: According to a recent 
report in the New York Times, some politicians in South Korea are 
calling for an indigenous nuclear weapons program due to the recent 
North Korean nuclear test.
    1. Senator Ayotte. What are your assessments of these reports?
    Admiral Harris. The United States is completely committed to the 
defense of South Korea and the ROK government is committed to the Non-
Proliferation Treaty. While some politicians may have personal views on 
the matter, these views do not represent the official position of the 
ROK government, and I have not received any indications during my 
engagements with ROK leadership that nuclearization is a consideration.
    General Scaparrotti. I do not believe these reports represent the 
senior leaders of the Republic of Korea (ROK) Government. I have not 
received any indications that nuclearization is under consideration by 
any of the ROK officials I am in contact with. The United States is 
completely committed to the defense of South Korea, and the ROK remains 
committed to the Treaty on Non-Proliferation of Nuclear Weapons (NPT). 
President Park has rejected the need for nuclear weapons as recently as 
13 January 2016. Additionally, Minister of Defense Han Min-koo rejected 
the call for developing nuclear weapons, instead calling for a THAAD 
deployment. This was in response to the remarks by the ROK's Ruling 
Party Floor Leader regarding nuclear weapons.

    2. Senator Ayotte. Do you believe South Korea or any other ally in 
the region may decide to pursue a nuclear weapons capability in the 
near future?
    Admiral Harris. Our allies benefit from the conventional and 
nuclear deterrence provided by our significant military capabilities, 
and I have received no indications that our regional allies are 
dissatisfied with the U.S. commitment to extended deterrence.
    General Scaparrotti. [Deleted.]

    3. Senator Ayotte. Why do you believe the United States nuclear 
umbrella is not deemed sufficient by those calling for an indigenous 
nuclear weapons program in South Korea?
    Admiral Harris. The United States and our alliance with the ROK 
have effectively deterred major hostilities on the Korean peninsula for 
over 60 years. Although the U.S. nuclear umbrella is designed to help 
deter and prevent major hostilities it cannot, nor was it meant to, 
deter all possible provocations. The calls for an indigenous ROK 
nuclear weapons program are not unique to recent events. It is 
understandable that some South Koreans would become increasingly 
concerned as the DPRK continues to advance its nuclear weapons program, 
and as a result want to bolster their own sense of national security as 
a result of the ongoing posture of the DPRK.
    General Scaparrotti. [Deleted.]
                                 pacom
    4. Senator Ayotte. Do you have the right number of U.S. Army troops 
stationed in or rotating through the PACOM area of responsibility?
    Admiral Harris. USPACOM has adequacy in some areas but faces 
shortfalls in others, specifically in those capabilities considered 
``High Demand/Low Density (HD/LD)'' throughout the Army. The physical 
number of U.S. Army troops stationed in, or rotating through, the 
USPACOM AOR is sufficient for steady state (Phase 0) operations; 
however, if a contingency occurs we will need to rely on the 
availability of trained and ready CONUS-based Army forces that can 
respond quickly to a short- to no-notice crisis and supplement what we 
have postured in theater. This remains the area of operational risk 
that is most significant when considered against OPLAN requirements. 
For certain specific capabilities (see question #5 for examples), our 
planning has determined that additional presence on the Korean 
peninsula is required, either via permanent stationing or rotational 
(deployed) forces. Increased forward presence (permanent basing) in the 
PACOM AOR would reduce the Army's deployment to dwell ratios and 
significantly alleviate stress on the force. Additional prepositioning 
of Army-specific equipment and supplies will also serve as a combat 
multiplier in both contingency and crisis.

    5. Senator Ayotte. Admiral Harris: If not, what more do you need?
    Admiral Harris. [Deleted.]
                            patriot missiles
    6. Senator Ayotte. General Scaparrotti: Do all the Patriot 
batteries in South Korea feature the ``Configuration 3+'' upgrade?
    General Scaparrotti. No. There are eight (8) United States Patriot 
batteries stationed in South Korea and all eight are scheduled to 
receive the Configuration 3+ upgrades in fiscal year 2017. U.S. Patriot 
batteries in the PACOM region are the priority for fielding 
Configuration 3+ upgrades.

    7. Senator Ayotte. General Scaparrotti: What are the implications 
of not having this upgrade?
    General Scaparrotti. The operational implications of not fielding 
configuration 3+ upgrades to the U.S. PATRIOT force would be additional 
risk in our ability to defend the ROK. The 3+ upgrades would improve 
the lethality of the PATRIOT in defending against the NK BMD threats. 
Not upgrading current U.S. PATRIOT with configuration 3+ leaves our 
systems less capable against the advancing capabilities of the NK 
missile force.
    Significant improvements that Configuration 3+ provides the force 
include:
    1) Missile Segment Enhanced (MSE) interceptors. These provide 
extended range and increased lethality.
    2) Radar Digital Processor (RDP) upgrades. This upgrade to the 
Patriot system radar will replace obsolete components, increase radar 
reliability, increase long range TBM detection, optimizes the MSE 
interceptors.
    3) PDB 8 software and Modem Man-stations in the command control 
van. The software updates improve system reliability and maximize the 
MSE interceptor capability and RDP improvements.

    8. Senator Ayotte. General Scaparrotti: Do you recommend that 
Patriots in South Korea receive the ``Configuration 3+'' upgrade?
    General Scaparrotti. Yes. I recommend that United States Patriots 
in Korea remain the priority for 2017 fielding of the Configuration 3+ 
upgrades due to the imminent threat we face.
    Patriot is currently the only capability on peninsula that defends 
against the North Korean ballistic missile threat. In order to maximize 
the viability of this BMD capability, I recommend that the U.S. Patriot 
systems assigned to the KTO remain a priority for upgrades with 
Configuration 3+.
                               __________
               Questions Submitted by Senator Mike Rounds
                       pacom platform allocation
    9. Senator Rounds. Admiral Harris and General Scaparrotti, you 
stated during testimony that there were specific Intelligence, 
Surveillance and Reconnaissance (ISR) platforms that would aid PACOM's 
mission that have not been provided to you during the Department of 
Defense global force allocation process. Please provide detail on the 
types and numbers of these platforms. We are prepared to receive a 
classified response if necessary.
    Admiral Harris. [Deleted.]
    General Scaparrotti. [Deleted.]
                               __________
                Questions Submitted by Senator Ted Cruz
                              port visits
    10. Senator Cruz. I am concerned about the apparent unwillingness 
of the Administration to open United States ports to Taiwanese ships 
during the ROC Navy's transit across the Pacific for their Fleet of 
Friendship goodwill visit to destinations in Central America. Given 
that Taiwan and the United States have built a close partnership in 
maritime security cooperation, is there an alternative procedure DOD 
can suggest for solving the problem of resupplying their fleet during 
the transit? Looking beyond this issue, what do you see as next steps 
that the United States and Taiwan can take to strengthen maritime 
cooperation?
    Admiral Harris. [Deleted.]
                          thaad in south korea
    11. Senator Cruz. I am pleased to see progress on discussions with 
South Korea regarding THAAD. This is a crucial step to securing our 
ally and protecting U.S. troops deployed in the region. As you aware, 
China wasted no time in waging a propaganda war against this action, 
going so far as to blackmail South Korea with economic retaliation if 
THAAD were deployed. I am concerned that this Administration and the 
Department of Defense have not been vocal enough in countering China's 
deceptive claims on THAAD's capabilities, nor condemning their harsh 
treatment of South Korea. Moving forward, what concrete steps will DOD 
take to address China's behavior regarding THAAD?
    Admiral Harris. I will continue to engage the American public on 
this issue, and I will continue to clearly represent United States 
policy to the international community. While no decisions have yet been 
made on a deployment of THAAD to the Korean Peninsula, the United 
States will take the steps necessary to protect our Homeland and our 
treaty ally. In recent bilateral engagements with China's military, the 
United States has made clear that American defensive capabilities on 
the Peninsula are intended solely to defend the Republic of Korea and 
United States troops and citizens there, against the evolving North 
Korean threat. This capability includes defense against North Korean 
ballistic missiles. We have also made clear that THAAD in South Korea 
is not directed at China and is not intended to affect strategic 
stability with China.
    General Scaparrotti. USFK remains focused on bilateral engagement 
with the ROK regarding the deployment of THAAD to the Korean Peninsula 
to enhance our theater ballistic missile defense. Interactions with 
China are beyond USFK's authorities, and I respectfully defer your 
question to PACOM.
                            south china sea
    12. Senator Cruz. China began aggressively expanding their 
territorial claims and building illegitimate islands almost two and a 
half years ago. You indicated during the Armed Services hearing that 
you believe the United States should carry out freedom of navigation 
operations in the South China Sea. When did you first provide this 
professional military advice to the Administration?
    Admiral Harris. Prior to assuming command of USPACOM, I served as 
the Commander of U.S. Pacific Fleet from November 2013 to May 2015. 
During that time, I provided multiple maritime options for the USPACOM 
Commander including proposed freedom of navigation operations. The 
USPACOM Commander considered those options in conjunction with other 
options leveraging all elements of national power. I assumed command of 
USPACOM in May 2015. Since assuming command, I have provided my 
professional military advice to the Secretary of Defense concerning all 
matters relevant to U.S. strategic objectives in the Pacific Command 
area of operations. This advice included proposed freedom of navigation 
operations in the South China Sea as well as other operations, 
activities, and actions designed to convey our strategic message and 
influence the behavior of Chinese leaders.

    13. Senator Cruz. Why did PACOM fail to exert its right to 
navigational maneuver in the waters surrounding these man-made islands 
from 2012 until October 2015? In your professional military opinion, 
has the delayed response made it more difficult to roll back and 
counter China's narrative that the South China Sea ``belongs to 
China,'' as a Chinese Vice Admiral declared last September?
    Admiral Harris. Although USPACOM did not conduct Freedom of 
Navigation Operations (FONOPS) inside 12NM of disputed South China Sea 
features in 2013 or 2014, USPACOM continued to conduct a broad range of 
military operations in the South China Sea, which China claims in its 
entirety. These operations include numerous monthly FONOPS since 2011 
in the South China Sea outside 12NM of disputed features challenging 
excessive restrictions in Exclusive Economic Zones and airspace, a 
significant number of reconnaissance flights each month, frequent 
single and multiple ship patrols as part of our Pacific Presence 
Operations, and eight FONOPS inside 12NM of disputed South China Sea 
features in 2011, 2012, 2015, and 2016.
    I have always been a proponent of the United States flying, 
sailing, and operating wherever international law allows and have 
always supported a robust FONOPS program. The United States has not 
relinquished the South China Sea to China. We have maintained a 
consistent, open, and prominent presence that has successfully 
demonstrated our commitment to our allies and partners, as well as a 
commitment to security and stability in the region.
                               submarines
    14. Senator Cruz. Admiral Harris, you expressed concern during the 
Armed Services hearing that our capacity to deploy submarines is 
falling well below the requirements of our combatant commanders, 
specifically noting that submarines provide you with your ``principal 
asymmetric advantage.'' Please explain the impact of that deficit on 
future operations in an environment where China continues to increase 
their A2/AD capabilities and Russia continues their investment in 
undersea warfare. Given the current size of our submarine fleet and 
existing shipbuilding projections, are you concerned that the United 
States could be denied access anywhere in your PACOM area of 
responsibility in the next decade? If you were not resource or asset 
constrained, how many attack submarines would you desire in PACOM?
    Admiral Harris. [Deleted.]
                               __________
            Questions Submitted by Senator Claire McCaskill
                     us strategy and regional order
    15. Senator McCaskill. Admiral Harris, recently, we have been 
working with the Chinese to increase dialogue and confidence building 
measures, particularly as they relate to operations on the high seas 
and in the air. In 2014, the US, China and 25 other maritime nations 
implemented the Code for Unplanned Encounters at Sea which would 
monitor maritime behavior. However, despite some progress, China 
continues its coercive behavior in maritime disputes through island 
building in the South China Sea and provocations around the Senkaku 
Islands in the East China Sea. Are the Chinese deliberately ignoring 
these confidence building efforts or are they interpreting differently 
than the US?
    Admiral Harris. China does not want a war or military conflict with 
the United States, and they likely view confidence building measures as 
moderately useful in preventing the inadvertent escalation of maritime 
encounters. As do we. That said, China's national policy holds that the 
rocks, shoals, and reefs in the South China Sea are China's. This 
drives their behavior which includes ignoring international law as it 
applies to maritime law. Regarding confidence building measures 
themselves, China does not view confidence building measures as 
directly relevant to disputes in the East and South China Seas. In 
these disputes, China's interest is in portraying other countries' 
operations in Chinese-claimed waters as an infringement on China's 
rights, which justify a stern response, rather than an encounter 
between ships exercising equal rights. As a result, I believe China 
will employ confidence building measures only selectively in the East 
and South China Seas, and not in situations in which it believes these 
confidence building measures constrain it from pursuing its sovereignty 
objectives.
    All this said, the Chinese are actively implementing standards and 
rules of behavior agreed to in the Code for Unplanned Encounters at Sea 
and the Rules of Behavior for the Safety of Air and Maritime Encounters 
that were recently signed as bilateral confidence building measures. 
The United States and China meet three times a year; twice during 
Military Maritime Consultative Agreement working groups, and once at a 
plenary session that addresses operational safety concerns, 
effectiveness of confidence building measures, as well as identifying 
additional areas for improvement. I believe these confidence building 
agreements and meetings have been helpful in improving safe maritime 
encounters.
              chemical biological stockpile in north korea
    16. Senator McCaskill. General Scaparrotti, in your testimony you 
commented that North Korea has one of the largest chemical weapons 
stockpiles and biological weapons research programs in the world. The 
recent National Commission on the Future of the Army found that the 
Army is incurring ``unacceptable risk'' in our response capabilities as 
they relate to, among other areas, chemical, biological, radiological 
and nuclear (CBRN) response. Do you agree with the Commission's 
findings?
    General Scaparrotti. Yes. I concur with the Commission's findings. 
The Army's force structure and response capabilities for CBRN response 
have been in steady decline over the past decade or longer. The vast 
majority of our force flow to support our OPLAN, in the area of CBRN 
response, is heavily dependent on the Reserve component and is 
projected to arrive in theater much later in the fight than we have 
requested or require. In dealing with the massive WMD programs within 
North Korea, we simply lack the capacity to adequately address the 
scale of this problem set.

    17. Senator McCaskill. General Scaparrotti, do you have sufficient 
CBRN response capability to meet the requirements on the Korean 
Peninsula?
    General Scaparrotti. No. We do not have sufficient CBRN response 
capability to meet potential contingencies in the Korean Theater of 
Operations, due to a lack of sufficient passive and active CBRN Defense 
capabilities and personnel. We have shortages in the area of collective 
protection and insufficient capabilities in both aerial and ground 
based persistent biological sensors/surveillance; The Chemical and 
Biological Defense Program (CBDP) and the Joint Program Executive 
Officer--Chemical and Biological Defense (JPEO-CBD) are currently 
working with us to address these issues. Additionally, we lack CBRN 
Specialists to manage/respond to a CBRN incident and execute the 
required post-incident decontamination.
                               __________
              Questions Submitted by Senator Joe Donnelly
                              hypersonics
    18. Senator Donnelly. Admiral Harris, do you see investment in 
hypersonic systems, including conventional prompt strike, as a priority 
for the future of our ability to deter aggression and defend our 
interests in the Pacific?
    Admiral Harris, Yes--investments in hypersonic weapons must be a 
priority to ensure our ability to deter aggression and defend our 
interests in the Pacific remain unchallenged. Hypersonic systems are a 
significant deterrent because they provide a non-nuclear option to 
provocation and the ability to rapidly project power to decisively 
defeat aggressors. Furthermore, hypersonic systems increase platform 
survivability and decrease operational employment risk in Anti-Access/
Area Denial environments.
                    anti-access/area denial (a2/ad)
    19. Senator Donnelly. Admiral Harris, General Scaparrotti, what 
advantages would flying 5th generation aircraft provide in the 
contested airspace over the Korean Peninsula?
    Admiral Harris. Fifth generation aircraft provide significant 
advantages in the contested airspace over the Korean Peninsula. Our 
fifth generation aircraft provide increased survivability and lethality 
in the A2/AD environment through enhanced systems and increased 
situational awareness. This said, due to the relative small number of 
fifth generation fighters that will be brought online by the Air Force, 
Navy, and Marine Corps in the next five years, I believe it is prudent 
to migrate some fifth generation capability and weapons to our existing 
large fourth generation fighter force.
    General Scaparrotti. [Deleted.]

    20. Senator Donnelly. Admiral Harris, General Scaparrotti, can you 
speak to the expected survivability of older and less protected 
airframes, such as Korean F-5s and US A-10s in the initial phases of a 
war in Korea?
    Admiral Harris. [Deleted.]
    General Scaparrotti. [Deleted.]

    21. Senator Donnelly. Admiral Harris, General Scaparrotti, what is 
your choice to go against threats such as MiG-29s and the plethora of 
short/long, stationery, transportable, radar and IR threats?
    Admiral Harris. Fifth generation fighters and hypersonics. The 
Pacific theater requires fifth generation fighters equipped with the 
payload and range that provides the air superiority necessary to win 
decisively against threats such as the MiG-29s. Fifth generation 
fighters are multi-role tactical aircraft with electronic warfare 
capabilities that can operate, and endure, in an Anti-Access / Area-
Denial (A2/AD) environment. Furthermore, it is essential that Pacific 
theater fighters are able to communicate with our regional allies such 
as: Australia, Japan, and South Korea who are procuring F-35 aircraft. 
Additionally, hypersonics are game changing technologies that enhance 
our ability to overcome the tyranny of distance, while providing the 
element of surprise. Hypersonics provide range at sea, and the air 
launch necessary for the freedom of maneuver of fleet operations. 
Hypersonics also give us the speed, survivability and time critical 
strike capability that allows our forces to strike at will.
    General Scaparrotti. [Deleted.]

    22. Senator Donnelly. Admiral Harris, General Scaparrotti, would we 
be able to gain air superiority over Korea faster or slower with F-35/
22s versus A-10s and even F-16s?
    Admiral Harris. We enjoy air superiority today against the North 
Korean Air Force with our F-22s, F-16s, F-15s and F/A-18s. We would 
gain air superiority faster with F-35/22s versus A-10s and F-16s. The 
superior technology of our fifth generation aircraft to provide 
situational awareness and counter-air capability, combined with our 
high level of pilot proficiency provide significant advantages against 
even the most advanced aircraft in North Korea, the MiG-29.
    General Scaparrotti. [Deleted.]

    23. Senator Donnelly. Admiral Harris, what do you see as the top 
A2/AD challenges we face in the Asia-Pacific region?
    Admiral Harris. The top three challenges are: (1) gaining and 
maintaining air and sea superiority, which requires ample submarines, 
fifth generation aircraft, and critical munitions; (2) defending space 
assets, to include communications, position, navigation and timing 
assets, and intelligence, surveillance and reconnaissance (ISR) assets; 
and, (3) defending our assets through integrated ballistic and cruise 
missile defense and dispersal operations.

    24. Senator Donnelly. Admiral Harris, what particular programs do 
you see as vital to maintaining our ability to project power in the 
Asia-Pacific?
    Admiral Harris. In order to project power in the Asia-Pacific 
Theater, PACOM forces require capabilities that can operate and survive 
in an Anti-Access / Area-Denial (A2/AD) environment against China and 
Russia. Some specific programs required in the PACOM theater are: 
regional submarines, Fourth Generation Fighters with upgraded Fifth 
Generation capabilities and Fifth Generation aircraft; precision 
munitions (i.e. AIM-9X, AIM-120D, SM-6); Long Range Anti-ship Missile 
(LRASM); advanced Intelligence, Surveillance, and Recognizance (ISR) 
communications systems (i.e. Advanced Hawkeye E2D and P-8 Poseidon). 
Our forces require systems that diminish gaps in surface, air and 
subsurface areas.

    25. Senator Donnelly. Admiral Harris, General Scaparrotti, a key 
component of Chinese military strategy would be attacks on regional 
United States land bases, of which five are currently within range of 
China's land-attack cruise missiles. Given limited resources, what 
priority should be given to investments in base dispersion, base 
hardening, enhancing the ability to operate from further away, and 
enhancing CONUS-based global strike capabilities?
    Admiral Harris. Regional missile forces continue to evolve in both 
capability and capacity, resulting in growing levels of risk to forward 
U.S. Forces. High priority must be given to reducing risk via 
investments in both active (ballistic and cruise missile defense) and 
passive defense (distributed operations, hardening and seaport/airport 
repair) at our existing, planned, and possible expeditionary operating 
locations. Additionally, high priority must be assigned to the 
development of the robust distributed logistics support capability that 
is essential to enabling sustained combat operations from numerous ``at 
risk'' U.S. operating locations in the Western Pacific.
    General Scaparrotti. As USFK does not focus on Chinese deterrence 
and defense per the scope of your question, I respectfully defer this 
request to the key leaders of both Pacific Command and U.S. Strategic 
Commands. However, USFK is focused on maintaining a level of security 
for our installations based on current threat assessments. Every 
installation conducts regular training and vulnerability exercises 
designed to harden our force protection. Additionally, USFK planners 
have developed and regularly refine contingency plans to disperse key 
systems when threatened.
                               __________
             Questions Submitted by Senator Mazie K. Hirono
                      asia-pacific rebalance 2025
    26. Senator Hirono. Admiral Harris and General Scaparrotti, Last 
month, the Center for Strategic and International Studies (CSIS) 
released the Asia-Pacific Rebalance 2025 Report. The SASC heard 
testimony on its findings earlier this month. An excerpt from the 
abridged report is as follows: ``Although the Obama administration 
issued a series of speeches and documents on the rebalance, the authors 
found that there remains no central U.S. Government document that 
describes the rebalance strategy and its associated elements. In 
interviews with leaders throughout the Department of Defense, in 
various U.S. agencies, on Capitol Hill, and across the Asia-Pacific, 
the study team heard consistent confusion about the rebalance strategy 
and concern about its implementation.'' Can you both please provide 
your thoughts on this? Do you agree that the United States does not 
have a clear strategy in the Pacific? What can you do in your capacity 
to support a clear and consistent strategy?
    Admiral Harris. [Deleted.]
    General Scaparrotti. I have a clear understanding behind the intent 
and objectives of the U.S. Rebalance, and am in regular dialogue with 
leaders throughout the Department of Defense and elsewhere in the U.S. 
Government to remain synchronized. Throughout my time in Command, I 
have regularly offered my best military advice to support the 
development and implementation of a clear and consistent strategy. The 
rebalance has played a role in the high priority allocation of 
resources to United States Forces Korea, as well as increased senior 
leader attention and time spent in Korea. This has been a key component 
to our success in Korea.
                                 pacom
    27. Senator Hirono. Admiral Harris, this past week it was announced 
that the contract award for the Joint Surveillance and Target Attack 
Radar System (JSTARS) program has been delayed by at least six months. 
How important is having the JSTARS capability in the Asia-Pacific 
region and are you concerned about the delays associated with the 
JSTARS recapitalization program? How does this impact your capabilities 
in Asia-Pacific?
    Admiral Harris. It is very important to maintain JSTARS capability 
in the Indo-Asia-Pacific region, and potential delays in the JSTARS 
recapitalization concern me. The primary impact is a potential gap in 
the Battle Management Command and Control (BMC2)-Intelligence 
Surveillance and Reconnaissance (ISR) capability to meet key strategic 
objectives. The current Air Force E-8C retirement plan would further 
reduce deployable capacity, impacting USPACOM access to forces. 
Advocacy is essential in retaining sufficient JSTARS capability to meet 
command requirements in the 2017-2028 timeframe, as there is no other 
alternative joint capability that provides an integrated BMC2-ISR 
capability of the E-8C.
                              eagle vision
    28. Senator Hirono. Admiral Harris, in your testimony you make 
mention of the fact that The Indo-Asia-Pacific is the world's most 
disaster-prone region. The United States plays a significant role in 
providing humanitarian assistance to countries that experience these 
hardships, and PACOM is a critical component of that aid. As the 
Commander of PACOM, can you please comment on the capabilities that the 
Eagle Vision system in providing assistance to those countries in need? 
As you know, the Hawaii Air National Guard is one of the few Air Guard 
units which hosts the system.
    Admiral Harris. Eagle Vision provides me with rapid access to broad 
area and multispectral imagery. It supports aircraft mission planning, 
mission target area visualization, intelligent assessment, map 
preparation, and other topographic applications in support of both 
warfighting or disaster response. Eagle Vision's most notable aspect is 
its ability to provide near real time imagery aiding command and 
control.
    These capabilities can enhance the ability of responders to focus 
limited assets on critical areas of need. Eagle Vision can be deployed 
to any location within the USPACOM AOR by C-130 or C-17. In the USPACOM 
AOR, Eagle Vision is currently used by the 293rd Combat Communications 
Squadron, Hawaii Air National Guard, Hickam Air Force Base, Hawaii.
                               pacom aor
    29. Senator Hirono. Admiral Harris, given the downward pressures on 
budgets and other resource restrictions, we obviously can't have 
everything we need in terms of providing national security 
capabilities. As far as PACOM is concerned, if additional resources 
were made available what items would you recommend having in the PACOM 
AOR?
    Admiral Harris. I recommend additional investment in the 
advancement of critical munitions, additional submarines, fourth 
generation fighters with upgraded fifth generation capabilities and 
fifth generation fighters, and persistent Intelligence Surveillance 
Reconnaissance (ISR). Critical munition (i.e. AIM-9X, AIM-120, SM-6) 
shortages impact USPACOM's ability to conduct high end warfare in an 
Anti-Access/Area Denial (A2/AD) environment. The restricted ranges of 
our aging surface-to-surface and air-to-surface munitions now serve as 
the limiting factor in the effectiveness of advanced U.S. assets. Until 
munition ranges and effectiveness catch up to the capability of our 
advanced fighters, ships, and submarines the benefit of having such 
capable assets will be stymied. Additional submarines would assist in 
maintaining an asymmetric advantage against the current adversary 
submarine threats in the region and fifth generation aircraft have the 
capability that can operate and survive in an A2/AD. Persistent ISR is 
necessary to bolster Ballistic Missile Defense (BMD). Persistent ISR is 
necessary to find, fix, and target concealed and mobile missiles in the 
AOR.
                                 thaad
    30. Senator Hirono. General Scaparrotti, I understand that a 
Terminal High Altitude Area Defense (THAAD) system is being considered 
for use against potential North Korean missile threats. Can you talk 
more about this weapon system and the capabilities that it would bring?
    General Scaparrotti. [Deleted.]
                        japan - korea relations
    31. Senator Hirono. General Scaparrotti, how would you currently 
assess the state of Japan-Korea defense cooperation including in the 
missile defense arena?
    General Scaparrotti. Although there are still lingering historical 
issues, the prospects for improved defense cooperation between Japan 
and Korea have increased. The North Korean threat has galvanized our 
partners on both sides and they have recognized that cooperation in the 
missile defense arena is paramount to national and regional security. 
Recent achievements like the 2014 Trilateral Information Sharing 
Arrangement and the U.S. ROK Japan Defense Trilateral Talks will 
continue to underpin trilateral relationships into the future. As 
evidence of these improving relations, there have been several Defense 
Trilateral Talks that have occurred in the wake of this year's DPRK 
nuclear and missile tests. I am cautiously optimistic both nations will 
continue to work together and strengthen our unified position against 
North Korea.
                        regional energy security
    32. Senator Hirono. Admiral Harris and General Scaparrotti, as you 
know, the Asia-Pacific region is home to some of the fastest growing--
and industrializing--economies in the world. As these economies grow 
and industrialize, they need to generate the energy needed to power 
their more modern economies. However, the Asia-Pacific region does not 
have substantial fossil fuel resources, and is already facing the 
challenges presented by air and water pollution, as well as the myriad 
other consequences of a rapidly changing climate. Furthermore, the 
distances within the PACOM AOR make energy transport and cost a 
vulnerability for our forces. The United States military's experiences 
in Iraq and Afghanistan are well documented examples of these 
difficulties. In your view, despite the currently record low price of 
oil, how much of a long-term vulnerability does competition for energy 
resources present in the region both for the relations between nations 
there as well as U.S. Forces in the AOR? What sort of pressures does 
this place on U.S. national security in the region, and what types of 
initiatives are you undertaking to help alleviate some of these 
concerns? What have been some of the outcomes of those efforts to date?
    Admiral Harris. Experts state that growth in trade of energy 
sources will be particularly large in the Indo-Asia-Pacific region and 
almost all these energy sources will require movement through 
international waters. To ensure global growth and to meet our nation's 
security priorities, international sea lines of communication must 
remain secure. Security of international sea lanes is a cornerstone of 
Pacific Command's mission. We employ two broad efforts: enduring 
presence and working with allies and partners. Enduring presence of 
Pacific Command's forces enhances international maritime domain 
awareness and supports the free flow of international trade, to include 
energy supplies. Pacific Command works with allies and partners to 
improve and/or develop their domestic maritime security capabilities. 
In its first year of execution, the Department of Defense Maritime 
Security Initiative addresses improving partner nation capability and 
capacity to conduct maritime security and enforce their resource rights 
within their Exclusive Economic Zone. Additionally, Pacific Command 
works closely with partners across the Indo-Asia-Pacific region in our 
strategic approach to ensure energy requirements will never be an 
operational constraint. Part of Pacific Command's energy security 
program includes building resiliency in energy systems; increase allied 
and partner interoperability; and integrating energy security 
principles into operations, activities, and actions. Outcomes of these 
efforts include energy security dialogues with allies and partners; 
inclusion in steady state campaign plan, contingency plans, and 
exercise scenarios; and informing innovation requirements for basing 
and operational energy security innovation in order to improve mission 
assurance and extend operational reach.
    General Scaparrotti. The Republic of Korea (ROK) is a small nation 
without a significant endowment of natural resources. Thus, significant 
shifts in energy prices or supplies have a potentially significant 
impact on the ROK economy. However, energy competition does not play a 
large role in ROK national security decision-making, nor does the ROK 
appear to feel significant pressure. A robust nuclear energy 
capability, combined with the security provided by the United States-
ROK Alliance, helps to alleviate energy concerns. The United States can 
further contribute to ROK energy security as a source of oil, 
particularly with the recent lifting of the United States crude oil 
export ban.
    The ROK does not have international oil or gas pipelines; they rely 
exclusively on tanker shipments. The ROK is one of the world's top 
importers of liquefied natural gas (LNG), coal, and crude oil. They are 
the second largest importer of LNG mostly from the Middle East and 
Southeast Asia. They are the fourth largest importer of coal which 
comes from Australia and Southeast Asia. The ROK is the fifth largest 
importer of crude oil, mostly from the Middle East. The ROK imports 
about 97% of its total primary energy consumption, and much of it from 
the Middle East and through Southeast Asia. The security of key sea 
shipping lanes, especially in the South China Sea (SCS), is paramount. 
The ROK has a vested interest in maintaining freedom of navigation 
operations (FONOPS) in the SCS to ensure its energy security.

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              

                        THURSDAY, MARCH 3, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.

               POSTURE OF THE DEPARTMENT OF THE AIR FORCE

    The committee met, pursuant to notice, at 9:32 a.m. in Room 
SD-G50, Dirksen Senate Office Building, Senator John McCain 
(chairman) presiding.
    Committee members present: Senators McCain, Inhofe, 
Sessions, Wicker, Ayotte, Cotton, Rounds, Tillis, Sullivan, 
Lee, Reed, Nelson, Manchin, Shaheen, Gillibrand, Blumenthal, 
Donnelly, Hirono, Kaine, King, and Heinrich.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. Good morning.
    The committee meets today to consider the posture of the 
Air Force in the context of our review and oversight of the 
fiscal year 2017 budget request. I welcome our witnesses, 
Secretary of the Air Force Deborah James and Chief of Staff of 
the Air Force General Mark Welsh.
    General Welsh, I understand this may be your last time you 
will appear before this committee. Thank you for not cheering. 
I just want to take this opportunity to express our gratitude 
to you and your family for 40 years of service and sacrifice in 
defense of our Nation and wish you every success in your future 
endeavors.
    Twenty-five years of continuous deployments, troubled 
acquisition programs, and frequent aircraft divestments have 
left us with the oldest and smallest Air Force in history. The 
combination of relentless operational tempo and misguided 
reductions in defense spending in recent years has depleted 
readiness. Today less than half of the Air Force fighter 
squadrons are fully combat mission ready, and the Air Force 
does not anticipate a return to full spectrum readiness for 
another decade.
    Meanwhile, potential adversaries are developing and 
fielding fifth generation fighters, advanced air defense 
systems, and sophisticated space, cyber, and electronic warfare 
capabilities that are rapidly shrinking America's military 
technological advantage and holding our aircraft at greater 
risk over greater distances.
    Despite temporary relief from the arbitrary spending caps 
imposed by the Budget Control Act, including through last 
year's Bipartisan Budget Act, we are still placing an 
unnecessary and dangerous burden on the backs of our airmen.
    Given the obvious needs of our Air Force to restore 
readiness, recapitalize our combat aircraft fleet, and invest 
in modernization, the President should have requested a defense 
budget that reflects the scale and scope of the national 
security threats we face and the growing demands they impose on 
our airmen.
    Instead, he chose to request the lowest level of defense 
spending authorized by last year's budget agreement and submit 
a defense budget that is actually less in real dollars than 
last year, despite the fact that operational requirements have 
grown.
    That leaves the Air Force $3.4 billion short of what the 
Air Force said last year it would need for fiscal year 2017. 
Given this budgetary shortfall, I am concerned the Air Force 
will not be able to meet the requirements outlined in the 2014 
QDR [Quadriennial Defense Review]: to simultaneously defeat an 
adversary while denying the objectives of another.
    The shortfall in this year's budget has forced the Air 
Force to make a number of painful and undesirable decisions. 
The most significant was to slow procurement of the F-35A by 45 
aircraft over the next five years. This budget-driven decision 
will likely increase the cost of this already costly aircraft, 
while exacerbating what defense experts call the modernization 
bow wave for other critical Air Force programs over the next 10 
years, which the Air Force admits it cannot afford at current 
funding levels. It also means it will take even longer for the 
Air Force to address the tactical fighter shortfall looming in 
the next decade.
    While we recognize the need for additional resources, this 
committee will continue to exercise rigorous oversight on Air 
Force acquisition programs, including the KC-46A tanker 
program, the presidential aircraft replacement, and the GPS 
Operational Control System, recently labeled the Air Force's 
``number one troubled program.'' If the Air Force, and the 
Department of Defense more broadly, wish to convince the 
American people that they need more taxpayer dollars, they must 
show they are efficiently and wisely using the resources they 
already have.
    In particular, questions persist about the validity of the 
F-35 program of record quantity. Just consider that 815 F-35A's 
have been deferred from delivery to the Air Force since 2002, 
and the Service's latest procurement profile now projects the 
last F-35A to be delivered in the year 2040. At a certain 
point, a 38-year acquisition program runs the risk of producing 
obsolescence, especially when our adversaries are accelerating 
technological developments to counter the F-35. I look forward 
to reviewing the Secretary of Defense's decisions on 
revalidation of the total F-35 program of record quantity, 
which is due to this committee by May 25th, 2016.
    The decision to further delay the F-35 procurement also 
underscores the folly of the Air Force's plan to retire the A-
10 fleet before a proven close air support replacement is 
fielded. Much fanfare has been made about the Air Force's 
decision not to divest A-10 aircraft in fiscal year 2018, but 
beginning in fiscal year 2018, the Air Force again plans to 
retire the entire A-10 fleet by 2021 with no replacement.
    As the Air Force proceeds with needed modernization, I 
recognize the need for a new bomber to replace our aging fleet 
of B-52, B-1, and B-2 aircraft. A long-range, penetrating 
strike capability is vital to deterring our enemies and 
reassuring our allies in increasingly contested environments in 
Europe and the Asia-Pacific.
    However, I remain seriously concerned about the acquisition 
strategy for the B-21 Long Range Strike Bomber, especially the 
use of a cost-plus contract for the development of this 
aircraft. I am still not convinced that this program will not 
repeat the failures of past acquisition programs such as the F-
35. I will carefully examine every legislative option to ensure 
that our Congress can fulfill our dual obligations to the 
American people, providing our warfighters with the necessary 
capability to defend this country and to do so at the lowest 
possible cost and shortest period of time.
    Similarly, ending the use of Russian rocket engines remains 
a top priority for this committee. Department leaders have 
correctly drawn attention to Russia's growing development of 
military capabilities to threaten U.S. national security in 
space. The greatest risk in this regard is that Vladimir Putin 
continues to hold our national security space launch capability 
in the palm of his hand through the Department's continued 
dependence on Russian rocket engines. This is a national 
security threat in addition to a moral outrage at a time when 
Russian forces continued to destabilize Ukraine, including 
nearly 500 attacks in the past week, as General Breedlove, the 
Commander of European Command, testified on Tuesday.
    The Treasury Department remains unwilling to sanction 
Roscosmos, the Russian parent company of the manufacturer of 
the RD-180, which is controlled by two sanctioned cronies of 
Vladimir Putin. This suggests a level of hypocrisy in U.S. 
sanctions policy that will only make it harder to convince our 
European allies to renew their own sanctions on Russia this 
summer.
    This committee wants to find a constructive solution to 
eliminate our dependence on Russian rocket engines immediately 
without compromising future competition, a goal that Secretary 
James said was possible in testimony in January.
    Finally, I want to express my continuing concern with the 
Air Force's mismanagement of its remotely piloted aircraft, or 
RPA [Remotely Piloted Aircraft], enterprise. The Air Force's 
MQ-1 and MQ-9 community remains undermanned and overworked. 
Yet, despite the Air Force's stated need for an additional 
3,000 RPA manpower authorizations, the Air Force's end strength 
remains the same as last year.
    While the Congress authorized greater retention bonuses for 
RPA pilots, the Air Force did not provide them out of a sense 
of ``fairness.'' After years of warnings that RPA pilots and 
maintainers are leaving in droves, this was a missed 
opportunity and a damaging mistake. I look forward to your 
explanation for this action.
    Senator Reed?

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman. Let 
me join you in welcoming Secretary James and General Welsh to 
the committee this morning to testify on the plans and programs 
of the Department of the Air Force for the fiscal year 2017 
annual authorization.
    We are grateful to both of you for your service to the 
Nation. Particularly, General Welsh, let me join the chairman 
in commending you for your outstanding service to the Nation 
and to the Air Force. You have led with vision and integrity. 
Thank you very much, sir.
    Over the past 15 years, the Air Force personnel and 
equipment have played a key role in support of our national 
security goals in Iraq, Afghanistan, and across the globe. Over 
this time, we have relied heavily on Air Force strike aircraft 
to take on important ground targets, Air Force manned aircraft 
and unmanned aerial vehicles to provide intelligence, 
surveillance, and reconnaissance support, and Air Force tankers 
and cargo aircraft to support coalition air operations.
    Our witnesses this morning face huge challenges as they 
strive to balance the need to support ongoing operations and 
sustain readiness with the need to modernize and keep the 
technological edge in the three domains of air, space, and 
cyberspace that are so critical to military success. The Air 
Force has produced a budget that, like all the Services, made 
tough decisions in a time of constrained resources.
    The Air Force is proposing significant force structure 
changes to ensure that it will have the right size and mix of 
assets and capabilities to meet strategic needs in a manner 
consistent with a constrained budget environment. The Air Force 
proposal includes major shifts in both strategic and tactical 
aircraft programs, with reductions shared among the Active Duty 
force, the Air National Guard, and the Air Force Reserve. Here 
are some examples.
    The Air Force is planning to retire the entire A-10 fighter 
force over the future years defense program as new F-35A Joint 
Strike Fighter aircraft replace them on a one-for-one basis. 
While there is a one-for-one replacement for aircraft and 
squadrons under the Air Force plan, it is not clear that the 
close air support capability of the modernized force will equal 
or exceed the close air support capability of the current 
force, and we would appreciate your thoughts, as the chairman 
has indicated. The disjunction between the deployment of F-35's 
and the proposed retirement of the A-10 raises that question, 
and it is a critical question.
    The Air Force continues its plan to eventually retire the 
entire U-2 fleet and keep the Global Hawk Block 30 remotely 
piloted aircraft fleet. In the meantime, the Air Force plans to 
develop and field capabilities for the Global Hawk that are 
intended to equal or exceed the capability of the U-2, as 
required by law. Again, I would appreciate an update on this 
particular issue.
    DOD [Department of Defense] has directed the Air Force to 
reduce the number of Predator and Reaper RPA, remotely piloted 
aircraft, Combat Air Patrols, CAPs. The previous goal was 65 
CAPs. The new goal will be 60 CAPs. This is to allow time for 
the Air Force personnel and logistics systems to catch up to 
the demand for RPA forces. Again, your views on how this is 
going to be accomplished would be actually critical.
    Finally, the Air Force wants to make significant reductions 
in certain high-demand/low-density forces, such as the AWACS 
[Airborn Warning and Control System], JSTARS [Joint 
Surveillance and Target Attack Radar System], and Compass Call 
fleets before they would be replaced by new systems and 
capabilities. We need to understand the risks involved and the 
gaps that would be produced in phasing one system out as other 
systems come aboard.
    Four years ago, Congress created a National Commission on 
the Structure of the Air Force to make recommendations on 
policy issues that are directly relevant to these force 
structure decisions. We look forward to receiving testimony 
from the Air Force on the progress being made to implement 
those recommendations.
    As the Air Force contemplates major force structure 
changes, we need to understand what if any effects these 
changes may have on the Air Force's ability to play a key role 
in implementing defense strategic guidance calling for a shift 
to refocus emphasis to the Asia-Pacific region, for one 
example. Again, I hope our witnesses today can give us this 
advice.
    You have, as the chairman has indicated, significant 
challenges in maintaining the acquisition programs with the new 
strike fighter. It is an expensive program, and again, I think 
it will be a focus not only of our questions but of your 
efforts over the next several months.
    I look forward to your testimony.
    Thank you, Mr. Chairman.
    Chairman McCain. Thank you.
    Welcome, Secretary James.

STATEMENT OF HONORABLE DEBORAH LEE JAMES, SECRETARY OF THE AIR 
                             FORCE

    Ms. James. Thank you, Mr. Chairman and Ranking Member Reed, 
and good morning to all the members of the committee.
    We have got a lot to talk about this morning, and General 
Welsh and I are very proud to be here to represent the Air 
Force.
    When we testified before you last year at our posture 
hearing, we outlined three priorities. Those are taking care of 
people, balancing readiness of today with the needs of 
modernization for tomorrow, and making every dollar count. I am 
here to tell you that those are the same priorities. They have 
not changed.
    But what has changed--and both the chairman and the ranking 
member have already touched upon this, that what has changed 
over the last few years are the threats and the challenges that 
are faced by our Nation around the world. Your Air Force is 
fully engaged in every region of the world, every mission area 
across the full spectrum of military operations. Put simply, we 
have never been busier on such a sustained global basis, at 
least not in the 35 years that I have been an observer on the 
scene.
    Now, General Welsh, is going to talk to you more about 
these areas, as well as many others under our priorities 
representing our budget in just a few minutes. But what I would 
like to do is use my precious time here before the committee to 
update on two key areas of interest, and both the ranking and 
the chairman touched upon these. Those two areas are the B-21 
bomber and space launch.
    Our nuclear enterprise is our number one mission priority, 
and the B-21 will be an essential piece of our Nation's nuclear 
backbone and, indeed, ditto for the conventional area as well. 
The B-21 will be a vital global precision attack platform that 
will give our country a deep, penetrating capability, enabling 
us to hold targets at risk anywhere on the globe and provide 
the President with flexible options in addressing future 
threats. Now that we are beyond the GAO [Government 
Accountability Office] protest period, we are moving forward 
with execution.
    Now, in terms of the B-21 acquisition, cost control is 
paramount. We have taken a careful look at lessons learned from 
previous acquisition programs. We have looked at those that 
have worked well, and we have looked at those that have not 
worked well. Experience tells us that there is no one-size-
fits-all when it comes to acquisition contracts and strategies 
because you see we have certainly examples of cost-plus 
failures, but there also have been cost-plus successes. 
Likewise, we have had some successes in fixed-price work, but 
there have also been some noteworthy failures in the fixed-
price development world to include the A-12, the Tri-Service 
standoff attack missile, the C-5, the future combat system, and 
the C-17.
    Now, some of these programs were canceled without delivery 
of any warfighting capabilities. Some had to sacrifice 
capability to stay within funding constraints. Some were 
restructured and significant additional funding was added to 
complete. Many of them, in addition, resulted in years of 
litigation.
    To help ensure that we now deliver the best value to the 
American taxpayer with the right quantities, the B-21 approach 
uses a mix of contract types to support the overall acquisition 
strategy, and this mix was specifically chosen to capitalize on 
the advantages of the different contract types while limiting 
the potential risks for cost growth and/or performance issues. 
Although the B-21 design incorporates mature and existing 
technology, we will be integrating those technologies on a 
never-before-built low-observable bomber. It is these two 
factors, the never-before-built bomber and the integration 
aspect that introduces risk into this development program, 
particularly when we get to integration and test phases.
    While some can draw comparisons between the B-21 and the 
KC-46, there are actually some very important differences. 
Unlike the KC-46, the B-21 is neither a commercial derivative 
aircraft, nor is it a commercial derivative design. Unlike the 
KC-46, the B-21 has no anticipated commercial or foreign sales 
market to offset any unexpected development costs.
    Now, after carefully considering these and other factors, 
the milestone decision authority determined a cost-plus 
incentive contract type was best for the development phase of 
the program.
    Now, of course, there have also been cost-plus failures. 
There is no question about that. F-22, B-2, F-35. They went way 
over cost and did not produce the performance on time. We are 
mindful about all of these examples, and we are also very 
mindful of the potential for cost growth. We believe that we 
have taken steps to address this.
    First, we had two independent cost estimates completed and 
we have funded to the higher estimate.
    Second, we have and will continue to ensure the 
requirements remain stable. By the way, the chief requirements 
control officer is sitting right next to me right now this 
morning.
    Third, we crafted an incentive structure that will reward 
cost and schedule performance during this cost-plus phase of 
the contract. We structured the majority of these incentives 
toward the back end of the cost-plus phase of the program, 
which means that the contractor will be incentivized to get to 
production as quickly as possible and as feasible and not drag 
it out in the cost-plus phase.
    Fourth, we are using those mature technologies I referenced 
to meet requirements and avoid developing key subsystems while 
also developing the aircraft. By the way, that combination was 
one of the things--one thing that went wrong in the B-2 
program.
    Now, all of these factors make us believe that we have a 
good approach and that we will control costs on this program. 
Technology maturation and risk reduction was fixed-price. The 
first five low-rate initial production options are fixed-price, 
and the remainder of the production will be fixed-price. The 
majority of this program will be fixed-price, but a portion, of 
course, is in the cost plus incentive arena.
    Let me now take a few moments just to update the committee 
on some elements with respect to space launch since we were 
last together in January.
    Now, during the January hearing on space launch, I 
testified that I too was disappointed that ULA [United Launch 
Alliance] had not been on the GPS-3 [Global Positioning System] 
competitive launch. I asked my team to go look at options for 
what could be done about this because, after all, the ELC is 
taxpayer dollars involved. My general counsel performed that 
review and coordinated the results with the OSD [Office of the 
Secretary of Defense] general counsel.
    The general counsel found that while certainly it is 
possible to terminate the contract, it is not probably the most 
cost-effective approach for the taxpayer. Given that ELC 
provides infrastructure, which is essential to the launches 
that are specific to the block buy, we would still have to pay 
for that service somehow, and we would end up probably paying a 
lot more than we are paying today. Breaking that contract and 
allocating those costs to each individual launch in the block 
buy would likely cost the taxpayer between $700 million and 
$800 million more.
    Now, that was the finding of my general counsel, together 
with the OSD [Office of the Secretary of Defense] general 
counsel. But I want to take one more step. I would like to get 
an independent legal review to see if there is some angle there 
that we are missing.
    Additionally, since the space hearing, the DOD engaged the 
Department of the Treasury regarding the status of sanctions as 
they pertain to the recent reorganization of Roscosmos and as 
the chairman noted the findings there.
    Meanwhile, we have continued our plan to transition away 
from the RD-180 rocket engine reliance, and in addition to the 
first 2 OTA [Other Transaction Authority] contracts that went 
to SpaceX and Orbital ATK, on February 29th we awarded two 
more. These two were to Aerojet Rocketdyne and to ULA. With 
these actions, we will have obligated all of the fiscal year 
2015 funding for rocket propulsion system work in a full and 
open competitive way per the law.
    Finally, we are still concluding and conducting an analysis 
on various allocation strategies, should allocation become 
necessary in the future. Preliminary analysis suggests that a 
transition to a combination of an allocation between the Delta 
and the Falcon launch service, on the other hand, would add 
anywhere from $1.5 billion to $5 billion in additional cost, 
depending on your assumptions and depending on when you would 
begin such a transition. The basic rule of thumb here is that 
the sooner a full RD-180 ban might start, the more disruptive 
it would be to the launch manifest and to the production 
timeline and the higher the cost would be.
    Now, none of this additional cost, whatever that cost ends 
up being, is currently contained within the Air Force program. 
As I just said, everything I just said is preliminary in 
nature. We are still trying to refine the details.
    As I wrap up, Mr. Chairman, I want to thank you and this 
committee for your leadership and support of the Bipartisan 
Budget Act. As you noted, it does not provide all of the 
resources that we felt we needed, but it is extremely important 
because it is much needed stability and predictability.
    While we are appreciative of this, we worry about the 
return of sequestration in fiscal year 2018 and beyond. You all 
remember in 2013, sequestration compelled us to park jets and 
delay upgrades and halt training, and that further exacerbated 
our readiness situation. If we return to it in fiscal year 
2018, we will be even worse off. It will touch our people, our 
modernization efforts, and our readiness. All of the programs 
that both the ranking and the chairman talked about in the 
beginning--all of these relate to money. We agree with these 
points. All of these points relate to money, and getting 
sequestration lifted permanently would be a fantastic start to 
helping the entirety of DOD in this arena.
    Thank you very much for your support of our Air Force and 
for our airmen, and we look forward to your questions.
    [The prepared statement of Ms. James and General Welsh 
follows:]
      
    
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
      
    Chairman McCain. General Welsh?

STATEMENT OF GENERAL MARK A. WELSH III, USAF, CHIEF OF STAFF OF 
                         THE AIR FORCE

    General Welsh. Thank you, Mr. Chairman and Ranking Member 
Reed, and distinguished members of the committee. It is always 
a privilege to testify before you and to join Secretary James 
in representing America's airmen.
    As you heard from the Secretary, our top priorities remain 
taking care of people, balancing readiness and modernization, 
and making every dollar count. While we keep one eye on those 
priorities, we keep the other on our very interesting world. 
Along with you, we have been watching China flex its muscles in 
the South China Sea. We have watched as they dramatically 
increased the level of technical capability in their air force 
and expanded the scope and complexity of their operations in 
both space and cyberspace.
    After wreaking havoc in Georgia, Crimea, and the Ukraine, 
we see a resurgent Russia now aggressively supporting the Assad 
regime in the skies over Syria and promise to modernize its 
legacy nuclear forces.
    We noticed Iran's broad overt and covert influence on 
unrest in the Middle East and its general malign influence 
inside and outside the region.
    We watched with interest as North Korea conducted an 
illegal nuclear test and subsequent rocket launch, perhaps 
signal events for a ballistic missile program yet to come.
    We continue to watch ISIS [Islamic State of Iraq and Syria] 
walk a trail of terror that now stretches well beyond Iraq and 
Syria.
    To confront these challenges and to ensure a fighting force 
that is able to overcome them all, our fiscal year 2017 budget 
request attempts to balance the size of our force with the 
required readiness and necessary modernization of that force.
    In terms of people, our fiscal year 2017 budget request 
modestly grows the total force and adds airmen in a number of 
critical career fields like ISR [Intelligence, Surveillance and 
Reconnaissance], cyber, maintenance, and battlefield airmen. We 
are asking to increase Active Duty end strength from roughly 
311,000 to 317,000 by the end of fiscal year 2017. Given our 
current operational tempo, it is imperative that we at least 
get to this number this year.
    If mission demands require additional growth in 2017, 
Secretary James is prepared to use her existing authorities to 
grow modestly beyond 317,000 provided we are able to attract 
the right talent for the positions we need. That would, of 
course, require congressional support of a reprogramming action 
to fund the additional manpower.
    In the Air Force, total force integration is alive and 
well. We continue to shift mission sets from the Active to 
Reserve components where appropriate and to integrate 
organizations when and where it makes sense. We have three 
Active Duty officers today commanding Reserve component wings, 
and this summer an Air Force Reserve officer will take over--
will take command--excuse me--of an Active Duty fighter wing 
and an Air National Guard officer will take command of an 
Active Duty mobility wing. We will also test a fully integrated 
air refueling wing beginning in fiscal year 2017.
    For fiscal year 2017, we have requested a 1.6 percent pay 
raise for both military and civilian airmen and targeted pay 
and retention bonuses for a variety of career fields, including 
RPA crews. Chairman, thanks to your help and the help of this 
committee, RPA and manned pilot incentives are finally at the 
same level, but we cannot stop there. This year, we chose to 
give our RPA pilots a $25,000 per year retention bonus and not 
the full $35,000 you authorized. We did that to make sure that 
the bonus for RPA pilots was commensurate with that of other 
critically manned pilot categories. We have some that are even 
in more crisis than RPAs at this point in time. We will intend 
to seek legislation this year to increase all of our aviator 
retention pay for manned and unmanned platforms to $35,000 per 
year. We will ensure you have all the details you need to 
assess that proposal.
    Finally, this year's budget expands the Sexual Assault 
Prevention and Response program, fully funds child care 
facilities, boosts educational benefits, and supports important 
infrastructure programs that benefit both airmen and their 
families.
    Readiness remains both an imperative and a struggle for us. 
Less than half of our combat units are fully prepared, as you 
heard, for a high-tech fight against a capable and well-
equipped force. This budget funds flying hours to the maximum 
executable level, invests fully in the corresponding 
sustainment accounts, and ensures our top end combat exercises 
like Red Flag and Green Flag remain vibrant.
    In consultation with our combatant commanders, we made some 
adjustments to address the global threats that I mentioned 
previously. We did rephase the A-10 and EC-130 divestitures. 
Both fleets are fully funded in fiscal year 2017. Keeping them 
beyond that is simply a manpower issue. We do not have enough 
people in the Air Force to continue to operate all the 
equipment we have today and to stand up a new fleet of F-35's. 
With additional manpower and funding to cover the activity, we 
could certainly do that, and I would be a very happy Air Chief 
if we got that increase. But today we do not have the manpower 
to do both.
    Our budget request also adds 24 MQ-9 Reapers and increases 
our munitions buy to meet operational demands.
    Our aircraft inventory is the oldest it has ever been, as 
the chairman started off mentioning, and our adversaries are 
closing the technology gap. We simply must modernize. This 
budget request includes ongoing investments in nuclear 
deterrence, space, and cyberspace. We are pressing ahead with 
legacy platform replacements, the F-35, KC-46, B-21, Combat 
Rescue Helicopter, and the JSTARS. Due to limited trade space, 
we had to defer five F-35's from our fiscal year 2017 program, 
delayed some upgrades to legacy weapon systems, and will 
continue to live with a dramatically reduced infrastructure 
improvement program.
    To maximize our buying power, we will streamline energy 
usage, we will employ airmen's cost-saving ideas by the 
hundreds, and we will march toward audit readiness by the end 
of this fiscal year.
    In closing, I would like to offer my thanks to each one of 
you for dedicating your time and your attention to our Military 
Services, not just our Air Force, and the remarkable men and 
women who give them all life.
    We look forward to your questions.
    Chairman McCain. Well, thank you very much.
    You know, the only problem, General, with your statement 
about the A-10 is you have no replacement for it, and it is in 
combat and in operation in Iraq and Syria as we speak. You want 
to retire it, but you have no plans, according to what has been 
submitted to this committee, as to the F-35's that will replace 
it. In fact, you have reduced the number of F-35's that we are 
requesting. It does not match up, General.
    General James. Chairman, the mission capability of the A-10 
will not be replaced by the F-35.
    Chairman McCain. We have a conflict going on in Iraq and 
Syria now, which the A-10 is in combat, most notable when they 
destroyed the fuel trucks, and you have nothing to replace it 
with.
    General James. Sir, we would do the work that the A-10 is 
doing today with the F-16 and the F-15E predominantly.
    Chairman McCain. Then why are you not doing it now?
    General James. We are, sir. They are flying many air 
sorties.
    Chairman McCain. You know, that again flies in the face of 
reality. The A-10's are flying the most effective and least 
costly missions in Iraq and Syria.
    General James. Chairman, we would love to keep it all. The 
fact is that the Budget Control Act----
    Chairman McCain. But you have nothing to replace it with, 
General. You have nothing to replace it with. Otherwise, you 
would be using the F-15's and the F-16's, which you have plenty 
of. But you are using the A-10 because it is the most effective 
weapon system. This is really unfortunately disingenuous. I 
mean, you have the options of using the F-15 and the F-16 right 
now. You are not. You are using the A-10.
    General James. Sir, we are using them both heavily. We are 
using the B-1 heavily.
    Chairman McCain. Every Air Force pilot that I know will 
tell you the most effective close air support system is the A-
10.
    General James. Senator, we have X amount of people and X 
amount of dollars.
    Chairman McCain. You have X amount of missions, and the A-
10 is carrying out those missions, General.
    General James. No, sir.
    Chairman McCain. That is amazing.
    General James. Senator, those are not the facts.
    Chairman McCain. Yes, they are the facts, General.
    General James. We can give you the numbers.
    Chairman McCain. They are the facts. The facts are on the 
ground in the destruction of the enemy by the A-10 aircraft. If 
you were not using the A-10, as you said, if you think the F-15 
and the F-16 can do the job, then you would be using them 
instead of the A-10.
    You know, General, I have had a little military experience 
myself, including in close air support. For you to sit there 
and tell me that we could be using the F-16 and the F-15 when 
we are not and your plans are to use the F-35 at 10 times the 
cost eventually, it flies in the face of not just my experience 
but the experienced pilots that I know, the U.S. Air Force 
pilots that I am in constant communication with.
    General James. Senator, my last comment. I do not want to 
argue this with you.
    Chairman McCain. You are arguing. You are arguing facts.
    General James. Senator, I will give you the facts of how 
many targets have been struck by which kind of platforms in 
Iraq and Syria over the last year.
    Chairman McCain. Yes, and a significant number of them have 
been done by the A-10. Is that true or false?
    General James. No. It is true.
    Chairman McCain. It is true? Then why would you want to 
retire the least expensive, most accurate close air support 
system?
    General James. I do not want to retire it, Senator. But the 
Air Force has to get bigger to do all this.
    Chairman McCain. But you have not got a replacement for it, 
General. For you to sit here and say that you do absolutely 
flies in the face of the facts. Enough said, General. Okay?
    General James. Okay, Chairman.
    Chairman McCain. You know, it is really embarrassing to 
hear you say something like that. When I talk to the people who 
are doing the flying, who are doing the combat, who say that 
the A-10 is by far the best close air support system we have--
it is embarrassing.
    General James. We all talk to them, Chairman. Thank you.
    Chairman McCain. Secretary James, on the rocket engine, 
which you chose to highlight, are you aware that there are 
members of--two members at least of Roscosmos who are on our 
sanctions list? You are aware of that.
    Ms. James. Yes.
    Chairman McCain. We have now two sanctioned cronies of 
Vladimir Putin who are getting X millions of dollars of 
taxpayers' money. Right?
    Ms. James. I do not know that to be true or false.
    Chairman McCain. Well, they are being paid. Are they being 
paid?
    Ms. James. I do not know.
    Chairman McCain. Is Roscosmos being paid? Do you know that?
    Ms. James. I got the decision from the Treasury Department 
vis-a-vis the sanctions----
    Chairman McCain. Do you know that Roscosmos is the Russian 
parent company of the manufacturer of the RD-180? Do you know 
that?
    Ms. James. I do not have access to who makes that money.
    Chairman McCain. It is public knowledge, Secretary James. 
It is public knowledge that the company is Roscosmos that is 
the company that is selling the--is a parent company of the 
manufacturer of the RD-180. You did not know that?
    Ms. James. Chairman, I would be happy to get the Treasury 
Department to come brief you.
    Chairman McCain. I am not asking for the Treasury 
Department. I am asking you if you know what is public 
knowledge. Do you know that it is public knowledge that 
Roscosmos is the parent company of the manufacturer of the RD-
180? Do you know that or not?
    Ms. James. I have not studied it in detail, but if you say 
so, I believe you.
    Chairman McCain. I am asking you if you know it not. This 
is really--you know, I have been to a lot of hearings in my 
time, but I have not quite seen one like this. I am asking you 
a question. Do you know that the Russian parent company of the 
manufacturer of the RD-180 is Roscosmos, of which two 
sanctioned cronies of Vladimir Putin control it? Do you or do 
you not know that?
    Ms. James. I accept your word. I know it.
    Chairman McCain. Thank you. I am astonished that you did 
not know it. I mean, after all, this is a pretty big deal that 
we have been talking about, and you chose to bring that up in 
this hearing, and you do not know that Roscosmos is the Russian 
parent company of the manufacturer of this rocket engine, which 
is controlled by two sanctioned cronies of Vladimir Putin. You 
did not know that?
    Ms. James. I brought up that the Treasury Department did 
not put the Roscosmos on the sanctions list, and you brought 
that up too, Chairman.
    Chairman McCain. That was not my question. My question was 
whether you knew that or not.
    Ms. James. Prior to you telling me this today, that 
individual aspect, no. But I accept your word and I know it 
now.
    Chairman McCain. I am not asking you to take my word. I am 
astonished that you did not know it.
    Senator Reed?
    Senator Reed. Thank you very much, Mr. Chairman.
    One of the points that you both made and I made in my 
statement was the decision by Secretary Carter to lower the 
number of combat air patrols for the remotely piloted aircraft 
from 60 to 65. My sense is that is a reflection of the stress 
on the whole enterprise, the number of pilots, et cetera. This 
is an asset that every commander needs more not less, as we 
hear every time we go overseas. Two questions follow from that.
    One is that in order to aid the enterprise, the training of 
the pilots, selection of pilots, who will fly these aircraft so 
we can get back up to the CAP levels of 65 or beyond, is there 
any legislative initiative that you need going forward, General 
Welsh and Secretary James? Do you want to start, General?
    General James. Senator, I do not believe there are. We are 
in the process now of doubling our production and our training 
pipeline between now and the end of fiscal year 2017. That is 
biggest and most significant first step. We have never trained 
more than 180 a year. We will train 334 this year and 384 
beginning next year. That is the beginning of the recovery in 
that enterprise and normalizing a battle written for the entire 
community. But I think we are on track to get that done.
    Senator Reed. Secretary James?
    Ms. James. I would concur. Not this year, but as we go 
forward, as you heard, we do want to modestly build up our end 
strength. There may be things coming down the pike next year.
    Senator Reed. General Welsh, we had a lively discussion in 
my office about--first, let me commend you on opening up the 
senior enlisted ranks to access to operators for Global Hawk, 
which you have done, which I think makes sense, and you can tap 
into some great expertise. The question, what about the 
Predator and Reaper communities? Those are still restricted to 
trained pilots and non-commissioned officers. Is there any plan 
to go look at the enlisted ranks to fill those slots?
    General James. Initially we want to get that community well 
first, complete our ``get well'' plan, get it healthy. It was 
not a problem moving--availability of officers who are enlisted 
to move through the pipeline. The problem was the training 
pipeline itself. We need to get that healthy first. We chose 
the Global Hawk community to initiate the enlisted RPA operator 
program because it is a smaller community. It can be more 
controlled initially. We can learn the lessons we need to learn 
as we do that, and then we will decide where we go from there.
    Senator Reed. Let me switch to another issue that I 
mentioned in my opening statement, and that is that we have 
some high-demand/low-density aircraft you are well aware of, 
JSTARS, AWACS, Compass Call. The plan again, because of 
pressure, is to retire these aircraft, and we are sort of in a 
similar dilemma as the A-10. We do not have an obvious 
replacement. Can you comment on that, General?
    General James. The strategy for those aircraft, JSTARS, EC-
130H, Compass Call, et cetera, is to try and modernize within 
our top line because we do not think there is more money 
coming. To do that, we have to take money out of our top line 
some way, and the way we have approached this is to look at 
downsizing to certain numbers of aircraft in those fleets to 
pay for the recapitalization program and just replace it on the 
fly. It means that short-term you have less capability in that 
mission area to support the combatant commanders with, but if 
we do not do this, long term we will have no capability in that 
mission area to support the combatant commanders.
    Senator Reed. You are going to use the internal budget 
issues to generate more improvements on existing aircraft or 
even build new aircraft.
    General James. That is our intent, sir. We can do that with 
any capability. It is not the ideal way to do it because you 
have to give up capability to get future capability. But we 
just do not think there is more money coming to support a 
development program.
    Senator Reed. Secretary James, one of the issues that is 
always attendant upon development of a new aircraft is not just 
the acquisition costs but the life cycle costs. Have you been 
looking at the B-21 in terms of life cycle costs? If you have, 
can you give an indication of how you are prepared to minimize 
those costs, since we are starting on this process right now 
with design and initial sort of production?
    Ms. James. I would like to, if I may, come back for the 
record or come back in a briefing format to give you some 
information on that, Senator Reed.
    Senator Reed. Thank you very much.
    Senator Reed. Thank you, Mr. Chairman.
    Chairman McCain. Senator Inhofe?
    Senator Inhofe. Thank you, Mr. Chairman.
    First of all, let me just say to the two of you I have been 
on this committee for 20 years, and I was on the House Armed 
Services Committee before that. I have found that the two of 
you are the most accessible of any Secretary and Chief that we 
have had in the past. I really do appreciate it. You have come 
out when we have called. I remember on very short notice, 
General Welsh calling you and asking if you would meet me in 
Fort Smith, Arkansas to look at a problem with the 188th wing 
there, and you were there. It was a little intimidating for me 
because I had to park my little Harmon Rocket next to your C-
20. But, nonetheless, we enjoyed that visit, all on short 
notice. I really do appreciate it.
    I want to use my time differently than the rest of them 
because it is very disturbing to me, when I watch the 
presidential debates and I hear people talking, nobody knows 
the level of threat that we are facing in this Nation right 
now. You know. Both of you know. But the people do not know 
that. That is what we should be talking about in terms of the 
resources that we have.
    When I read the statement that was made by our former 
Secretary of Defense, Chuck Hagel, when he said, quote, 
American dominance on the seas, in the skies, and in space can 
no longer be taken for granted, you know people back in 
Oklahoma, when we say that, maybe it is not believable. But it 
is true. I think in your statement that you submitted, you said 
in different words the same thing. The era in which the United 
States could project military power without challenge has 
ended. I agree with that.
    The thing that that translates into is the other statement 
that you made the deteriorating military strength is an 
invitation for conflict. We all remember when we were looking 
at the big bomb and the threats that we were facing. Our 
feeling was at that time you have to have it, but you never 
want to use it. The best way not to use it is to have it. You 
have got to have that force.
    One of the things that was stated in your message when you 
said, quote, your Air Force will support the most urgent 
combatant commander request. When I read that, that means to me 
that we cannot meet all of the combatant commander requests, 
but just the most urgent ones. Do you want to define what an 
urgent one is, either one of you?
    General James. Senator, the decision on which combatant 
commander's request we actually prioritize is actually made 
through a joint process. The ultimate decision belongs to the 
Secretary of Defense. There is a debate that goes on or a 
requirement that is presented from a combatant commander to the 
Joint Staff. The services engage in the discussion. The Joint 
Chiefs engage, and the Secretary of Defense makes a decision 
based on what he sees to be the greatest priority.
    Senator Inhofe. Yes, but if we had the resources, would you 
not say that you would be meeting--attempting to meet most all 
of the requests that they have, not just the urgent ones.
    General James. Senator, all the services would like to meet 
all----
    Senator Inhofe. You were at Hill, I think, were you not, 
when you were flying during Desert Storm I think it was, 
probably F-16's I would guess.
    At that time, was the threat to the United States as great 
as it is today?
    General James. Sir, I think the greatest existential 
threat, the nuclear threat that Russia holds, was the same, but 
other than that, no.
    Senator Inhofe. Well, James Clapper and every witness we 
have had before this committee has said that we are facing the 
greatest threats today that we have ever faced. Some of them 
say not just in the last 40 years but in the history of this 
country. I believe that is true. That is what we need to be 
talking about.
    You mentioned a minute ago that we are trying to go up from 
310,000 to 317,000 Active Air Force. Is that correct?
    Ms. James. Yes. The Chief did mention that, Senator, and it 
is--actually I think it is 311,000 to 317,000 for the Active. 
You will recall about a year or so ago, we also increased our 
Guard and Reserve to about 3,000 additional. We are modestly 
now upsizing Active, Guard, and Reserve. As the Chief was 
saying, we think, given world demands and our reading of the 
situation, that there may be cause for even more provided that 
we can get the right talent.
    Senator Inhofe. Yes. That is really, Madam Secretary, the 
point I am trying to make here. At that time, if we had 300,000 
or so Guard--or currently Guard, we would be talking about a 
total force, including the Reserve component, of around 
600,000. I mean, round figures. At the time that you were 
flying those F-16's, at that time we actually had 134 combat-
coded fighter squadrons. Today we have 55.
    This is the point I am trying to get across because we know 
it in this room, but the Americans do not know it, that we have 
a greater threat and we have less than half of the capability 
in terms of numbers that we had at that time.
    Ms. James. We are approximately 200,000 people smaller than 
we were at the time of Desert Storm.
    Senator Inhofe. Yes, and that is the point I want to make, 
and I do not have time for that.
    But for the record, I would like to ask you if we had three 
top priorities, what would they be if we had the funding levels 
to support where we are deficient today. For the record. All 
right? Thank you.
    Ms. James. Thank you.
    Senator Inhofe. Oh, I meant to mention also I really 
appreciate your greatest asset being here too, Betty.
    Chairman McCain. Senator King?
    Senator King. First, I want to associate myself with the 
comments of Senator Inhofe. I think we are facing--all the 
testimony that has been in all the hearings, whether for me in 
Armed Services or in Intelligence, that we are facing a more 
diverse and serious threat environment than we have faced in 
any of our adult lives.
    I think the important point--and people often talk about 
defense budgets and do we need to modernize the nuclear fleet--
is that the most successful foreign policy initiative in terms 
of peacekeeping has been our deterrent. The fact that nuclear 
weapons have not been used since 1945 is a function of the 
reality of the fact that have a deterrent force. It is a 
paradox that in order to prevent war, you have to prepare for 
war. There is a danger, particularly I am concerned, as is 
Senator Kaine, that we have ceded our congressional power over 
war-making to the executive. I think that is something that we 
really need to discuss and focus upon. But the larger question 
is how do we maintain the peace, and the best way to do that 
paradoxically is to prepare for war. That is what we are 
talking about today.
    Let me ask some specific questions about the B-21. Is the 
fixed-price part of the contract fixed today? In other words, 
is there a price or is that to be set after the design phase? 
Madam Secretary?
    Ms. James. The price is related to what is called the APUC 
[Average Per Unit Cost]. If you think back, Secretary Gates in 
the year 2010 set a price point for what we now call the B-21. 
The fixed-price is fixed. It is fixed today.
    Senator King. It is a dollar amount?
    Ms. James. Yes.
    Senator King. It is so many millions of dollars per 
airplane.
    Ms. James. Yes.
    Senator King. As I understand it, 70 percent of the 
contract, roughly, is in this fixed-price component.
    Ms. James. Correct.
    Senator King. 30 percent is in the cost-plus component, 
which is engineering and design. The fixed-price part is fixed.
    Ms. James. We will make that price point--beat it actually, 
we hope, vis-a-vis what Secretary Gates set.
    Senator King. Could you explain as briefly as possible the 
incentive structure in the cost-plus part of the contract that 
is designed to mitigate the very real and I think legitimate 
concerns the chairman has articulated about cost-plus contracts 
generally?
    Ms. James. The basic approach involves having very specific 
performance milestones, having gates along the way during that 
cost-plus phase of the contract. Then there are incentives, 
meaning a fee that the contractor will earn, provided that they 
hit those milestones and do it correctly.
    Senator King. If they do not hit the milestones, if they do 
not hit the price milestones, if the cost-plus is too much on 
the plus side, they lose incentive fees.
    Ms. James. They lose the fee. They lose partly the fee or 
they can lose all of the fee under certain circumstances.
    Senator King. What we are really talking about here in 
contractual terms is risk. They are not willing to bear all the 
risk of new R&D, but we are not bearing all of it either 
because of the way the fee is structured.
    Ms. James. That is right. It is a shared risk situation, 
and the bulk of the incentives are geared toward the tail end 
of the EMD [Engineering Manufacturing and Development], which 
gives the contractor the incentive to go as quickly as possible 
and not drag out the cost-plus EMD portion, to get to 
production as quickly as is feasible.
    Senator King. Well, that gets to my next question. Senator 
Inhofe has a very powerful chart that talks about the length of 
time it takes to bring a new airplane to flight, and it was 
something like 23 years as opposed to a new automobile or a new 
commercial plane. Those three things, automobile, commercial 
plane, and military plane, used to be the same, roughly, time 
frame 30 years ago, and today there is this dramatic 
difference.
    Are we focused on time as well as price?
    Ms. James. We are focused on both, and we project the mid-
2020's would be the IOC [Initial Operating Capability] of this 
aircraft.
    Senator King. Well, I hope that there are structures in the 
contract too that strictly relate to this issue because, you 
know, the F-35 time was a real problem. I think Senator 
Inhofe's chart was 23 years now is the time to bring a new----
    Ms. James. There are, Senator.
    Senator King. One final quick point in terms of design. 
Because we are designing a structure, a platform, if you will, 
that will have a significant life, 20-30 years, I hope that the 
design concept includes--``easy'' is not the right word, but 
facilitates modularization and modernization without having to 
redesign the whole structure. I think that is very important. 
Otherwise, it is obsolete the day it takes to the air.
    Ms. James. You are right and it does.
    Senator King. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Sessions?
    Senator Sessions. Thank you, Mr. Chairman.
    General Welsh, with regard to nuclear issues, as Senator 
King and Senator Donnelly, our ranking member on the Strategic 
Subcommittee, we have been dealing with these issues for many 
years. I think we have good bipartisan understanding of these 
issues. Deterrence is the key fundamentally to peace. It is 
important.
    Is it not true, however, that the Russians are aggressively 
pursuing nuclear advancement in making a number of--taking a 
number of steps to achieve that?
    General James. They are, Senator.
    Senator Sessions. Tell me about how you feel about it. 
Particularly within NATO [North Atlantic Treaty Organization], 
we have a dual aircraft that is capable of nuclear and 
conventional weapons. I understand that it is at least a week 
before that aircraft could be loaded and deployed to deliver a 
nuclear weapon. It seems to me that is the kind of signal that 
Russia might misread as not being alert and determined to use 
our nuclear capability if we have to. Do you think that is 
acceptable, and should we improve that delay time?
    General James. Senator, there are various levels of 
response time required by the NATO system. It depends on the 
qualification level of the crew, the current alert status of 
the crew, the NATO threat level that has been set at the time. 
Actually I think you can do it faster than a week. But this is 
something you have to pay attention to all the time.
    Senator Sessions. Well, I just think it is important for 
us, do you not, that we start our modernization program, get it 
moving to send a message to the entire world that we are not so 
shaken by the concept of nuclear weapons that we are not going 
to be prepared to defend ourselves if it happened. Do you think 
we need to be sure we are moving forward at a steady pace to 
maintain the nuclear arsenal, modernize it, make it more safe, 
but yet more effective if delivered?
    General James. Senator, I think one of the reasons we are 
facing this bow wave and recapitalizing the nuclear 
infrastructure is because we have not stayed on a steady pace 
with our investment in it over time. Now we are going to have 
to pay the price and prioritize our investment over the next 10 
to 15 years.
    Senator Sessions. Well, I think that is the conclusion of 
our subcommittee, absolutely. Over the last 20-30 years, we are 
the slowest nuclear power in the world to modernize and 
recapitalize our nuclear weapons system.
    With regard to this RD-180, Russian launch system, that 
goes into space, you have said this before, but I would like 
you to repeat it. Are you committed to transitioning off the 
Russian engine and to an American-made replacement as soon as 
feasible? Both of you can answer.
    Ms. James. Yes, absolutely.
    Senator Sessions. Well, Secretary James, how we do that 
could impact significantly cost. Is that right?
    Ms. James. Yes.
    Senator Sessions. Well, one figure you gave us, Madam 
Secretary, was $1.5 billion to $5 billion in cost. What was 
that?
    Ms. James. We agreed to do an analysis--and that analysis 
is still ongoing--of different possibilities of allocation 
strategies, one of which involves Delta on the one hand--so 
some of the launches going under Delta----
    Senator Sessions. That would be the Delta medium that is 
more expensive right now?
    Ms. James. That would be the Delta--I am looking around. I 
think is that the heavy? That would be the Delta heavy. Then 
there would be--the other side of the allocation would be the 
SpaceX variant. SpaceX would do the launches that it is 
certified to do, and the others would be done by the Delta.
    That approach would cost additional dollars to the Air 
Force budget, to the taxpayer, anywhere on the order of $1.5 
billion more to maybe as high as $5 billion more depending on 
when you would cut of the RD-180 and start this approach. There 
are various assumptions at play here, and we are still doing 
the analysis. Those figures are preliminary.
    Senator Sessions. Well, it is a bitter pill it is taking as 
long as it apparently is taking to replace the engine.
    However, I am concerned about cost, and I think that you 
have to be concerned. A billion dollars or $5 billion would 
impact your ability to do the things you have already been 
asked about, would they not, General Welsh? It would have to 
come out of your hide.
    General James. Senator, that is the problem right now. It 
is balancing this.
    Senator Sessions. Senator McCain and this committee is 
going to give vigorous oversight to that. But I think you 
cannot make foolish decisions and incur more cost than is 
reasonably necessary in this project. I really care about that.
    With regard to the long-range strike bomber, now named the 
B-21, we are talking about $550 million a copy I understand. 
That is half a billion dollars per plane. Just for a layperson, 
that seems like a lot. Are we missing something here in our 
entire process of procurement both in terms of how many years 
it takes to accomplish this and ending up with a cost this 
high? Or is there anyway to achieve the same quality and 
capability in a shorter time at less cost?
    Ms. James. Well, that figure that you quoted, the $550 
million, in fiscal year 2010 dollars is actually the price 
point that former Secretary Gates wrote into the acquisition 
strategy. Frequently in Defense, we do not pick a price point 
and then try to do the development and the procurement around 
that price point. The private sector does that all the time. 
Defense usually does not. This was a rather unusual program, 
and it was all about cost control. I know it is a lot of money, 
but it is a lot of capability for a lot of money.
    Senator Sessions. Well, thank you. My time has expired. 
Thank you very much for your service, both of you, and we will 
continue to work on these tough issues.
    Ms. James. Thank you.
    Senator Reed [presiding]. On behalf of Chairman McCain, 
Senator Heinrich.
    Senator Heinrich. Thank you very much.
    Secretary James, you mentioned at the beginning the focus 
on taking care of people. I still have very serious concerns 
that we are not adequately taking care of our RPA community, 
particularly our RPA pilots. I would certainly ask that the 
issue that Chairman McCain mentioned at the very beginning 
regarding bonuses be looked at again. You know, General Welsh, 
I know when we talked about this last year, the community was 
practically at the breaking point. As somebody who represents 
the Nation's premier RPA training mission in New Mexico, I am 
very pleased at the focus that has been put on this. I think 
that you, General Welsh and Secretary James, General Carlisle 
as well--we all very much appreciate the focus, but we have to 
do more because this is a very, very serious stressor and we 
are not seeing the relief that we need yet.
    You have heard from some of my colleagues concerns about 
this as well. I want to put a little different focus on it in 
regards to my question and focus specifically on the training 
element of the RPA [Remotely Piloted Aircraft] mission versus 
the operational challenges that we face right now.
    I want to ask what plans the Air Force has to invest in 
additional training facilities and infrastructure specifically 
at Holloman Air Force Base or at other locations to handle the 
increased workload that we see coming down the pipeline as a 
result of trying to fix some of these stresses.
    General James. Senator, this year in fiscal year 2017, the 
budget request asks for a little over $3 million to finish a 
GCS facility at Holloman so we can put the new Block 50 
cockpits in there when they arrive, also to house the current 
GCS so we get people out of trailers into a little more livable 
day-to-day environment.
    Next year we asked for more money because one of the things 
that has changed in our plan as a result of the ``get well'' 
plan is that the 6th reconnaissance squadron, which has been 
doing the training for the Predator crews, was scheduled to be 
divested. We are now going to keep that, transition it to MQ-
9's, build new facilities, equipment, and the infrastructure 
required to be able to train students in that squadron now. 
That will also be done at Holloman. I believe that is $43 
million here in the next couple years.
    Senator Heinrich. Fantastic. I think this focus is going to 
pay a lot of dividends down the road. I appreciate everything 
you are doing on this front.
    Secretary James, last year one of the things that I 
expressed concern about is the lack of modernization for our 
Air Force research laboratories. As you know, these labs play a 
critical role in developing and deploying next generation 
systems, improving acquisition program outcomes--we have spent 
a lot of time talking about that today--and in making sure that 
operational technical problems are solved in a reasonable time 
period.
    I am still highly concerned about this. I look at this 
budget and it invests heavily in modernization programs like 
the F-35, the B-21, but it seems to be continuing to 
shortchange the underlying infrastructure that develops the 
technologies that really set us apart from our adversaries in 
the world.
    What is the Air Force's plan to modernize its research 
laboratory infrastructure, specifically focused on things like 
MILCON [Military Construction] and increased flexibility for 
minor construction projects so that we have that infrastructure 
in place to support the kind of capabilities that we all know 
we need?
    Ms. James. Just a few points, if I may make, Senator. There 
are two Air Force-owned lab projects that are in the fiscal 
year 2017 budget, $13 million for a facility at Kirtland, which 
would be focusing on space vehicle research, and then there is 
a $75 million project for Eglin, and that would be focusing on 
advanced munitions and technology. Those are the two that are 
Air Force-owned labs that are in the budget.
    We also have dollars in the budget that will do the MIT-
Lincoln Lab approach. That is a different form of a lab. We are 
advancing the ball on that.
    But let me come back to your overall point, and that is the 
infrastructure spending across the Air Force. This was one of 
the reductions that we had to make, one of the tough choices, 
along with some of the modernization choices and the other 
things that we talked about earlier. Neither one of us--I think 
I speak for the Chief too. We are not satisfied with the level 
of funding there. We are essentially shortchanging a lot of 
different areas and a lot of different facilities, but that is, 
again, a budget situation. A BRAC [Base Realignment and 
Closure] would certainly help for us to be able to shed excess 
infrastructure and that way we could spend the dollars on those 
facilities that we really need for the future.
    Senator Heinrich. I wanted to raise this for my colleagues 
because I think we need to understand that there are some very 
difficult tradeoffs being made here. We are certainly not 
meeting the needs of basic infrastructure, and it is one of the 
things we need to focus on with regard to research and 
development and also with regard to things like our ranges, 
which just simply do not also get the MILCON investment that 
they need to support all of our services, not just the Air 
Force.
    Thank you all.
    Senator Reed. On behalf of Chairman McCain, Senator Cotton, 
please.
    Senator Cotton. Thank you.
    Earlier this week, I chaired a classified hearing of the 
Airland Subcommittee about the B-21. It was a very worthwhile 
hearing. One thing I noted in that hearing is no member asked 
about the need for the next generation bomber. They understood 
the strategic threats we face and the capability it delivers. 
Obviously, there are many issues that we cannot entertain here 
in this hearing.
    But one thing I would like to hear from both of our 
witnesses on the question we asked in that classified setting 
is why will the B-21 be different. We have ongoing issues with 
the F-35. We were supposed to have 620 F-22's. We got 187. We 
were supposed to have 80-something B-2's. We got 20. Many of 
those decisions go back decades. There is not much we can do 
about that now. But what is it about the way the contract for 
the B-21 has been structured and about this aircraft that gives 
us the confidence, given the vital need for the aircraft, that 
we will, at the end of the program, in fact, have 100 aircraft? 
General Welsh, if you would like to start.
    General James. Senator, for it to be different, we have to 
make it different, which is going to require attention from 
this minute forward under this program at every level of our 
Air Force and the right kind of oversight provided by everyone 
from the Congress to the Department of Defense to our folks in 
Air Force Materiel Command and our acquisition chain.
    The difference to date has been the collaborative effort 
with industry before we even sent a request for proposal out to 
industry was, at least in our experience, incredibly good. We 
identified needs and the cost curve before we wrote the 
requirements for the RFP [Request for Proposals]. We set a 
requirements baseline for this airplane 4-plus years ago and it 
has not changed at all. We have held very firm to that. As a 
result, the industry teams who were competing were able to get 
way ahead of the game in terms of looking at integration of 
sensors onto the platform, final design work, et cetera because 
they were not worried about us changing a requirement that 
would cause them to reshuffle all that work again at some point 
in their development process. I think that is why we saw the 
fact that the actual price that they came in within their bids 
was lower than what we had put on as a requirement of the 
system.
    We have to keep that same kind of communication, that same 
kind of dialogue going from now forward. We cannot take our eye 
off this ball or it will drift like everything else has. We 
just cannot let it.
    Senator Cotton. Secretary James, do you have anything to 
add?
    Ms. James. First of all, I certainly concur with everything 
that the Chief said.
    Back to the actual strategy, we tried to learn from both 
successes and failures of the past acquisition strategies. We 
are approaching this differently. He mentioned the importance 
of having stable requirements, and in order to change a 
requirement, it requires the Chief of Staff of the Air Force 
himself to sign off on such a thing. There have not been 
changes.
    We went and we got two independent cost estimates because 
the other thing that we learned from the past is having proper 
estimates that are realistic is really important. We budgeted 
to a higher independent cost estimate to provide enough margin 
in the program. Then we structured the contract in a hybrid 
fashion, some of which is cost plus incentive for a portion of 
the contract, and a lot of it is in the firm fixed-price world. 
The period of development, which is cost plus incentive, the 
incentives are specifically structured so that the contractor 
will be incentivized to meet milestones on time. If they do, 
they make their maximum fee. It is also backloaded such that 
the contractor is incentivized to get through the cost-plus 
portion into production and into the firm fixed-price as soon 
as feasible and not drag it out in the cost-plus arena.
    Then if I could ask the Chief to just say a few words 
because the other part of the question had to do with the need, 
the Nation's need for the bomber, and how it will be different, 
given the threats that we----
    Senator Cotton. My time is running short. As I said, there 
was uncommon consensus in the subcommittee hearing about the 
need for this next generation bomber.
    General Welsh, I want to turn my attention to a more 
immediate practical matter. I hear from Arkansans who are 
flying missions in the Middle East right now over Iraq and 
Syria that our aircraft are in some ways facing a maintenance 
crisis, that we have F-15E's that are either not able to take 
off or having to return early because of their age and because 
of maintenance issues. Could you say a little bit more about 
this situation?
    General James. Sir, our fleets of airplanes are getting 
old. All of them are, except the ones just coming off the line 
now. We have now six fleets of airplanes that are older than 50 
years old, and we have 23 I believe that are older than 25 
years. Supplies are getting tougher to find. Manufacturers are 
diminishing. Cost of maintenance is increasing. Our aircraft 
availability is going down in virtually every system we have. 
It is just a fact of life right now in the Air Force. It is why 
we have to modernize. The cost of day-to-day operations in our 
Air Force is going up because the fleets are old.
    Senator Cotton. Well, you can imagine what it is like to 
hear from Arkansans who are either flying these aircraft or 
whose children are flying these aircraft. On the one hand, they 
see cost overruns on the F-35. They see brand new F-15A's 
destined for Saudi Arabia sitting on the flight line at St. 
Louis, and then they see what happens to pilots when their 
aircraft goes down over territory controlled by the Islamic 
State. Are we putting the kind of resources we need to into 
this immediate problem of the maintenance and flight readiness 
of these aircraft that are being flown every day by America's 
sons and daughters over a brutal terrorist army?
    General James. Senator, we pay an awful lot of attention to 
maintenance of our airplanes before we put people in them to go 
fly. I think that is reflected in the actual maintenance rates 
and the lack of emergencies over enemy territory for the last 
25 years. Our maintenance teams are remarkable. They are 
stressed because they are undermanned. We have built up a 
35,000 person ISR enterprise over the last 10 years or so while 
we cut the Air Force 50,000 people overall, which is an 85,000 
person cut to the rest of the 330,000 mission area in the Air 
Force. We are thinned out everywhere. That is the manpower 
problem. There is no place we can go to grab people because we 
are undermanned everywhere. Our people are working their tails 
off. They are doing great work. I feel comfortable about the 
safety of our crews who are flying these airplanes, but keeping 
them safe is getting harder and harder and more and more 
expensive.
    Senator Cotton. Well, thank you. My time has expired. But I 
think it is incumbent upon us as a committee to do everything 
we can to make sure that we are getting you the resources and 
tools that you need on the front lines, even as we are looking 
to the next generation of capabilities as well. Thank you.
    Chairman McCain [presiding]. Senator Nelson?
    Senator Nelson. Mr. Chairman, welcome.
    General Welsh, thank you so much for your long and very 
distinguished record.
    I just want to raise two questions that, while I am doing a 
markup, I am sure the chairman raised. One is the Russian 
engine, the RD-180. Madam Secretary and General, is it your 
opinion that we would buy the RD-180 as little as possible in 
order to protect us against a gap that we would not have 
sufficient engines to have access to space?
    Ms. James. I certainly want to buy it as little as 
possible. You said the magic word, sir, and that is assured 
access to space, which is the top job that we all have.
    The other element was we were trying to get to a 
competitive environment so that two companies could actually 
have a reasonable competition and that would be a good thing 
for the taxpayer, the industrial base, and so on. We did feel 
that a little bit more flexibility in the number of engines 
would help get us through that competitive environment to the 
transition and to such point that we have a fully capable 
rocket, plus an engine manufactured in America that is 
integrated and certified. We think that is a little bit more 
time and a little bit more flexibility would be helpful.
    Senator Nelson. I will just conclude this by saying that we 
are concerned about a gap of potentially three or four years 
where the only way to get to space is we could not go on the 
Falcon 9 because it does not have the lift capability of 
getting some of those payloads to orbit and would have to go on 
the Delta IV. But there you are talking about a much more 
expensive launch than the Atlas V, which could put those 
payloads to orbit. Is that correct?
    Ms. James. That is correct. Essentially it boils down to 
money. If you were to cut off the use of the RD-180's, 
depending on assumptions, the manifest would have to be changed 
and things would perhaps get delayed to a degree. But this is 
where I referenced that our analysis is still ongoing.
    Senator Nelson. Okay. I think we all want to get to the 
same place, and the bottom line is assured access to space.
    Ms. James. Right.
    Senator Nelson. Let me go over to the B-21. In this 
contract, we have got production at the end, and we have got 
development now. Because of the good work by the chairman on 
previous contracts, namely the tanker, and his concerns about 
the overruns, the chairman is quite concerned about is this a 
cost-plus on the development side. But you all, obviously, 
having been very sensitized to the fact of overruns in the 
past, indeed, as the chairman has pointed out, on the F-35, you 
wanted to make this as tight as you could going out on an RFP. 
In that development stage, you actually have about five units 
that are going to be basically at fixed-price. Is that correct?
    Ms. James. The contract that was let some months ago is for 
engineering, manufacturing, and development, and then it is 
also for the production phase, the LRIP [Low Rate Initial 
Production], what is called LRIP, the low rate initial 
production phase, and that will deliver to us a certain number 
of aircraft, 21, if memory serves me correctly.
    Senator Nelson. General, do you want to add anything to 
that?
    General James. No, Senator. Those aircraft are at a fixed 
cost after that, the first five production lines.
    Senator Nelson. I must admit in the classified briefings 
that we have had and that this Senator has had personally, I, 
knowing the sensitivity of the chairman, have hammered on this 
over and over with regard to watching the cost. I have been 
impressed with the Air Force doing everything that you can 
possibly do on a contract of this magnitude to make sure that 
you rein in those costs. It is our job to have the oversight 
and to make sure that you are doing the job. I want to commend 
you for what you have done thus far.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Ayotte?
    Senator Ayotte. I want to thank the chairman.
    I want to thank both of you for your service to the country 
and your families as well. Appreciate it.
    I would like to ask you, Secretary James, about the Haven 
Well situation in Portsmouth that you and I have talked about, 
the PFC [Perfluorinated compound] contamination of the 
groundwater in Portsmouth, New Hampshire. This is something 
that I just have a couple of questions on.
    The Air Force submitted a report last September and found 
that as of September 15th, there were thousands of 
servicemembers, both Active Duty and Guard, as well as 
civilians, that may have been exposed to the PFCs there. I just 
wanted to get the update on what the plan is to contact those 
individuals.
    Then as a follow-up on this, the City of Portsmouth also 
just submitted recently a proposal to the Air Force on how to 
clean up the contamination at Pease. I understand that was 
submitted three weeks ago. I would like just to get a sense of 
when you expect the Air Force to respond to the City of 
Portsmouth. Obviously, I hope you will be transparent and 
responsive.
    Ms. James. On the second point, Senator, I am going to have 
to go back and check with our Assistant Secretary for I&E just 
to see where that proposal stands. I have not seen that 
proposal myself.
    Senator Ayotte. If you can submit just when you expect to 
respond for the record, that would be helpful. Thank you.
    Ms. James. I will do that.
    You are right. You and I have talked about this. Sometimes 
as we as a country and as a military, in our efforts to protect 
people, sometimes communities get contaminated to a certain 
degree. We regret it and we stand by it, and we are prepared to 
take the right action and clean it up.
    We have notified airmen, including former airmen, of what 
has happened so that they are aware of it, and that occurred, 
if I recall correctly, by mid-December. That happened some time 
ago. We are going to clean the water.
    We are also working with the CDC [Centers for Disease 
Control] on the matter of developing a plan for health 
monitoring. They have the lead, but we are working with them.
    Senator Ayotte. Excellent. I would just urge you with 
Portsmouth submitting the proposal, that you work very closely 
with the city and in a transparent manner so that we can really 
get this cleaned up and also get treatment or support for 
anyone who has been affected. I appreciate that. Thank you.
    General Welsh, I would like to ask you when do you expect 
the SDB-2 to achieve a demonstrated full mission capability for 
the F-35A.
    General James. Senator, I will have to get the date. I do 
not know that off the top of my head.
    Senator Ayotte. I think we have, in some documents, heard 
from your staff that it is not going to be before 2022, but if 
you can get me the exact date, I would appreciate it. Thank 
you.
    Senator Ayotte. I would also like to ask you--I know that 
Senator McCain had asked you some questions about the A-10. How 
many A-10's will be grounded in fiscal year 2018 due to 
unserviceable wings and also how many in 2019?
    General James. Senator, our intent would be for none of 
them to be grounded for unserviceable wings. A-10's that are in 
the fleet we need to keep flying.
    Senator Ayotte. Excellent. I am glad to hear that.
    As I understand it, there needs to be some work done on the 
A-10 wings. Does the Air Force plan to submit a reprogramming 
request to ensure that that support is there? Because I 
understand there is going to need to be some work done or some 
enhanced wing assemblies.
    General James. Senator, my understanding of this is that we 
have the funding and the wings necessary for fiscal year 2017, 
and we have a decision point during this year that we will 
reach where we have to make a decision on acquiring them in 
2018 and beyond. If that is not accurate, I will get you the 
right answer shortly after this hearing.
    Senator Ayotte. Well, one thing I understand is that there 
are 110 more wings that are needed. Am I hearing you say today 
that you are committed to ensuring that these wings are 
repaired and that they remain, obviously, operational so that 
we can continue to use the A-10 as it is doing, as I understand 
Ash Carter, the Secretary, has recently said, a great job in 
the fight against ISIS [Islamic State of Iraq and Syria]?
    General James. Senator, they are doing a great job in the 
fight against ISIS and everywhere else we use them. Anything 
that we have in our inventory that needs modifications to stay 
safe and effective, our intent is to continue to do that.
    Senator Ayotte. Okay. I appreciate that.
    I also want to ask about what is happening in the boneyard 
right now with the A-10. As I understand it from information my 
office has gotten, in 2014 the Air Force scrapped or destroyed 
about 44 A-10's, and even beyond that, as I understand it, in 
2015 as well, there were a number of A-10's scrapped, to a 
total of 82 A-10's scrapped in the boneyard. The cost to 
destroy one of these A-10's is, as I understand it, $15,500 per 
A-10. One thing I am concerned about, as we have the A-10's out 
fighting the battle against ISIS, we have the Air Force 
spending about $1.3 million in the last 2 and a half years 
destroying A-10's. Are there no parts on those aircraft that 
were destroyed that could have been used to support the A-10's 
that are being deployed now? Is that not why we keep--one of 
the reasons we keep them in the boneyard?
    General James. Senator, the word ``destroy''--I have to 
define that. I do not know what that means. I do not know if 
that means they disassembled them and took parts of the 
airplane to use as spare parts, which would be normal. I do not 
know the facts on this case, Senator. I will find out for you.
    Senator Ayotte. Well, I hope you would because, as I 
understand it, we have been told that there are plans to 
destroy a total of 79 A-10's this and next fiscal year. What I 
would like to understand is if we are destroying these A-10's, 
is this being done prematurely, number one, given obviously the 
concerns we have about the close air support capacity and also 
the concerns that we ensure that we are getting the right parts 
to keep our flying A-10 fleet in really full maintenance 
operational capacity? Can we make sure that we get an answer to 
that?
    General James. Yes, ma'am. We will get you an answer for 
that. There is certainly no intent to not have flying airplanes 
fully serviced with spare parts. I doubt very seriously if 
anything is going on that is causing that to happen. But I will 
get you the facts. I just do not know.
    Senator Ayotte. Well, I appreciate it. I appreciate the 
follow-up on both the wing issue, which is critical to make 
sure that our A-10's keep flying and also on the boneyard 
issue. Thank you, General.
    Chairman McCain [presiding]. Senator Kaine?
    Senator Kaine. Thank you, Mr. Chair.
    Thanks to both of you, Secretary James, General Welsh. It 
is always good to have you here.
    I want to ask about two things: budget and Air Force sort 
of strategic thinking about unmanned platforms. On the budget 
first.
    In your testimony, you talked a bit and offered I think 
appropriate thanks to our chair and ranking member on the two 
year budget deal that we struck in October and the 
appropriations bill that we followed up with in December.
    We have now done two two year budgets in a row. Painful 
getting to both of them. But to me the two year budget deals 
sort of have three strong pluses.
    One, two years gives you more certainty than one year. I 
think certainty is good.
    Second, in the two year budget deals, we have treated the 
BCA caps as a discipline but not as straitjacket. It is sort of 
a starting point, but in each of the two year budget deals, 
Murray-Ryan in December 2013 and then the deal in October, we 
used the caps as a starting point, but we adjusted off them to 
take account of current realities.
    The third positive about this deal in my view was that it 
expressed a preference for base funding over OCO [Overseas 
Contingency Operations] funding, and it was something I think 
everybody on this committee wanted to get to. There is a role 
for OCO, but we should not use OCO generally just as a way to 
end run the caps. We should try to, again, provide more 
predictability by putting funds in the base when we can.
    There is a little bit of discussion going on up here now. I 
am on the Budget Committee too. More of it is on the House side 
than the Senate side about whether we should undo the second 
year of the two year budget deal and just revisit it and maybe 
do something different. I strongly opposed that on the theory 
that two year budget deals are providing certainty and why 
would we want to now kind of throw that up in the air and 
inject more uncertainty in the situation.
    Would you agree that a two year deal provides a certainty 
that is helpful to you and, if at all possible, we should kind 
of try to stick with it?
    Ms. James. I certainly agree that having certainty is an 
excellent thing and the two year budget deal does give us that 
certainty. Not so much from my military work but from my 
professional staff member work when I was on the House Armed 
Services Committee, I would tend to agree. If you do that to 
the deal, if you open the deal, it might open up a hornets' 
nest. But again, I say that from my past experience.
    As you heard both General Welsh and I note, and many of the 
members have noted, there are all these programs that people 
are concerned about. We are concerned about them too. We 
certainly could use more money. But I as an American citizen 
would not want to see the deal reopened and then everything go 
poorly as a result and lurch toward a government shutdown and 
things of that nature. Stability is pretty key.
    Senator Kaine. General Welsh, additional comments?
    General James. Senator, all the concerns about the makeup 
of the budget plan we share, but stability is a wonderful thing 
actually, especially in the environment within the last few 
years.
    Senator Kaine. It seems to me maybe we have kind of 
blundered into--I am not sure we have gotten there completely 
intentionally, but we have blundered into a positive where you 
do a two year budget deal, then a 1-year appropriations deal. 
The two year budget provides some general certainty, and when 
you get the first year appropriations bill done, that gives you 
some predictability, but it also gives you the ability in year 
two to alter the appropriations line items to take account of 
some reality. You get some in-the-ballpark certainty with the 
ability to kind of true things up in the second year. It is my 
hope that we stick with the two year deal and do not do another 
one.
    I want to ask you about unmanned platforms and really 
bigger picture kind of strategically how you approach it. I was 
reading last month a series of articles about the CBARS of the 
Navy. It is carrier-based aerial refueling system tanker that 
they are working on that I think the committee has supported. 
It kind of made me wonder within the Air Force how doctrinally 
do you approach the analysis of platforms to determine this 
could be profitable to go, an unmanned direction. These would 
be platforms we would never want to go unmanned. All my 
military LAs [Legislative Liasons] have always been people who 
have flown things, and so I am all into pilots. But I am just 
kind of curious about how you approach this question for your 
future investment about what can be done unmanned and what 
necessarily needs an onboard crew.
    General James. Senator, I think we start with where does 
having an unmanned platform in some way, shape, or form make 
the mission either more cost-effective or more successful. An 
example initially was ISR [Intelligence Surveillance 
Reconnaissance]. You can actually orbit over a point in space--
you can monitor a target for hours and hours and hours beyond 
what the human body can tolerate. But we have less than 10 
percent of our aircraft fleet is unmanned at this point in 
time. That will likely grow over time. When it becomes safe 
enough to fly unmanned systems that move freight over time and 
distance in a predictable way with the autonomy to manage 
routes, et cetera, I think you will see it grow there.
    We have to be careful about cost curves that look a lot 
like airplane cost curves that we have discussed earlier for 
unmanned systems. That will not work. We cannot keep going 
bigger and more cosmic. We have to go smaller in some cases and 
look at augmenting manned platforms. You know, swarms is a 
great concept. If it can be managed from an airborne platform 
or remotely by a human in the loop, they would become 
incredibly effective very, very quickly.
    We are looking for those ideas where it is practical, it is 
affordable, and we can build a program we can execute in the 
near to mid-term before we start to change a mission area to 
remotely piloted with vehicles.
    Senator Kaine. You mentioned the swarm concept. We have not 
spent too much time talking about that here, but I gather that 
that is a very important component of this thinking about sort 
of the third offset. If that is going to be a big strategic 
direction going forward, that would necessarily involve the 
innovation around the creation of new unmanned platforms.
    General James. Yes, sir. Man-machine interface coupled with 
autonomy, coupled with thinking systems is exactly what the 
third-rail strategy is all about. We have been working on this 
for the last couple years.
    Senator Kaine. How much of that work--oh, I am already 
over. I am sorry, Mr. Chair. I will stop there and follow up 
later.
    Chairman McCain. Senator Rounds?
    Senator Rounds. Thank you, Mr. Chairman.
    I just want to go back just a little bit. I also attended 
the classified briefing on the B-21. I was curious about when 
we talk about this hybrid contracting strategy of the cost plus 
incentive and then the fixed-price, have you ever used it 
before. Clearly there was a logic and you understood the need 
to look at keeping our costs under control and working it 
through. You have touched about it here with Senator King a 
little bit and so forth. But is there anything else with regard 
to the approach that was determined that we really have not 
delved into today that you think should be said?
    Ms. James. I think we have covered it fairly well today, 
Senator. The key components are thinking how we look to the 
programs of the past, both those that had done poorly and those 
that had done well. Given the specifics of this program, some 
of which involves mature technologies, that suggests less risk, 
but when you are talking about a never-before-developed 
platform and then the very important integration, that suggests 
that there is risk. As I mentioned for that development phase, 
we did think cost plus incentive was the way to go but 
carefully constructing those incentives to get the types of 
behaviors from the contractor that we seek.
    The Chief is in charge of requirements. The stable 
requirements is very important. We think we have budgeted well 
for this. We took the independent cost estimate and we budgeted 
to that level, which is higher. That gives us a margin of 
protection, and we are looking to move into the production 
phase, which is firm fixed-price, as quickly as is feasible. 
The incentives are structured to make that happen.
    Echoing what the Chief said, it ultimately will come down 
to persistent focus and the human beings who will be overseeing 
this to keep it on track. Certainly we--and there is another 
team of people as well. We are very committed to doing that.
    Senator Rounds. With regard to your readiness goals, the 
priorities and the responses that you have to demands that are 
there right now, how would you assess the high-end combat 
skills such as those that would be employed against a near peer 
competitor? I know we are talking a little bit about the A-10 
and so forth, and I know that in its current environment there, 
it has a high survivability rate. If you are talking about near 
peer competition, there may be some real challenges with the A-
10, but that would not just be the A-10. It would be other 
areas as well.
    What would you believe to be the biggest obstacles in the 
Air Force's readiness recovery?
    General James. To answer your first question, sir, how do I 
see us against a very tech savvy, well-equipped foe, we are 
rusty. That is not what we have been doing for the last 25 
years. We have been operating in a different environment.
    I think the key being ready for the full spectrum of 
operations that we could potentially face is consistent and 
persistent investment over time in the mission critical 
infrastructure that allows you to train to that level. We have 
heard discussion from Senator Heinrich, for example, about 
training ranges, black and white world test infrastructure, 
simulation infrastructure so that you can actually simulate a 
threat that our fifth generation capabilities will be operate 
against. Building that in the real world in a training range is 
cost-prohibitive. We have to get into the simulation business 
and go to virtual constructive and then add live training into 
it.
    All those things have to happen to develop a force over 
time, and that is the long-range readiness issue that we have 
to invest in now to recover. That will take us 8 to 10 years 
once we have a chance to reset the force from what we are doing 
today, which is not going to happen soon.
    Senator Rounds. I have got just about a minute left, but I 
am really curious. You talk long-term. What about the near-term 
and mid-term readiness rebuilding efforts? Can you rank 
basically how this is fitting in with the need to modernize 
specifically the purchases of the F-35, the KC-46, the B-21, 
the cybersecurity needs that we need to address, the 
capabilities, the ISR priorities? How does that fit in terms of 
the rebuilding efforts right now for modernization that we are 
challenged with as you talk about? How does it fit in?
    General James. Senator, for us it has to fit in at the top 
of the priority list. The prioritization right now in our 
budget, as we make decisions, wherever we can, we prioritize at 
this point manpower, size of the force. We cannot get any 
smaller. We just cannot do what we are trying to do right now 
plus anything new if we get any smaller.
    The second thing is readiness because when the Nation 
calls, we have to be able to answer.
    Then the third thing is modernization. This year, what you 
are seeing in our budget is we have cut the force for 25 years 
straight, and now we cannot cut it anymore and still do our 
job. We cut readiness for about 10 years to pay for 
modernization, and about five years ago, we decided we cannot 
do that anymore. We are not going to be ready enough as a force 
to do the job if we are called.
    Now the only place we have left to go for money to balance 
things out is modernization. That is what the budget reflects. 
That is why you are seeing the F-35 slid to the right, even 
though we have been trying to protect it. You are seeing other 
programs that make F-16's and F-15's viable in 10 years against 
the threat we expect then are being delayed because we just do 
not have the money to do it. It is a balancing act, Senator.
    Senator Rounds. Thank you, Mr. Chairman.
    Chairman McCain. Senator Donnelly?
    Senator Donnelly. Thank you, Mr. Chairman.
    Secretary James, I want to start by thanking you for the 
time you spent with me at Grissom Air Base in Indiana last 
year. It sent an important message to the men and women of 
434th and the communities that support them about the 
importance of their mission.
    Madam Secretary, when do you anticipate we will see another 
KC-46 basing opportunity for a Reserve-led unit? Either one can 
answer.
    Ms. James. Yes. Chief, if you have that date or do you have 
it written down?
    The next time a basing decision for a Reserve unit. Is that 
what you said, sir, for the KC-46?
    Senator Donnelly. That is correct.
    General James. I think the next update will be actually 
late winter this year, late this year, early next year, and 
then that will be the decision that has already been announced 
for MOBE-4. The primary base has already been identified and 
the alternates have been identified. That environmental study 
has now started and it will be done the end of this year.
    The next one, I believe, starts--the next study--we are 
going to start looking at it in late fiscal year 2017--or 
excuse me--calendar year 2017 for the next selection of the 
next KC-46 base.
    Ms. James. Would that be for the Reserve----
    General James. I do not remember which is the next----
    Ms. James. We are going to get back to you on this so that 
we get you a good time frame.
    Senator Donnelly. In the last basing decision, the Air 
Force emphasized the importance of Reserve-led associate units, 
which aligns with the recommendation of the Air Force 
Commission report that recommended expanding the number of 
associate units. Do you anticipate that the Air Force will be 
creating more Reserve-led associate wings in the future?
    Ms. James. I am very interested in associate wing 
structures, and so we cannot say for sure, but we are pushing, 
pushing, pushing for additional integration at all times. I 
think it certainly is a possibility and we will just have to 
continue to review as we go forward.
    General James. Senator, we mentioned the integrated wing 
that we will start testing this year. That integrated wing is 
actually a Reserve wing, and it will be led by a Reserve 
commander with Active Duty fully embedded inside the wing.
    Senator Donnelly. Secretary James, when we talk about the 
growing threats to U.S. air superiority, many people assume we 
are talking about a distant prospect of direct conflict with 
countries like Russia and China. But while that is a reality, 
we also need to be prepared for a more immediate concern, which 
is the spread of advanced Russian and Chinese weapon systems 
into the wars we are already fighting. We are seeing advanced 
air defenses spread to countries throughout the Middle East and 
Africa, including Syria where our pilots are already flying.
    General Welsh, understanding we are in an unclassified 
setting, how concerned are you for our airmen and women if they 
have to face systems like Russia's S-400 in the near future?
    General James. Senator, I am very concerned about it. That 
is why I keep insisting that we have to modernize. An air force 
that does not stay ahead of the technology curve will fail. 53 
countries today are flying Russian fighters around the world. 
They will export their new capabilities as they field them, and 
their new capabilities will be better than our old stuff.
    Senator Donnelly. General, are you willing to provide us, 
you know, as time provides, a classified briefing regarding the 
threats our airmen are facing even not so much with Russia and 
China but where their equipment is being utilized?
    General James. Sir, I would be honored to do that.
    Senator Donnelly. Thank you very much.
    Secretary James, is the Air Force committed to commonality 
as a means to modernize and maintain the triad in a way to work 
together to not only be more efficient but also help on the 
budget end as well?
    Ms. James. We are definitely actively exploring different 
elements of commonality with the Navy as we together are 
looking to modernize the three legs of the triad. Yes, we are 
looking at that very closely.
    Senator Donnelly. Thank you, Mr. Chairman.
    Chairman McCain. Senator Sullivan?
    Senator Sullivan. Thank you, Mr. Chairman.
    Madam Secretary, General Welsh, thank you for your 
testimony.
    I want to begin by just thanking you and the airmen you 
lead for what you do. You know, your testimony highlights a lot 
of things that I do not think most Americans are aware of like 
constant combat operations for a quarter century. It is 
remarkable. The broader number of areas in which you 
specialize, fighters, close air support, ISR, strategic 
airlift, two-thirds of the nuclear triad, GPS [Global 
Positioning Systems] systems.
    You know, my State sees a lot of this on a daily basis. As 
you know, the F-22 fighter squadron just recently deployed to 
Korea and Japan as a show of force for our allies there. We are 
intercepting Russian bombers again almost on a weekly basis. 
You know, in Alaska, we have become the combat air power in the 
Asia-Pacific, if not for the country, in terms of F-16's, F-
22's, C-17's, KC-135's, AWACS, HH-60's, the C-130's, F-35's 
come in JPARC [Joint Pacific Alaskan Range Complex] . I just 
appreciate and see a lot in terms of the airmen that you are 
leading.
    Let me ask a basic question. Actually two. How is morale? 
When you are here testifying talking about cutting forces, 
cutting readiness, that has got to impact morale.
    Then a broader, more strategic question, you are here 
talking about a budget that is cutting our ability to do what 
the Air Force does best, the smallest Air Force in our history. 
Why do you believe the President or Secretary of Defense is 
putting forward such a small budget? Why do we not begin with 
morale?
    General James. Morale actually, if you visit as many airmen 
as I am privileged to visit and Chief Cody is privileged to 
visit and Secretary James is privileged to visit, you walk away 
with the perception that morale is pretty darned good. They are 
a little tired.
    Senator Sullivan. Great.
    General James. They have questions. They are concerned 
about the future because they actually are very connected to 
what goes on in this city and all these issues we have been 
talking about.
    Senator Sullivan. Right.
    General James. They pay attention. Even our very young 
airmen do. All the services are this way now. They are worried 
about their future, the future of their mission set, what is 
happening to their airplane, their squadron, their family 
services. All those things are of interest to them. They sense 
this pressure on resources, which is going to affect those over 
time. But when it comes to how proud they are of who they are, 
of what they represent, of the people they stand beside, and of 
how well they do their job, morale is not an issue.
    Senator Sullivan. That is good to hear.
    How about on the budget?
    General James. I think the budget is--well, you will have 
to talk to the President and the Secretary of Defense to get 
why they are submitting the budgets they are, sir.
    But I will tell you this, the folks in the Air Force just 
see what we are asked to do and they want to do it better than 
anybody else on the planet can do it. When they do not feel 
they have the right tools to get that done or there are too 
many things to do for the number of people they have standing 
around, they get frustrated by that.
    Senator Sullivan. Let me ask on the F-35's. You know, 
Lieutenant General Bogdan has highlighted that you are 
beginning to reduce the unit price of the F-35A to well below 
$100 million, but your budget proposes to decrease procurement 
to 43 from 48. Does this risk undermining or reversing the 
reduction of unit costs in terms of what you have been able to 
do to drive down costs?
    Ms. James. I was going to say we do not believe so, not for 
the short run. The reason for that, because when you decrease 
the buy, ordinarily the unit cost does go up, but what the 
dynamic is over the next several years is that because of the 
FMS [Foreign Military Sales] buys being higher, we believe that 
the unit cost will be stable, reasonably stable, and not go up 
dramatically because of this. As you said, General Bogdan is 
very focused on cost control and continuing to do better and 
better.
    Senator Sullivan. Do you believe that the reduction in 
procurement--is that going to impact the arrival of F-35's that 
are scheduled in places like Eielson or other bases around the 
country?
    General James. Senator, over the next 15 years--if we 
stayed at the lower production rate, over the next 15 years, it 
would mean two fewer squadrons to field between now and 2030. 
It is going to affect someplace.
    In the near term, it will not have a dramatic effect 
because we will be standing units up. But by 10 to 15 years 
from now, you will start to see a delay in beddown of units.
    Senator Sullivan. Let me ask one final question. I want to 
follow up on what Senator King had talked about on the 
procurement timeline and how the procurement timeline for major 
weapon systems has increased dramatically over the years. In 
the NDAA [National Defense Authorization Act] last year, the 
chairman and others on this committee were very focused on 
giving you more authority over procurement.
    What do you believe is the most important thing we can do, 
either the services or the Congress or both, to help bring down 
the procurement timeline of major weapon systems that we have 
seen grow over the years that I do not think anyone is 
satisfied with?
    Ms. James. Well, first of all, the changes of last year I 
think are very positive. To the extent now that the Air Force 
and the Navy and the Army will be able to be the MDA [Milestone 
Decision Authority], the decision authority for milestones, 
going forward on some of the newer programs, I think that will 
help as we go forward.
    My advice to you would be to continue--and we do the same 
thing with our regulations--continue to look to streamline, 
wherever possible. Sometimes we have the approach of lots and 
lots of oversight. We do this. You do this. Although that is I 
think a good idea on troubled programs--we have to do that when 
things have gone amiss--sometimes you need to ease up a little 
bit on the vast majority of programs that are actually going 
quite well. Because we have a set of rules that tends to apply 
to most programs at a certain dollar level, even the programs 
that are executing well, nonetheless, have the weight of what I 
will call a lot of oversight. I would say continue to look 
streamline, and we should do the same thing on our end.
    Senator Sullivan. General, any thoughts?
    General James. Senator, I believe that really reform 
acquisition--you should start will smaller programs and look at 
them in a very concentrated way. Ninety-five percent of the 
acquisition programs in the Air Force are cost and schedule. 
They do not get the same attention the big programs do, but 
they are going tremendously well, and they normally do.
    If you identified some category of those smaller programs 
and went to the program managers and their industry partners 
and said, what can you do to take 50 percent of time and 25 
percent of cost out of your small program and then gave them 
leeway to do that and looked at the results, we may be able to 
learn which things are not adding value to the process and then 
bring those up into the bigger programs.
    When we start with the big programs, nobody really wants to 
give up oversight control, and it is harder to make change that 
way. But we have got a lot of programs that work really well. 
Let us make them work much, much better and then learn the 
lessons from that to change the enterprise.
    Senator Sullivan. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Blumenthal?
    Senator Blumenthal. Thanks, Mr. Chairman.
    I would like to continue the line of questioning that 
Senator Sullivan began on the F-35. The delay in procurement of 
five F-35's was accompanied also by the pushback, the delay in 
60 aircraft per year as a procurement plan. You are saying 
today that will not increase the per-unit cost because there 
will be FMS, foreign military sales? By what countries? What 
increase in per-country sales by what countries and when?
    Ms. James. I will have to get you that detail.
    Senator Blumenthal. Well, how can you testify, with all due 
respect, that you are confident that the per-unit will not rise 
when you cannot tell us what countries will be buying more of 
the aircraft?
    Ms. James. General Bogdan, the program manager, has 
informed us that because of FMS buys, he does not project that 
the unit cost will go up in a substantial or material way. That 
is his assessment.
    I will get you the list of FMS customers.
    Senator Blumenthal. Do you have information as to any 
countries that will be buying more?
    General James. Senator, I know countries' air chiefs who 
have talked to me about their countries' desire to buy into the 
program. They have not fully committed to the program yet, and 
I do know there are air chiefs who would like to buy more in 
the near to mid-term. With your permission, rather than talking 
about them publicly, I would be glad to give you--tell which 
ones those are after the hearing.
    Senator Blumenthal. I think this is an important point 
because we know what happens when sales decline. Ordinarily, as 
Secretary James has observed quite rightly, the per-unit cost 
rises, and the viability of this program really depends on it 
being affordable and the credibility of the companies and the 
entire Air Force budget depends on this kind of information. I 
certainly would appreciate that information, and I know--I 
agree with you--that there are countries that would like to buy 
more, but we also have seen that other countries are as hard-
strapped as we are, in fact, even more so because their 
economies may be less robust than ours. That kind of 
information is really important.
    How important do you think that the F-35 program is to the 
Air Force modernization plans, General?
    General James. Sir, the F-35 program at this point in time 
is essential to our modernization program. Capabilities are 
going to be fielded by both China and Russia in the next five 
to six years, if not a couple years sooner, that will make 
airplanes that we have in the fleet today, except for the F-22, 
not competitive. We have to have some level of ability to 
compete with those threats in the future.
    Senator Blumenthal. Well, I agree with you completely, 
which is why I am so concerned about the affordability of the 
program and the trust and confidence of the American people 
that it can be done within the limits of what our spending can 
be.
    Let me turn to the----
    Chairman McCain. Before you leave that issue, it is well 
known that the new Canadian Government is reconsidering their 
commitment to buy the F-35. That is amazing. I do not know 
where the witnesses have been residing, missing out on these 
international decisions that are clearly under review by many 
nations because of the cost of the F-35.
    Please proceed.
    Senator Blumenthal. Thank you, Mr. Chairman.
    Let me turn to the National Guard and Reserve units. I 
know, Madam Secretary, you had responsibility as an Assistant 
Secretary for our Reserve program. I am concerned that the 
Active Air Force is receiving C-130J aircraft. Our National 
Guard and Air Force Reserve will still be flying the C-130H. 
Perhaps, General Welsh, you could tell us a little bit about 
your strategy for outfitting the Air National Guard and Air 
Force Reserve with the most suitable modern aircraft.
    General James. Thanks, Senator. I think it is important to 
remember how we ended up where we are. When we built the C-
130H's, the newest C-130, we put it into the Guard and Reserve, 
and the Active kept the C-130E model. The newest fleets were in 
the Guard and Reserve. Then the C-130J came along and it was 
time to recapitalize the oldest C-130's which were in the 
Active force. That is why the C-103J went there first.
    The C-130J buy ends at the end of this FYDP [Future Years 
Defense Program] essentially as we finish populating our Air 
Force Special Operations Command C-130J fleet. We believe that 
we need more C-130J's in the total force. We right now are 
building and have almost finalized the modernization plan for 
the entire fleet. We are doing this in conjunction with the 
Guard, the Reserve, and the Active Duty. It is led by Air 
Mobility Command. Every State TAG [The Adjutant General] is 
going to be part of this review process and final affirmation 
of the plan. We will do the AMP [Avionics Modernization 
Program] increment 1 and 2 to do the near-term and the far-term 
navigation update, and then modernization of those C-130H 
models. As part of that plan, we will identify units at the 
back end of that modernization for increment 2 as ones that 
would probably be the best choice if we can generate funding 
for C-130J between now and that point in time in 2028 to start 
populating those squadrons with C-130J's wherever we can get 
the money to do it.
    We need to modernize our 130 fleet. All these units are 
fantastic units and contributing routinely to the joint fight 
around the world.
    Senator Blumenthal. I agree totally. They are fantastic 
units. They are contributing greatly, and they need a 
modernized fleet. Thank you for making that point.
    My time has expired, but if you have additional details, I 
would welcome them in written form. Thank you very much, 
General. Thank you, Madam Secretary.
    Chairman McCain. Senator Graham?
    Senator Graham. Thank you, General. Thank you very much for 
your service. Secretary James, thank you for coming.
    Your favorite topic, the A-10. If you had all the money 
within reason in the world, would you keep the A-10 or would 
you want to retire it?
    General James. I would keep the A-10 and build a new low-
threat CAS platform. I would replace the A-10 with it when it 
was fielding, and I would use the other money to build manpower 
to stand up the F-35 in the Air Force. We need the capability. 
We are stressed. We have been for 25 years. We are downsizing. 
That is what I would do, and I think it is a logical plan. We 
just do not have the money to do it.
    Senator Graham. I think that is the point. We are having 
all these fights about the A-10. But it is a budget-driven 
problem.
    General James. Sir, this is not about the A-10 at all. It 
is about having to make decisions. I find myself in an almost 
surreal position arguing to divest things I do not want to 
divest, to pay a bill we were handed in law, and we are not 
being allowed to pay it by the institution that passed the law.
    Senator Graham. What do you think is the biggest 
consequence of sequestration to the Air Force thus far?
    General James. My opinion. I will let the boss jump on 
here, sir.
    But, Senator, my opinion is it is not really the mechanism 
of sequestration. That was a shock in 2013. It is more the 
Budget Control Act caps and how they have reset the sense of 
what is good in a budget. We are still $12 billion below what 
we had planned even four years ago for our budgets. All the 
force structure that we had in place in the Air Force at that 
time that we have had trouble divesting was based on a top line 
that was $12 billion to $20 billion per year more than what we 
are going to have going forward. We have to make some very 
difficult decisions to live within that top line.
    Senator Graham. If we go back to sequestration, what awaits 
us from an Air Force point of view?
    General James. Exactly what we saw in 2013, sir, decreased 
training, decreasing readiness, much more frustration on the 
part of our people. When they looked out windows at airplanes 
they could not fly, we had a problem with moral then. If we do 
that again, we will have a much bigger one than we did last 
time.
    Senator Graham. Is it affecting families?
    General James. I think it affects families' concern more 
than it directly affects families, to be fair. We have done a 
pretty good job of protecting family programs. But the tension 
associated with it, the concern about the future of their 
platform, their unit, their tasking affects everybody.
    Senator Graham. In your time in the military, have you ever 
seen more threats to the Homeland than you do today?
    General James. No, sir, not threats to the Homeland.
    Senator Graham. Secretary James, anything you want to add 
right quick?
    Ms. James. I would just add that every program that has 
been discussed here today is a good program, and it all comes 
down to money. Somehow if you have got to balance your books, 
as we have to submit a budget each year, you have to make 
choices about what you are going to invest in and what you are 
going to cut. None of the cuts are easy cuts. They all hurt 
some element of the force. Every single program pretty much 
that has been discussed here today falls into that category.
    As the Chief said, we always ask at every juncture Congress 
to work with us. I know this committee has been leaders in this 
regard, but to convince everybody else that we have to lift 
sequestration permanently because, of course, it will come back 
to us in fiscal year 2018 if action does not occur.
    Senator Graham. The Russian rocket problem is not a 
sequestration problem. Is it?
    Ms. James. That is one and the contract strategy for the B-
21 is one that we discussed here today. But most of the other 
issues I think have related to money.
    Senator Graham. Why do you think we have such fights with 
the Air Force in this committee? They seem to happen a lot.
    Ms. James. Well, these are lively discussions from our 
oversight committee and the people who are executing on the 
programs.
    Senator Graham. Does it make sense to you what we are 
trying to say about the Russian rockets--the committee?
    Ms. James. It certainly makes sense and I agree and I too 
want to get off the reliance of the RD-180 as quickly as 
possible.
    General James. Senator, can I make one comment?
    Senator Graham. Sure, absolutely. But tell me how does this 
movie end with the Russian rocket debate. But go ahead. I am 
sorry.
    General James. Well, let me slip back to the fight comment 
you made. I think the discussions we have, whether it is my 
discussion earlier with the chairman or it is any other 
discussions we have with members of the committee, come from 
the same passion for providing national security for this 
country.
    Senator Graham. It just seems that we fight more with the 
Air Force than anybody, and I am in the Air Force--or used to 
be, anyway. Still am in my own mind. Just take that back. I 
mean, we got four branches of the service. We seem to tangle 
with you all more than anybody, and it is not that we do not 
respect the Air Force. I certainly do. It was one of the 
highlights of my life to have been a part of it.
    But you promise us, Secretary James, that this rocket 
engine thing is going to end well, that Senator McCain will be 
pleased one day soon?
    [Laughter.]
    Ms. James. I promise you we are working very hard on the 
problem. We are getting all of the analysis done, and I am sure 
at the end of the day, you know, we will get your guidance, 
your law that will pass. The new NDAA will settle it going 
forward.
    Senator Graham. Well, that will be a good day.
    Thank you both. Thank you, General Welsh. You have provided 
really good leadership at a tough time for the Air Force. I 
sincerely mean that.
    To all those who fly, flight, our job is to let you win. 
Thanks much.
    Chairman McCain. Well, to illustrate the point, I received 
a letter today after several months from Secretary James saying 
that concerning the Russian rocket, quote, assuming a Delta-
Falcon phase two split buy, the pre-decisional Air Force 
estimate projects a cost in excess of $1.5 billion. This 
morning you said not $1.5 billion. You said $5 billion.
    Ms. James. I said somewhere between $1.5 billion and $5 
billion, depending on the assumptions and when RD-180 access 
would stop.
    Chairman McCain. Actually I quote. Assuming a Delta-Falcon 
phase 2 split buy, the pre-decisional Air Force estimate 
projects a cost increase in excess of $1.5 billion. It does not 
mention $5 billion in this letter, Secretary James. I can read 
English.
    Ms. James. That figure of $1.5 billion assumes the block 
buy continues, that we still have RD-180's for the block buy. 
If there were a decision by Congress to break the block buy, to 
stop access to those RD-180's, that could create even larger 
costs. The $5 billion comes from the Mitchell study of about a 
year and a half ago.
    Chairman McCain. But you do not mention any of that in this 
letter.
    Ms. James. I am mentioning it today. It depends on 
assumptions.
    Chairman McCain. I am to disregard really the letter you 
sent to me that I have been waiting several months for. Maybe 
that helps explain some of the difficulties that we have.
    This hearing is adjourned.
    [Whereupon, at 11:34 a.m., the hearing was adjourned.]

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              

                        THURSDAY, MARCH 10, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.

   U.S. STRATEGIC COMMAND, U.S. NORTHERN COMMAND, AND U.S. SOUTHERN 
                      COMMAND PROGRAMS AND BUDGET

    The committee met, pursuant to notice, at 10:02 a.m. in 
Room SD-G50, Dirksen Senate Office Building, Senator John 
McCain (chairman) presiding.
    Committee members present: Senators McCain, Inhofe, Wicker, 
Ayotte, Fischer, Cotton, Ernst, Tillis, Sullivan, Graham, Reed, 
Nelson, Manchin, Gillibrand, Blumenthal, Donnelly, Hirono, 
King, and Heinrich.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. Good morning. The committee meets today to 
receive testimony on the posture of U.S. Northern Command, 
Southern Command, and Strategic Command to inform its review of 
the Defense Authorization Request for Fiscal Year 2017.
    I'd like to extend our appreciation to the witnesses for 
their many years of distinguished service, and to the men and 
women of our military who defend our Nation every day.
    Admiral Tidd, this is your first time testifying before the 
committee as the Commander of U.S. Southern Command [SOUTHCOM]. 
After nearly 2 months in command, I look forward to your 
assessment of the challenges within your area of 
responsibility, as well as your strategy to confront them. It's 
clear you face a daunting array of security and governance 
challenges in the region, yet SOUTHCOM continues to suffer from 
persistent resource shortfalls that undermine efforts to 
confront these challenges. I hope you will outline for the 
committee where you are being forced to accept the greatest 
risk as a result of these shortfalls. Of particular concern is 
the deteriorating situation in Central America, where feeble 
governance, endemic corruption, and weak security institutions 
are allowing transnational criminal organizations to operate 
with impunity. We, of course, must improve and adequately 
resource our drug interdiction strategy to combat these groups, 
but we must also renew our efforts to combat the real driver of 
drug trafficking: the demand here at home. The demand for the 
drugs that these groups traffic--heroin, methamphetamine, and 
cocaine--is too high, and the profits too great, to dissuade 
these criminals from their illicit actions.
    To be clear, the threat posed by these groups extends 
beyond the drugs they smuggle into our communities. The 
smuggling routes they control are also used to traffic weapons, 
bulk cash, and human beings. As your predecessor, General 
Kelly, testified before this committee, terrorist organizations 
could seek to leverage these same smuggling routes to move 
operatives with intent to cause grave harm to our citizens or 
even bring weapons of mass destruction into the United States.
    On a more positive note, I'm interested in your assessment 
of the ongoing talks in Colombia and how you believe the United 
States can best support our partners as they enter a new and 
likely more challenging era. Colombia, once on the cusp of 
becoming a failed state, has emerged from decades of conflict 
as a stark example of what sustained U.S. support and 
engagement can achieve. It's vitally important that we continue 
to invest in our relationship during this critical period so as 
not to squander the extraordinary progress that has been 
achieved.
    I'd like to take a moment to recognize the military 
servicemembers conducting detention operations at Guantanamo 
Bay. Too often in the course of debating the future of the 
detention facility, we lose sight of the remarkable men and 
women who serve honorably under extraordinarily difficult 
conditions. Admiral, please convey our deepest appreciation for 
their service and the professionalism they display each and 
every day on behalf of our Nation.
    Admiral Gortney, I look to you for an update on the current 
state of United States-Mexican security cooperation and 
opportunities for our two nations to strengthen this vital 
partnership. While Mexico's efforts to combat transnational 
criminal organizations have resulted in notable successes by 
capturing or killing senior cartel leaders, such as El Chapo, 
the security situation remain highly volatile and continues to 
directly impact the security of our southern border. Heroin, 
largely produced in Mexico, continues to ravage communities all 
across the Nation and demands a renewed effort to combat this 
scourge, both in our seats and also at its source.
    I also look forward to your assessment of the increasing 
threat posed to the Homeland by the development of advanced 
missile capability--of advanced missiles capable of carrying 
nuclear payloads by Russia, Iran, and North Korea.
    Admiral Haney, the strategic threats to the United States 
and its allies have increased exponentially in just the few 
short years since you've taken the helm of Strategic Command. 
While nuclear, cyber, and counterspace threats generally have 
been on the rise, Secretary Carter's warning that, quote, 
``We're entering a new strategic era,'' has great implications 
for STRATCOM [U.S. Strategic Command]. Return to great power 
competition noted by the Secretary means that deterring Russia 
and China once again assumes primacy in your planning and 
operations. Whatever President Obama may have hoped for, the 
United States can no longer seek to reduce the role of nuclear 
weapons in our national security strategy or narrow the range 
of contingencies under which we would have to consider their 
use. U.S. Strategic Command faces significant near- and longer-
term challenges.
    In about 15 to 20 years, U.S. nuclear submarines, ICBMs 
[intercontential ballistic missiles], air-launch cruise 
missiles, heavy bombers, and nuclear-capable tactical fighters 
will have to be withdrawn from operational service, having been 
extended well beyond their original service lives. 
Modernization programs are in place to replace these systems, 
but there is no slack left in the schedule. Today's Congress 
supports fully the modernization of the U.S. nuclear deterrent. 
Any reduction in funding over the next decade, however, could 
delay the development of these replacement systems, increasing 
strategic risk at a time when Russia and other countries 
continue to modernize their nuclear capabilities.
    Russia, then, is your near-term challenge. Russia's 
aggression in Ukraine and destabilizing actions in Syria take 
place under a nuclear shadow. Russia has threatened our NATO 
allies with nuclear strikes, is developing a new nuclear 
ground-launch cruise missile capable of ranging most of Europe, 
and has fired air- and sea-launch cruise missiles against 
targets in Syria, missiles that could be armed with nuclear 
warheads and flown against European and United States targets.
    Your task, Admiral Haney, is to ensure that strategic 
Command is prepared to deter Russian nuclear provocations. This 
requires better intelligence about Russian nuclear capabilities 
and plans, a nuclear planning process tied to EUCOM [European 
Command] and NATO operations, and a survivable, well-exercised, 
and ready nuclear force.
    Finally, as this committee continues its review of the 
Goldwater-Nichols Act, we're interested to hear your views as 
to whether our defense enterprise is organized properly to 
perform the missions that cut across the functional and 
geographic boundaries we have drawn. We also welcome any ideas 
on reform we might consider to make our defense enterprise more 
effective without minimizing the vital tasks that must be done.
    I noted, to the members of the committee, that yesterday we 
had an all-Army panel, and today it's an all-Navy panel, a 
definite upgrade.
    [Laughter.]
    Chairman McCain. Senator Reed.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Thank you, Mr. Chairman.
    May I point out that the meeting of the United States Naval 
Academy Alumni Association will take place immediately 
following the hearing in the ante room.
    [Laughter.]
    Senator Reed. Thank you, Mr. Chairman.
    I want to welcome our witnesses, particularly Admiral Tidd, 
who's appearing before this committee for the first time. Thank 
you, sir, for your service.
    Admiral Gortney, this could be your last hearing before the 
committee. Thank you for your extraordinary service in so many 
different capacities. Not only you, but your families, have 
served with great distinction and great sacrifice. Obviously, 
the men and women in your commands have done so much.
    Admiral Haney, likewise to your family and to the men and 
women of your command.
    I'm pleased to see some senior noncommissioned officers 
here. Thank you for what you do to lead our forces.
    Admiral Haney, your command has responsibilities for the 
functions that are global in nature--space and nuclear, to name 
a few. But, your first and foremost responsibility is to ensure 
that the nuclear triad can deter threats that are existential 
to our Nation. This administration has committed to the 
modernization of all three legs of our triad. Our current 
nuclear forces cost about 4 percent of our DOD [Department of 
Defense] budget, which is a relatively good bargain, 
considering the threats they deter on a daily basis. But, in 
the late 2020s, as the Chairman has mentioned, when this 
modernization is at its peak, that figure will rise to about 7 
percent of the DOD budget. While this is about half of what we 
spent at the height of the Cold War, it is still a considerable 
amount of money, and I will want to hear your views on the 
importance of this modernization and how it can be done in the 
most cost-effective manner possible.
    Admiral Gortney, your mission is to protect the Homeland, 
to deter and defeat attacks on the United States, and to 
support civil authorities in mitigating the effects of 
potential attacks and natural disasters. While Admiral Haney is 
responsible for synchronizing global missile defense, planning, 
and operation support, you are responsible for the operation of 
our Homeland ballistic missile defense system. We look forward 
to hearing about the ongoing improvements to the ground-based 
missile defense system, particularly the enhancement of sensors 
and discrimination capabilities.
    In addition, NORTHCOM [Northern Command] works closely with 
other Federal agencies, the Governors, and the National Guard 
to collaborate on responding to natural and manmade disasters, 
and partners with Canada and Mexico to promote security across 
our borders. I look forward to hearing about your current 
efforts in these areas and how these would be impacted by the 
return of sequestration next year.
    A number of the problems in NORTHCOM originate from the 
SOUTHCOM AOR. Drug traffickers and transnational criminal 
organizations are not bound by geographic borders, and the 
violence and instability they engender have pushed individuals 
to flee, often seeking sanctuary on our shores. An obvious 
answer then is to address the problem at the root. Of course, 
such efforts require a whole-of-government approach, 
incorporating the capabilities of interagency partners, such as 
the State Department, FBI, and the Drug Enforcement Agency. 
Consequently, any cuts made to their budgets have direct 
implications on the ability, particularly, of SOUTHCOM 
[Southern Command] to carry out its mission.
    SOUTHCOM is responsible for maintaining our security 
relationship in the region. The closest military-to-military 
relationship in the AOR [Area of responsibility] is with 
Colombia, who, with our sustained assistance, has undergone a 
remarkable transformation. It is now equally important to 
ensure that the peace implementation phase of this 
transformation is as robustly supported as the kinetic 
operations.
    Admiral Tidd, as you stated in your testimony, nowhere is 
our own security more inextricably intertwined to that of our 
neighbors, partners, and friends than in Latin America, and the 
Caribbean. I look forward to hearing your views on how we can 
best maintain our engagement in this important area of the 
world.
    Thank you very much, Mr. Chairman.
    Chairman McCain. Welcome the witnesses. Your complete 
statements will be made part of the record.
    Admiral Haney.

 STATEMENT OF ADMIRAL CECIL E. D. HANEY, USN, COMMANDER, U.S. 
                       STRATEGIC COMMAND

    Admiral Haney. Good morning, Chairman McCain, Ranking 
Member Reed, and members of the committee.
    I'm honored to be here with you today and pleased to 
testify with Admiral Bill Gortney, Commander, U.S. Northern 
Command, Admiral Kurt Tidd, Commander, U.S. Southern Command. 
I'm also honored to represent my team of sailors, soldiers, 
airmens, and marines, and civilians who carry out the various 
missions assigned to U.S. Strategic Command. They are dedicated 
professionals who represent our most precious resource and 
deserve our unwavering support. As a result of their efforts, 
our Nation's strategic nuclear deterrent force remains safe, 
secure, effective, and ready, and we are working hard to 
improve the resiliency and flexibility in space and cyberspace.
    It is critical, as you've stated, that we modernize our 
strategic nuclear deterrent capabilities that underpin our 
Nation's security. As you know, the current global security 
environment is more complex, dynamic, and uncertain than 
possibly anytime in our history as adversaries and potential 
adversaries challenge our democratic values and our security in 
so many ways. They are modernizing and expanding their nuclear 
capabilities, developing and testing counterspace and 
cyberspace technologies, and are advancing conventional and 
asymmetric weapons.
    Future deterrent scenarios will likely include multiple 
adversaries operating across multiple domains and using anti-
access aerial denial asymmetric warfare in ``escalate to de-
escalate'' tactics. These trends affect strategic stability.
    Given all of this, the missions of U.S. Strategic Command 
remain important to our joint military forces, to our Nation 
and our allies and partners. Comprehensive strategic deterrence 
and assurance and escalation control is far more than just 
nuclear weapons and platforms. It includes a robust 
intelligence apparatus, space, cyberspace, conventional and 
missile defense capabilities, and comprehensive plans that link 
together organizations in a coherent manner.
    Additionally, we engage daily on a broad range of 
activities across our other mission areas, including 
intelligence, surveillance, and reconnaissance, combating 
weapons of mass destruction, joint electronic warfare, and 
analysis and targeting.
    These guide my command priorities. Achieving comprehensive 
strategic deterrence, assurance, and escalation control 
requires a long-term approach to investing in capabilities in a 
multi-generational commitment to intellectual capital. The 
President's Budget for fiscal year 2017 strikes a responsible 
balance between national priorities, fiscal realities, and 
begins to reduce some of the risks we have accumulated because 
of deferred maintenance and sustainment. This budget supports 
my mission requirements, but there is no margin to absorb new 
risk. Any cuts to that budget will hamper our ability to 
sustain and modernize our forces.
    Thank you. I look forward to your questions.
    [The prepared statement of Admiral Haney follows:]

            Prepared Statement by Admiral Cecil E. D. Haney
                              introduction
    Mr. Chairman and distinguished members of the committee, I am 
honored to be here today. Thank you for the opportunity to provide 
testimony on the posture of United States strategic forces, my 
assessment of the President's Fiscal Year 2017 Budget, and how United 
States Strategic Command (USSTRATCOM) is confronting today's complex 
global security environment. I am also pleased to be here with Admiral 
Bill Gortney, Commander of United States Northern Command; and Admiral 
Kurt Tidd, Commander of United States Southern Command. I thank you all 
for your continued support to our Nation's defense.
    I have the privilege of leading a motivated team of strategic 
warriors focused on mission excellence. While today, the Nation's 
strategic nuclear deterrent force remains safe, secure, effective and 
ready, we are working diligently to improve the resilience, 
responsiveness, credibility and flexibility of our operational plans 
and capabilities. USSTRATCOM is focused on deterring strategic attack, 
providing assurance to our allies and partners, and providing 
warfighting solutions to other Combatant Commands and partners across 
the spectrum of operations. While executing our global 
responsibilities, we continue to forge enduring partnerships with 
agencies and organizations across the U.S. Government, academia, 
commercial industry, and Allied nations.
    The momentum we have established is largely due to those who 
dedicate themselves to national security in spite of uncertainty and 
resource challenges: the soldiers, sailors, airmen, marines, and 
civilians who carry out and support our strategic missions. Thank you 
for the opportunity to publicly acknowledge their service, devotion and 
professional skill.
    Over the last two years, I have gained considerable insight 
regarding the progress and work remaining to deliver comprehensive 
strategic deterrence, assurance and escalation control. My focus here 
is to provide clarity, make recommendations on required steps for 
continued success, and demonstrate how USSTRATCOM supports strategic 
stability and national security.
    Much remains to be done to sustain and modernize the foundational 
nuclear deterrent force that we need to protect the Nation from 
existential threats in an increasingly uncertain and unpredictable 
environment. We must continue to meet critical investment timelines to 
ensure that aging platforms and weapons systems do not reach the point 
at which their viability becomes questionable.
    The President's Budget offers a balanced approach to national 
priorities and fiscal realities, and reduces some accumulated risk as 
we pursue modernization across USSTRATCOM mission areas. The Bipartisan 
Budget Act of 2015 provided near-term fiscal stability for these 
critical missions, and we appreciate Congressional and White House 
support in this effort. I support continued bipartisan efforts to 
achieve long-term relief from the constraints imposed by the Budget 
Control Act of 2011, especially given the multi-year acquisition 
timelines required to modernize our strategic systems.
    Maintaining and improving comprehensive strategic deterrence, 
assurance and escalation control requires a multi-faceted, long-term 
approach to investing in strategic capabilities and a renewed, multi-
generational commitment of intellectual capital. As I look at trends in 
the security environment, continued long term investment is needed to 
ensure that current progress transitions into long-term success. Our 
allies and adversaries are observing and assessing the fiscal emphasis 
placed on our Nation's strategic deterrence and assurance capabilities. 
We cannot afford to send mixed messages on their importance by 
underfunding them.
                      global security environment
    Today's global security environment is complex, dynamic and 
volatile; perhaps more so now than at any other time. The dangers 
presented by this unpredictable security environment are compounded by 
the continued propagation of asymmetric methods, the unprecedented 
proliferation of advancing technologies, and the increasingly 
provocative and destabilizing behavior by current and potential 
adversaries. Some nations are investing in long-term military 
modernization programs, including capabilities that could pose an 
existential threat to the United States. A number of others are 
developing, sustaining, or modernizing their nuclear forces, including 
weapons and platforms that are mobile, hardened and underground.
    Russia. Russia warrants our attention. Its new security strategy 
makes clear that Russia seeks to re-assert its great power status. 
Russia is modernizing its conventional and strategic military programs, 
emphasizing new strategic approaches, declaring and demonstrating its 
ability to escalate if required, and maintaining a significant quantity 
of non-strategic nuclear weapons. Russia has engaged in destabilizing 
actions in Syria and Ukraine (Eastern and Crimea), while also violating 
the Intermediate-range Nuclear Forces (INF) Treaty, and other 
international accords and norms. Russia is also developing counter-
space and cyber capabilities
    Despite these activities, and assertions by some that the United 
States and Russia are in a nuclear arms race, there is continued 
adherence to the New Strategic Arms Reduction Treaty (New START) by 
both nations. In compliance with a series of treaties, the United 
States has reduced its stockpile by 85 percent relative to its Cold War 
peak. Instead of dozens of delivery systems, we now have four strategic 
delivery platforms. We seek no new military capabilities in our nuclear 
forces. Rather, we seek to retain and modernize only those capabilities 
needed to sustain a stable and effective deterrent capability. We are 
on track to achieve New START limits of 1550 deployed warheads and 700 
deployed delivery systems by February 2018.
    The benefit of New START is that it promotes stability by 
maintaining equivalency in nuclear weapon numbers and strategic 
capability. It also promotes transparency via inspections and helps 
assure our non-nuclear allies they do not need their own nuclear 
deterrent capabilities. However, to maintain strategic stability as we 
draw down to New START central limits, the remaining systems must be 
safe, secure, effective and ready.
    China. In addition to pursuing regional dominance in the East and 
South China Seas, China continues making significant military 
investments in nuclear and conventional capabilities. China is re-
engineering its long-range ballistic missiles to carry multiple nuclear 
warheads and continues to develop and test hyper-glide vehicle 
capability. China's pursuit of conventional prompt global strike 
capabilities, offensive counter space technologies, and exploitation of 
computer networks raises questions about its global aspirations. While 
China periodically reminds us of its ``No First-Use'' nuclear policy, 
these developments--coupled with a lack of transparency on nuclear 
issues such as force disposition and size--impact regional and 
strategic stability.
    North Korea. North Korea's behavior over the past 60 years has been 
very problematic. Today, North Korea continues heightening tensions by 
coupling provocative statements and actions with advancements in 
strategic capabilities, including claims of miniaturized warheads; 
developments in road mobile and submarine launched ballistic missile 
technologies. Most recently, North Korea has conducted its fourth 
nuclear weapons test and another missile launch of a satellite into 
space, furthering its ICBM research. These actions show disdain for 
United Nations Security Council resolutions and a dangerous lack of 
regard for regional stability.
    Iran. As Iran follows the mandates of the Joint Comprehensive Plan 
of Action, we must be vigilant to detect if Iran ever shifts its 
intentions to pursue a nuclear weapon. Iran continues to develop 
ballistic missiles and cyberspace capabilities--and we remain focused 
on countering its destabilizing activities in the region.
    Violent Extremist Organizations (VEOs). Ungoverned or ineffectively 
governed regions remain incubators for those who seek to attack the 
world's peaceful societies. VEOs recruit and operate freely across 
political, social, and cyberspace boundaries. The effect of weapons of 
mass destruction (WMD) in the hands of VEOs could be catastrophic, and 
highlights the importance of our non-proliferation and counter WMD 
efforts.
    In summary, the global strategic environment is increasingly 
complex. Unlike the bipolarity of the Cold War, today's multi-polar 
world with state, non-state, and mixed-status actors is more akin to 
multiplayer, concurrent and intersecting games of chess that severely 
challenge regional and global security dynamics. Future conflicts will 
not be contained within prescribed borders, stove-piped domains, or 
segregated areas of responsibility. We must view threats as 
transregional, multi-domain and multi-functional, requiring a 
comprehensive approach to strategic deterrence, assurance and 
escalation control.
                     usstratcom in the 21st century
    USSTRATCOM counters diverse and complex threats through the 
execution of its fundamental mission: to detect and deter strategic 
attacks against the U.S. and our allies, and to defeat those who attack 
if deterrence fails. USSTRATCOM is assigned nine distinct 
responsibilities: Strategic Deterrence; Space Operations; Cyberspace 
Operations; Global Strike; Joint Electronic Warfare; Missile Defense; 
Intelligence, Surveillance and Reconnaissance; Countering Weapons of 
Mass Destruction; and Analysis and Targeting. These diverse assignments 
are strategic in nature, global in scope, and intertwined with Joint 
Force capabilities, the interagency process and the Whole-of-Government 
approach. Each mission supports or is interconnected with the others, 
and their combined capabilities enable a comprehensive approach to 
strategic deterrence, assurance and escalation control in the 21st 
century.
    Deterrence is a fundamentally human endeavor, firmly rooted in 
psychology and social behavior. At the most basic level, deterrence is 
achieved through one of two mechanisms. The first is an aggressor's 
recognition that unacceptable costs may be imposed for taking an action 
and recognition that forgoing this action may result in lesser costs. 
The second is an aggressor's belief that the contemplated action will 
not produce its perceived benefit, or that not acting will produce a 
greater perceived benefit. These elements combine to convince potential 
adversaries that they will not succeed in an attack, and even if they 
try, the costs will far outweigh the benefits. USSTRATCOM's 
capabilities underpin these fundamental elements of deterrence.
    Achieving comprehensive deterrence, assurance and escalation 
control requires nuclear weapons systems along with a robust 
intelligence apparatus; space, cyberspace, conventional, and missile 
defense capabilities; global command, control, and communications; and 
comprehensive plans that link organizations and knit their capabilities 
together in a coherent way.
    Priorities. USSTRATCOM is guided by my six overarching priorities:
    1. Deterring strategic attack against the United States and 
providing assurance to our allies. Strategic attacks can occur through 
a variety of means in any domain. They may impact many people or 
systems, affect large physical areas, act across great distances, 
persist over long periods of time, disrupt economic or social 
structures, or change the status quo in a fundamental way.
    2. Providing the Nation with a safe, secure, effective and ready 
nuclear deterrent force. Foundational documents such as the 2010 
Nuclear Posture Review, the 2013 Report on Nuclear Weapons Employment 
Strategy, the 2014 Quadrennial Defense Review (QDR), and the 2015 
National Military Strategy have consistently repeated this mandate. I 
am committed to providing our Nation with a viable and credible nuclear 
deterrent force.
    3. Delivering comprehensive warfighting solutions. To effectively 
deter, assure, and control escalation in today's security environment, 
threats must be surveyed across the ``spectrum of conflict.'' 
Escalation may occur at any point, in varying degrees of intensity, 
with more than one adversary, in multiple domains, to include ``below 
threshold activities'' that would not ordinarily propel international 
action. Our actions and capabilities must convince any adversary that 
they cannot escalate their way out of a failed conflict, and that 
restraint is always the better option. Doing so requires a deeper, 
broader understanding of our potential adversaries, so that we can deny 
action; hold critical nodes at risk; and prevent activities, 
perceptions and misperceptions from escalating. We must also look at 
our military capabilities in a holistic manner, and fully integrate 
them within our other elements of national power. We must pursue a 
Whole-of-Government approach to deterrence, including allies and 
partners in our efforts, with ready forces in all domains.
    4. Addressing challenges in space and cyberspace with capability, 
capacity and resilience. Space capabilities remain foundational to our 
way of life not only for the United States but for the international 
community at large. Yet some nation states are investing in counter-
space capabilities. We must assure our continued access to space 
through improved space situational awareness, operating procedures, 
resiliency and other operational concepts central to our ability to 
maintain an advantage in space. Cyberspace underpins all of my mission 
areas and has become a critical facet of national power. We must 
continue to develop a robust Cyber Mission Force with the authorities, 
skills and resources to protect our DOD networks against a maturing set 
of cyberspace threats. Additionally, cyber defense of future networked 
systems must be a design priority.
    5. Building, sustaining and supporting partnerships. We aim to work 
seamlessly with the other Combatant Commands, across the Federal 
Government, commercial sector, academia and with partners and allies to 
apply the scope of the USSTRATCOM portfolio toward a synchronized 
pursuit of national objectives. This robust interaction must occur at 
all levels at USSTRATCOM and includes operations, planning, exercising 
and wargaming.
    6. Anticipating change and confronting uncertainty with agility and 
innovation. Sound decision-making requires thorough analysis to 
prioritize our activities with flexible, agile and adaptable thinking. 
This effort includes a variety of wargames, demonstrations and 
exercises to evaluate deterrence and escalation control options. We 
will support the DOD Defense Innovation Initiative and the associated 
Advanced Capability and Deterrence Panel's efforts. This will help us 
identify new operational concepts, develop cutting edge technology, and 
enable a continuing evolution of ideas on how to deter current and 
potential adversaries.
                mission area capabilities & requirements
    We must maintain a military capability that provides our leadership 
with the decision space to respond in the best interest of the United 
States. This includes the ability to mitigate current and future risk 
as it pertains to nuclear, space and cyberspace threats. Therefore, 
prioritizing resources to meet our requirements necessitates a 
thoughtful assessment of national priorities in the context of fiscal 
realities. The President's Budget supports my mission requirements, but 
there is no margin to absorb risk. Any cuts to the budget will hamper 
our ability to sustain and modernize our military forces, and will add 
significant risk to our strategic capabilities.
Nuclear Deterrent Forces
    Today, America's nuclear forces remain safe, secure, effective and 
ready. For more than 70 years, thanks in part to our credible nuclear 
forces, the United States has deterred great power war against nuclear-
capable adversaries.
    Nuclear Triad. Our nuclear Triad is a requirement. The policy of 
maintaining a nuclear Triad of strategic nuclear delivery systems was 
most recently re-iterated in the 2014 QDR. Our Intercontinental 
Ballistic Missiles, Ballistic Missile Submarines, Air-Launched Cruise 
Missiles, and nuclear capable heavy bombers and associated tankers each 
provide unique and complementary attributes that together underpin 
strategic deterrence and stability--and each element is in need of 
continued investment. The Triad provides a hedge against technical 
problems or changes in the security environment and must consist of 
independently viable weapons systems and platforms which present 
adversaries with a complex, multi-pronged problem. The fiscal year 2017 
budget request funds the Ground Based Strategic Deterrent program to 
replace our aging Minuteman ICBM fleet, which for decades have served 
to complicate an adversary's decision to launch a comprehensive 
counterforce strike on the United States. The fiscal year 2017 budget 
request funds the Ohio-Replacement Program to ensure the uninterrupted 
deployment of the Triad's most survivable leg. The Long Range Strike-
Bomber, Long Range Stand-Off Cruise Missile, and B61-12 gravity bomb 
are needed to provide the flexibility, visibility and ability to 
forward-deploy and to support our extended deterrence commitments to 
our allies.
    Intercontinental Ballistic Missiles (ICBMs). Our ICBM force 
provides a responsive, highly reliable and cost effective deterrent 
capability. To maintain an effective Minuteman III force through 2030, 
USSTRATCOM supports several near-term sustainment efforts, including 
ICBM Fuze Modernization, Launch Control Center Block Upgrade, and 
Airborne Launch Control System Replacement. Vital ICBM security 
improvements include a UH-1N Helicopter Replacement, Payload 
Transporter Replacement and ICBM Cryptographic Upgrade. Beyond 2030, 
the Ground Based Strategic Deterrent program is essential to 
recapitalize the ICBM force prior to Minuteman age out I fully support 
an integrated Ground Based Strategic Deterrent weapon system that 
recapitalizes flight systems, ground launch systems, command and 
control, and support equipment. I am encouraged by the ongoing Air 
Force and Navy effort to study the feasibility of sharing common 
technology between their respective programs in order to reduce costs 
and preserve the unique skills required to field capable ballistic 
missile weapon systems.
    Ballistic Missile Submarines (SSBNs). Recapitalizing our sea-based 
strategic deterrent force remains my top modernization priority. The 
Navy's SSBNs and Trident II D5 ballistic missiles constitute the 
Triad's most survivable leg. The Ohio-class SSBN fleet is undergoing 
significant sustainment efforts to maintain our nation's required high 
operational availability and extend the life of the D5 ballistic 
missile. USSTRATCOM continues to strongly support and work with the 
Navy as it modernizes the SSBN fleet. The Ohio Replacement SSBN, 
currently in development and expected to be fielded in 2031, will 
continue to serve as the Nation's survivable strategic deterrent into 
the 2080s. Despite a hull life extension from 30 to 42 years, the 
current Ohio-class will quickly approach the end of its effective 
service life. No further extension is possible. Any further delay will 
put the reliability of our sea-based nuclear deterrent at unacceptable 
risk. In addition, we must continue our commitment to the United 
Kingdom to develop and field the Common Missile Compartment to ensure 
both nations' SSBNs achieve operational capability to replace the 
existing platforms.
    Heavy Bombers. Our dual-capable B-52 and B-2 bombers are the most 
flexible and adaptable leg of the nuclear Triad and provide significant 
conventional capabilities. Bombers play a key role in stabilizing and 
managing crises by providing a visible signaling option and rapid hedge 
against operational and technical challenges in other legs of the 
nuclear Triad. Ongoing and planned sustainment and modernization 
activities, to include associated Nuclear Command, Control and 
Communications upgrades, will ensure our bombers provide credible 
deterrent capabilities until their planned end-of-service-life. I fully 
support the Air Force program for fielding a new, highly survivable 
penetrating conventional and nuclear Long Range Strike Bomber (LRS-B). 
When coupled with a new Long Range Stand-Off (LRSO) cruise missile and 
the B61-12 gravity bomb, the LRS-B will provide the President with 
flexible options to address a range of contingencies in non-permissive 
environments. Maintaining an air-delivered standoff and direct attack 
capability is vital to meeting our strategic and extended deterrence 
commitments and denying geographic sanctuaries to potential 
adversaries. The new LRSO is needed to replace the aging Air Launched 
Cruise Missile (ALCM), which has far exceeded its originally planned 
service life, is being sustained through a series of service life 
extension programs, and is required to support our B-52 bomber fleet. 
Likewise, the B61-12 is needed to extend the life of aging gravity 
nuclear weapons and provide continued viability for both the B-2 
strategic bomber and dual capable fighter aircraft supporting our NATO 
and extended deterrence commitments.
    Foundational to the nuclear triad is a synthesis of dedicated 
sensors, assured command and control, nuclear weapons and their 
enabling infrastructure, treaties and non-proliferation activities.
    Sensors. Indications and warning are necessary for maximum decision 
space, and strategic missile warning remains one of our most important 
capabilities. Along with persistent and tailored intelligence, our 
Integrated Tactical Warning and Attack Assessment network provides 
timely, accurate, unambiguous and continuous tactical early warning, 
allowing us to select the most suitable course of action in rapidly 
developing situations. While the Defense Support Program is nearing the 
end of its operational life, the Space-Based Infrared System program is 
on track to provide continuous on-orbit warning. The survivable and 
endurable segments of these systems, along with Early Warning Radars 
and nuclear detonation detection elements, are in urgent need of 
sustainment and modernization. We must continue to maintain legacy 
systems and address the ever-increasing risk to mission success. Prompt 
and sufficient recapitalization of these critical facilities and 
networks--to include electromagnetic pulse protection and survivable 
endurable communications with other nodes in the system--will be 
pivotal in maintaining a credible deterrent.
    Nuclear Command, Control and Communications (NC3). All USSTRATCOM 
missions require robust global Command, Control, Communications, and 
Computer (C4) capabilities and infrastructure supporting the 
President's national-decision making process across a spectrum of 
scenarios. These communications capabilities are crucial to providing 
the President and his key advisors the right information to expand 
decision space. USSTRATCOM is teaming with the White House, national 
laboratories, and the private sector to develop a Global C4 system, 
setting the conditions for timely, informed National decision making 
anywhere on the globe. The Council on Oversight of the National 
Leadership Command, Control and Communications System has proven 
effective in synchronizing and prioritizing modernization efforts, and 
articulating those priorities to Congress.
    Maintaining a credible nuclear deterrent for the long term requires 
recapitalization of key systems and capabilities throughout the NC3 
architecture. The unpredictable challenges posed by today's complex 
multi-domain, multi-threat security environment make it increasingly 
important to optimize our aging NC3 systems architecture while 
leveraging new technologies. Maintaining nuclear deterrence and 
strategic stability requires a command and control architecture 
comprised of interdependent fixed and mobile systems and nodes that 
deliver capability throughout the space, air and land domains. Through 
continued funding for NC3 modernization programs, we can ensure 
effective command and control of the Nation's forces well into the 
future.
    In space, we are transitioning from Military Strategic and Tactical 
Relay (MILSTAR) to Advanced Extremely High Frequency (AEHF) satellite 
communications systems. The AEHF satellite constellation system, 
coupled with requisite ground node and airborne platform Family of 
Advanced Beyond Line-of-Sight terminals (FAB-T) and the Presidential 
and National Voice Conferencing (PNVC) system, will extend enhanced 
capabilities to enable collaboration between the President and senior 
advisors under any circumstance and also assure connectivity with the 
nuclear forces.
    Our efforts to field an air layer network supported by AEHF and a 
modernized Very Low Frequency/Low Frequency (VLF/LF) capability will 
increase resiliency and reliability across the NC3 architecture and 
begins to address the emerging threats to our space-based 
communications. I support the investment plan to replace our aging very 
low frequency receivers on the E-6B Airborne Command Post (ABNCP) and 
the E-4B National Airborne Operations Center (NAOC), providing assured, 
world-wide survivable communications into the future. Additionally, the 
Air Force continues to fund the very low frequency receiver on the B-2 
bomber fleet, and began a program to install next generation protected, 
assured, and survivable communications on the B-2.
    Within the land component, there are efforts underway to upgrade 
fixed and mobile warning systems to enable them to leverage the 
evolving Space Based Infra-Red System (SBIRS) capability. Progress has 
also been made on the construction of the new USSTRATCOM Command and 
Control (C2) Facility, which will support all our missions and will be 
a key component of our future nuclear and national C2 architecture. The 
C2 Facility, which is on track for occupancy in 2018, serves as a 
visible reminder to adversaries of the importance and national 
commitment to modernize our aging NC3 facilities.
    Weapons and Infrastructure. Today's stockpile remains safe, secure, 
effective, and meets operational requirements. However, our nuclear 
weapons (now averaging 27 years of service) and supporting 
infrastructure (some of which date back to the Manhattan Project) are 
in dire need of modernization and life extension. Surveillance 
activities, Life Extension Programs (LEPs), and Stockpile Stewardship 
efforts are essential to mitigating age-related effects and 
incorporating improved safety and security features without a return to 
underground nuclear explosive testing. Continued talent pool investment 
with our nuclear scientists and engineers is also paramount to 
providing viability to our stockpile requirements.
    As a member of the Nuclear Weapons Council (NWC), I work closely 
with my DOD and Department of Energy National Nuclear Security 
Administration (NNSA) counterparts to ensure we maintain a safe, 
secure, and effective nuclear stockpile. Active and sustained execution 
of the NWC's long-term ``3+2'' strategy to deliver three ballistic 
missile and two air-delivered warheads is crucial to addressing near-
term technical needs and future capability requirements. W76-1 and B61-
12 LEPs are on track and are necessary to maintain confidence in the 
reliability, safety and intrinsic security of our nuclear weapons. 
Additionally, early activities are underway to synchronize the LRSO 
cruise missile program with the W80-4 warhead LEP to ensure these 
programs are fielded in time to maintain a viable stand-off nuclear 
capability. The President's Budget ensures schedule alignment of the 
cruise missile and its associated warhead.
    Treaties. International agreements such as New Strategic Arms 
Reduction Treaty (New START), the Open Skies Treaty (OST), and the 
Intermediate-range Nuclear Forces (INF) Treaty contribute to strategic 
stability through transparency, confidence building, and verification. 
The State Department has primary responsibility for treaty 
administration, and USSTRATCOM remains closely involved in their 
execution. While these agreements have served valuable roles in 
promoting strategic stability, treaty violations are a significant 
cause for concern.
    In meeting treaty obligations, the United States Air Force has 
eliminated all non-operational intercontinental ballistic missile 
silos, and is placing 50 intercontinental ballistic missiles into a 
non-deployed status. All intercontinental ballistic missiles now carry 
only a single warhead. The Air Force has also eliminated non-
operational B-52G series heavy bombers, and is converting 42 B-52H's to 
conventional-only bomber missions. Additionally, the United States Navy 
is sealing four launch tubes on each Ohio-class SSBN, removing 56 
launch tubes from accountability under New START.
    Budget. Sustaining and modernizing the nuclear enterprise 
infrastructure is crucial to maintaining a viable nuclear deterrent 
force. It is impressive to see today's systems working well beyond 
their expected service life, but we cannot rely on that indefinitely. 
Aging weapon systems and supporting infrastructure are stressing our 
ability to maintain a viable and credible force.
    I share concerns about the cost of modernization, but the greater 
worry is the cost if we do not make needed investments. To reverse the 
long trend of flat or even declining resources, there must be a 
sustained, multi-decade investment program to our weapons, delivery 
systems and supporting infrastructure. As stated by the Congressional 
Budget Office, the expected cost of nuclear forces represents roughly 5 
percent to 6 percent of the total costs of the planned defense budgets 
for the next ten years. The importance of the foundational nuclear 
deterrent force to national security, assurance to our allies, our non-
proliferation objectives and strategic stability far outweigh the 
expense of recapitalization. Failing to provide the resources requested 
in the fiscal year 2017 budget request would delay the development of 
these programs and unacceptably degrade our credibility and ability to 
deter and assure. Our Nation must make this investment.
Space Operations
    The U.S. must maintain assured access to space. Our national space 
capabilities allow us to globally navigate, communicate, and observe 
events in areas where non-space sensors are not feasible. Space 
capabilities are also a vital component of comprehensive deterrence and 
assurance and are critical to supporting our deployed forces and our 
national decision-making processes. Investment in these capabilities is 
vital to our national security. We greatly appreciate the continued 
support of Congress in helping to increase the resiliency and vitality 
of our space assets.
    The space domain has increasingly become contested, degraded, and 
operationally limited. These are not new challenges. Some countries 
have clearly signaled their intent and ability to conduct hostile 
operations in space as an extension of the terrestrial battlefield. 
These operations would deny U.S. Forces the advantages of space, which 
have enabled us to favorably shape events in all corners of the globe.
    In response to growing space threats, the DOD and Intelligence 
Community (IC) established the Joint Space Doctrine and Tactics Forum 
(JSDTF), which I co-chair with Ms. Betty Sapp, Director, National 
Reconnaissance Office. The JSDTF's goals are to ensure U.S. space 
policy, doctrine, operational concepts, strategies and planning 
scenarios reflect that space is a contested domain, populated by 
dynamic actors. We have already made significant improvements in the 
integration of exercises and wargames, and are revising associated 
joint doctrine, as well as new tactics, techniques and procedures for 
our space operators. The JSDTF will foster the transformation of how 
the U.S. operates in space by promoting seamless functionality between 
the DOD and IC--a tight bond we must continue to strengthen.
    Another key initiative is the establishment of the Joint 
Interagency Combined Space Operations Center (JICSpOC) located at 
Schriever Air Force Base in Colorado. This center combines the efforts 
of USSTRATCOM, Air Force Space Command, and the intelligence community 
with a goal to create unity of effort and facilitate information 
sharing across the national security space enterprise. At its current 
phase, the JICSpOC is providing a robust location to conduct 
comprehensive operational experimentation. The JICSpOC will ensure the 
space enterprise meets and outpaces emerging and advanced space threats 
and will provide vital information for national leadership, allies, 
partners and the Joint Force. It will also serve to enhance the 
Nation's deterrent posture by demonstrating the United States is 
prepared when our space capabilities are threatened.
    A component to all of these efforts is Space Situational Awareness 
(SSA)--the information that allows us to understand what is on orbit, 
where it is, where it is going, and how it is being used. Consistent 
with long-standing obligations and principles of the Outer Space Treaty 
and other international legal standards, our goal is to ensure space 
remains a safe domain for all legitimate users. Sharing SSA information 
and collaborating with other nations and commercial firms promotes safe 
and responsible space operations, reduces the potential for debris-
producing collisions and other harmful interference, builds 
international confidence in U.S. space systems, fosters U.S. space 
leadership, and improves our own SSA through knowledge of owner/
operator satellite positional data.
    USSTRATCOM has negotiated SSA Sharing Agreements and Arrangements 
with 51 commercial entities, two intergovernmental organizations 
(EUMETSAT and European Space Agency), and ten nations (Spain, France, 
Italy, Japan, Australia, Canada, South Korea, United Kingdom, Germany, 
and Israel) and is in the process of negotiating additional agreements. 
Through these sharing agreements, USSTRATCOM assists partners with 
activities such as launch support; maneuver planning; support for 
satellite anomaly resolution, electromagnetic interference reporting 
and investigation; support for de-commissioning activities; and space 
object conjunction assessments.
    The Geosynchronous Space Situational Awareness Program (GSSAP) 
achieved initial operational capability in October of 2015, and 
USSTRATCOM is now operating GSSAP satellites to enable our cutting-edge 
SSA capabilities. GSSAP facilitates space-monitoring activities that 
contribute to global safety of spaceflight, as well as the peaceful 
access to space.
    At the nucleus of USSTRATCOM's approach to space security is 
mission assurance--ensuring combatant commanders have required access 
to space-based capabilities. USSTRATCOM's Joint Functional Component 
Command for Space (JFCC-SPACE), located at Vandenberg Air Force Base in 
California, leads the effort, and through the Joint Space Operations 
Center (JSpOC), executes continuous and integrated military space 
operations and routinely tracks thousands of space objects in orbit 
around the Earth. This includes more than 1,300 active satellites 
operated by approximately 60 nations and a wide variety of government, 
commercial, and academic organizations. The JSpOC also maintains the 
catalog of all artificial Earth-orbiting objects, charts preset 
positions for orbital flight safety, and predicts objects reentering 
the Earth's atmosphere.
    We must sustain judicious and stable investments to preserve the 
advantages we hold in this complex environment. Examples include the 
Space Fence program which will greatly expand the capacity of the Space 
Surveillance Network; investments in modeling and simulation that will 
increase our understanding of the space environment and adversary 
capabilities; and funding for satellite communications that are 
resistant to interference. We must also continue to seek innovative and 
solutions with Allies and our commercial partners to ensure access to 
space operations remains available. These include active and passive 
protection measures for individual systems and constellations, and a 
critical examination of the architectural path we must follow to ensure 
resilience and affordability in our space capabilities.
Cyberspace Operations
    This year will mark the sixth anniversary of United States Cyber 
Command (USCYBERCOM). USCYBERCOM imparts an operational outlook and 
attitude to the management of the DOD's approximately seven million 
networked devices and 15,000 network enclaves.
    Our primary focus for cyberspace operations within DOD is building 
the capability and capacity to protect DOD networks, systems, and 
information; defend the nation against cyberattacks; and support 
operational and contingency plans. The Cyber Mission Force (CMF) 
construct addresses the significant challenges of recruiting, training 
and retaining people, in addition to acquiring the facilities and 
equipment necessary for successful cyberspace operations. We are 
creating 133 cyber mission teams manned by more than 6,000 highly 
trained people by the end of fiscal year 2018. To date, 84 of those 
teams are fielded and assigned to a variety of missions, including our 
ongoing efforts to degrade, dismantle, and ultimately destroy ISIL. 
These teams support combatant commands and national missions. Budget 
stability is crucial to achieving this vision.
    On 30 September 2015, the Secretary of Defense and the Chairman of 
the Joint Chiefs of Staff signed the DOD Cybersecurity Culture and 
Compliance Initiative (DC3I), tasking USSTRATCOM and USCYBERCOM to lead 
implementation. DC3I fosters long-term improvement through training, 
inspections, reporting and accountability. Improving our cybersecurity 
culture requires a holistic approach that addresses people, processes, 
and technology. Such efforts will continue to be critical to defending 
our DOD networks.
Global Strike
    USSTRATCOM's Joint Functional Component Command for Global Strike 
(JFCC-GS) operates from Offutt AFB, Nebraska. JFCC-GS provides a unique 
ability to command and control our global strike capabilities and build 
plans that rapidly integrate into theater operations. This includes 
integration of combat capability associated with kinetic and non-
kinetic effects.
    Conventional Prompt Global Strike (CPGS) capability offers the 
opportunity to rapidly engage high-value targets without resorting to 
nuclear options. CPGS can provide precision and responsiveness in Anti-
Access/Area Denial environments while simultaneously minimizing 
unintended military, political, environmental or economic consequences. 
I support continuing research and development of CPGS capabilities.
Missile Defense
    Ballistic missile proliferation and lethality continues to increase 
as countries acquire greater numbers of ballistic missiles, increase 
their ranges, and incorporate countermeasures. North Korea possesses 
the Taepo Dong 2 space launch vehicle/ICBM, and has displayed the KN08 
road-mobile ICBM that is likely capable of reaching much of the 
continental United States. North Korea also possesses hundreds of 
Short- and Medium-Range Ballistic Missiles capable of threatening South 
Korea, Japan, and forward-deployed United States forces in Eastern Asia 
and the Western Pacific. Iran's ballistic missile capability also 
presents a significant challenge to United States interests in the 
Middle East. Iran's overall defense strategy relies on a substantial 
inventory of ballistic missiles capable of striking targets throughout 
Southwest Asia and parts of Europe.
    Accordingly, effective missile defense is an essential element of 
the U.S. commitment to strengthen strategic and regional deterrence 
against states of concern. The Ground Based Midcourse Defense (GMD) 
system protects the United States Homeland against a limited ICBM 
attack from North Korea and potential future threats from Iran. 
However, continued investment in three broad categories is required to 
lower costs and improve our capabilities against growing threats: 1) 
persistent and survivable sensors, 2) increased inventories of Ground 
Based Interceptors (GBI) with improved performance and reliability and 
3) increased regional capability and capacity. These needs can be 
addressed by the continued funding of priority programs such as: Long-
Range Discrimination Radar (LRDR), Redesigned Kill Vehicle (RKV), Aegis 
Ballistic Missile Defense, Terminal High-Altitude Area Defense follow-
on, Overhead Persistent Infra-Red sensors, Upgraded Early Warning 
Radar, and Joint Tactical Ground Stations. Collectively, these 
improvements increase interceptor effectiveness and lower costs to 
defeat threats.
    We have made significant progress in reaching our missile defense 
goals. To enhance Ballistic Missile Defense System (BMDS) sensors and 
discrimination, we are using available technology to improve sensors, 
battle management, fire control and kill vehicles, while fielding LRDR 
to improve tracking and discrimination for Homeland defense against 
Pacific theater threats. We are also increasing the number of GBIs from 
30 to 44 by the end of 2017. Upgrades continue to improve GBI fleet 
reliability, and the development of the RKV began last year with 
deployment expected in approximately 2020. The RKVs will be more 
reliable, cost-effective, and easier to produce.
    The European Phased Adaptive Approach (EPAA) contributes to the 
defense of our deployed forces in Europe and our European NATO Allies. 
EPAA Phase 1 was achieved in December 2011. Phase 2 is going through 
testing and integration and we expect it to achieve operational 
capability in Spring 2016. Phase 3 remains on schedule to be 
operational in the 2018 timeframe and will provide defensive coverage 
against medium- and intermediate-range threats with the deployment of a 
second Aegis Ashore site in Poland and an upgraded SM-3 Block IIA 
interceptor. The EPAA continues to be interoperable with NATO's 
Ballistic Missile Defence system.
    While significant investments in intercept technology have 
increased our missile defense capability, much work remains. Increases 
in the quantity and quality of threats increase the risk that adversary 
missiles will penetrate our defenses and reach their intended targets. 
We are working with the Joint Integrated Air and Missile Defense 
Organization, the Missile Defense Agency and industry partners to 
explore improvements to the current BMDS. We must also examine the 
potential to prevent attacks by countering threats prior to launch. 
Efforts to defeat missile threats across the launch spectrum rely on 
awareness and warning and must be based on actions that are 
synchronized within a fully integrated missile defense architecture to 
maximize our limited defensive capacity.
Countering Weapons of Mass Destruction (CWMD)
    The U.S National Security Strategy states ``there is no greater 
threat to the American people than weapons of mass destruction, 
particularly the danger posed by the pursuit of nuclear weapons by 
violent extremists.'' The DOD Strategy for CWMD also affirms that the 
pursuit of WMD and potential use by actors of concern pose a threat to 
U.S. national security and stability around the world. As DOD's global 
synchronizer for CWMD planning efforts, USSTRATCOM supports this 
strategy by leveraging the expertise resident in our Center for 
Combating Weapons of Mass Destruction (SCC-WMD), the Standing Joint 
Force Headquarters for Elimination (SJFHQ-E), and our partners at the 
Defense Threat Reduction Agency (DTRA)--all located at Ft. Belvoir, 
Virginia. Together our organizations conduct real-world and exercise 
CWMD activities with the other combatant commands to identify, 
prioritize, and mitigate WMD risks posed by the proliferation of WMD 
technology and expertise to nation-states and non-state actors.
    To execute the DOD Strategy for CWMD, we have identified a need for 
comprehensive situational awareness that incorporates collaborative 
tools, continuously assesses the WMD threat, and provides a holistic 
awareness of the WMD environment. This capability would provide an 
enhanced awareness of emergent catastrophic-scale WMD threats that 
require collaboration across the interagency and partner nations. There 
is also an urgent need to update agent defeat weapon systems and 
develop modeling and simulation to assess collateral damage during WMD 
weapon attacks. USSTRATCOM is working closely with DTRA to resolve 
modeling and simulation shortfalls and ensure that cutting-edge 
technology is applied to WMD consequence.
    The National Strategic Research Institute (NSRI) at the University 
of Nebraska, a University Affiliated Research Center in partnership 
with USSTRATCOM and the DOD, is providing our nation with cutting-edge 
mission-essential research and development capabilities in Combating 
Weapons of Mass Destruction (CWMD). The NSRI experienced another 
successful year conducting scientific research to help ensure 
preparedness for WMD threats.
Joint Electronic Warfare / Joint Electromagnetic Spectrum Operations
    The electromagnetic spectrum (EMS) reaches across geopolitical 
boundaries and domains, and is tightly integrated into the conduct of 
commerce, governance and national security. Commercial demand for 
spectrum access results in increased pressure on bandwidth 
traditionally used for military operations. Additionally, our potential 
adversaries are actively pursuing capabilities to contest our use of 
the EMS.
    Joint Electromagnetic Spectrum Operations (JEMSO) strengthens U.S. 
national objectives and enables the combat capability of the Joint 
Force by ensuring access to the EMS while denying adversaries the same. 
USSTRATCOM is developing JEMSO policy and doctrine, addressing 
capability gaps across the DOD, and working closely with the Combatant 
Commands, Services and other U.S. Government agencies through advocacy, 
planning and training.
Intelligence, Surveillance, & Reconnaissance (ISR)
    The demand for ISR has outpaced our ability to meet all needs. At 
the same time, we are focused on increasing the effectiveness and 
persistence of ISR capabilities while reducing business costs. Located 
at Joint Base Anacostia-Bolling, Washington, DC, USSTRATCOM's Joint 
Functional Component Command for ISR (JFCC-ISR) is working with the 
Joint Staff, Services, Combatant Commands and the Intelligence 
Community to improve the management of DOD's existing ISR capabilities. 
I fully support maximizing the agile use of the capabilities we have, 
while also enhancing allied and partner contribution and cooperation. 
These efforts are designed to increase the persistence of our ISR 
capabilities, reduce the risk of strategic surprise, and increase our 
ability to respond to crises.
Targeting and Analysis
    Targeting requires dedicated analysis. USSTRATCOM's Joint Warfare 
and Analysis Center (JWAC) in Dahlgren, VA enhances our Strategic 
Deterrence and Global Strike missions by providing unique comprehensive 
analysis. JWAC's ability to solve complex challenges for warfighters--
using a combination of social and physical science techniques and 
engineering expertise--is invaluable to protecting the Nation and 
helping the Joint Force accomplish its missions.
                               our people
    People remain our most precious resource and deserve our 
unequivocal commitment to their well-being. Just as we sustain and 
modernize our platforms and weapons, we must sustain and modernize our 
workforce. Maintaining a talent pool of nuclear scientists and 
engineers is also paramount to providing viability to meet our 
stockpile requirements. Likewise, investing in the future of the 
professionals who operate, maintain, secure, and support our nuclear 
enterprise is critical. Tomorrow's leaders must have the ability to 
stretch their intellect well beyond one-dimensional problems. They must 
be able to operate in a multi-dimensional environment with multiple 
activities taking place simultaneously.
    My visits throughout the past year confirmed my belief that we have 
an outstanding team in all of our mission areas. I am honored to lead 
such a focused, innovative and professional group dedicated to 
delivering critical warfighting capabilities to the Nation. Whether 
they are underwater on an SSBN, underground in a Launch Control Center, 
in the air on a bomber, or supporting missions from cyberspace to outer 
space, these great Americans do all they can for our Nation.
                               conclusion
    Achieving strategic deterrence, assurance and escalation control 
will require a multi-faceted, long-term approach to investing in 
strategic capabilities and a renewed commitment to sustaining 
intellectual capital. The sustainment and recapitalization of our 
Nation's strategic capabilities is sorely needed and must not be 
delayed.
    In today's uncertain times, your support, combined with the hard 
work of the exceptional men and women of United States Strategic 
Command, will ensure that we remain ready, agile and effective in 
deterring strategic attack, assuring our Allies and partners, and 
addressing current and future threats.

    Chairman McCain. Admiral Gortney.

 STATEMENT OF ADMIRAL WILLIAM E. GORTNEY, USN, COMMANDER, U.S. 
   NORTHERN COMMAND AND COMMANDER, NORTH AMERICAN AEROSPACE 
                        DEFENSE COMMAND

    Admiral Gortney. Chairman McCain, Senator Reed, 
distinguished members of the committee, it's an honor to be in 
front of you here today with my longtime shipmates, Admiral 
Cecil Haney and Admiral Kurt Tidd.
    First off, I'd like to thank you for the 2-year budget 
relief to sequestration. Last year, I talked about 
sequestration being the biggest threat to national security. 
The Bipartisan Budget Act of 2015 is a much appreciated step in 
the right direction, and we all look forward to a more 
permanent solution in the future.
    I also appreciate the time many of you have spent with me 
over the past two weeks. From our discussions, I believe our 
time is spent--best spent if I quickly summarize the range of 
significant threats to the Homeland, because I agree with DNI 
[Director of National Intelligence] Clapper when he told your 
committee last month, ``Unpredictable instability has become 
the new normal.''
    I look at threats to the Homeland from those most dangerous 
to most likely. On the most dangerous, the nation-states: 
Russia, China, North Korea, where the peninsula is more 
unstable than it's ever been since the Armistice, and, of 
course, Iran. Non-state actors: Daesh, and, in the future, 
whatever adaptation Daesh will morph into. Then transnational 
organized crime who move product--drugs, humans, weapons, or 
anything that will make them a profit, exploiting the many 
seams between the nations in North, Central, and South America, 
the seams between the many agencies of the Governments of those 
nations, the seams created by the inadequate authorities, 
resources, and training of many of those agencies in those 
nations, and, yes, the seams created by the geographic 
boundaries of our combatant command structure, seams for which 
Kurt Tidd and I are accountable to close while we work the 
military-to-military effort of our Nation's whole-of-government 
approach to the many shared challenges within North, Central, 
and South America.
    The number-one priority of the Department and NORAD 
[Northern American Aerospace Defense Command] and NORTHCOM is 
Homeland defense. It's a no-fail mission, and it's just as 
important today as when NORAD and NORTHCOM were established, 
with one single commander responsible for the defense of our 
Homeland through the many domains of air, space, maritime, 
land, and cyber, although, within cyber, our responsibility 
extends only as far as defending our own networks.
    Today's evolving and resurgent threats are a function of 
the return-to-great-power competition and the continuing global 
terrorist threat. These threats create vulnerabilities best 
mitigated through an integrated and binational approach across 
the multiple domains, which requires a fully integrated defense 
in the air, space, sea, and land domains. As a result, together 
NORAD and NORTHCOM have evolved well past our Cold War and 9/11 
origins, and are today inseparable. We defend the Homelands in 
the air through the NORAD, and the remaining domains through 
NORTHCOM, facing the traditional and nontraditional threats in 
our assigned battlespace. NORAD and NORTHCOM work seamlessly 
together in defense of our Homeland. We're focused on complete 
unity of command and unity of effort. We are two commands, but 
a single, fully-integrated headquarters organized and trained 
to face the diverse array of evolving threats to our Nation's 
security.
    Outside the traditional military threat and again created 
by the return-of-great-power competition is the nontraditional 
threat to the Homeland. To counter this threat, I'm a 
supporting commander to the Department of Homeland Security, 
the Department of Justice, and the many law enforcement 
agencies engaged in this crucial fight. Here, my primary 
concern are homegrown violent extremists who are self-
radicalized and are in the receive-only mode and not actively 
communicating back to Daesh. These extremists are targeting SOF 
[Special Operations Forces], Department of Defense personnel 
and facilities, and our own fellow citizens. This is what 
occurred in Chattanooga on a DOD facility and in San Bernardino 
against our Nation's civilian population. As the commander 
accountable for setting the force-protection condition of DOD 
facilities in the continental United States, we at NORTHCOM 
work closely with the Army, Navy, Air Force, and Marine Corps 
in order to balance the enduring nature of this threat with the 
services' ability to complete the many missions they have here 
in the Homeland.
    In closing, I want to mention our Homeland partnerships 
that enable our success. We partner continuously with the 
numerous interagency components of the government. These 
include the National Guard, both airmen and soldiers, the 
intelligence community, law enforcement agencies, and our 
closest mission partner, the Department of Homeland Security. 
Our mission partners maintain nearly 60 liaison officers in our 
headquarters, and these patriots are fully embedded into our 
ops and our intel organization.
    Building partnership capacity within the Homeland is 
absolutely vital to our mission. At NORTHCOM, 70 percent of our 
major exercise--and this is nearly 200 each year--are focused 
on our mission partners as the primary target audience of the 
exercise programs. We call this Theater Security Cooperation 
within the Homeland. This is NORTHCOM supporting our mission 
partners, and our mission partners supporting us, which is why 
we view these Homeland partnerships as our center of gravity, 
as they are critical to the success across all of our assigned 
mission areas.
    Thank you for giving me the opportunity to speak, and I 
welcome your questions.
    [The prepared statement of Admiral Gortney follows:]

            Prepared Statement by Admiral William E. Gortney
                              introduction
    Chairman McCain, Ranking Member Reed, and distinguished members of 
the Committee, I appreciate the opportunity to appear before you today 
to discuss the posture of United States Northern Command (USNORTHCOM) 
and North American Aerospace Defense Command (NORAD). I am here 
representing the Commands' soldiers, sailors, airmen, marines, coast 
guardsmen, national guardsmen, reservists, and civilians safeguarding 
our nation amidst the most diverse and challenging security atmosphere 
in our history. Brave men and women are confronting this rapidly 
changing defense environment head-on. It is an honor and a privilege to 
serve alongside them and I am grateful to the Committee for the support 
you provide.
    North America is increasingly vulnerable to a vast array of 
evolving threats--from highly capable, national powers to disaffected 
individuals who act in response to extremist propaganda. These threats 
are growing and becoming much more diffuse and less attributable. 
Moreover, I believe that many of the crises originating as regional 
conflicts elsewhere in the world are rapidly manifesting themselves 
here at home and they continue to challenge our ability to warn and 
defend.
    The complexity and volatility of our strategic environment demands 
that we advance and sustain the capabilities to protect our Homelands. 
I believe the President's fiscal year 2017 budget represents a balanced 
approach to maintaining our strategic advantage within the realities of 
a fiscally-constrained environment. We are still feeling the impacts of 
sequestration, primarily because the majority of the Services' cuts 
were from the operations and maintenance accounts, which directly 
impedes their ability to provide trained and equipped servicemembers to 
Combatant Commands. I thank the Committee for your support in passing 
the Bipartisan Budget Act of 2015, which represents another important 
step toward permanent relief from the sequestration caps in the Budget 
Control Act of 2011.
    We are resolute in our commitment to deter, prevent, and defeat 
attacks against the United States and Canada. We stand ready to provide 
rapid and robust support to the primary lead agencies responding to 
domestic disasters and the law enforcement agencies (LEAs) charged with 
combating transnational organized crime. We continue to strengthen our 
regional and Homeland partnerships; they are our center of gravity.
                         strategic environment
    The expansive complexity of the contemporary security environment 
makes defending the Homeland a continual challenge. The spectrum of 
threats to our national security ranges from traditional nation-state 
military capabilities to individuals with access to increasingly 
destructive technologies. The diffusion of capability, the inexact art 
of predicting intent, and the complications of attribution all 
contribute to a blurring of lines between traditional military threats 
and asymmetric threats that trigger military support or response. 
Technological advances and proliferation coupled with pockets of 
instability will generate a growing array of potential threats against 
which we must posture ourselves. Many of our potential adversaries are 
pursuing advanced weapons development not seen in decades. 
Individually, they pose serious concerns to our national security and 
the international community. Collectively, they represent a vast 
spectrum of complex and volatile threats that I believe will only 
continue to grow and threaten the Homeland if we hesitate to act 
decisively.
                                 russia
    A resurgent Russia continues to assert itself on the world stage. 
No longer content merely to pursue primacy within its near abroad, 
Russia's forays into Syria highlight Vladimir Putin's willingness to 
employ military power to advance his agenda outside Russia's near 
abroad. Last year I stated that Russia is progressing toward its goal 
of deploying long-range, conventionally armed cruise missiles 
comparable to Western systems. In 2015 these efforts came to fruition, 
as Russia employed heavy bombers, surface vessels, and a submarine to 
launch advanced conventional cruise missiles at targets in Syria. These 
operations served as a proof-of-concept for weapons systems and tactics 
ultimately intended to provide flexible deterrent options in a future 
crisis.
    Russia's strategic nuclear forces remain the only foreign military 
threat that could imperil our nation's existence, and Moscow continues 
to spend significant resources to modernize its nuclear arsenal and 
delivery systems. While Russia seeks to avoid a strategic conflict with 
the United States, Moscow perceives itself to be threatened by a 
coordinated Western effort to erode its sovereignty, weaken its 
economy, and undermine its regime. I am concerned these threat 
perceptions could prompt Russia's leaders to misinterpret our 
intentions in a crisis, leading to inadvertent escalation.
                                 china
    As part of its long-term, comprehensive military modernization 
program, China continues to modernize and expand its strategic forces 
with a focus on improving its ability to survive a first strike and 
penetrate United States' missile defenses. Concerned that that United 
States precision strike and missile defense capabilities undermine its 
strategic deterrent, Beijing is working to improve the survivability of 
its nuclear force to ensure a credible second-strike capability.
    China continues to supplement its modest silo-based 
intercontinental ballistic missile (ICBM) force with a growing number 
of road-mobile ICBMs and is now in the process of operationalizing its 
first viable class of ballistic missile submarines, which, if 
successful, would be China's first sea-based strategic nuclear 
deterrent. China is also developing a range of anti-access and area-
denial weapons which, along with its cyber, counter-space, and 
strategic nuclear capabilities, are designed to discourage United 
States intervention in a regional crisis. Meanwhile, Beijing's 
diplomatic strategy appears to be focused on limiting United States 
options by denying physical and political access in key regions around 
the globe.
                              north korea
    North Korea's recent hostile cyberspace activity, nuclear testing, 
and continued ballistic missile development represent a dangerous 
threat to our national security. North Korea's recent nuclear test and 
satellite launch demonstrate Kim Jong Un's commitment to developing 
strategic capabilities, as well as his disregard for United Nations 
Security Council resolutions. The regime's efforts to develop and 
deploy the road-mobile KN08 ICBM have profound implications for 
Homeland missile defense, primarily because the missile obviates most 
of the pre-launch indicators on which we have traditionally relied to 
posture our defenses. While the KN08 remains untested, modeling 
suggests it could deliver a nuclear payload to much of the Continental 
United States. We assess Kim Jong Un is unlikely to attack our Homeland 
unless he perceives an imminent threat to his regime's survival. 
However, we are concerned the possession of a nuclear ICBM could 
embolden the regime's intransigence below the nuclear threshold and 
complicate our response to a crisis on the peninsula. While I do not 
believe that North Korea's efforts to develop a submarine-launched 
ballistic missile represent a near-term threat to the United States 
Homeland, the program underscores the level of effort and resources the 
regime is willing to devote to developing advanced weapon systems. As 
the combatant commander charged with defending the Homeland, I take 
this threat very seriously, particularly in light of North Korea's 
unpredictable leadership.
                                  iran
    Iran poses multiple significant security concerns to the United 
States, and I remain wary of its strategic trajectory. Last year's 
conclusion of the Joint Comprehensive Plan of Action was a welcome 
development, but, Iran's continuing pursuit of long-range missile 
capabilities and ballistic missile and space launch programs, in 
violation of United Nations Security Council resolutions, remains a 
serious concern. Iran has successfully orbited satellites using a 
first-generation space launch vehicle and announced plans to orbit a 
larger satellite using its ICBM-class booster as early as this year. In 
light of these advances, we assess Iran may be able to deploy an 
operational ICBM by 2020 if the regime choses to do so. Additionally, 
Iran has invested in developing advanced offensive cyberspace 
capability and has demonstrated cyberspace operations that could 
threaten our critical civil infrastructure.
                           violent extremists
    In addition to the challenges posed by global and regional powers, 
a more insidious threat comes from extremists who undermine our 
national security through radicalization and violence. Here in the 
Homeland, we face a pernicious terrorist threat from the self-
proclaimed Islamic State of Iraq and the Levant (ISIL), which I choose 
to refer to as Daesh. Their sophisticated and robust social media 
campaign is motivating citizens to do harm to fellow citizens. Daesh 
has a strong recruiting narrative amplified by abundant attention in 
traditional and social media, which can resonate amongst disaffected 
Westerners. The tragic attacks in Chattanooga and San Bernardino 
underscore the difficulty intelligence and law enforcement face in 
detecting Homegrown Violent Extremists (HVEs) who do not show outward, 
reported signs of radicalization prior to an attack.
    Meanwhile, we remain attuned to the potential for foreign terrorist 
organizations to conduct more complex, directed attacks in North 
America. al Qaeda and Daesh have communicated their intent to attack 
North America, and Daesh demonstrated its capability to conduct 
horrific, large scale attacks with the November 13th attacks in Paris. 
In addition, we have observed a continued focus on aviation targets, 
most notably by the probable bombing of a Russian airliner over the 
Sinai Peninsula in November. While much work needs to be done, since 9/
11, our law enforcement partners and the wider Intelligence Community 
have vastly improved procedures to deter or prevent similar coordinated 
attacks, but terrorists are constantly adapting. We are prepared to 
support civil authorities when asked if a complex or large-scale attack 
were to take place.
                     transnational organized crime
    Transnational Organized Crime (TOC) presents a dangerous and highly 
sophisticated threat to the United States and a challenge to global 
stability. Transnational Criminal Organizations (TCOs) exploit 
infrastructure, corrupt officials, challenge societal norms, and are 
responsible for attacks on law enforcement and innocent civilians. TCOs 
represent the principal suppliers of illicit drugs into the Homeland 
and the trafficking of precursor chemicals for use in illicit drug 
production. TOC erodes the rule of law through extortion, violence and 
other illicit activity, which creates a security vulnerability that 
could be exploited by state and non-state actors.
                           lines of operation
    In my statement to this Committee last year, I described the unique 
aspects of USNORTHCOM as the nation's Homeland geographic combatant 
command (GCC) and NORAD as the nation's oldest bi-national command. I 
explained the importance of prioritizing our complementary and 
individual functions with a focus on our shared end states. Our key 
Lines of Operation are more critical than ever to our mission success. 
We map all of our activities to these Lines of Operation, which shape 
our activities and effort.

 
 
 
      USNORTHCOM and NORAD Lines of Operation
     ---------------------------------------------------------------
       Defense of our Homelands
       Defense Support of Civil Authorities
       Homeland Partnerships
       Regional Partnerships
       The Arctic
       Professionalism and Excellence
       Warfighters and Families
 

                        defense of our homelands
    As the Commander of USNORTHCOM and NORAD, my primary task is to 
defend the Homelands. Defense of our Homelands is our dominant line of 
operation, and it is the core focus of USNORTHCOM and NORAD primary 
missions. We are ever mindful of the supreme responsibility we have of 
defending the security of the United States, our citizens, and our 
allies and partners. In 2015, we celebrated NORAD's 57th year defending 
North America against attack through our no-fail aerospace warning and 
aerospace control missions. NORAD was born in the Cold War and expanded 
to an internal threat focus after 9/11. By contrast, USNORTHCOM was 
born in the aftermath of 9/11 and shaped by the seminal nature of those 
attacks. Both Commands are ever-adapting within the strategic 
environment, and we work hard to develop our capabilities to outpace 
threats.
                            missile defense
    USNORTHCOM's most prominent Homeland defense mission is Ballistic 
Missile Defense (BMD). Currently, our BMD architecture is designed 
primarily to defend against limited long range ballistic missile 
attacks from North Korean and Iran. In light of an evolving threat and 
the increasingly enigmatic and unpredictable nature of North Korea's 
dictator, Kim Jong Un, I believe it is imperative that the United 
States continue to develop more capable forces and broader options for 
effective ballistic missile defense. Our BMD architecture is comprised 
of a group of independent, yet interrelated components that form a 
complex and unified defensive network. This system of systems cannot be 
modernized and maintained sequentially; each component must be improved 
concurrently to outpace the evolving threat. I agree with and support 
the modernization priorities set by Vice Admiral Jim Syring and his 
team at the Missile Defense Agency (MDA), including improvement in our 
discrimination sensors, lethality of our kill vehicles, sustainment of 
the BMD architecture, and development of our kinetic and non-kinetic 
options. I am grateful to this committee for your support and 
commitment to modernizing our Ballistic Missile Defense System (BMDS).
    We are on the right path to improving our sensors through the 
development and deployment of the new Long Range Discrimination Radar 
(LRDR). This critical midcourse sensor is expected to provide 
persistent sensor coverage and vastly improve our target tracking and 
discrimination capability. The LRDR will help us evaluate our 
countermeasure options and increase the capability of our Ground Based 
Midcourse Defense (GMD) interceptors.
    We remain on track to deploy the final 14 interceptors in Alaska, 
which will give us 44 missiles in the ground by the end of 2017. 
Finishing the inventory is a big step toward the robust BMDS of the 
future, but it is critical that we not stop there. We need to continue 
working on enhancements to the current Exo-atmospheric Kill Vehicle 
(EKV), and investments in the future Redesigned Kill Vehicle (RKV). We 
need to invest in the lethality of our kill vehicles, and in ways to 
get us to the right side of the cost curve. Our adversaries are 
developing relatively inexpensive technologies, which we assess can 
reach the Homeland. By contrast, our interceptors are vastly more 
expensive. Today, our BMDS is in an unsustainable cost model, which has 
us postured to shoot down inexpensive rockets with very expensive ones.
    I believe that Homeland defense is fundamentally an ``away game'', 
and missile defense is no exception. Today's GMD system is designed to 
intercept incoming threats after the launch is initiated. While that 
approach offers us sufficient decision space, we need to augment our 
defensive posture with one that is designed to defeat ballistic missile 
threats in the boost phase as well as before they are launched, known 
as ``left of launch.'' In concert with our public and private 
stakeholders, MDA is working on an emerging technology that will enable 
us to employ non-kinetic methods to defeat ballistic missile threats 
when we receive indications that a launch is imminent. I believe this 
technology will reduce the overall cost of engagement-based missile 
defense and provide us options to defeat ballistic missiles that 
continue to proliferate around the world.
    We work closely with other GCCs, functional combatant commands, and 
partner nations to leverage capabilities that enable us to protect the 
Homeland. Thanks to agreements with the Government of Japan, United 
States Pacific Command (USPACOM) was able to deploy a second Army Navy/
Transportable Radar Surveillance and Control Model 2, or AN/TPY-2 to 
Japan, which dramatically improved our ability to ``defend forward.''
    In addition to the proliferation of ballistic missile threats, I am 
deeply troubled by the development of advanced long-range cruise 
missiles and the growing threat they represent to North America. Russia 
possesses both conventional and nuclear cruise missiles with the range 
to reach North America and it has proliferated some advanced cruise 
missile technologies to other actors. This threat is real and it is 
imperative that we develop effective response options to outpace the 
threat and enhance our deterrence. We are working with the Joint 
Integrated Air and Missile Defense Organization (JIAMDO), MDA, and 
other stakeholders to improve our Cruise Missile Defense (CMD) 
capabilities.
    Effectively countering and defeating cruise missiles requires a 
layered and integrated architecture that can defend across the full 
spectrum of the engagement sequence. Cruise missiles represent a real 
operational challenge because of their increased standoff capability, 
low altitude and small radar signatures. Although no single system can 
counter all cruise missiles, we have confidence in our layered 
architecture to defend the Homeland. To defeat this more capable 
threat, we are working on enhancements to each of the individual 
systems, including our Indications and Warnings capabilities, wide-
area-surveillance, and advanced fire control infrastructure.
    We are in the first segment of our three-phase Homeland Defense 
Design (HDD) effort, which will improve our capability to find, fix, 
track, target, and engage growing air threats, such as those posed by 
cruise missiles, low-slow aircraft, and long-range aviation. In this 
first phase, we are testing and evaluating advanced sensors as well as 
integrated command and control capabilities. In addition to the new 
STateside Affordable Radar System (STARS), we had begun a three-year 
operational exercise of the Joint Land Attack Cruise Missile Defense 
Elevated Netted Sensor System (JLENS). This exercise has been an 
opportunity for us to see how well JLENS can fit into the existing 
Integrated Air Defense System (IADS) of the National Capital Region 
(NCR), including deployment of a JLENS Fire Control System aerostat, 
which is designed to work in tandem with the surveillance aerostat.
    Unfortunately, on October 28, 2015, the JLENS Fire Control System 
aerostat detached from its mooring station on Aberdeen Proving Ground, 
Maryland, and eventually grounded in a wooded area in northeast 
Pennsylvania. The Army is conducting a thorough investigation to 
determine the cause of the incident. Although this was a setback to our 
operational exercise, we still believe the JLENS system shows great 
promise in defense of the NCR. If the outcome of the investigation 
leads to the resumption of the operational exercise, we will work with 
the Army and the Office of the Secretary of Defense, as well as 
Congressional Defense Committees, on the way forward to continue our 
assessment of JLENS' performance in support of cruise missile defense.
       aerospace warning, aerospace control and maritime warning
    In 1958, the United States and Canada formalized the bi-national 
agreement, which created NORAD to provide centralized operational 
control of continental air defenses against the threat of Soviet 
bombers. Every subsequent renewal of that agreement helped reshape the 
partnership to meet evolving threats to North America. After the fall 
of the Soviet Union, and in light of non-traditional aerospace threats, 
NORAD expanded its mission to include air sovereignty, warning, and 
assessment. In the aftermath of September 11, 2001, NORAD's paradigm 
changed, and we began to focus on aviation security issues originating 
within Canada and the United States. For the last 14 years, Operation 
NOBLE EAGLE has defended our nation against 9/11-style terrorist 
attacks and other non-traditional aviation threats.
    Aerospace warning and aerospace control of North America remains 
NORAD's primary missions. The command retains robust air defense 
capabilities to execute the air sovereignty mission over Canada, Alaska 
and the continental United States. Today, we are confronted with an 
unprecedented spectrum of aerospace and maritime challenges, ranging 
from resurgence in Russian naval and aerospace activity to the 
proliferation of private Unmanned Aircraft Systems (UAS).
    In addition to expanded military activity in Europe and the Middle 
East, we are observing a significant rise in Russian military 
assertiveness in the approaches to North America. Russian Long Range 
Aviation activity has surged, beginning with regular out-of-area 
patrols in 2007, culminating with a record number of out-of-area 
patrols in 2014 and the first-ever combat use of Russian heavy bombers 
in the Syrian conflict in November 2015.
    NORAD is responsible for monitoring and identifying all aircraft of 
interest approaching North America that may enter the sovereign 
airspace of either Canada or the United States. On July 4th, 2015, 
NORAD fighter aircraft intercepted and visually identified two sets of 
Russian Tu-95 ``Bear'' long-range bombers flying in the United States 
Air Defense Identification Zone, one in the airspace west of Alaska's 
coast and another off the coast of central California. Although none of 
the four bombers entered United States or Canadian sovereign airspace 
and were not a direct threat to our national security, they do 
represent a strategic demonstration of Russian military capability. I 
believe these flights are one way the Kremlin delivers the message that 
Russia remains a power with global reach.
    In addition to increasing activity from state-actors and the 
potential for 9/11-style attacks, the growing availability and 
expanding capability of small manned and unmanned aerial systems will 
challenge the DOD, the Department of Homeland Security (DHS), and our 
law enforcement partners defending our airspace. UAS constitute a 
rapidly-developing industry, with increasingly sophisticated and yet 
simple-to-operate systems available for purchase by the general public, 
increasing the likelihood that more of these aircraft will be used in 
the National Airspace System. Although the vast majority of these 
devices are operated in a lawful manner, their growing availability 
increases the likelihood of illicit use. Countering increased 
proliferation of non-traditional aviation technology (NTAT) will take a 
whole-of-community approach, with law enforcement at every level 
playing a critical role.
    NORAD is postured to defend against threats to North America by 
aircraft, cruise missiles, and medium or large UASs. However, the 
layered detection infrastructure used to detect, identify, and track 
these threats is not designed for smaller non-traditional aircraft or 
UAS. On April 15, 2015, a small manned gyrocopter departed from 
Gettysburg, Pennsylvania and flew to the NCR, landing on the grounds of 
the Capitol in Washington, DC. The gyrocopter unknowingly exploited an 
operational challenge in detecting and tracking low-altitude and slow-
speed aerial vehicles.
    The airspace surrounding the NCR, known as the Washington DC. 
Special Flight Rules Area (SFRA) is monitored by the Integrated Air 
Defense System (IADS), which is a vast network of radars, cameras, and 
other detection and warning devices. The IADS is extremely capable of 
identifying and tracking potential threats to the NCR--anything from 
large commercial aircraft down to small, single-propeller recreational 
aircraft. Our post-event analysis revealed that the gyrocopter was 
detected by several of our integrated sensors as it approached and 
transited the SFRA. However, some of the aircraft's operational 
parameters, including speed, altitude, and radar cross-section fell 
below the thresholds necessary to differentiate it from surrounding 
objects , including weather, terrain, and birds. This event reinforced 
the fact that detecting and tracking low-altitude and slow-speed aerial 
vehicles is a significant technical challenge. The post-event analysis 
was a turning point for the interagency community's efforts addressing 
the technical and procedural changes necessary to detect, track, and 
mitigate threats posed by these non-traditional aviation technologies.
    As the spectrum of aerospace and maritime threats expands, we test 
and evaluate our ability to warn and defend against a range of 
scenarios. We challenge ourselves to outpace the known threats and 
anticipate the unknown ones. In order to test responses, systems and 
equipment, NORAD conducts numerous exercises with a variety of 
scenarios, including airspace restriction violations, hijackings and 
responses to unknown aircraft. This year, we conducted fourteen robust 
interagency live-fly aerospace defense exercises. These training events 
are scenario-based and are intended to exercise all aspects of our 
airspace defense plans. Defending the airspace in the NCR requires 
close collaboration with all the interagency stakeholders; therefore, 
we coordinate and exercise with our key partners, including the Federal 
Aviation Administration (FAA), the National Capital Region Coordination 
Center (NCRCC), the Joint Air Defense Operations Center (JADOC), the 
Civil Air Patrol, the U.S. Coast Guard, and the Continental NORAD 
Region (CONR) Eastern and Western Air Defense Sectors.
    In addition to NORAD's traditional air defense role, our mission 
set also encompasses maritime warning, which includes the unique 
responsibility of providing maritime domain awareness and maritime 
warning of activities conducted in the maritime approaches and internal 
waterways of North America. Although NORAD does not have a maritime 
control mission, we are uniquely postured to process, assess and 
disseminate intelligence and operational information to our Canadian 
and United States interagency partners. The maritime approaches to 
North America are extremely congested, which makes executing a 
unilateral, bilateral or bi-national response to a threat challenging. 
We issued eight maritime warning advisories in 2015, providing a 
critical bi-national Homeland defense support capability.
                            homeland defense
    Global violent extremism is on the rise and it is neither 
restricted to a single ideology nor constrained by borders. The 2015 
attacks in Paris, Mali, Chattanooga, San Bernadino, and others 
represent a growing radical movement of groups and individuals inspired 
by a range of beliefs that promote or use violence to undermine our 
universal values. Here in the Homeland, we are seeing a growing use of 
violence by domestic terrorists and HVEs, many of whom are radicalized 
by violent extremist groups like Daesh, and al Qaeda.
    We collaborate with the Federal Bureau of Investigation (FBI), DHS, 
and many other federal agencies to provide unity of effort to deter, 
prevent, and defend against threats to our Homeland. Our federal 
partners and allies have successfully deterred or prevented some 
violent plots, but blind spots and intelligence gaps are common when 
trying to counter terrorism, so we must prepare for those times when we 
have no specific warning. In making assessments of possible threats, we 
gather and share snippets of information and try to determine how 
individual threat reports may morph into threat streams. We assess 
these threats against four specific attributes: plausibility, 
credibility, specificity, and imminency. In a number of cases, we are 
able to establish that the threats are plausible and credible, but 
often times we lack specific and imminent pre-operational indicators, 
which makes preventing these attacks especially challenging.
    As the Commander of USNORTHCOM, I am responsible for protecting DOD 
installations and personnel from domestic threats. One of my assigned 
tasks is setting the baseline Force Protection Condition (FPCON) for 
DOD installations in the Homeland. Earlier this year, we began to 
observe a growing focus on targeting members of the United States 
military, in addition to virtual targeting of DOD personnel after Daesh 
released the names and addresses of U.S. servicemembers.
    On May 7, 2015, I raised the FPCON level in the United States to 
FPCON Bravo, which is only the second time that has been done since 9/
11. My decision was a prudent measure to ensure increased vigilance and 
safeguarding of DOD personnel, installations, and facilities within my 
USNORTHCOM Area of Responsibility (AOR). I believe terrorists will 
continue to emphasize targeting DOD personnel for the foreseeable 
future, so establishing a preemptive, unpredictable frequency of 
actions will mitigate threats to our installations, personnel, assets, 
resources, and infrastructure.
    After the tragic July 16th shootings in Chattanooga, I released an 
additional force protection advisory that mandated several additional 
randomly-applied security measures within FPCON Bravo, with an emphasis 
on off-installation activities, including recruiting stations, Reserve 
centers, and Reserve Officer Training Corps units. With this threat not 
diminishing, these increased security measures will likely become our 
new normal, so we implemented measures that were practicable and 
sustainable for the facilities affected.
    For the Homeland, I believe Daesh's center of gravity is in their 
narrative and a perception of success in bringing about a 21st century 
``caliphate.'' Our objective must move beyond defending against violent 
extremism to preventing it entirely by breaking their cycle of 
radicalization, which will require countering their narrative at the 
grassroots level. Countering the narrative of terrorists like al Qaeda 
and Daesh requires a globally unified response, including positive and 
proactive contributions from national and local governments, local 
communities, and the private sector.
           counternarcotics and transnational organized crime
    The trafficking and the endemic abuse of illicit drugs represent a 
national security threat to the United States. The primary criminal 
drug threat is posed by Mexican TCOs, the main suppliers of cocaine, 
heroin, methamphetamine, and marijuana throughout the United States. 
TOC distribution networks and drug trafficking enterprises are 
expanding, most notably among the heroin and methamphetamine markets. 
Here in the Homeland, TCOs maintain relatively low profiles to avoid 
confrontations with law enforcement, but their domestically-affiliated 
gangs commit violent crimes to maintain power in their territories and 
control their local drug markets. In addition to illicit drug 
trafficking, these intricate TOC networks move legal goods, weapons, 
natural resources, and people, with revenues comparable to the gross 
domestic product of small countries.
    Combating TOC requires unity of effort among federal, state, local, 
and foreign governments. We will continue to work together with our 
interagency partners in assisting Mexico and other countries around the 
world to respond to the evolving threats posed by transnational 
criminal organizations. Central to this effort is strengthening our 
partner nations' ability to enhance the rule of law so that judicial, 
law enforcement, security, and community organizations can effectively 
combat the TCOs.
    USNORTHCOM works very hard to develop the trusted partnership 
opportunities with our domestic law enforcement agencies and Mexican 
military partners to align and synchronize our efforts. We provide 
title 10 counterdrug support to federal, state, and local law 
enforcement agencies, and we coordinate with the National Guard to 
synchronize DOD support to domestic law enforcement. When requested by 
Mexico, and in a manner consistent with the human rights provisions of 
the Leahy Law, USNORTHCOM cooperates with the U.S. Country Team and the 
Mexican military to support efforts building C-TOC capacities to 
disrupt and degrade TCO activities.
    We provide operational counterdrug support through our subordinate 
command, Joint Task Force North (JTF-N), which recruits and employs 
title 10 units on a strictly voluntary basis filling domestic law 
enforcement gaps with mostly military-unique capabilities. In 2015, 
JTF-N provided support to 51 specific multi-domain and multi-LEA 
operations, including detection and monitoring, ground surveillance, 
and mobility support.
    In addition to providing critical military-unique support to LEA, 
the operational support provided by the title 10 units significantly 
benefits DOD, because in many cases, it simultaneously achieves many of 
the supporting unit's critical training requirements. The planning, 
interagency collaboration, and dynamic execution of these missions 
closely approximates the missions these units will perform during 
future deployments, and the setting of southwest border operations 
mirrors the austere environment common to many forward-deployed 
locations.
    USNORTHCOM is just one supporting organization in the much larger 
interagency and international law enforcement effort to counter TOC in 
the global environment. We contribute, as the other combatant commands 
do, by addressing threats in our AOR, providing support to our 
interagency and host nation partners, and collaborating with each other 
to close gaps and seams. We will continue our efforts to enhance mutual 
trust, increase collaboration, improve C-TOC capacity, and to 
contribute to a cooperative defense of North America.
                                 cyber
    Cyber threats are increasingly among the most serious national 
security dangers faced by the United States today, and I remain adamant 
in considering activity in cyberspace as integral to an overall 
domestic attack assessment. More and more we are confronted by a range 
of actors, from nation states like Russia, North Korea, China, and 
Iran, to profit-motivated criminals and ideologically-driven hackers. 
Both state and non-state actors attempt to target critical 
infrastructure, information and telecommunication systems, and 
financial institutions. What makes cyber attacks so difficult to defend 
against is the speed at which the technology advances, coupled with the 
diffuse nature of the attacks and the difficulty to attribute the 
source.
    Cyber attacks pose a serious risk to the networks and systems 
controlling our critical infrastructure. The U.S. military is dependent 
on privately owned critical infrastructure, an attack on which could 
yield potentially severe consequences in a time of crisis. We are 
working with our Government and industry partners to isolate our 
vulnerabilities and identify ways to prevent malicious cyber activity 
while defending our networks.
    In addition to the millions of daily vulnerability probes of our 
networks and other cyber sabotage activity, we have seen a rise in 
Chinese cyber espionage, resulting in a significant loss of 
intellectual property and sensitive information that resides on some of 
our unclassified systems. This loss of vital intellectual property has 
the potential to damage our national security and impede our economic 
growth.
                  defense support of civil authorities
    As the USNORTHCOM Commander and a GCC with responsibility for 49 of 
50 states, I have the responsibility to provide DOD assistance to 
federal, state, local, territorial, and tribal authorities within the 
Homeland. Defense Support of Civil Authorities (DSCA), our second Line 
of Operation, is a unique authority by which we facilitate DOD support 
in response to requests for assistance from civil authorities for 
domestic emergencies, law enforcement support, and other domestic 
activities. DSCA covers the spectrum of civil activities, from 
localized weather incidents to the response to weapons of mass 
destruction events. The DOD has a long history of supporting civil 
authorities with specialized skills, capabilities, and capacities 
maintained for the battlefield that provide stability in the wake of 
catastrophic events at home. Our support has been significantly shaped 
by lessons learned in the aftermath of Hurricanes Katrina and Sandy, 
and we conduct vigorous exercises to forge our enduring partnerships 
with agencies and organizations across the country. We stand ready to 
support the lead federal agencies (LFA) in responding quickly to 
natural and manmade disasters and to the effects of terrorist attacks.
    The most prominent and frequent support we provide is disaster 
response assistance to DHS's Federal Emergency Management Agency 
(FEMA). Last year's FEMA major disaster declarations were mostly in 
response to severe storms, flooding, and wildfires. We directly 
supported disaster relief operations to several states that suffered 
widespread flooding, including South Carolina. One of the worst fire 
seasons in recent United States history occurred this past year, with 
wildfires spreading throughout much of the Western United States and 
straining federal, state, and local firefighting capacity. Of note, 
2015 was the worst year on record for wildfires in Washington State, 
culminating in a rash of fires that resulted in a federal emergency 
declaration. As a result of widespread fires, the National Interagency 
Fire Center (NIFC) set the national Preparedness Level (PL) at PL5, the 
highest level, which indicated that wide geographic areas were 
experiencing major incidents which had the potential to exhaust all 
agency fire resources. For the first time since 2006, the NIFC 
submitted a Request For Assistance (RFA) through USNORTHCOM, with final 
approval by the Secretary of Defense for DOD firefighting support. In 
August 2015, NIFC's request was approved, and with the help of the 
United States Army, we deployed 200 soldiers from 17th Field Artillery 
Brigade located at Joint Base Lewis-McChord in Washington to provide 
ground support to the fire-fighting effort. The crews assisted the fire 
prevention efforts, and constructed firebreaks to slow or stop the 
progress of the fire.
    As incidents in the Homeland develop, we work closely with our 
interagency partners to provide options for DOD support, should they 
require our assistance. In November, the DHS and U.S. Department of 
Health and Human Services (HHS) observed an increase in the number of 
unaccompanied children (UC) and family units apprehended along the 
Southwest Border, with a trend that was projected to exceed its organic 
housing capacity. The Office of Refugee Resettlement at HHS initiated a 
plan to expand its temporary capacity to house unaccompanied children, 
which included a request to the DOD to identify facilities capable of 
temporarily housing UCs. In support of HHS and with the help of the 
Services, we coordinated the use of several DOD installations that 
could be used for this purpose, under a reimbursable agreement between 
the agencies. In January 2016, 129 UCs arrived at Holloman Air Force 
Base, New Mexico under the care of HHS' Administration for Children and 
Families and USNORTHCOM remains ready to facilitate the use of other 
DOD installations if needed.
                         homeland partnerships
    The focal point of USNORTHCOM and NORAD's power and strength are in 
the partnerships that we create and sustain with joint, interagency, 
and multinational organizations. Our trusted partnerships are our 
center of gravity and are critical to our success across the spectrum 
of our missions. Homeland Partnerships, our third line of operation, 
underscore every one of our mission areas, and are best represented by 
the integration in our headquarters of nearly 60 DOD and non-DOD 
federal agencies, department representatives, and liaison officers. I 
view Homeland defense as a team effort, and I rely on partnerships with 
my fellow combatant commands, the Services, and our interagency 
partners to accomplish this mission.
    We have built on our partnership with the Joint Improvised-threat 
Defeat Agency (JIDA) and the resulting collaboration with the lead 
federal agencies to protect the Homeland from next-generation 
Improvised Explosive Devices (IED).
    We continue to develop our key partnership with the DHS and provide 
support through frequent strategic, operational and tactical dialogue. 
I collaborate regularly with DHS Secretary Jeh Johnson through visits 
and monthly video teleconferences. I believe that his Southern Border 
and Approaches Campaign will further unify Homeland defense and 
security along our southern border. We are underway with the first of 
three deliberate phases of support toward an end state of fully 
integrated and synchronized operational activities with DHS's new Joint 
Task Forces (JTFs).
                         regional partnerships
    USNORTHCOM and NORAD do not face today's complex strategic 
environment alone. Our allies and partner nations actively contribute 
to the cooperative defense of North America. Strong and reliable 
Regional Partnerships, our fourth line of operation, are critical for 
us to protect our shared values and ways of life and defend our nations 
in depth. We are inextricably linked with our partners through 
geography, economies, and demographics, and conduct deliberate security 
cooperation with them to strengthen our defense in depth and advance 
our mutual security interests.
                                 canada
    For over 57 years, NORAD has been a model for international 
cooperation and a symbol of trust and confidence between the United 
States and Canada. Our partnership is reinforced by our common values, 
and today, the men and women who wear the cloth of these two great 
nations work side-by-side throughout USNORTHCOM and NORAD. We are 
fortunate to have dedicated Canadian military members fully integrated 
throughout the NORAD Command and staff, including the three-star 
Canadian officer who serves as my NORAD Deputy Commander. This year, we 
hosted our 8th annual Tri-Command Staff Talks among USNORTHCOM, NORAD, 
and Canadian Joint Operations Command (CJOC), during which we were able 
to advance several key initiatives, including combined training and 
exercises, and synchronization of our requirements and capabilities 
advocacy processes. Going forward, I will promote our alliance with 
Canada to enhance our interoperability and contribute to combined 
operations.
    With our Canadian partners, we are focusing on a deliberate 
collaborative investment strategy to outpace current and potential 
adversaries and counter emerging threats through a seamless and layered 
defense. As a result of our recent NORAD Strategic Review directed by 
the Chairman of the Joint Chiefs of Staff and the Canadian Chief of the 
Defence Staff, we commenced an effort to modernize NORAD. One of the 
first parts of our modernization is the North Warning System, which is 
the linchpin of our ability to detect, assess, and track airborne 
activity along the northern border of North America. Over the next 
decade, a priority will be research and development in next-generation 
indications and warning systems for the northern approaches to improve 
detection, surveillance, and engagement of current and emerging 
threats, ensuring our ability to monitor, control, and respond if 
necessary.
                                 mexico
    This year, the military-to-military relationship between the United 
States and Mexico reached unprecedented levels of coordination. Today 
we are strategic partners, respecting the laws and sovereignty of our 
individual nations, while confronting shared security challenges. We 
have developed an enduring cooperative relationship with the 
Secretariat of National Defense (SEDENA) and the Secretariat of the 
Navy (SEMAR). We work closely with the Mexican military to enhance 
planning, tactical skills, communication capabilities to include 
cybersecurity, and incorporation of human rights principles. In 2015 
alone, I personally met with top military leaders of Mexico on eight 
separate occasions to strengthen our relationships and enhance our 
coordination.
    I expect the safety and security of North America will be a long-
term fight, and we continue to help the Mexican military build 
partnership capacity at their pace. We continued our training and 
equipping efforts focusing on ensuring the timely delivery of a record 
Foreign Military Sales (FMS) investment of over a billion dollars by 
the Government of Mexico in UH-60 Blackhawk helicopters and High 
Mobility Multipurpose Wheeled Vehicles (HMMWV). We also began the 
process this year of partnering with United States and Mexican civil 
organizations to enhance the Government of Mexico's ability to control 
and regulate their southern border with Guatemala and Belize. The focus 
of our efforts in this region is to collaborate on improving the 
communications network and investing in a biometrics system to promote 
interagency coordination and reduce insecurity.
    This past summer, in conjunction with our Customs and Border 
Protection Air and Marine Operations partners, we conducted our second 
annual bilateral security cooperation exercise with Mexico, which 
demonstrated the significant progress we have made in training, 
information sharing and interoperability with the Mexican military. The 
exercise employs a cooperative response scenario designed to exercise 
and refine procedures to monitor, track and coordinate a response to an 
illegal flight transiting the border between the United States and 
Mexico. We expanded the scope of this year's exercise by including a 
two-phase live-fly portion, with the first phase simulating a hijacked 
aircraft originating from the United States and transiting into Mexico. 
The second phase was a simulated stolen aircraft suspected of carrying 
narcotics which originated in Mexico and transited into the United 
States. Not only did these two scenarios improve our information 
sharing and mutual warning processes, the enhanced air control 
procedures we developed provided the foundation necessary to streamline 
a coordinated response to suspicious aircraft transiting our shared 
border.
    Our combined efforts to promote democratic values, respect human 
rights, and counter TCOs continue to be a key focus of the training 
provided by the Western Hemisphere Institute for Security Cooperation 
(WHINSEC). This program provides a critical foundation for mutual 
security and democracy, and the relationships formed by the students at 
WHINSEC reinforce the trust and cooperation among the participating 
nations.
                              the bahamas
    Increased tourism, maritime, and commercial activity complicated by 
a resurgence in illicit trafficking and foreign influence, makes the 
Caribbean region a significant challenge in maintaining our national 
security. We are working with our regional partners to build domain 
awareness and develop capabilities to counter illicit trafficking and 
smuggling. Our ``third border'' with The Bahamas is the basis for a 
partnership critical to the security of the United States. The Bahamian 
Government is a willing partner, though they are limited in their 
security capacity, so we are forging a strong partnership through our 
support of the Royal Bahamas Defence Force (RBDF) and are helping them 
build capabilities that enhance detection, monitoring and interdiction 
of the migrant and drug flows that transit their country.
                               the arctic
    Climate change and receding polar sea ice in the Arctic combined 
with global interest in emerging economic opportunities and an increase 
in human activity pose unique security challenges for the United 
States. Although the Arctic remains a vast, harsh and challenging 
operating environment, many Arctic nations are demonstrating increased 
interest and presence in the region. I believe that The Arctic, our 
fifth line of operation, represents the intersection between geography 
and interests. I view the Arctic as an emerging region where we will be 
called upon to support other federal agencies and work with our 
regional partners to safeguard the stability and security of the 
region.
    We believe that while the likelihood of military conflict in the 
Arctic in the short term is low, international interest and presence 
are growing and it is necessary that the United States, and 
specifically the DOD, plan for a wide range of challenges and 
contingencies. Today, the often harsh operating environment yields 
significant variability in the pace and scope of change in commercial 
activity, which complicates our ability to plan and invest in our 
required capabilities. Constrained budgets and competing priorities 
dictate that we take a proactive, yet prudent approach to our 
investments in Arctic capabilities.
    As the Commander of USNORTHCOM, one of my assigned tasks is to be 
the DOD advocate for Arctic capabilities. In this role, I am 
responsible for collaborating with DOD Arctic stakeholders to help 
identify capability requirements and shortfalls across the spectrum of 
DOD operations and champion their resolution with our trusted partners. 
Our Arctic Capabilities Advocacy Working Group (ACAWG) is a 
collaborative forum among DOD, interagency, and trusted international 
Arctic stakeholders, including geographic and functional combatant 
commands, the Joint Staff, the Military Departments and Services, and 
DOD agencies that supports these actions.
    Our ACAWG is taking a prudent, fact-based approach to Arctic 
advocacy and investment so that we do not over invest, under invest, or 
be late to need. We are looking at short, middle, and long-term 
material and non-material capabilities across the spectrum of DOD 
operations, including Doctrine, Organization, Training, Materiel, 
Leadership and Education, Personnel, Facilities and Policy. Our forces 
must be able to navigate, communicate, and sustain themselves to be 
effective in the region. To facilitate this, we are looking at 
capabilities that support domain awareness, communications, 
infrastructure, and sustainable presence.
    Establishing a presence in the Arctic is an extremely costly 
proposition, with estimates running three to ten times the cost of 
building comparable facilities elsewhere. I believe that large 
fundamental infrastructure investments are not required to establish a 
large physical presence in the Arctic. Instead, we are concentrating on 
scalable infrastructure sufficient for us to support contingency and 
emerging Arctic missions, with a focus on qualified and equipped forces 
that have essential Arctic-capable platforms that can deploy and 
operate freely in the region, when required.
    The United States has assumed the Chairmanship of the Arctic 
Council at a crucial time amidst growing international presence and 
interest in the Arctic. I believe that it is in the best interest of 
the United States that we accede to the Law of the Sea Treaty to give 
us a stronger position as we negotiate the complexities of territorial 
concerns and maritime security interests.
                               conclusion
    Our final two Lines of Operation, Professionalism and Excellence 
and Warfighters and Families, are perhaps the most pivotal because they 
underpin our endeavors across the spectrum of our assigned missions. We 
hold ourselves to the highest standards of personal and professional 
conduct. We reinforce our warfighters by ensuring that they are 
properly trained for their missions, while also providing the family 
advocacy programs, community outreach and service support functions 
that are critical to the families who, in turn, support our warriors.
    Despite what is likely to be an onerous fight against increasingly 
diffuse threats, we are very fortunate to be able to depend on the 
brave men and women who choose to wear the cloth of their nation and 
defend their fellow citizens. We embrace our no-fail mission at a time 
when our unique capabilities are needed most, and with your support, 
together with the exceptional men and women of USNORTHCOM and NORAD and 
our trusted partners, we will remain the greatest force for freedom, 
safety, and security for North America. I look forward to your 
questions.

    Chairman McCain. Admiral Tidd.

    STATEMENT OF ADMIRAL KURT W. TIDD, USN, COMMANDER, U.S. 
                        SOUTHERN COMMAND

    Admiral Tidd. Chairman McCain, Ranking Member Reed, 
distinguished members of this committee, thank you for the 
opportunity to speak with you today.
    I'm honored to represent the men and women of United States 
Southern Command, and I'm very pleased to be here today with my 
very good friends and shipmates, Cecil Haney and Bill Gortney.
    I'd like to thank the Congress, and this committee 
specially, for its longstanding support to our mission and to 
our partners in Central America, South America, and the 
Caribbean.
    I'd like to focus my opening remarks very quickly on three 
Cs and three Gs. The Cs are connections, Colombia, and Central 
America.
    The first C, of connections. Security in this hemisphere 
connects directly to other parts of the world. Smuggling 
networks run through South America directly into our Homeland. 
Foreign terrorist fighters flow from the Caribbean to Syria and 
to Iraq. As part of their global strategy, Russia attempts to 
discredit our reliability as a trustworthy partner here in our 
own region. These issues transcend artificial boundaries, and 
they demand a transregional, united response.
    The second C is Colombia. As has already been recognized, 
this committee knows well Colombia's transformation has been 
remarkable. Once on the brink of failure, Colombia is now on 
the brink of peace. But, the hardest work lies ahead, extending 
government influence into dangerous criminal-controlled 
territory, confronting the persistent threat of cocaine 
production and trafficking, and, above all, securing a just 
peace that will end more than 50 years of conflict. With the 
blood and treasure that they have already sacrificed, with all 
that they continue to do to export security across the region, 
the Colombian people have more than earned our sustained 
support.
    The third C is Central America. As we recognized during the 
2014 migrant crisis, what happens on the streets of San 
Salvador and Tegucigalpa have a--has a direct impact on the 
streets of Tucson and Providence. Our Central American partners 
are doing all they can to win their countries back from vicious 
gangs and narcotraffickers, but they cannot do it alone. 
Because we remain the number-one world's consumer of illicit 
drugs, we owe it to them to do our part.
    Now to the three Gs: global networks, global competitors, 
and Guantanamo Bay.
    Global networks are the biggest threat that we face in our 
region. No two networks are alike. Some are international 
criminal enterprises focused on transporting any illicit cargo 
for the right price. Others are small operations that smuggle 
desperate migrants. Still others support terrorist 
organizations through financing and through the spread of their 
violent extremist ideology. No matter the motivation of these 
groups, though, all of them have a corrosive effect on the 
stability and the security of every country that they infect, 
including our own.
    Global competitors. They also operate deliberately in the 
western hemisphere as part of their broader global strategies. 
The most concerning of them is Russia, which portrays the 
United States in our theater as unreliable and as withdrawing 
from this pivotal region.
    Finally, Guantanamo Bay, where we conduct the most 
principled, humane detention operations anywhere in the world. 
We will continue to do so until the very last detainee steps on 
an airplane and departs the island. I know this committee 
shares my enormous pride in the men and women who serve in this 
demanding, sensitive, and often thankless mission with honor 
and with the utmost discipline, professionalism, and integrity. 
They are every bit as engaged in the war and every bit as 
deserving of our thanks and praise when they return home, just 
as their brothers and sisters who have returned home from Iraq 
and Afghanistan. I thank very much your recognition of the hard 
work that they do.
    Mr. Chairman, members, thank you again for the opportunity 
to appear before you today. I look forward to our continued 
discussions.
    [The prepared statement of Admiral Tidd follows:]

               Prepared Statement by Admiral Kurt W. Tidd
                              introduction
    Mr. Chairman, Ranking Member Reed, and distinguished Members of the 
Committee: thank you for the opportunity to appear before you today to 
discuss U.S. Southern Command's activities in Central America, South 
America, and the Caribbean. Before I begin, I would like to thank the 
Congress--and this Committee in particular--for its longstanding 
support to our mission and to our partners in the region. Our efforts 
are made possible through your help and by the hard work of our service 
components, Joint Task Forces, and our soldiers, sailors, marines, 
airmen, coast guardsmen, civilians, and contractors.
    In my short time in command, I have dedicated myself to expanding 
my knowledge of U.S. Southern Command's area of responsibility (AOR). 
The Latin America and Caribbean of today is far different than it was a 
quarter of a century ago. \1\ The region is home to a substantial 
middle class that actively seeks more responsive and transparent 
governments able to deliver promised services. There is little risk of 
armed conflict between neighboring states; border disputes are settled 
in diplomatic channels, not on battlefields. Governments are more 
democratic and respectful of human rights than at any point in the 
region's history. Militaries are more capable, professional, and among 
their countries' most trusted institutions. \2\ These militaries are 
also some of our most reliable partners, committed to working with us 
and with one another to confront threats to hemispheric security.
---------------------------------------------------------------------------
    \1\ Secretary of State John Kerry, Remarks at the 45th Annual 
Washington Conference of the Council of the Americas. April 21, 2015.
    \2\ Latin American Public Opinion Project (LAPOP): 2014 
AmericasBarometer, Vanderbilt University.
---------------------------------------------------------------------------
    Despite these improvements, the region still faces persistent, 
unresolved challenges. The slowing Chinese economy and falling global 
commodity prices are causing economic downturns across Latin America. 
Violent crime, widespread poverty, and fragile institutions continue to 
plague many nations. Pervasive corruption, inequality, chronic 
unemployment, deteriorating citizen safety, and limited economic 
opportunity drive migration, propel young men and women to join violent 
gangs, or set the conditions for instability and potential violent 
radicalization. Lack of state presence, ineffective governance, and 
weak rule of law provide fertile ground for the drug trade and the 
spread of powerful criminal networks. Public frustration with slow 
economic growth, social exclusion, and endemic government corruption 
fuels social protests and unrest. In certain countries there is a 
troubling trend toward authoritarianism: elected leaders that shun 
democratic standards, abuse human rights, muzzle the press, and 
suppress the opposition. Natural disasters such as ?hurricanes, 
earthquakes, volcanoes, fires, floods, and drought--as well as 
potential regional epidemics like the Zika virus--loom as ever-present 
?dangers.
    The good news is none of these challenges is insurmountable, but 
all warrant continued engagement. Because no nation in the region poses 
a direct, conventional military threat to the United States, Latin 
America tends to rank fairly low on force allocation priorities. This 
is understandable--but often requires what is, in my view, an 
unfortunate trade-off. Our attention to other parts of the world should 
not come at the expense of the significant gains made in our own 
hemisphere. Over the last twenty years, prudent engagement by the U.S. 
military has supported democratic governance and economic development, 
nurtured and developed professional defense forces, and encouraged 
greater security collaboration. Along with the State Department and 
other interagency partners, we have worked hard to realize a vision of 
the Americas where countries share responsibilities, cooperate as 
equals, and advance common interests and values.
    Now, as criminal networks threaten the integrity of institutions 
and jeopardize citizen security, we must help countries build on the 
considerable progress achieved to date and continue working towards our 
shared priorities. As competitors seek to challenge our aim of being 
the region's security partner of choice, we must redouble our 
commitments and reinvigorate our partnerships. As the world works to 
contain the spread of violent extremism and confront challenges to a 
rules-based international order, we must seek new ways to strengthen 
our network of allies and partners. As we face an increasingly complex, 
interconnected security environment, we must look beyond borders and 
boundaries and seek not just whole-of-government, but whole-of-
hemisphere solutions to our shared challenges. Mr. Chairman, positive 
and persistent U.S. engagement remains essential to advancing a Western 
Hemisphere that is prosperous, stable, and secure. \3\ With the 
continued support of the Congress and in full collaboration with our 
interagency and regional partners, U.S. Southern Command will continue 
working towards that goal.
---------------------------------------------------------------------------
    \3\ The White House, National Security Strategy. February 2015.
---------------------------------------------------------------------------
    Finally, Mr. Chairman, Members: I am humbled and honored to be part 
of the great team at U.S. Southern Command, and I look forward to 
working with you and your staffs in the coming years. I intend to focus 
my efforts in four key areas: ensuring we remain the premier security 
partner of choice in this hemisphere; deepening our interagency 
collaboration to generate heightened trust; becoming the innovation 
platform for the Department of Defense, interagency, and international 
partners; and enabling the critical transregional operations and 
initiatives of our sister Combatant Commands and interagency partners. 
We will continue to pursue an era of inclusive engagement with this 
vital part of the world and advance our ``Partnership for the 
Americas.''
                          security environment
    The security environment in Latin America and the Caribbean is 
characterized by complex, diverse, and non-traditional challenges to 
U.S. interests. The principal challenge remains transnational criminal 
networks, which are well-organized, well-financed, well-armed, and 
technologically advanced. These networks are efficient, adaptive, 
innovative, and exceptionally ruthless. They will transport anything or 
anyone--cocaine, heroin, weapons, people, even wildlife--if they 
believe the potential profit is greater than the potential risk. 
Enormous profits allow criminal networks to acquire capabilities that 
rival or even exceed those of the states that battle them, including 
high-powered rifles and machine guns, transport planes, and long-range 
submersibles. In response to these extraordinary circumstances, 
democratic governments have deployed their militaries to support 
overwhelmed police forces.
    The overarching threat to our national security, however, is not 
just the range of illicit commodities that are trafficked, but instead 
the destabilizing operations, corruptive influence, and global reach of 
many of these networks, some of which smuggle `special interest aliens' 
(SIAs). Although the vast majority of SIAs are seeking economic 
opportunity, such as some from Iran, or are refugees fleeing war, like 
some from Syria, there is a risk that violent extremist organizations 
could exploit established networks, established smuggling routes, or 
other regional vulnerabilities--including lax immigration and border 
security, corrupt government officials, or the enabling capabilities of 
criminal organizations--to enter and move through the region 
undetected.

 
 
 
            Spotlight: Syrian SIAs in the AOR
        --------------------------------------------------------
          In 2015, partner nation officials detained
          six groups of Syrians in Honduras, St. Maarten, Costa
          Rica, the Dominican Republic, and Paraguay.
          In each case, access to fraudulent or stolen
          documents and corrupt law enforcement officials
          facilitated SIA movement through numerous countries
          in the AOR.
 

    Let me talk for a moment on that last vulnerability. Whether Sunni 
or Shiite extremists would wittingly collaborate with criminal groups 
to accomplish their goals is up for debate. Many people are quick to 
dismiss the possibility of these groups working together in this part 
of the world. They believe the absence of evidence of a relationship is 
evidence of its absence. Mr. Chairman, we at U.S. Southern Command 
can't be that certain. We know that extremist groups are ideologically-
driven and want to harm the United States. We know that criminal 
organizations are profit-driven and will engage in illicit activities 
that increase their bottom line. We also know that both operate in the 
same dark underworld of illicit finance, fraudulent documents, and 
weapons trafficking and that violent extremist organizations have 
availed themselves of some of these criminally-provided services. What 
U.S. Southern Command lacks is the intelligence necessary to identify, 
monitor, and fully illuminate and understand these networks and the 
resources necessary to significantly disrupt, degrade and ideally 
dismantle them.
    Like our counterparts in the U.S. Government and the Congress, we 
are also deeply concerned by the `triple threat' posed by foreign 
terrorist fighters: they strengthen transnational terrorist groups, 
incite others back home to conduct attacks, and can ultimately return 
to launch acts of terror. \4\ ISIL's strategic communication efforts 
have resonated around the world, including in parts of Latin America 
and the Caribbean. Since 2013, we have seen a small number of 
individuals and their families leaving the region to join ISIL in Syria 
or Iraq. The appeal of violent extremist ideology to some Caribbean 
citizens and their subsequent travel to Iraq and Syria remains a 
concern; not just for us, but for our friends and partners across the 
region.
---------------------------------------------------------------------------
    \4\ House Committee on Homeland Security, Final Report of the Task 
Force on Combating Terrorism and the Foreign Fighter Threat. September 
2015.
---------------------------------------------------------------------------
    As in other parts of the world, the potential return of violent 
extremists is a threat. These individuals could be well positioned to 
spread ISIL's poisonous ideology and potentially inspire or execute 
acts of terror against U.S. or partner nation interests. Many partner 
nations are unable to monitor the potential return of foreign fighters 
and often lack robust counterterrorism legislation and capabilities to 
confront this threat. There is a significant and growing consensus--
which I have personally observed during conversations with security 
chiefs across the region--about the threat of radicalization to 
violence in this hemisphere; San Bernardino and Paris are clear 
examples and dramatic wake-up calls that radicalization can happen 
anywhere. We will work with our partners to enhance support to the 
global coalition to counter ISIL, other transregional terrorist 
threats, and violent extremist organizations.
    As a state sponsor of terrorism, Iran's nefarious involvement in 
the Western Hemisphere also remains a matter for concern. While Iranian 
engagement has waned in recent years, President Rouhani recently 
indicated that Tehran intends to increase economic, scientific, and 
cultural ties with Latin America though he has made this same pledge 
several times since his election in 2013. Additionally, Lebanese 
Hezbollah maintains an extensive regional network of supporters and 
sympathizers, some of whom are involved in trade-based money laundering 
and other illicit activities to generate revenue, a portion of which 
goes to support the parent organization in the Middle East. Lebanese 
Hezbollah also maintains an infrastructure with the capability to 
conduct or support terrorist attacks. As with every aspect of our 
counterterrorism efforts, the U.S. Government remains vigilant against 
these threats, working closely with our partners to protect the 
southern approaches to the United States.
    Apart from what I have already discussed, several other trends 
impact regional stability. In El Salvador, Guatemala, and Honduras, 
many of the conditions that caused the 2014 migration crisis of 
unaccompanied children--high homicide rates, chronic poverty, and lack 
of economic opportunity--remain the same or are worsening, leading the 
UN High Commissioner for Refugees to call for action to respond to the 
`looming refugee crisis' in the region. \5\ While apprehensions on our 
border are down, Mexico's apprehensions at its southern border have 
increased dramatically over the past three years. \6\ Sustainable 
development and security gains must continue apace if the sub-region is 
to address its long-standing challenges. To this end, I would like to 
thank the Congress for providing funding to our State Department and 
USAID partners as part of the U.S. Strategy for Engagement in Central 
America, a five-year initiative that will help State Department and 
USAID address the root causes of migration.
---------------------------------------------------------------------------
    \5\ Comments made by UN High Commissioner for Refugees Antonio 
Guterres on the release of The UN Refugee Agency's report Children on 
the Run: Unaccompanied Children Leaving Central America and Mexico and 
the Need for International Protection. October 28, 2015.
    \6\ Customs and Border Patrol apprehended 145,316 Central American 
migrants (including 39,970 UACs) at the US SW Border in fiscal year 
2015. From October 2014 to April 2015, Mexican officials stopped nearly 
93,000 Central American migrants, far exceeding the 49,800 detained in 
the same period 12 months earlier.
---------------------------------------------------------------------------
    Central America is still awash in weapons and street gangs such as 
MS-13 and M-18, both of which originated in the United States and have 
close, direct, and growing ties with their U.S. counterparts. As an 
indication of how dire the situation is in El Salvador, its Supreme 
Court designated these groups as terrorists by ruling they violate the 
fundamental rights of the population and seek to usurp state power. 
Gangs are targeting the police and military with homemade grenades and 
car bombs and terrorizing Salvadoran citizens. According to the FBI, 
MS-13 is now present in 42 U.S. states, with a significant presence in 
Houston, Long Island, Charlotte, and Washington, DC. \7\ Mr. Chairman, 
the simple fact is that economic and security crises in Central America 
reverberate almost immediately through communities across our country.
---------------------------------------------------------------------------
    \7\ National Gang Intelligence Center Assessment, November 2015.
---------------------------------------------------------------------------
    Further south, rising crime, violence, and deteriorating economic 
conditions continue to plague Venezuela. Due to speculation about the 
potential end of United States immigration policies favorable to 
Cubans, an increasing number of Cuban migrants are traveling overland 
through Central America and Mexico to cross at the United States 
Southwest border, with over 30,000 arriving via this route in fiscal 
year 2015--in addition to more than 4,000 that arrived via traditional 
maritime routes through the Florida Straits. Haiti--one of the most 
unstable and least developed nations in the Western Hemisphere--will be 
especially vulnerable as the electoral crisis drags on and the United 
Nations stabilization mission draws to a close.
    Our Colombian partners have made heroic strides battling the FARC, 
but a peace accord will not spell the end of their security challenges. 
Even if a peace accord is signed this spring, Colombia will confront 
other threats, including criminal networks that will gladly recruit 
experienced ex-FARC members and exploit the potential power vacuum 
generated by the FARC's demobilization. As an example, the 
transnational criminal network Clan Usuga is quickly becoming a 
significant threat to Colombian national security. The 3,000-strong 
group is comprised of former paramilitaries; has agents throughout 
Central and South America and Spain; and is expanding into Venezuela to 
increase its share of the drug trade. All of these issues warrant 
continued active United States engagement to ensure our partners in 
Central America and the Caribbean can address sources of instability 
and Colombia can deliver on the promise of a hard-won peace.

 
 
 
         Spotlight: Colombia's Counter IED Capacity
      ------------------------------------------------------------
         The Colombian military, with our support and that of our
        interagency partners like JIDA, has reduced IED incidents
        by 21 percent in 2015. Casualties from IEDs are down 38
        percent and the ``found and cleared'' rate for IEDs is
        nearly 80 percent.
 

    We must also contend with global competitors from outside our 
hemisphere that are strategically and purposefully operating in the 
Western Hemisphere. In this part of the world, Russia's actions are 
directly connected to its broader global efforts to demonstrate that 
Russia is a global power capable of challenging United States 
leadership and the established rules-based international system. 
Russian officials' rhetoric, high-level political visits, and military-
security engagements are designed to displace the United States as the 
partner of choice in the region. Over the past year, Russia continued 
to maintain a presence in Latin America, collecting information about 
the region and the United States. Since mid-December 2014, Moscow has 
deployed an oceanographic and a hydrographic research ship to 
Nicaragua; an intelligence collection ship to the United States east 
coast and Caribbean; and an additional oceanographic research ship to 
the Caribbean. This is four naval deployments to Latin America in less 
than twelve months, all of which involved data or intelligence 
collection. Russia also reached an agreement with Nicaragua for 
simplified port access and logistical support, and regularly broadcasts 
anti-American propaganda in Ecuador, Argentina, and Venezuela via 
Russian state-owned RT-TV, which also broadcasts to the United States, 
and via online news and Sputnik Mundo, which is targeted to Latin 
American audiences. Russia uses this media to create doubts about 
United States intentions and criticize United States policies.
    We need to engage proactively and deepen security cooperation with 
our partners in the Americas. We strongly suspect that Russia's actions 
in the Western Hemisphere are not driven by events in this AOR, but 
rather are integrated into a larger, more holistic approach. This 
requires an equally integrated, transregional response on our part. 
When it comes to transregional competitors, we are closely coordinating 
with fellow combatant commanders to ensure we are contributing not just 
in our area of responsibility but across regional boundaries to ensure 
competitors are unable to exploit seams between our areas of 
responsibility.
    In contrast to Russia, China's primary focus in the region is on 
trade and investment. Still, China seeks to forge security 
relationships as part of its strategy to increase its influence in the 
region. Military engagements tend to focus on soft-power, with offers 
of training in Beijing, high-level visits, donations of equipment, and 
naval diplomacy efforts. During May-June 2015, a Chinese Naval 
Hydrographic Survey Ship made port calls in Brazil and Ecuador during 
its circumnavigation. The Chinese Navy's 20th Naval Escort Task Force 
made a port call in Cuba in November as part of their goodwill cruise 
around the world. Additionally, the Chinese hospital ship PEACE ARK 
visited Peru, Grenada, and Barbados in 2015 to provide medical services 
to local communities, marking the vessel's second visit to the region 
since 2011. Chinese defense firms also continue to make inroads into 
the Latin American arms markets through low-cost military hardware, no-
strings-attached sales and financing, and offers of co-production 
facilities in the region. While China's competition for regional 
influence does not pose a direct military threat to our interests in 
this hemisphere, it does reinforce the importance of ensuring China's 
activities abide by regional political, economic and security norms. It 
also underscores the importance of the United States remaining engaged 
in this important part of the world.
                           command priorities
    To address these challenges, we work with our partners to defend 
the southern approaches to the United States, respond to regional 
contingencies, and promote security cooperation with the 31 nations and 
16 areas of special sovereignty in our AOR. We focus on one no-fail 
mission and four priorities, which I would like to discuss today.
    We continue to conduct safe, humane, legal, and transparent care 
and custody of the remaining detainees currently at Joint Task Force 
Guantanamo (JTF-GTMO). Detention operations are a demanding, sensitive, 
and often thankless mission. The medical and guard force deal with 
enormous stress and are subject to near-constant verbal and physical 
assaults by detainees. Some of our female troops must continue to deal 
with the frustration of a temporary court order that prevents them from 
performing their assigned duties, even though they are all fully 
trained, immensely qualified, and embody the values of equality and 
diversity that our nation espouses to the world and holds dear. Despite 
these challenges, and as many of you have witnessed first-hand, the men 
and women at JTF-GTMO conduct the most humane, principled detention 
operations anywhere in the world, often exceeding the requirements of 
U.S. laws and the Geneva Convention. I thank you for your continued 
active support for these tremendous young men and women and invite you 
to continue to visit them to see for yourselves the conditions under 
which they labor, and the quiet professionalism with which they execute 
their duties.
    Unlike the conduct of our troops, the condition of many JTF-GTMO 
facilities falls far short of acceptable standards. As the Congress 
knows, most of the facilities constructed to temporary standards are 
deteriorating rapidly due to the harsh environment, ongoing mission 
demands, and a chronic lack of funds for maintenance and 
recapitalization. Last year, rains associated with Hurricane Joaquin 
resulted in widespread leaks in troop housing--an unsurprising 
occurrence, given the dilapidated condition of these buildings. With no 
long-term military construction, we expect to continue addressing life, 
health, and safety issues in an incremental, piecemeal manner that 
rapidly becomes more costly than investment in new construction.
    In concert with our law enforcement, intelligence community, 
diplomatic, and regional partners, we remain focused on countering 
transnational organized crime (CTOC). Our Joint Interagency Task Force 
South (JIATF-S) is at the forefront of our efforts to combat the 
illicit drug trade and to illuminate the networks engaged in this 
nefarious activity. Although receiving only 1.5 percent of the total 
U.S. counterdrug budget, JIATF-S and its international partners disrupt 
three times the amount of cocaine seized at or within U.S. borders. 
While the U.S. Navy was only able to provide limited surface ships to 
and U.S. Customs and Border Protection assets, as well as significant 
contributions by partner nations and Allies, helped disrupt 192 metric 
tons of cocaine in fiscal year 2015. Operations like MARTILLO not only 
strike a blow to powerful criminal networks, they ultimately save U.S. 
lives and resources by stopping hundreds of tons of cocaine, heroin, 
and other drugs destined for our cities and towns.

 
 
 
                                            Operation MARTILLO Fiscal Year 2015 Disruptions
                      ------------------------------------------------------------------------------------------
                       Cocaine                               192 MTs
                       % disrupted by partners               35%
                       Marijuana                             62,995 lbs
                       Bulk cash                             $11.4 million
 

    In response to the insecurity that drove last year's unaccompanied 
children crisis, we are prioritizing our capacity-building efforts in 
the Northern Tier of Central America. We thank the Congress for its 
support to our CTOC activities and for recognizing the important role 
security plays in addressing the sub-region's long-standing challenges. 
Through equipment support, infrastructure projects, counterdrug 
training, and aggressive information sharing, we are improving our 
partners' maritime interdiction and border security capabilities and 
enhancing regional domain awareness. To complement these efforts, last 
year our Marine component deployed a Special-Purpose Marine, Air, 
Ground Task Force (SPMAGTF) to help partner nations extend state 
presence and security in Honduras, Guatemala, El Salvador, and Belize. 
Working alongside Honduran military and government officials, U.S. 
Marines built roads and a C-130 capable airfield and provided essential 
water services to vulnerable populations. Working in tandem with Joint 
Task Force-Bravo, the SPMAGTF promises to be one of our most responsive 
forces; sourced mainly by Marine Reservists, it provides us with an 
agile, forward-deployed, rapid response capability that is without 
equal.

 
 
 
         Spotlight: Support to Interagency Operations
      -------------------------------------------------------------
         In 2015, we supported United States Immigration and
        Customs Enforcement's (ICE) Operation CITADEL, which
        targeted the smuggling of migrants from the Middle East,
        Asia, Africa, and Latin America into the United States.
        This operation led to the dismantlement of large-scale
        criminal networks and the rescue of many unaccompanied
        children.
 

    We also dedicate significant effort to remaining vigilant against 
the threat of violent extremism, and I thank the Congress for providing 
the dedicated resources to support this important mission. Our 
counterterrorism (CT) efforts center on building and supporting partner 
nation capacity to detect and defeat terrorist threats within their 
borders. We are working with partners from across the region to counter 
extremism, recruitment, and radicalization to violence in vulnerable 
communities. Over the past year our Special Operations Forces (SOF) 
conducted multiple engagements such as subject matter expert exchanges, 
counterterrorism-focused exercises, and civil affairs activities. These 
efforts--coupled with support to U.S. Country Teams and interagency 
operations--ensure our nation and those of our friends remain secure. 
As discussed earlier, transnational organized crime and terrorist 
networks are intersecting layers of a global illicit economy. We will 
begin to explore if and how taking a counter network approach against 
illicit networks can improve our insight and successes in both our CTOC 
and CT efforts.

 
 
 
             Spotlight: DOD Rewards Program
      -------------------------------------------------------------
         In 2015, the DOD Rewards Program enabled partner nation
        authorities to bring 135 members of terrorist
        organizations to justice.
 

    Whether countering transnational organized crime and terrorism, 
supporting disaster response operations, establishing cyber defense 
capabilities, or emphasizing a solid human rights foundation, building 
partner capacity is the cornerstone of everything we do. Our efforts 
help build and nurture committed and capable partners who can control 
their borders, address drivers of insecurity and instability, respond 
to natural and man-made disasters, and contribute to regional 
security--all of which help generate an extended layered defense of the 
U.S. Homeland and protect our interests. Although it is impossible to 
do justice to all the incredible work being done by our joint task 
forces, service components, and the National Guard's State Partnership 
Program, I would like to share a few highlights of our capacity-
building efforts in the region. \8\
---------------------------------------------------------------------------
    \8\ For a full overview of component activities, please see the 
Annex.
---------------------------------------------------------------------------
    After 51 years of armed conflict, Colombia--a strategic ally, 
friend, and preeminent partner--is on the verge of ending the 
hemisphere's longest-running guerilla war. Thanks to its own efforts 
and our sustained assistance, Colombia has been transformed from a near 
failed state into a major regional player with significant political 
influence, world-class security forces, and a growing economy. The 
Colombian military has grown from an internal defense force to a 
respected exporter of counterdrug and counter IED expertise \9\ and is 
standing up a regional demining center of excellence. The Colombian 
Navy is also a regular contributor to NATO counter-piracy operations 
off the coast of Africa as well as counterdrug patrols in our own 
hemisphere with JIATF-South.
---------------------------------------------------------------------------
    \9\ In 2015, USSOUTHCOM and the Department of State Bureau of 
International Narcotics and Law Enforcement supported military and 
civilian law enforcement capacity-building activities by Colombian 
military and law enforcement personnel. USSOUTHCOM provided assistance 
to the COLMIL to execute 85 military BPC activities. These activities 
were focused on maritime interdiction, support to law enforcement 
entities, security and maintenance of vessels at port, riverine 
training, command and control, border security, intelligence training, 
and human rights training.
---------------------------------------------------------------------------
    Colombia's transformation is remarkable, but it will still face an 
uncertain period with many new challenges even when an accord is 
reached. In many ways the hardest work lies ahead. For Colombia to 
successfully consolidate the promise of its decades-long struggle, the 
United States must remain as fully engaged a post-peace accord partner 
as we ever were during Colombia's struggles. U.S. Southern Command will 
continue to support Colombia's efforts to: take the FARC off the 
battlefield and out of illicit activities; successfully implement a new 
counternarcotics strategy and establish state presence; conduct 
humanitarian demining; and transform the Colombian military to adapt to 
an evolving security environment. On a broader level, it is also 
essential that we continue providing Colombia a robust and agile 
assistance package that will help it successfully address the new 
security, developmental, and human rights challenges posed by a post-
accord environment.
    To enhance the professional development of the region's military 
officers and senior enlisted leaders, U.S. Southern Command conducts or 
facilitates International Military Education and Training (IMET), 
military and defense exchanges, and security seminars. Through the 
Defense Institution Reform Initiative (DIRI) and William J. Perry 
Center for Hemispheric Defense Studies, we are supporting the increased 
professionalization of regional defense organizations. These programs 
help build accountable, transparent armed forces that can ensure the 
sustainability of U.S. security cooperation investments, increase 
citizen safety, and uphold universal values such as good governance, 
rule of law, and respect for human rights. We are also supporting the 
development of a competent and professional Non-Commissioned Officer 
(NCO) corps through close interaction during engagements, exercises, 
and at defense institutes like the Western Hemisphere Institute for 
Security Cooperation (WHINSEC) and Inter-American Air Force Academy 
(IAAFA).

 
 
 
         Spotlight: Building Cyber Defense Capacity
      -------------------------------------------------------------
         We are building cyber security and cyber defense
        capabilities with seven regional partners and working with
        Brazil, Peru, Colombia, and Chile as they establish
        dedicated cyber defense commands or capabilities.
 

    As the only Combatant Command with a dedicated human rights office, 
we continue to make progress engaging our partners on this foundational 
issue. Last year, Paraguay became the 11th partner nation to commit to 
implementation of the U.S. Southern Command-sponsored Human Rights 
Initiative (HRI) within its military forces. We also supported civil-
military dialogues in Honduras and Guatemala and held the first-ever 
HRI event in Haiti. Partner nations acknowledge their responsibility to 
respect and protect human rights, but generally lack the resources to 
build strong programs. Requests for HRI assistance far exceed our 
ability to support--which is why we encourage regional militaries to 
share their expertise with one another. During last year's Tradewinds 
exercise, Caribbean security officials led multiple training tracks on 
human rights issues, advancing our goal of increased human rights 
integration in multinational exercises.
    Like HRI, our humanitarian assistance and humanitarian and civic 
assistance programs also yield significant `return on engagement.' 
These programs help improve our partners' abilities to provide 
essential services to their citizens, reduce human suffering, and 
support economic development. But they do more than that-- they remind 
the world that our military's greatest strength is more than our proven 
ability to project power around the globe, it is the generosity and 
compassion of our people. There is perhaps no better symbol of that 
generosity than deployments by our world class hospital ship USNS 
Comfort. As part of Continuing Promise 2015, medical and support staff 
from across the U.S. military and the region worked alongside nearly 
400 volunteers to treat 122,268 patients and conduct 1,255 surgeries. 
In an historic event during the Comfort port call in Haiti, U.S. and 
Cuban medics worked side by side to treat Haiti's poor and exchange 
best medical practices. Continuing Promise is without a doubt one of 
the U.S. military's most impactful missions, but future Comfort 
deployments are in jeopardy due to the U.S. Navy's budget constraints.

 
 
 
          Spotlight: Partnership with NGOs Aboard the Comfort
       -----------------------------------------------------------
          More than 400 volunteers from NGOs and academic
         institutions worked alongside U.S. military members,
         serving as doctors, nurses, and surgeons. USNS Comfort
         also hosted the NGO Operation SMILE, which provided 279
         life-changing surgeries to patients in the region.
 

    Additionally, our annual Beyond the Horizon and New Horizons 
humanitarian exercises help advance security, prosperity, and good 
governance in equal measure, while also building the capacity of 
partner nations to respond to disasters without request for U.S. 
assistance. As part of these exercises, United States Air Force and 
Army medical teams conducted readiness training that treated over 
30,000 patients in El Salvador, Panama, and Honduras. In partnership 
with regional militaries and civilian agencies, we constructed disaster 
relief warehouses, emergency operation centers, schools, clinics, and 
hospitals in remote or under-serviced areas. These exercises were 
supported by private sector and NGO partners, who provided nearly $4 
million in donations of gifts-in-kind and services for the citizens of 
Latin America. In these and other activities, we work closely with 
other U.S. agencies--including the Department of State and USAID--to 
support their efforts in promoting resilient democratic societies 
through sustainable, long-term development.
    I would also like to highlight one of our most successful capacity-
building efforts: the Global Peace Operations Initiative (GPOI). In 
partnership with the State Department, GPOI allowed us to train and 
equip more than 3,500 peacekeepers (male and female) from six partner 
nations. These partners are currently deployed to four United Nations 
(UN) peacekeeping missions in Africa and Haiti. The relatively small 
investment--$7.6 million in fiscal year 2015--not only supported 
training and equipping of peacekeepers, but also enabled El Salvador to 
deploy an attack helicopter unit to the U.N. Mission in Mali; allowed 
Peru to deploy a heavy engineer company to the U.N. mission in the 
Central African Republic; assisted Chile's efforts to create a regional 
gender integration training capability; and helped Uruguay sustain 
critical enabling helicopter and riverine capabilities supporting the 
U.N. mission in the Democratic Republic of Congo. All of these efforts 
help maintain stability in war-torn states and troubled regions, 
protect civilians, and deliver critical humanitarian aid. Given the 
multiple benefits of GPOI, I fully support continuing and expanding 
this important program throughout the region.
    The State Partnership Program and our multinational exercises 
continue to build a strong Inter-American system of persistent defense 
cooperation. A force multiplier to our efforts, National Guard units 
from 19 states conducted 215 activities that developed core 
competencies in regional military forces, promoted the concept of 
citizen-soldiers as public servants, and reinforced our bilateral 
relationships with 28 countries. In the Caribbean, we conducted a 
highly successful iteration of our annual Tradewinds exercise, which 
brought together more than 750 participants from 17 different nations 
to work together on real-life training scenarios related to disaster 
response and CTOC operations.
    As part of Southern Seas 2015, UNITAS--the United States Navy's 
longest-running annual maritime exercise--brought together North 
American, South American, Pacific, and African maritime forces from 
eight countries to improve interoperability and build working 
relationships at sea. Last year we had the largest U.S. Force 
participating in the exercise's history, courtesy of the creative 
employment of the USS George Washington and associated air wing during 
her transit through the region. While these types of maritime 
engagements offer unparalleled opportunity to engage with our partners 
in areas of maritime law and policy, discussion of issues like 
excessive maritime claims can become derailed by the United States' 
status as a non-party to the United Nations Convention on the Law of 
the Sea. Accession to the Convention gives the United States a seat at 
the table and thus an immeasurably stronger position from which to 
engage our partners on maritime security concerns.
    Finally, contingency planning and preparation--which includes other 
exercises like Panamax, Fused Response, Fuerzas Humanitarias and 
Integrated Advance--prepares our team to respond to regional crises and 
enhances interoperability with our interagency and regional partners. 
These efforts not only improve our planning, training, and readiness, 
they build invaluable relationships across agencies, departments, and 
governments. For example, in the event of a natural disaster in Central 
America, our Joint Task Force Bravo--located at Soto Cano Airbase in 
Honduras--will be at the forefront of our response efforts. Essentially 
a small aviation regiment with 18 helicopters, JTF-Bravo is our only 
permanently deployed contingency force in the region. The outstanding 
men and women of JTF-Bravo regularly conduct life-saving search and 
rescue missions and provide humanitarian assistance and logistical 
support to Honduran and regional counterdrug operations.
    We train for a variety of contingencies, one of which is a mass 
migration event. We work closely with our interagency partners in the 
State Department, the Department of Homeland Security, and other 
regional partners to monitor increased migrant flows. Last year, we 
conducted a mission rehearsal exercise at United States Naval Station 
Guantanamo Bay to test our ability to support a response to a 
humanitarian crisis in the Caribbean. As the only permanent Department 
of Defense base in Latin America, the United States Naval Station 
provides persistent U.S. presence and immediate access to the entire 
region. It serves as a forward operating base for DHS-led migrant 
operations and a distribution and staging area for foreign humanitarian 
assistance and disaster relief operations. If directed to execute 
today, resource and capacity challenges at the Naval Station would 
significantly impact our support to the Department of Homeland Security 
and the Department of State operational and contingency plans. These 
challenges call into question our ability to provide safe care, 
custody, and transportation of interdicted migrants, which is 
especially concerning given recent increases in migrant flows.
                      critical needs and concerns
    U.S. Southern Command is committed to honoring the trust American 
taxpayers place in us, and we strive to make every defense dollar 
count. Through better business practices, we are working to mitigate 
funding reductions and gain efficiencies throughout our headquarters. 
Our most significant challenge is under-sourcing of assets, an issue 
that will be compounded should sequestration return. For every 
additional capacity-building activity we conduct, we can further 
strengthen the security network that keeps our partners stable and our 
Homeland secure. For every additional ship and air asset we are able to 
dedicate to the detection and monitoring mission, we can disrupt 
approximately 20 more metric tons of cocaine. For every additional ISR 
resource we are provided, we can better illuminate threat networks in 
the region. Yet even with the limited resources we have, we punch well 
above our weight class. We are in fact, a world-class welterweight: we 
are fast and agile; we are well trained; and we have the strength and 
stamina for the long run--qualities that are essential for success 
against the threats and challenges in our area of responsibility.
    To help mitigate shortfalls in the detection and monitoring 
mission, we employ creative and non-traditional approaches like 
adapting anti-IED technology for use in counterdrug operations in dense 
jungle and mountainous terrain. Looking ahead, we will continue to 
explore alternatives to traditional sourcing solutions, including 
driving innovation and experimentation into training and exercises. 
With a multitude of willing and welcoming partners in Latin America and 
the Caribbean, we have a unique experimentation training environment, 
perfect for expanding war gaming; testing new operational concepts, 
tactics, technologies and procedures; and exploring new ways to combine 
capabilities and improve interoperability. Additionally, we will 
continue to pursue opportunities to use innovative ISR platforms. I 
especially want to thank the Congress for the additional funding, which 
is helping increase our domain awareness and enhance ongoing CTOC 
operations.
    While JIATF-South--through excellent interagency and partner nation 
coordination--has developed impressive air and maritime awareness of 
drug movements, when the networks hit terra firma we go dark. To 
address these blind spots, we are exploring how we might partner even 
more closely with the interagency and partner nations to improve 
synchronization and fully illuminate threat networks. We will work with 
our Central American partners, the Department of State, the 
intelligence and law enforcement communities, and U.S. Country Teams 
every step of the way as we improve our collective effort to degrade 
and disrupt the corrosive operations of criminal networks.
    Finally, I thank the Congress for your continued support to U.S. 
Southern Command's talented men and women and their families. 
Unfortunately, our servicemembers, especially our junior enlisted 
personnel, face a significant quality-of-life challenge: the lack of 
affordable housing. In almost all respects, Miami is the perfect city 
for our headquarters. I say `almost' because the cost of living is one 
of the highest in the nation. Many of our assigned personnel cannot 
afford to live near the command, and government housing acquired 
through domestic leasing is expensive and extremely competitive. We are 
currently working with the Department of Army to develop our formal 
housing requirement, and we will work closely with the Congress as we 
move forward to improve the quality of life of our men and women in 
uniform.
                               conclusion
    In closing, I am sure members of this Committee will agree: nowhere 
is our own security more inextricably intertwined to that of our 
neighbors, partners, and friends than in Latin America and the 
Caribbean. In an increasingly chaotic and insecure world, this region 
can and should serve as a beacon of hope, peace, prosperity, and 
partnership. This is both the promise and the potential of our shared 
home. It is a goal shared by our partners and one that we can achieve--
but only by remaining engaged and only by working together. Day in and 
day out, the outstanding team at U.S. Southern Command is doing exactly 
that: we are building partnerships that protect our interests, defend 
our Homeland, uphold the global common good, and advance security, good 
governance, and opportunity. Once again, thank you for your persistent, 
sustained support for your U.S. Southern Command, and I look forward to 
our discussion.
       Annex: 2015 Joint Task Force and Component Accomplishments
     joint interagency task force south (jiatf-s) key west, florida
      Joint Interagency Task Force South contributed to the 
disruption of 192 metric tons of cocaine in fiscal year 2015, worth 
nearly $3.9 billion wholesale. This represents 76 percent of all 
documented U.S. cocaine removals that were likely directed towards the 
U.S. market. JIATF-S employs an integrated defense forward capability 
for the ongoing efforts at the U.S. Southwest Border and for U.S. 
operations in the Western Hemisphere using tactical control (TACON) 
ship days, TACON flight hours, and by monitoring illicit air activity 
using Forces Surveillance Support Center relocatable over-the-horizon 
radar.
      Operation MARTILLO: The vast majority of JIATF-South 
successes came as a result of JIATF-South leadership and coordination 
of Operation (OP) MARTILLO, the multi-lateral effects-based operation 
designed to deny the Central American littoral routes to illicit 
traffickers. Begun on January 15, 2012, OP MARTILLO results to date 
include the disruption of 595 metric tons of cocaine, the seizure of 
$25.8 million in bulk cash, and the seizure of 1486 detainees and 478 
vessels and aircraft. OP MARTILLO has had the desired effect of 
increasing partner nation participation in U.S. efforts to disrupt 
illicit trafficking and counter transnational organized crime.
      Operational Results and Impact: In the air domain, over 
the past year, JIATF-South documented a 53 percent decrease in illicit 
air tra20.cks destined for Central America (primarily Honduras). 
Decisions made by some of our partner nations to establish lethal air 
interdiction policies have impeded JIATF-South's efforts to share 
illicit air track information with those partner nations. Ultimately, 
air trafficking continues to be a declining percentage (3 percent) of 
overall cocaine flows. In the maritime domain, during the same period, 
JIATF-South documented a 20 percent increase in the overall volume of 
cocaine departing the source zone in South America. Eastern Pacific 
flow currently accounts for more than 68 percent of documented cocaine 
movement. It is assessed the increase in Eastern Pacific cocaine 
movement is at least partially caused by trafficker adaptation to 
focused law enforcement pressure in the Western Caribbean. JIATF-South 
is currently developing strategies to better apply requisite pressure 
against each threat vector, so as to curtail transit options available 
to traffickers. The increase in documented flow is partially due to 
increased law enforcement reporting and contributions from partner 
nations to augment collective situational awareness. JIATF-South 
identified several transatlantic maritime cases in fiscal year 2015 and 
established a liaison officer at the Maritime Analysis Operations 
Center-Narcotics in Lisbon, Portugal to facilitate the targeting of 
these cases by European law enforcement agencies. JIATF-South Counter 
Threat Finance team targeted $30.5 million in bulk cash and closely 
worked with DEA Lima, Peru on several investigations. JIATF-South 
Container Cell supported investigations resulting in 7 MTs of cocaine 
seized in commercial shipping containers and continues to develop 
relationships to increase situational awareness of global movements of 
cocaine via commercial shipping.
      Supporting Defense of the Homeland. The establishment of 
three Department of Homeland Security Joint Task Forces, JTF-East, JTF-
West, and JTF-Investigations in 2015 has the potential to greatly 
enhance the interagency effort to defend the southern approaches. 
JIATF-South has been integrally involved with and fully supports the 
development of these organizations so that efforts to counter illicit 
trafficking will be synchronized to produce the greatest combined 
effect. Since its inception in September 2012, OP Unified Resolve, the 
counter illicit trafficking operation supporting Puerto Rico, has 
substantially improved and formalized interoperability between JIATF-
South, Coast Guard District 7, Coast Guard Sector San Juan, and the 
Customs and Border Protection (CBP) Office of Air and Marine Caribbean 
Air and Marine Branch in our shared Counter Illicit Trafficking 
operations. Under the new DHS JTF construct OP Unified Resolve will be 
coordinated by Joint Task Force-East.
      Role of Partner Nations: In fiscal year 2015, 50 percent 
of JIATF-South disruptions were marked by partner nation participation. 
The role of our Latin American partners should not be understated. Of 
the 250 illicit trafficking events disrupted by JIATF-South in fiscal 
year 2015, 88 of these (35 percent) would not have been successful 
without the support of our international partners. Many Central 
American partners have greatly increased their ability to respond to 
illicit trafficking cases cued by JIATF-South including Guatemala, 
Panama, and Costa Rica who collectively responded to twice the number 
of events in fiscal year 2015 compared to fiscal year 2014. The success 
of JIATF-South continues to draw support as several additional nations 
have expressed interest in joining the international effort to counter 
illicit trafficking. The contributions of ships and aircraft to the 
Transit Zone effort by the U.K., France, the Netherlands, and Canada 
continue to be significant and needed.
      Innovation and Transition to Counter Network Operations: 
Recognizing the holistic nature of the threats and challenges to the 
U.S. from TCOs in the Western Hemisphere, JIATF-South's planning 
process is orienting the command and its focus towards countering the 
organizations responsible for undermining the stability and security of 
the region. With their authorities firmly planted in the detection and 
monitoring (D&M) of illicit trafficking, JIATF-South will employ 
several initiatives to focus their core mission set on illuminating 
illicit networks for disruption. Network focused D&M will rely on 
Tactical Development Analysis, Threat Finance Information, and 
Container Cell intelligence to develop awareness and increase 
effectiveness in a fiscally austere environment. Additionally, JIATF-
South is leveraging interagency partnerships to develop the ability to 
detect and monitor illicit trafficking activity, using the cyber 
domain.
                 joint task force guantanamo (jtf-gtmo)
                          guantanamo bay, cuba
      Safe and Humane Custody and Control: JTF-GTMO conducted 
safe, humane, legal, and transparent custody and control of detainees, 
including those convicted by military commission. High Value Detainees 
(HVDs) and non-HVDs maintained family contact via mail, telephone calls 
and, in areas which support this service, videophone conferences 
coordinated by the International Committee of the Red Cross (ICRC). 
High quality care, to include routine and urgent medical care, was 
provided to detainees on a 24-hour basis. General surgical care, dental 
care, preventative medicine, optometry and mental health services were 
provided, or arranged, as was targeted specialty care on a recurring 
basis.
      Legal and Transparent Operations: Assessments of 
detention conditions by the ICRC continued with four visits in 2015. 
All detainees were provided the opportunity to meet with ICRC delegates 
and medical personnel during these visits. Additionally, detainees are 
granted access to legal representation. For non-High Value Detainees, 
during fiscal year 2015 JTF-GTMO scheduled 385 habeas meetings (259 
were completed) and 222 commissions meetings (141 completed). With 
respect to High Value Detainees, JTF-GTMO scheduled 43 habeas meetings 
(29 completed) and 1,781 commissions meetings (894 completed). 
Committed to transparency, JTF-GTMO hosted 75 media representatives 
from 40 domestic and international news organizations and answered 
hundreds of media queries during the past year. Similarly, JTF-GTMO 
also hosted 166 Distinguished Visitor visits totaling more than 1100 
personnel, including seven Congressional Delegations, Service Chiefs 
and senior DOD, DHS, DOJ and DOS policy makers.
      Military Commissions: Support for the Military 
Commissions process is a priority of JTF-GTMO. These proceedings are 
open to observation by the media, victim family members, non-
governmental organizations and other visitors. In fiscal year 2015, 
JTF-GTMO supported 3 days of hearings which addressed pre-trial motions 
in the case of United States v. Mohammad, et al., the five individuals 
accused of coordinating the September 11, 2001 attacks on the United 
States (referred to in the press as ``the 9/11 Five'') and 4 days of 
hearings to address pre-trial motions in the case of United States v. 
Al Nashiri, the alleged USS Cole bomber. Additionally, the Court 
arraigned and conducted 7 days of hearings to address pre-trial motions 
in the case of United States v. al Iraqi, an alleged al Qaeda commander 
charged with law of war offenses.
        In the ``9/11 Five'' military commission, the judge's 7 
January 2015 interim order bars female guards from touching (absent 
exigent circumstances) the 9/11 Five detainee-accused during movements 
to and from attorney-client meetings and commission hearings. This 
order remains in effect until the judge hears evidence and argument and 
makes a final ruling. The cancellation of several commissions sessions 
in 2015 prevented the resolution of this issue. The practical effect of 
the judge's order is that it prohibits female guards from participating 
in commissions-related movements of the 9/11 Five detainee-accused. 
Male guards therefore complete extra duties that female guards may not 
perform. The judge's order resulted in fifteen (15) Equal Opportunity 
(EO) complaints because a portion of the guard force cannot perform 
their assigned duties based on gender. The EO complaints are 
unresolved.
      Infrastructure: Sustainment costs continue to rise due to 
the many facilities at JTF-GTMO that are past their designated 
lifecycle. Sustainment, Restoration and Modernization (SRM) costs have 
steadily increased the last four years ($19M, $20M, $21M, $24M). Eight 
military construction (MILCON) projects, valued at $231M, were planned 
for fiscal year 2015-18 to address infrastructure concerns. Six of 
those projects, valued at $207M, or 90 percent of the total Military 
Construction (MILCON) budget were cancelled in January 2015.
      Detainee Movement Operations: JTF-GTMO conducted 12 
Detainee Movement Operations during fiscal year 2015 which transferred 
35 detainees to 10 different countries.
                     joint task force-bravo (jtf-b)
                      soto cano air base, honduras
      Joint Task Force-Bravo is a forward-based expeditionary 
joint task force operating as U.S. Southern Command's lead forward 
element in the Central American (CENTAM) region. The Joint Task Force 
integrates and synchronizes efforts, provides assets and capabilities 
to enable others to operate, and executes operations in support of the 
CCDR's priorities of Countering Transnational Organized Crime (CTOC), 
Humanitarian Assistance / Disaster Relief, Building Partner Nation 
Security Capacity, and Contingency planning/support to promote regional 
cooperation and enhance security throughout Central America. JTF-Bravo 
performs the following missions:
      Facilitates integration of Partner Nation and U.S. 
Government agencies to develop a common understanding of Transnational 
Criminal Organizations (TCO) and enables operations to counter 
identified TCO networks.
      Conducts combined operations with military and law 
enforcement elements from the U.S. and Partner Nations to disrupt and 
deter organized crime networks in Central America.
      Consistently refines and evolves a common understanding 
of the environment and its efforts to enable partners to counter 
threats to both the CENTAM region and the American Homeland
      Provides a running estimate of the environment to both 
synchronize and integrate operations to achieve the right, overall 
effects against Criminal Transnational Organizations / Illicit 
Facilitation Networks.
      Supports efforts dedicated to Building Partner Capacity 
by providing subject matter expertise and capabilities throughout 
CENTAM in areas ranging from medical support to the local population 
and fire-fighting capabilities, to logistical support to partner nation 
militaries.
      Serves as U.S. Southern Command's first responder for 
natural disasters and humanitarian events within CENTAM.
      Is prepared to provide SOUTHCOM a no-notice command and 
control node throughout CENTAM in a natural disaster scenario.
      Manages the only all-weather day/night C-5 Galaxy-capable 
airfield in CENTAM, supporting ongoing operations and maintaining 
readiness to facilitate humanitarian assistance and disaster relief 
throughout CENTAM.
      JTF-B's operations enable DOD, DOS, IA, and PN efforts 
throughout CENTAM. Over the past year, JTF-B provided air movement 
support to the Honduran military for twelve iterations of Operation 
CARAVANA during 2015 (moving 3,525 pax and 135,500 pounds of 
equipment), allowing them to position forces into isolated regions of 
eastern Honduras and posturing them to effectively deter Illicit 
Facilitation Networks. JTF-B also conducted 25 medical missions during 
2015. These missions provided vital care to underserviced communities 
within Central America, increasing the local population's faith in 
government, providing HN medical training, and fostering goodwill 
across the region. In addition, JTF-B also assisted the Government of 
Belize in drug eradication efforts and supported U.S. Law Enforcement 
and military units in training the Belizean Defense Forces--providing 
time and space as the Belize forces continue to develop capacity.
      Finally, JTF-B conducted or directly supported a number 
of vital Contingency Operations, such as a high visibility mission to 
repatriate Central American citizens back to their home counties, 
supported 15 MEDEVAC missions in 2015--including a Honduran soldier 
seriously injured in a drug interdiction off the shore of Gracias a 
Dios, Honduras, a Search and Rescue mission of a missing American off 
the coast of Roatan, Honduras, as well as in the search effort for 
survivors of a capsized ferry off the coast of Nicaragua. JTF-B's 
continuing activities demonstrate U.S. commitment to CENTAM, posturing 
our Nation as the partner of choice and a force that will serve the 
people of Central America for years to come.
                       u.s. army south (arsouth)
                  headquarters: ft sam houston, texas
      Security Cooperation: ARSOUTH conducted 164 security 
cooperation events with 23 countries in U.S. Southern Command's area of 
responsibility. These events represent both engagements and building 
Partner Nation capabilities with other militaries in the region.
      Countering Transnational Organized Crime (CTOC): ARSOUTH, 
with the support of the Texas Army National Guard, 72nd IBCT, conducted 
CTOC tactical training in Guatemala and Honduras. They also conducted 
information training in Guatemala, Honduras and El Salvador. The four 
Mission Essential tasks trained were: Border Control Operations, 
Command Post Activities, Information Support to Operations, and 
Sustainment Operations. These training efforts contributed to the 
capacity-building efforts of our Partner Nations, enabling selected 
elements of their security forces to better focus on basic border 
control and security operations. U.S. Army South has supported 60 
operations in the SOUTHCOM AOR, contributing to the arrest of 71 
individuals including 14 HVT's, and seizure of 12.5 metrics tons of 
cocaine and $12.3 million. These operations have contributed to the 
disruption of TCO networks especially in Honduras and Guatemala.
      Information Security Cooperation: In addition to the CTOC 
training effort, ARSOUTH conducted Information engagements as a part of 
the Distinguished Visitor Program, Bilateral Staff Talks, and all 
regional Professional Development Exchanges, enabling military 
information capacity building in support of Guatemala, Honduras, El 
Salvador, Colombia, Chile and Peru.
      Counter Terrorism: ARSOUTH conducted 10 Subject Matter 
Expert Exchanges in six countries that included over 750 host nation 
soldiers. The engagements included: Medical, Search and Rescue, 
Logistics, Maintenance and Communications.
      Civil-Military Relations: ARSOUTH conducted Civil-
Military Relations Professional Development Exchanges in Brazil, 
Colombia, Chile, Dominican Republic, Nicaragua, Panama, Peru, 
Guatemala, Honduras and El Salvador, improving the ability of these 
countries to conduct inter-organizational coordination during 
humanitarian assistance / disaster relief operations and in countering 
transnational criminal organizations. These exchanges demonstrate the 
synergy and value of interagency collaboration and provide an effective 
forum for executive-level information-sharing, both bilaterally and 
regionally.
      Humanitarian Assistance Program (HAP): HAP focuses on 
activities which help build partner nation capacity to provide 
essential services to their populace, with particular emphasis on 
response to disasters and other crises, reinforcing citizen security, 
and sustaining stability in a particular country or throughout the 
region. ARSOUTH, as USSOUTHCOM's Executive Agent for the construction 
facet of HAP, completed 21 projects in 2015, and also initiated the 
planning for 22 future construction projects across the AOR.
      Global Peace Operations Initiative (GPOI): GPOI is a 
security assistance program to enhance international capacity to 
conduct United Nations and regional peace support operations. ARSOUTH, 
as USSOUTHCOM's GPOI construction executive agent, executed 14 projects 
in Central and South America and initiated the planning for three 
future projects (El Salvador and Uruguay).
      Conference of the American Armies (CAA): The CAA (20 
member Armies, 5 observer Armies and two International Military 
Organizations) strengthens relationships and improves interoperability 
in peacekeeping and disaster relief operations through the creation and 
implementation of practical initiatives approved by the Army 
commanders. Army South organized and led delegations representing the 
U.S. Army Chief of Staff at conferences on IEDs, Disaster Response, 
Interagency Operations and CAA Procedures in Colombia, Mexico, Brazil 
and Chile.
      Exercise Beyond the Horizon (BTH): Humanitarian and Civic 
Assistance Field Training Exercises were conducted in El Salvador and 
Panama. BTH El Salvador yielded six engineer projects and three general 
Medical Readiness Training Exercises (MEDRETEs), treating a total of 
24,627 patients. In the El Salvador effort, over 1,760 U.S troops 
participated, and the host nation provided 163 security, engineering 
and medical personnel. BTH Panama included an Ophthalmology specialty 
MEDRETE which removed 250 cataracts from pre-screened patients, while a 
general MEDRETE treated 4,760 local patients. Forty eight U.S. troops 
participated in these efforts, while the Panamanian Ministry of Health 
and the Panamanian National Police provided over 60 personnel for this 
bilateral collaborative initiative.
      Exercise Fuerzas Aliadas--Humanitarias (FA-HUM): This 
year's Humanitarian Assistance/Disaster Relief Table Top Exercise (TTX) 
was hosted by Honduras, to build Partner Nation capacity to respond to 
a major disaster and strengthen military/security force collaboration 
and cooperation in the region. The TTX exercised the coordination, 
response and integration of Honduras' SINAGER (National Risk Management 
System) members and other International Cooperation members. It greatly 
improved their ability to respond to an adverse event, activating 
SINAGER and national, regional, and international emergency protocols.
      Exercise PANAMAX 2015: This year's Joint/Combined 
operational exercise focused on the defense of the Panama Canal and 
designated ARSOUTH as HQ, Multi-National Forces-South. The Crisis 
Action Planning Phase had 127 participants--82 U.S. and 45 Partner 
Nation personnel from 9 countries. ARSOUTH also hosted the CFLCC with 
Colombia as the lead country which included 62 personnel from 15 
Partner Nations and 29 U.S. personnel. In addition, ARSOUTH 
participated in a bilateral exercise with the Government of Panama 
(PANAMAX-Alpha) where 20 United States personnel worked with the 
Panamanians coordinating United States forces assistance during 
simulated security operations.
      Exercise Integrated Advance 2015: For 2015 Integrated 
Advance is a Command Post (CPX) and Field Training Exercise (FTX) 
focused in the Caribbean and designed to conduct combined security, 
peacekeeping and selected maritime operations. This Joint operational 
exercise focused on the interagency planning required for a United 
States response to a Caribbean Mass Migration. ARSOUTH formed the core 
of the JTF-MIGOPS with 127 personnel (including 52 from other military 
services and government agencies).
              u.s. naval forces southern command (usnavso)
                     headquarters: mayport, florida
      U.S. Naval Forces Southern Command/U.S. FOURTH Fleet 
(USNAVSO/FOURTHFLT) employs maritime forces in cooperative maritime 
security operations in order to maintain access, enhance 
interoperability, and build enduring partnerships that foster regional 
security in the USSOUTHCOM Area of Responsibility (AOR).
      Continuing Promise 2015 (CP 15): U.S. Navy Hospital Ship 
USNS Comfort completed her longest and most successful CP in history, 
conducting mission stops in 11 partner nations (Belize, Guatemala, 
Jamaica, Nicaragua, Panama, El Salvador, Colombia, Dominica, the 
Dominican Republic, Honduras, and Haiti) from April through September 
2015. The CP-15 medical team treated 122,268 patients, including 1,255 
surgeries conducted aboard the Comfort, along with 279 surgeries 
conducted by the non-government organization ``Operation Smile'' aboard 
the Comfort. The CP-15 also featured 1,285 subject matter expert 
exchanges, 94 engineering projects, and 85 community relations events. 
Almost 400 members of non-government organizations deployed as part of 
the CP team, which included approximately $5.24 million dollars in 
donations to the 11 partner nations. CP-15 sent a strong message of 
U.S. commitment and partnership with the people of the Caribbean, 
Central and South America, and directly impacted more people in our 
partner nations than any other U.S. Navy mission.
      Southern Seas 2015 (SS 15): Task Force 49 (TF 49), led by 
Commander Carrier Strike Group Nine, deployed to the USSOUTHCOM AOR, 
sailing around South America from the end of September through mid-
December 2015. TF-49 participated in both UNITAS Pacific, hosted by 
Chile, and UNITAS Atlantic, hosted by Brazil. This was the largest and 
most capable U.S. Force to participate in UNITAS in the more than 50-
year history of the multi-national maritime exercise. UNITAS is the 
longest-running naval exercise in the world. USS George Washington also 
conducted multi-day bilateral exercises with the Japan Self-Defense 
Force, the Peruvian Navy, the Chilean Air Force, and the Brazilian Navy 
as well as receiving distinguished visitors from Panama, Colombia, 
Uruguay, Argentina, and Paraguay.
      Southern Partnership Station (SPS): SPS is a series of 
Navy/Marine Corps engagements focused on Theater Security Cooperation 
(TSC), specifically Building Partner Capacity (BPC), through Subject 
Matter Expert Exchanges (SMEEs) with partner nation militaries and 
civilian security forces. SPS engagements include Community Relations 
projects that focus on our partnerships, shared interests, and shared 
values. 2015 SPS Deployments:
        SPS Joint High Speed Vessel 2015 (SPS JHSV 15): USNS 
Spearhead built partner capacity while conducting TSC engagements 
through the use of Adaptive Force Packages (AFPs) ashore in Belize, 
Guatemala, Colombia, and Honduras. The sailors, marines, soldiers, 
airmen, NCIS agents, and civilian mariners making up the Spearhead Team 
built upon the firm foundation of the JHSV 14 deployment, and the 
persistent annual presence of Spearhead and the AFPs in the USSOUTHCOM 
AOR are reaping rewards of partnership and interoperability.
        SPS Oceanographic 2015 (SPS OCEANO 15): With the 
support of the Naval Oceanographic Office, survey ship USNS Pathfinder 
conducted hydrographic surveys in the Western Caribbean, shore-based 
Fleet Survey Teams conducted hydrographic surveys in coastal waters of 
Peru, Honduras, and Jamaica, and a Light Detection and Ranging aircraft 
and crew conducted hydrographic surveys in the coastal waters of 
Honduras. All SPS OCEANO surveys are conducted with the assistance of 
partner nation personnel and equipment, and support USSOUTHCOM's 
Oceanographic, Hydrographic, and Bathymetric Program and the Chief of 
Naval Operations Global Maritime Partnership Initiative. All 
hydrographic survey and environmental assessment data is shared to 
enable safe and effective maritime navigation and access to the 
littoral for naval and joint forces.
      Operation MARTILLO: Two frigates, one destroyer, one 
coastal patrol ship, JHSV SPEARHEAD, four fixed-wing maritime patrol 
aircraft squadrons, and one scientific development squadron detachment 
deployed to support Operation MARTILLO, conducting D&M Operations under 
the tactical control of Joint Interagency Task Force South, targeting 
illicit trafficking routes in the waters off Central America.
      USS Columbus: The Los Angeles-class fast attack submarine 
deployed to the USSOUTHCOM AOR. Columbus visited United States Naval 
Station Guantanamo Bay, Cuba, and made two Panama Canal transits.
      PANAMAX 2015: Chile served as Combined Forces Maritime 
Component Commander (CFMCC) for the annual PANAMAX Exercise, which 
exercises defense of the approaches to the Panama Canal. Chile led a 
multinational staff of more than 50 military and civilian personnel 
from 16 Partner Nations (including the U.S.), all based at USNAVSO/
FOURTHFLT Headquarters in Mayport. In this year's PANAMAX, the CFMCC 
staff worked through the Navy Planning Process to produce a Concept of 
Operations (CONOP) with notional forces, for presentation to the 
Combined Joint Task Force led by U.S. Army South. Now in its 13th year, 
PANAMAX focuses on ensuring the defense of the Panama Canal, increasing 
multinational force interoperability while supporting the training 
requirements of all participating nations' civil and military services.
                  12th air force (air forces southern)
            headquarters: davis-monthan afb, tucson, arizona
      Security Cooperation: Twelfth Air Force (Air Forces 
Southern) (hereafter AFSOUTH) led 50 security cooperation events in 11 
USSOUTHCOM partner nations. Engagements focused on countering 
transnational organized crime, communications, aircraft operations and 
maintenance, ISR, space, cyberspace security, safety, command and 
control, space capabilities, aerospace medicine, air evacuation, 
expeditionary medicine, information sharing, mobility, Future 
Engagement Talks, logistics, aircrew search and rescue, and 
humanitarian assistance and disaster relief. The 571st Mobility Support 
Advisory Squadron completed 19 air advisor events in Belize, Brazil, 
Colombia, Curacao, El Salvador, Guatemala, Honduras, Jamaica, Panama, 
and Peru, training 417 partner nation military members.
      Legal: The AFSOUTH Staff Judge Advocate promoted Law of 
Armed Conflict adherence and Human Rights Law in 9 legal engagement 
activities with Brazil, Chile, Colombia, Guatemala, Honduras, and 
Trinidad & Tobago.
      Airlift Missions: AFSOUTH executed 85 theater airlift 
missions, moving more than 4,267 passengers and 406 tons of cargo 
throughout USSOUTHCOM's area of responsibility.
      System of Cooperation among the American Air Forces 
(SICOFAA): SICOFAA strengthens relationships and improves 
interoperability in peacekeeping and disaster relief operations through 
the creation and implementation of practical initiatives approved by 
the commanders of the 20 SICOFAA member Air Forces and the 5 observer 
Air Forces. USAF Chief of Staff and the 12 AF (AFSOUTH) Commander 
participated in the annual American Air Chiefs Summit (CONJEFAMER) in 
Mexico City in June 2015. Delegates from USAF and AFSOUTH participated 
in five SICOFAA committee meetings and the CONJEFAMER planning 
conference.
      Medical Support: AFSOUTH provided medical planning and 
oversight of detainee movement operations and forward operating 
location missions; delivered operational health expertise and steady-
state planning for contingency and real world operations across 
USSOUTHCOM AOR; supplied counterdrug operations medical guidance and 
planning support; and coordinated USAF medical engagements for New 
Horizons and Beyond the Horizon exercises. Surgeon General provided 
Crisis Action Team support for PANAMAX and Integrated Advance. AFSOUTH 
International Health Specialists conducted 15 Theater Security 
Cooperation global health engagements with partner nations addressing 
flight medicine, air evacuation, force health protection, and 
expeditionary medicine advancing regional collaboration across the 
aerospace medicine enterprise.
      New Horizons 2015 (Honduras): AFSOUTH trained 120 U.S. 
Military personnel in this joint exercise. Engineering personnel 
constructed one new 1400 square foot school and drilled two water wells 
supporting 3,000 Honduran citizens. During the exercise, deployed 
medical personnel not only provided care for U.S. members, but also 
volunteered their medical capabilities to the local hospital emergency 
room by treating 678 Honduran civilians and providing over 100 surgery 
consults. Additionally, deployed communications support personnel wired 
the local hospital offices for internet capability. International 
Health Specialists conducted a 12 day infectious disease assessment for 
the local Ministry of Health and provided a final report with 
recommendations to improve local health conditions.
      ISR: AFSOUTH provided command and control for ISR 
missions in support of USSOUTHCOM priorities. AFSOUTH executed 939 ISR 
missions and 5,423 flight hours, resulting in over 4,544 images and 
nearly 9,235 minutes of video. This information assisted in numerous 
drug trafficking seizures in the SOUTHCOM AOR by the United States and 
its partner nations in fiscal year 2015. AFSOUTH continues to assist 
critical partner nations in counter-drug/counter-narcotics trafficking 
efforts and is currently working to enable Air Force operational and 
ISR capability in both Guatemala and Honduras. AFSOUTH assists both 
Colombia and Peru in maintaining the strategic initiative against 
illegally-armed combatants who previously threatened the very existence 
of those nations.
                marine corps forces south (marforsouth)
                      headquarters: doral, florida
      Theater Security Cooperation: In 2015, MARFORSOUTH 
completed more than 120 Security Cooperation events in 21 countries. 
This resulted in over 750 Partner Nation Marine Corps and Defense Force 
personnel trained. While continuing to foster long-term relationships 
based on mutual respect and common values, MARFORSOUTH conducted a 
variety of key leader engagements throughout the USSOUTHCOM area of 
responsibility that reinforced our commitment to partner nation 
leadership. To meet shared security objectives in combatting 
transnational organized crime, MARFORSOUTH delivered tailor-made 
training to our partners by establishing persistent presence security 
cooperation teams in Belize, El Salvador, Guatemala, and Honduras. This 
was training often conducted hand-in-hand with our Colombian Marine 
Corps partners through the United States/Colombia Action Plan.
      SPMAGTF-SC-15: From June to November 2015, U.S. Marine 
Corps Forces, South deployed Special-Purpose Marine, Air, Ground Task 
Force-SOUTHCOM (SPMAGTF-SC) to Central America. Leveraging a force one-
tenth the size of those in CENTCOM and AFRICOM, SPMAGTF-SC temporarily 
deployed to one of the most austere locations in Honduras to provide 
support to partner nation militaries and populations living in extreme 
poverty and at the highest risk for involvement in illicit activities. 
Using SPMAGTF-organic aircraft and engineering support, marines and 
sailors throughout Honduras, El Salvador, Guatemala, and Belize focused 
on building and maintaining partnership capacity through shared values, 
challenges, and responsibility. The Marines built three schools, 
improved a partner nation military airfield, and provided essential 
water services to those in need. This force was instrumental in 
bringing together the national level government of Honduras with remote 
populations mostly segregated by terrain, expanding governance and 
visibility on key issues in the region.
      SPS-JHSV 15--Marine Detachment (MARDET): MARFORSOUTH 
deployed 35 Marines and Sailors to Guatemala and Honduras in support of 
United States Naval Forces Southern Command/United States Fourth 
Fleet's Southern Partnership Station (SPS) initiative. The MARDET 
provided engineer support to the SPS mission and met emergent 
requirements under OPERATION ESCUDO UNIDO. This is the first iteration 
of SPS that included a USMC Deputy Mission Commander, who was an 
integral part of the Navy Expeditionary Combat Command's C2 structure 
for the mission. 32 of the engineers supported airfield construction at 
Mocoron in Gracias a Dios, as well as humanitarian construction 
assistance and water purification projects in the area.
      Tradewinds Phase II (Ground): In June 2015, MARFORSOUTH, 
in partnership with the Belize Defence Force, Canada, and 17 other 
partner nations from the Caribbean Region, executed Exercise Tradewinds 
2015 Phase II (Ground), a combined Field Training Exercise (FTX) in 
Belize, in order to enhance combined Counter Transnational Organized 
Crime (CTOC) operations capability and promote interoperability and 
multinational relationships throughout the theater. There were over 400 
participants in the Belize-hosted, MARFORSOUTH-led ground portion of 
the exercise that accomplished the capacity building exercise through 
five distinct exercise tracks in a Subject Matter Expert Exchange 
(SMEE). The tracks included nine days of interoperability training in 
command and control, jungle tactics, military support to law 
enforcement, instinctive shooting, and riverine skills. Of note, 
Tradewinds 2015 facilitated the positive increase of mil-to-mil 
relationships between Mexico and Belize that resulted in training and 
cooperation that was exclusive of the exercise and enhances the border 
security of both nations.
      MLAC-15: In August 2015 United States Marine Corps 
Forces, South executed the Marine Leaders of the Americas Conference in 
Cartagena, Colombia to increase professional exchanges and strengthen 
relations among naval infantry forces within the Western Hemisphere. 
This sixth iteration was co-hosted by commander, United States Marine 
Corps Forces Command on behalf of the Commandant of the U.S. Marine 
Corps, U.S. Marine Corps Forces, South and the Infanteria de Marina de 
Colombia. This event provided the Commandant of the Marine Corps with 
an opportunity to meet and engage senior Marine Corps and naval 
infantry leaders from 15 partner nations.
      UNITAS Amphibious 2015: From 14-25 November 2015, 
approximately 1,000 representatives from Brazil, Canada, Chile, 
Colombia, Mexico, Paraguay, Peru, and the United States participated in 
UNITAS Amphibious 2015, a combined Field Training Exercise in the 
vicinity of the Ilha do Governador and Ilha da Marambaia, Brazil, in 
order to enhance interoperability in Amphibious Operations, and 
Humanitarian Assistance/Disaster Relief (HA/DR) missions. The U.S.-
sponsored exercise, UA 2015, develops and sustains relationships--which 
improve the capacity of our PN security forces to achieve common 
desired regional goals. This annual exercise fosters friendly 
cooperation and understanding among all participating forces.
      Security Augmentation Force (SAF): The SAF is 
MARFORSOUTH's designated company of marines that reinforces Diplomatic 
Missions in the AOR, as required in support of `New Normal' 
requirements. In close coordination with Department of State, the SAF 
is postured in CONUS should an Ambassador decide that the local guard 
force is unwilling, unable, or insufficient to provide security to his 
mission. While there are currently no high threat posts in the AOR, the 
potential for a natural disaster is possible for some Embassy 
locations. MARFORSOUTH deploys its Marine Liaison Element to visit each 
Embassy, solidifies plans of action with the Country Team, and captures 
relevant information that will enable SAF in rapidly responding to 
crisis.
              special operations command south (socsouth)
                    headquarters: homestead, florida
      Building Partner Capacity: SOCSOUTH elements worked with 
Partner Nation units in Belize, Brazil, Colombia, the Dominican 
Republic, El Salvador, Honduras, Guatemala, Guyana, Panama, and Peru to 
improve their capacity to conduct ground and maritime interdiction, 
broaden and reinforce their civil affairs programs, engage in Military 
Information Support Operations (MISO), and develop their intelligence 
capacities. Through active engagement, SOCSOUTH helped Partner Nations 
develop self-sustaining capabilities to better protect themselves, 
contribute to regional security and stability, and collaborate with 
U.S. and other forces.
        SOCSOUTH used episodic engagements-including 26 Joint 
Combined Exchange Training (JCET) events--with multiple Central 
American, South American, and Caribbean partners to develop United 
States forces' skills and enhance Partner Nation interoperability.
        In Brazil, SOCSOUTH JCETs allowed United States and 
Brazilian counter-terrorism forces to share best practices for 
operating in a range of complex environments and assisted the 
Brazilians' capacity building efforts in preparation for the upcoming 
Olympic Games.
        In Colombia and Peru, SOCSOUTH continued to partner 
with these Andean Ridge nations as they confronted narco-terrorist 
insurgencies and global illicit trafficking networks. Colombia's 
enhanced capacity is a significant supporting element of that nation's 
ongoing peace process.
        In Honduras, SOCSOUTH teams and Colombian counterparts 
continued to help train National Police officers of the TIGRES special 
response unit as part of expanded United States support to Honduran 
authorities as they confront sources of insecurity in urban and remote 
rural areas.
        In Belize, El Salvador, and Guatemala, SOCSOUTH teams 
engaged the Partner Nation in cooperative activities to reinforce their 
Naval Special Forces maritime interdiction capabilities. Guatemalan and 
Salvadoran Naval Special Forces conducted seven major maritime 
interdiction operations in support of Joint Interagency Task Force-
South's (JIATF-S) multinational collaborative efforts against regional 
illicit traffickers.
      Civil Affairs: In 2015, 14 civil affairs teams and civil-
military support elements engaged eight Partner Nations as they worked 
to enhance civil-military relations, reduce the vulnerability of key 
populations impacted by transnational organized crime or violent 
extremism, and improve/extend governance in underserved regions.
      Military Information Support Operations: SOCSOUTH 
maintained military information support teams in six Partner Nations 
supporting Colombia's Demobilization and Counter Recruitment Programs, 
Guatemalan Interagency Task Forces, Panamanian security services' 
outreach programs in the Darien border region, the global DOD Rewards 
Program, and United States Government Anti-Trafficking in Persons 
efforts. These activities supported a broad range of efforts against 
transnational organized criminal and violent extremist organizations.
      Intelligence Analytical Support to U.S. Country Teams: 
SOCSOUTH provided support to U.S. Country Teams efforts focused on 
terrorism, human smuggling network s, and transnational organized 
crime.
        SOCSOUTH helped develop host nation capabilities and 
country team support through a number of subject matter exchanges.
        SOCSOUTH supported multiple U.S. Country Team and 
Homeland Security Investigations (HSI) collaborations with Partner 
Nations, with emphasis on countering Special Interest Aliens involved 
in cross-border criminal activities.
      Building Intellectual Capital: SOCSOUTH, in conjunction 
with the Colombian Joint Staff College, conducted six Counter-Terrorism 
Fellowship Program (CTFP)-funded seminars in Bogota, Colombia during 
2015. Subject-matter expert presenters from the United States, 
Colombia, and other nations collaborated with hundreds of participants 
from 18 Western Hemisphere and NATO countries. Late in the year, 
SOCSOUTH worked with Partner Nation defense and security institutions 
in El Salvador to build a complementary regional CTFP series in that 
country.
      Fuerzas Comando 2015: Fuerzas Comando is a USSOUTHCOM-
sponsored, SOCSOUTH-executed multinational exercise featuring a Special 
Operations skills competition and a Senior Leader Seminar designed to 
promote military-to-military relationships , increased 
interoperability, and improved regional security. Approximately 700 
military, law enforcement, and civilian personnel took part. The 2015 
skills competition was held in Poptun, Guatemala and included 
participation by 18 Partner Nations and the United States. In the city 
of Antigua, distinguished representatives from each nation discussed 
approaches to combating terrorism, organized crime, and illicit 
trafficking at the Senior Leader Seminar.
      Fused Response 2015: SOCSOUTH executes an annual CJCS-
directed exercise to validate time sensitive crisis action planning, as 
well as training, readiness, interoperability and capability of Special 
Operations Forces in support of regional crises and contingencies. 
Fused Response 2015 was a Joint and Combined exercise held across 
several locations in Honduras. United States military and civilian 
personnel and aircraft operated with their Honduran counterparts to 
refine rapid crisis response procedures and learn from each other's 
best practices.
      Panamax 2015: In this annual USSOUTHCOM-sponsored, 19-
nation exercise, regional forces support the Government of Panama as it 
protects safe passage through the Panama Canal, ensures its neutrality, 
and preserves its national sovereignty. SOCSOUTH took part as a member 
of the multinational Special Operations team led by Brazil.
      Gator Aide 2015: Exercise Gator Aide is a Personnel 
Recovery exercise designed to validate USSOUTHCOM's non-conventional 
assisted recovery capabilities. SOCSOUTH worked with U.S. interagency 
partners to enhance each other's readiness to prepare for, plan, and 
conduct specialized search and rescue operations throughout the region.

    Chairman McCain. Thank you very much, Admiral Tidd.
    Admiral Gortney, it's been described by many Governors and 
law enforcement individuals in the Northeast and the Midwest 
that the drug overdose deaths of manufactured heroin is now, in 
the view of some Governors, a, quote, ``epidemic.'' That is now 
being brought to my attention, and many, many others, 
particularly those who represent these States. How's it getting 
in?
    Admiral Gortney. It's coming through the traditional legal 
border crossings in very small quantities, some----
    Chairman McCain. By individuals or vehicles, or both, or--
--
    Admiral Gortney. Both. Both, sir. By very small quantities, 
because of the profit margin. I was just down in--at the San 
Diego-Tijuana border crossing, an immense challenge separating 
the legal versus the illegal activity that comes across the 
border and how the technology is--that our Custom and Border 
Patrol and Immigration are using is being circumvented by a 
very adaptable enemy.
    Chairman McCain. What do we need to do?
    Admiral Gortney. Well, two things, sir. We need to work on 
the technologies that allow us to detect this. We need to work 
at the root cause within Mexico, in the case of the poppy 
production and the eradication of the poppies. We'd work with 
SEDENA [Secretariat of National Defense] and SEMAR [Secretariat 
of Navy] on that, in our mil-to-mil responsibilities, as well 
as working with our partners north of the border. We do that 
through JTF [Joint Task Force] North, helping them improve 
their--our mission partners improve their capability and 
capacity where----
    Chairman McCain. Should we expect more of the Mexican 
Government?
    Admiral Gortney. I would think we--yes, sir, we do need to 
expect more of the Mexican Government and all of the agencies 
within the Mexican Government.
    Chairman McCain. The manufactured heroin is much easier 
than cultivated heroin.
    Admiral Gortney. Yes, sir. Between heroin and 
methamphetamines, the precursors in methamphetamines are coming 
from China, factories in China, and we have to tackle all of 
the illicit drugs that are coming across the border, sir.
    Chairman McCain. Part of it, as you mentioned in your 
remarks, it has got to do with the fundamentals of economics, 
and that's supply and demand. If there's a demand, there's 
going to be a supply.
    Admiral Gortney. That's absolutely correct, sir.
    Chairman McCain. Admiral Tidd, you, I think very correctly, 
applauded the agreement in Colombia with the FARC. I think it 
is a testimony to the Colombian people and government, first of 
all, but it is a sign and a story that we should understand 
better, and that is, it's been a long-term investment by the 
United States of America of billions over time because the 
heroin--excuse me--the cocaine was obviously a threat to the 
United States of America. But, now we are hearing that poppy 
cultivation--or cocaine--is way up. Is that correct?
    Admiral Tidd. Yes, sir, that's correct. I think in the next 
set of figures that will come out, we're going to see a very 
significant increase in coca production.
    Chairman McCain. With the cocoa production up, that means 
there's going to be more cocoa coming into the--cocaine coming 
in the United States.
    Admiral Tidd. I'd--that's what I would expect, yes, sir.
    Chairman McCain. That's where the market is. What do we 
need to do there? Because obviously it will lower the cost of 
cocaine, the--more people will find it affordable. What do we 
do there?
    Admiral Tidd. Sir, I think it's a multifaceted approach. 
First and foremost, we need to continue to stand steadfast with 
our Colombian friends. As you recognized, it's a--it is a 
relationship that extends over decades. We will need to 
continue to work very closely with them.
    With regard to the actual movement of cocaine, those 
transnational criminal networks that have moved the cocaine, we 
need to do everything that we can to apply pressure on them to 
detect, to illuminate, and then to disrupt them. That 
disruptive work will require the efforts of both--all of our 
interagency partners as well as allied partners.
    Chairman McCain. Admiral Gortney, what--we know that Mr. 
Baghdadi, the head of ISIS, has--is sending people out of ISIS 
in the wave of refugees that have left Syria and Iraq. What is 
the threat of someone--individual or individuals coming across 
our southern border?
    Admiral Gortney. I think if someone can find a seam to 
enter into our country, legally or illegally, they're going to 
exploit that particular seam. That's why we work very closely 
with our mission and partners to the south while we look into 
the drugs, we look to the left and right to see, within those 
seams, if there's anything else that be moving--in this case, 
terrorists.
    Chairman McCain. What more do we need to do in order to 
secure our southern border? Have we made progress in securing 
our southern border, or is it basically the status quo?
    Admiral Gortney. I think the efforts have been effective, 
but not nearly as effective as we would like them to be. We're 
working against a very adaptive enemy who will exploit the 
seams. As we make an advance in one area, they're very quickly 
able to overcome that. We're not able to stay out in front of 
that, their OODA [observe, orient, decide and act] loop, so to 
speak. That's where we need to--that's where we need----
    Chairman McCain. Well--so, what do we need to do? Isn't it 
true that more and more of those who are being apprehended are 
what we call OTM [on the move], other than Mexican?
    Admiral Gortney. That's correct. There's--as I look at it, 
it's the mass migration that are escaping the conditions within 
Central America, and the cartels are moving the people. The 
other problem is the drugs. The one that is the most concerning 
to us is the heroin that is being produced and shipped out of 
Mexico, and the methamphetamines. Moved by the same cartels.
    Chairman McCain. What do we need to do?
    Admiral Gortney. We need to tackle both. They both have 
different problem sets.
    Chairman McCain. I mean, do we need more Border Patrol? Do 
we need more towers? Do we need more--in other words, what more 
do we need to do to increase our border security?
    Admiral Gortney. The first thing, for the people, is 
improving the conditions within Central America, a whole-of-
government approach, working with the countries down there to 
improve the conditions so that people want to remain within----
    Chairman McCain. That's a long-term project. What about 
the----
    Admiral Gortney. Yes, sir.
    Chairman McCain. What about the short term?
    Admiral Gortney. Sir, both of them demand long-term 
problems. This is a 30-year fight that we have to confront. 
When it comes to the drugs, it's working with our mission 
partners in those countries, as well as Mexico. It's improving 
the technology along----
    Chairman McCain. What about security on the border itself? 
Is it--we need more technology? We need more towers? We need 
more Border Patrol? What do we need?
    Admiral Gortney. I would say that the--having been on the 
Mexican-Guatemalan border and then the Arizona and the Mexican 
border, the threat is a function of the--what we need is a 
combination of analyzing the threat, the terrain, the 
technology, and the training of the people. Efforts along all 
of those, both with our people and then working with Mexico and 
with Guatemala and Belize is exactly in order against all of 
those.
    Chairman McCain. Senator Reed.
    Senator Reed. Well, thank you very much, Mr. Chairman.
    Let me begin with Admiral Haney. Admiral Haney, we are in 
the process of modernizing the triad, for very obvious and 
compelling reasons. With respect to the air aspects, there is 
proposals for a new penetrating bomber, but that bomber also 
needs ordnance to carry. Two items which you could comment upon 
are the replacement for our existing air-launched cruise 
missile and also the B61-12 gravity bomb. But, a related issue 
would be timing of--improvements on these delivery systems 
might, in fact, be--come along before the new penetrating 
bomber, but they would be very, very useful on whatever 
platform it's applying. I presume that, but you might confirm 
or refute.
    Admiral Haney. Ranking Member Reed, the air leg associated 
with our triad of platforms is very important, in terms of 
complex deterrents that any adversary that would want to 
escalate their way out of a failed conflict would have to also 
deal with. That's important in strategic stability. As you've 
indicated here, and I will articulate, it's very important that 
we move forward with the replacement bomber, in that our B-52 
fleet, the planes flying today were off the assembly line in 
1962. We'll still be flying that plane into the 2040s. Even our 
B-2 fleet is about 25 years old. It's important that we're able 
to have that capability--stealth platform to deliver both 
nuclear and conventional missions.
    With regards to nuclear arsenals for that plane in order to 
have both flexible deterrents as well as visible deterrents, 
it's important that we replace the air-launch cruise missile. 
It was built in the '70s for a 10-year lifespan, well beyond 
that span today. That's why it's very important that we replace 
it with the long-range standoff cruise missile program that's 
just now getting underway in part of the President's budget for 
2017. We already have a cruise missile, but it's well beyond 
its lifespan, and we need to replace it.
    We also have programs associated with the B61-12 nuclear 
bomb that replaces four variants of, again, aging bombs. This 
helps us reduce our stockpile and have a more effective 
deterrent.
    Senator Reed. Just a follow-up question. As you develop 
this new air-launch cruise missile, it--I presume, and correct 
me if wrong, it could be launched from numerous platforms, even 
existing platforms. Is that correct?
    Admiral Haney. Absolutely. B-52, for example, which 
launches our air-launch cruise missile, doesn't have stealth 
characteristics. We'll use this new long-range standoff.
    Senator Reed. Thank you.
    Admiral Haney. You're welcome.
    Senator Reed. Admiral Gortney, you have many 
responsibilities in your--as you've indicated in your testimony 
and your response to the Chairman. One issue, though, is 
missile defense--national missile defense. Can you give us, 
sort of, an update on the long-range discrimination radar? How 
is it going? Also, generally, our posture when it comes to 
missile defense.
    Admiral Gortney. We're on track with long-range 
discriminating radar and the necessary investments to keep our 
ballistic missile defense architecture to make it the very best 
we can and then to improve it. We want to thank the Members of 
Congress for those investments. We're in good shape there, sir. 
We're on path to have 44 interceptors in the ground by the end 
of 2017; 40 in the great State of Alaska and four in 
California.
    Also, we thank you for the investments to help us get on 
the correct side of the cost curve, because right now we're on 
the wrong side of the cost curve, both in theater ballistic 
missile defense and intercontinental ballistic missile defense 
against rogue nations. Admiral Jim Syring, at MDA, and I asked 
for those investments and the research and development to help 
us get on the correct side of the cost curve. They're in the 
budget, and we thank you for that. Those that pay out, we'll be 
coming to you and asking you to put those into production once 
we understand what they do. I'm confident in the capability 
that we have today.
    Senator Reed. Just a follow-up question. This is always a 
subject of constant evaluation and reevaluation, but, at this 
juncture, your view would--on the need for an East Coast array 
of missiles, that need is not evident at this moment?
    Admiral Gortney. I do not see it, sir. If the threat 
manifested itself from Iran today, I have the ability to engage 
it today. If I had one dollar to invest, I'd put it to where we 
could engage in those capabilities that get us on the correct 
side of the cost curve. Those capabilities will work both for 
theater ballistic missile defense for our servicemembers and 
their families overseas, as well as ballistic missile defense 
for here in the Homeland.
    Senator Reed. Thank you.
    Admiral Gortney. Yes, sir.
    Senator Reed. My time is run out. But, Admiral Tidd, I want 
to commend your efforts and also the--your testimony today. One 
of the chief issues that I think emerges from your testimony is 
the need to build capacity in our allies in the region, that we 
can't, by far, do it alone. That is a multi-agency effort, not 
just SOUTHCOM, but SOUTHCOM plays a very critical role, 
because, for many in Latin America and South America, you used 
to represent not just Department of Defense, but the United 
States in your command. A quick comment, because my time is 
expired.
    Admiral Tidd. Yes, sir. Thanks very much.
    Where the Department is--of Defense--is able to play a 
useful is, we have a regional and a subregional look. The 
actual activities occur on a country-by-country basis, but 
we're able to look across the entire region and, I think, 
provide a very useful service to our interagency partners.
    Senator Reed. Thank you, sir.
    Chairman McCain. Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chair.
    I--in this morning's Air Force Times, Admiral Haney, I 
noticed the--it caught my eye because Senator Rounds and I were 
just on Diego Garcia--that the Air Force is deploying three B-
2s there. You're quoted in the article, announcing--making this 
announcement in this morning's Air Force Times. Any comments 
you want to make about that deployment of those three B-2s in 
Diego Garcia?
    Admiral Haney. Senator Inhofe, I would not describe it as a 
deployment. We take our global----
    Senator Inhofe. That's how it was characterized in the 
article, though.
    Admiral Haney. Well, I didn't get interviewed by----
    Senator Inhofe. All right.
    Admiral Haney.--Air Force Times, so I would say they 
probably mixed some of my earlier statements, et cetera.
    We actually send out our bombers--B-52s, B-2s--number one, 
were we invited to participate in exercises with our allies and 
partners. We do that throughout the globe. We do Pacific 
operations, as well.
    Senator Inhofe. Yeah. Well, that's good.
    I want to--there's an area where I have sensed that there 
is a disagreement between our military intelligence, on one 
side, and the State Department, on the other side, having to do 
with the Open Skies Treaty. Russia has reportedly announced its 
intent to submit plans for aerial surveillance flights, which I 
understand are permitted under the Open Skies Treaty, over the 
United States using advanced digital cameras. Several in the--I 
think Clapper made some comments, and certainly Lieutenant 
General Vincent Stewart, Director of Defense Intelligence 
Agency, with--concerned about this because of the advanced 
technology that's out there. To quote him, he says, ``The 
things that you can see, the amount of data you can collect, 
the things you can do with post-processing allows Russia, in my 
opinion, to get incredible foundational intelligence on 
critical infrastructure, bases, ports, all of our facilities.'' 
He was critical of this. What is your thinking about this? 
Where do you fall down on this?
    Admiral Haney. Senator Inhofe, I think, as with all things, 
we have to take a balanced approach, but we have to look at 
this very carefully. Clearly, we, back here recently, did an 
Open Skies Treaty mission over Russia with one of the 32 other 
signors of the treaty. It's a mechanism by which we are able to 
have transparent mechanisms with our allies and other partners 
in that group, while at the same time we have to be careful as 
we look through the technology advances using digital media 
versus film. Sustaining film is problematic today. This is--got 
to be in balance. Clearly, I'm concerned of any Russian ability 
to gain intelligence on our critical infrastructure.
    Senator Inhofe. Now, when we were going over Russia, were 
we using the advanced digital equipment?
    Admiral Haney. We were not, because we haven't gotten that 
far yet.
    Senator Inhofe. They're ahead of us, then. All right.
    The--when Senator Reed was talking about the--all three 
legs, you were concentrating on the air legs of the triad. 
The--Admiral Winnifeld recently made the statement--and I'll 
quote him--he said, ``Any remaining margin we have for 
investing in our nuclear deterrent has been steadily whittled 
away as we've pushed investments further and further into the 
future.'' Do you think, Admiral Haney, that Russia is actively 
modernizing their nuclear weapons delivery system and we're 
just--are they ahead of us?
    Admiral Haney. Well, I would----
    Senator Inhofe. If so, is this a concern?
    Admiral Haney. Well, Russia's modernization program in 
their nuclear deterrent forces is of concern. Period. Dot. End. 
The piece when you look at what they've been modernizing, it 
didn't just start. They've been doing this, quite frankly, for 
some time, with a lot of crescendo of activity over the last 
decade and a half.
    Senator Inhofe. Yes, we've been talking about it for a long 
period of time, that we have not been keeping up in our 
program, as many people think we should. A lot of us, when 
we're back in the--our own States, we hear things that are 
going on, and some things really catch the attention of the 
American people. I brought up these two issues, because these 
are two that do make a difference and the people are aware of, 
and there are concerns out there.
    Thank you.
    Chairman McCain. Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Admiral Tidd, welcome to Florida. Welcome to Miami.
    Admiral Tidd. Sir, it's a delightful place to live.
    Senator Nelson. In your three Cs and three Gs, you talked 
about this efficient network that moves things from south to 
north, not only drugs, human trafficking, all kinds of 
contraband. Do you have enough resources to do that in the 
President's Budget?
    Admiral Tidd. Sir, the simple fact of the matter is, we do 
not. I do not have the ships, I do not have the aircraft to be 
able to execute the detection and monitoring mission to the 
level that has been established for us to achieve.
    Senator Nelson. This is a unique role, where the Navy in 
the Caribbean and the Pacific coordinates with the law 
enforcement arm of the Coast Guard. They need assistance, too, 
don't they?
    Admiral Tidd. Sir, I would agree completely. It is very 
much a team sport. The activities that are orchestrated by our 
Joint Interagency Task Force South in Key West Florida involve 
the efforts of all of the State--excuse me--all of the Federal 
law enforcement agencies as well as the Department of Defense. 
Coast Guard plays a very significant role.
    Senator Nelson. We have seen some lessening of the violence 
and the drug lords in Honduras. That used to be the number-one 
murder capital in the world. Just this past weekend, I met, on 
several occasions, with the President of Costa Rica. They seem 
to be fairly stabilized. But, we're getting more drugs coming 
into stable places in the past, such as Panama. That being the 
Panama Canal, an expanded canal, what do you think is the 
threat there?
    Admiral Tidd. Senator, the adversary that we are dealing 
with is very flexible, very agile, and it's like squeezing a 
balloon; when we squeeze in one place, if we are not able to 
apply pressure across the entire breadth of the network, they 
will adapt and move to the area that they think they can get 
in. As we have been--had some success working with our Honduran 
partners, as they have been able to get out and apply greater 
pressure in areas that previously had been denied to them, 
we're seeing the--that the drug traffickers are moving the 
landing points for the--where the drugs are coming ashore in 
Central America to different countries.
    Senator Nelson. Couldn't we get a lot more support from 
Mexico, where all these drugs, basically, other than the ones 
that are going the water route to Puerto Rico, some to Haiti--
couldn't we get a lot more support from Mexico, since they come 
there and then they go across the border?
    Admiral Tidd. Senator, I would defer that specific question 
to----
    Senator Nelson. I know----
    Admiral Tidd.--to Admiral Gortney.
    Senator Nelson.--it's not in your AOR, but what do you 
think?
    Admiral Tidd. What I think is that we continue to work very 
closely with the militaries of all of the countries of Central 
America. I know that NORTHCOM works closely with the Mexican 
military to improve their capability and capacity to get this 
problem. Our ability to share information effectively plays a 
significant role.
    Senator Nelson. Well, at least we got El Chapo. That was a 
step in the right direction.
    Tell me about Haiti. They've got this interim government. 
Is it working until they can finally declare a President?
    Admiral Tidd. Sir, I think the situation in Haiti--every 
morning that we wake up, we watch--and to make sure that they 
have not had significant crises that have occurred there. 
They're going to have their hands full for a long time to come.
    The role played by the U.N. peacekeeping operation, 
MINUSTAH [United Nations Stabilization Mission in Haiti], there 
has been absolutely critical in sustaining that--the stability 
that is there. We've got some key partners in the nation, most 
notably Brazil that has been a real backbone of that MINUSTAH 
operation. We would hope that countries like that would 
continue to make those contributions.
    Senator Nelson. Basically, bottom line, until they improve 
in their economic depravity, it's going to be a nation whose 
government is always subject to a lot of corruption.
    Admiral Gortney, what do you think about Mexico in helping 
us out?
    Admiral Gortney. I think they're in a 30-year fight, going 
after immense challenges. The number-one problem is corruption. 
If you look at the root cause that you've got to solve first--
and this is Admiral Soberon's words, not mine--is to go after 
the corruption within the country. We need to assist them 
across our whole-of-government approach in this 30-year fight. 
They're great mission partners. SEDENA and SEMAR are great 
mission partners, but they have an immense challenge. We do 
everything we can to assist them with that.
    Senator Nelson. Isn't it interesting that you can rely on 
that elite unit at the federal level, but you get anywhere 
below that, it's just--you can't even say anything about intel; 
otherwise, it gets to the drug lords.
    Admiral Gortney. Yes, sir. You mentioned the--recapture of 
El Chapo. Those Mexican marines were trained by United States 
marines.
    Senator Nelson. Well, that's very good.
    With that, I'll say, Mr. Chairman, the marines are standing 
tall.
    Chairman McCain. Senator Fischer.
    Senator Fischer. Thank you, Mr. Chairman.
    Admiral Gortney, our adversaries are continuing to invest 
in developing advanced long-range cruise missiles. That can 
hold the United States at risk. I think we have really thin 
defenses against those. Can you talk a little bit about the 
JLENS program and what role this plays in defending the United 
States against a cruise missile attack?
    Admiral Gortney. Yes, ma'am. The three types of missiles we 
worry about, the third one is the cruise missile attack. The 
Russians have--are employing these cruise missiles in Syria 
today, both from bombers, ships, and submarines. When there's 
no operational or tactical requirement in the battlefield to do 
it, they're messaging us that they have this capability, and 
those missiles can--have made it either a conventional or a 
nuclear-tipped warhead.
    In order to defeat this threat--I've been defending against 
them since I was a lieutenant JG, and I've shot over 1300 of 
them. If you want to defeat this threat, you have to be able to 
detect it. In order to do that, you need an array--a radar that 
is above the horizon. That can come in many forms. It can be 
the AWACs, it can be the E-2 Hawkeye for the Navy, or it can be 
JLENS [Joint Land Attack Cruise Missile Defense Elevated Netted 
Sensor System]. What it does for us here in the national 
capital region as we're executing our test, is putting this 
array up. It fills a gap--at the classified level I can't say 
in this forum--it fills a cap--a capability gap that I do not 
have today. We look forward to restarting the JLENS program 
after the very unfortunate mishap that we have. We understand 
what happened. We've put in place the mitigation efforts. We 
look forward to completing it, because, should it bear out, it 
fills a gap that I do not have today against this particular 
threat.
    Senator Fischer. Thank you, sir.
    Admiral Haney, last week General Rand, who commands Global 
Strike Command, he testified that the Huey helicopters 
providing security for our ICBM fields, they cannot meet the 
emergency response requirements. Can you talk about the current 
capability gap that we have and the need that we see to replace 
those helicopters?
    Admiral Haney. Senator Fischer, the--General Rand's 
comments were spot on the mark there. These current 
helicopters, these UH-1Ns, don't have the lift capability, the 
speed capability to meet the requirements that have been 
improved--validated through a number of studies, as well as 
Might Guardian exercises, and what have you. They don't have 
the lift to get the amount of security forces to the scene. 
When you look at these missile fields, they're vast, and they 
cover large areas, as you well know. They--in order to meet 
those kinds of requirements, we need a new helicopter.
    Senator Fischer. Would you say that need is urgent?
    Admiral Haney. I would definitely say the need is urgent.
    Senator Fischer. Thank you, Admiral.
    Thank you, Mr. Chairman. I have to run, to preside.
    Chairman McCain. Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    Thank you all for your service and for being here today.
    I think, Admiral Tidd, if I could, you know, you were 
talking about the drugs, and this and that. If you were going 
to rate--and I've just heard a couple of statistics--but how 
the drugs are getting here, most predominantly--by air, sea, 
over ground, or through tunnels?
    Admiral Tidd. I would defer to Admiral Gortney to----
    Senator Manchin. Okay.
    Admiral Tidd.--talk how they actually get across the U.S. 
border into the United States. But, as they go through the 
SOUTHCOM region, they go by air and by sea.
    Senator Manchin. Okay.
    Admiral Tidd. Then over land of Central America.
    Senator Manchin. How do they get into the United States 
border? Across it----
    Admiral Gortney. Through all mechanisms, sir. Everything 
that we talked about, that Admiral Tidd talked about, through 
the tunnels----
    Senator Manchin. I've heard that--and, sir--and, Admiral, 
that's the--I had not heard that tunnels were so prevalent. I 
heard that tunnels are probably one of the most pervasive ways 
that this stuff is getting in, and we're not doing a whole lot 
about the tunnels.
    Admiral Gortney. Well, sir, I've been in one of the 
tunnels.
    Senator Manchin. Okay.
    Admiral Gortney. I've looked at the tunnel detection 
capability that Custom and Border Patrol use, the technology 
that they have applied to that, and then crawled through the 
tunnels with them. It's a--once again, it's a very adaptive 
enemy that goes out there. If they can find a mechanism in 
order to----
    Senator Manchin. Are we destroying the tunnels?
    Admiral Gortney. Yes, sir, we are, those that we find. As 
they detect them, they then work the law enforcement piece on 
each side to find out where the entry and exit piece is, what 
is the network that is controlling that entry and exit piece 
after that, and working both sides of the borders on it. Then, 
once the--once they understand that, they'll go ahead and 
destroy and fill in the tunnel.
    Senator Manchin. Do you think a wall is needed?
    Admiral Gortney. Sir, we--a wall will not solve the immense 
problems that go out there. You need all of the technology.
    Senator Manchin. I know. Would it help? I'm just saying--
because people believe--of course, there's a lot of rhetoric 
about a wall----
    Admiral Gortney. Yeah.
    Senator Manchin.--these days in the news, but I'm--
sincerely, do you believe that it could help, or would help, 
more----
    Admiral Gortney. Well----
    Senator Manchin.--than not having a wall?
    Admiral Gortney. The--I have flown the border between what 
we call our middle border, on the Arizona side, and I've seen 
the technology that is applied there, be it sensors, be it 
fencing. Every type of fencing that happens to be out there, 
because the terrain demands different types of fencing----
    Senator Manchin. Sure.
    Admiral Gortney.--for it, and we need to put in place all 
of that technology across our border as we try and work with 
our mission partners south of the border, as well as cut back 
significantly the demand signal here in our country.
    Senator Manchin. If I could follow up with you again, 
Admiral, as--yesterday, Lieutenant General Thomas submitted in 
written testimony that ISIS-inspired lone actors pose the most 
direct and immediate threat to United States Homeland. As we 
saw in San Bernardino and Dallas. There are many folks in my 
State of West Virginia that have a lot of concerns with our 
Government when our Government considers accepting refugees 
from overseas. They're more concerned about, Are we doing the 
proper vetting process? I would ask, Should we accept Syrian 
refugees into this country at this time? Are we able to do the 
proper vetting, since we have such little facts about those 
people coming?
    Admiral Gortney. Homeland Security has a very robust 
vetting process for everybody that comes into this country, 
particularly focused on the Syrian refugee challenge that's 
coming this way. I have confidence in the program, but no 
program is perfect, sir. When I look at people that are trying 
to come to do nefarious activity in our country, the ones that 
I am not--I am most concerned are those that enter the country 
legally, under a legal means, because then they have freedom of 
maneuver to operate within the United States. Those that try 
and enter illegally have hooks that we may have opportunities 
to pick up. Then, if they're maneuvering inside, they have--do 
not have the freedom of maneuver inside the country. It is the 
vetting process, a very robust vetting process that Homeland 
Security has, that is absolutely critical----
    Senator Manchin. But, you all recommend that we do not 
reduce that vetting process whatsoever.
    Admiral Gortney. No, I would not----
    Senator Manchin. Thank you.
    Admiral Gortney.--at all.
    Senator Manchin. Admiral Haney, if I could ask you. In 
recent days, we have once again seen North Korea threaten to 
conduct a preemptive nuclear strike and reduce Seoul into a sea 
of fire and ashes. Now, I know we always hear that rhetoric 
anytime we partner with South Korea, as we're doing right now, 
to conduct military exercises, but it seems to be a lot 
stronger this time. It seems to be growing stronger every year. 
Do you feel there is a linkage to North Korea's ratcheted 
rhetoric and their more aggressive missile test?
    Admiral Haney. Well, I won't, Senator, try to rationale----
    Senator Manchin. Right.
    Admiral Haney.--North Korean behavior and Kim Jung Un's 
behavior. I will state that the nuclear test, the fourth test 
they just did here, and the space launch that they just did, 
further enhanced their understanding and knowledge associated 
with this. North Korea has made many claims--miniaturization of 
nuclear warheads. They've paraded around their KNO-8 
intercontinental ballistic missile. I think we have to take 
these problems seriously, because it's clear to me they are 
working hard to----
    Senator Manchin. Is it more aggressive than you've seen in 
the past?
    Admiral Haney. Absolutely.
    Senator Manchin. So--thank you.
    Thank all of you.
    Chairman McCain. Admiral, if I could just follow up. Your 
greater concern is people who come into this country legally, 
as opposed to coming across our border. Is that a correct----
    Admiral Gortney. Yes, sir, because it's their ability of 
freedom of maneuver to operate within our country. Anytime that 
someone is--comes through illegally, we have the--a better 
opportunity to detect them and pick them up. As they're in the 
country, just as the San Bernardino attack showed out, the 
woman involved entered the country legally. We did not have the 
sensors, the ability to detect what she wanted to do. You've 
got to tackle both of them as we go forward.
    If you look at the Paris attacks, they entered the EU 
legally. They operated--they had freedom of maneuver to operate 
within the EU on the continent, because of the policies that 
they have in the EU--operated and planned the attack in a 
country that did not have the authorities that Paris did, and 
then freely move into France to conduct the attack. Disabling 
their--this freedom of maneuver is--I think is absolutely 
critical, which goes back to the vetting policy that was asked 
before, sir.
    Chairman McCain. Senator Cotton.
    Senator Cotton. Thank you.
    Admiral Tidd, I want to talk about the potential for 
migrant flows into the United States from Latin America, as we 
saw during the migrant crisis in the summer of 2014. Obviously, 
there are push factors involved, given the crime and the 
violence in, say, Central America. But, there are always pull 
factors involved, as well. This is one reason why President 
Obama stated, in 2014, that parents in Central America 
shouldn't send their children to the United States through 
coyotes or human traffickers. Similarly, you see, in Europe, 
after Chancellor Merkel said that Germany would take all 
migrants and refugees, there was a significant increase in the 
flows, not just from places like Syria and Iraq, but from many 
other countries in Africa and Asia.
    Therefore, I'm very troubled by what I heard last night in 
the Democratic debate. It's easy to write off political debates 
as theater, but we're the world's superpower. There's only six 
people right now who are likely to be our next President of the 
United States, our next Commander in Chief. Last night, the two 
candidates in the Democratic side said, essentially, that they 
would never send any children back to their country of origin 
if they make it to the United States. What kind of message did 
that send to families in Central America and South America 
about the risk they're willing to undertake to send their 
children to the United States through human traffickers and 
through coyotes?
    Admiral Tidd. Senator, I think one of the most effective 
things that the Department of Homeland Security was able to do 
to begin to curtail that movement of children coming into the 
country back in 2014 was to try to change the messages that 
were being communicated via social media back to family 
members, that, ``It's safe, it's easy to come in. You won't be 
incarcerated.'' They put a hard push to communicate that, if 
you come across the border, you will be held until you can be 
processed for return back home. I think all of the steps that 
can be taken to deal with those pull factors would be critical.
    Senator Cotton. I agree. I mean, I don't think it's an 
especially moral policy what Chancellor Merkel has proposed in 
Europe or what we heard last night. We're essentially saying, 
to people who are poor and oftentimes in countries racked by 
violence, that if you can survive, you can stay here.
    Admiral Tidd. The critical work that you identified to try 
to change the push factors out of those countries, the long-
term sustained work that's being done by Department of State, 
by USAID [United States Agency for International Development] 
to try to provide economic opportunities so that those--the 
people will find that it is economically a much better decision 
to remain home, and then the work that's being done to try to 
improve security within those countries so that it is not a--
it's a life-or-death decision to remain home--that's the key to 
the long-term----
    Senator Cotton. I agree, on the long-term solution, the 
work that you and all the men and women of SOUTHCOM do and have 
done for many years are critical to build that kind of capacity 
in the countries that send the most migrants here. But, I also 
think that statements by American leaders, that essentially 
create a full employment opportunity for human traffickers are 
very damaging, not just for our country, but for the young 
children that might be sent here.
    I'd like to stay in your AO [area of operation] and turn to 
Guantanamo Bay. I led a delegation of the freshmen on this 
committee and the Intelligence Committee last year to see 
Guantanamo Bay. We were very impressed by the operations. We 
were even more impressed by the men and women you have serving 
there. Could you explain to us a little bit about the stressful 
and sometimes dangerous working conditions they face handling 
these depraved terrorists?
    Admiral Tidd. Senator, thanks for the opportunity. We--
I've--in the short two months that I've been in the--this 
position, I've visited Guantanamo Bay twice to see for myself, 
to be able to assess exactly the high degree of professionalism 
and discipline that the men and women execute that mission. As 
you observed, it is very difficult, very challenging, 
oftentimes under enormous pressure from both the expectations 
from outside, but then also just the actions of the detainees 
there. There have been a--in the last 12 months, 100 assaults 
committed by the detainees on our guard force, assaults in the 
form of splashing, scratching, pushing, shoving, those sorts of 
activities, and then threats of worse if they had the ability 
to do that. The fact that our men and women never respond in a 
negative way, that they continue to remain very professional, I 
think is testimony to the fact that they are supremely well 
trained, they are exceptionally well qualified for the mission 
that we ask them to do. All of the American people can be very 
proud of the job that they've done--that they have done and 
continue to do.
    Senator Cotton. Thank you.
    My time is expired.
    Chairman McCain. Senator Blumenthal.
    Senator Blumenthal. Thanks, Mr. Chairman.
    Admiral Haney, you note in your testimony, and I'm quoting, 
``Recapitalizing our sea-based strategic deterrent'' remains 
your top priority, end quote. Considering the gap that we're 
facing in submarine capabilities, do you think that we ought to 
consider building three submarines a year--two Virginia-class 
and one Ohio replacement?
    Admiral Haney. Oh, Senator Blumenthal, I am supportive, and 
as you correctly stated----
    Senator Blumenthal. I am, too. I am, too, and I appreciate 
your support.
    Admiral Haney.--the building and the capability that we 
need to have, in terms of the Ohio replacement, SSBN, is a top 
priority. As I mentioned also, having conventional capability 
across our joint military forces is also important. We've got 
to get that balance right. I'm not--to give you an acquisition 
strategy on the number per year and what have you, there, I 
will say we need to have a--I depend upon the strong submarine 
force and all their capabilities, but, in particular, to have 
that strategic survivable capability underwater is very 
important to our Nation as a whole.
    Senator Blumenthal. I didn't ask you to commit to doing it, 
but to consider doing it, which I think is really important. 
Privately, I think that the Navy has been receptive to this 
idea of two Virginia-class submarines a year, plus the ORP 
[Office of Research Protections] at least for some period of 
time. In order----
    Admiral Haney. Well, I can I'd like to see five per year, 
but, you know, we have to do things in reason. From the spirit 
of what we need as a country as a whole, we've got to get that 
balance right. We do know, as I'm thinking you're implying, 
correctly so, that our submarine force does bring significant 
value to our Nation.
    Senator Blumenthal. Admiral Tidd, some of the reports that 
we've had indicate that we can actually see illicit 
substances--opioids, heroin--transported across waters, even 
across borders, but we lack the equipment and manpower to 
intercept and interdict and stop them. Is that true?
    Admiral Tidd. Senator, it is. First, what I'd like to do is 
thank the exceptional efforts of the Congress to provide 
additional resources as they became available for us to be able 
to increase the resources that we do have. The--we've been able 
to apply those resources very quickly in some new ways and to 
be able to take advantage of some nontraditional capabilities 
to increase our ability to see the movement and things that are 
going on.
    It still only gives us glimpses. We're not able to maintain 
a persistent view of activities going on within the theater. As 
you rightly point out, our ability to interdict is extremely 
limited. The number of surface ships largely provided by the 
U.S. Coast Guard, but the U.S. Navy also provides some limited 
capability, as well, but even that, it's not enough for us to 
be able to deal with the--what we're able to see.
    We try to mitigate that by increasing the capability of our 
partner nations, and they've--and the development that we've 
been able to do in their intercept capability and interdiction 
capability has made a significant improvement. As it stands 
right now, about half of the interdictions that occur, occur 
with the help of partner nations.
    Senator Blumenthal. Well, my time is limited, but let me 
just emphasize how important I think the American people 
believe it is to interdict and intercept the flow of these 
illicit substances. Clearly, the demand side needs to be 
addressed. In fact, we are seeking to do so through the 
Comprehensive Addiction and Recovery Act, which is only a step 
in the right direction, because it lacks the resources to 
provide the kind of treatment and services and even law 
enforcement support that we need to do. The demand side is 
important, but equally so, the work that you're doing is 
absolutely critical. I recognize that the dedicated men and 
women under your command are working as hard and long as they 
can with the limited resources they have.
    I'm hopeful that we can get from you a more specific list 
of resources, whether it's equipment, ships, aircraft, that you 
think are necessary. I'm not asking you to provide it now, but 
I would, for the record, ask that you provide it to the 
committee.
    Thank you, sir.
    Admiral Tidd. Sure.
    Senator Blumenthal. Thank you very much, Mr. Chairman.
    Thank you all for your dedicated service to our Nation.
    Chairman McCain. Senator Ayotte.
    Senator Ayotte. Thank you, Chairman.
    I want to thank all of you for your service and leadership 
for our country.
    Admiral Gortney, in the 2016 NDAA [National Defense 
Authorization Act], I was able to include a very--a bipartisan 
effort that was focused in asking the Secretary of Defense to 
carry out research, development, testing, and evaluation 
activities with Israel on anti-tunnel capabilities to detect, 
map, and neutralize Hamas and Hezbollah terrorist tunnels that, 
of course, are used for those tunnels to come up and commit 
attacks in Israel. But, we also know that this is a very 
important issue, not only in protection of our friend and ally, 
Israel, but also on our southern border, because we know that 
tunnels on our southern border can be used to smuggle drugs, 
like heroin and Fentanyl, which are devastating my State, into 
the United States, and they also presumably could be used by 
other bad actors, including terrorists.
    Admiral Gortney, has there been collaboration with Israel 
on terror tunnels that has benefited NORTHCOM's and the Joint 
Task Force North's efforts to develop technology to detect, 
map, and neutralize drug-smuggling tunnels on our southern 
border?
    Admiral Gortney. Absolutely, ma'am. It's very, very helpful 
for us. You know, we don't have a monopoly on good ideas in our 
country. When we can partner with our partners overseas that 
have a similar challenge, it's very, very--it's been very, very 
beneficial, both for us and for our partners in the Custom and 
Border Patrol.
    Senator Ayotte. Excellent. I'm glad to hear it. I look 
forward to continuing to focus on those efforts.
    How much of this is an issue as we look at--in New 
Hampshire, we had a record number of drug overdose deaths this 
year from heroin and Fentanyl--420. It's been devastating. In 
fact, right now, on the Senate floor, we have the Comprehensive 
Addiction Recovery Act, which is focused, obviously, on the 
prevention, the treatment, and support for our first responders 
so that they can help bring people back from drug overdoses. 
But, thinking about the interdiction piece, what's happening 
over our southern border on this issue? This is something I've 
raised also with Secretary Johnson. Can you give us an update 
on your interdiction efforts?
    Admiral Gortney. Yes, ma'am. Our interdiction efforts, we 
work both sides of our middle border. North of our border, we 
do the Department of Defense support with our mission partners 
through JTF North. You know, just last year, it was a $10.7 
million program that we were given for JTF North, and they 
assisted in pulling--taking $436 million of drugs off the 
street with our mission partners. We use the services in order 
to do that. In a 30-day period, over one stretch of territory 
that Custom and Border Patrol was asking us to take a look at, 
they were able to interdict 1 pound of marijuana and only one 
trafficker. We put United States Marine Corps ground sensor 
platoon who were in their training in order to deploy, and, in 
that same 30--in another 30-day period over that same terrain, 
they were able to pull up 1200 pounds of marijuana and 75 
traffickers. Being able to assist with them is absolutely 
critical for that.
    Senator Ayotte. What are you seeing on heroin and Fentanyl?
    Admiral Gortney. Heroin and Fentanyl are coming through our 
normal passages, the legal entry control points across our 
border. Heroin, predominantly through the San Diego passage. 
Very, very small shipments, which is very, very difficult for 
our partners to be able to detect with the technology that they 
have today.
    Senator Ayotte. What more could we do to assist you to give 
you some more technological tools or personnel to try to 
address this? Because what's happening in New Hampshire and 
across the country is, the price of heroin and Fentanyl, of 
course, have gone down dramatically, and you've got people----
    Admiral Gortney. Ten dollars a pop in any----
    Senator Ayotte. Yeah. They're going from prescription 
drugs, unfortunately, to heroin, and people are dying.
    Admiral Gortney. That's correct. Everywhere, ma'am. We've 
got to--we have to tackle this from both sides of the problem. 
Where our mission partners--what do our mission partners need 
in the capabilities to detect, improvements with all of our 
whole-of-government approach with Mexico and Central and South 
America. I'm responsible for the Mexican piece, of the mil-to-
mil piece. Then we have to work on the demand signal. Sir, I 
want to--Senator Donnelly, with your anti-opiate bill that goes 
to the floor today, absolutely critical. You know, we look at 
this, the three of us look at this through not only military 
officers that are tasked to defend the Nation and what we can 
do in order to do that, but we look at it as fathers and 
grandfathers, as well. We have to go after the demand signal 
while we work the interdiction piece.
    Senator Ayotte. Let me just thank Senator Donnelly, because 
this is something that he's been a great leader on that we've 
worked together, and appreciate his efforts on this and focus 
on it, and others on this panel who have been working on it.
    I also wanted to ask, Admiral Gortney, in your prepared 
statement, you said that you assess that Iran may be able to 
deploy an operational ICBM by 2020 if the regime chooses to. 
Well, we know, in the last several days--first of all, we had a 
ballistic missile test in October, one in November, and, in the 
last 2 days, we've had several ballistic missile tests from 
Iran. Can you give us the detail on that assessment? Obviously, 
they're testing this capacity--where they stand on this 
development.
    Admiral Gortney. Yeah. None of their tests violate any of 
the agreements that are out there, but I think it's indicative 
of where their minds are. I don't see a change in their 
behavior. If they had the capability today, I have the ability 
to engage it today. We watch very closely. We thank the 
committee and all of Congress for the investments that allow us 
to be able to outpace that particular threat.
    Reading their intentions, I don't see a change from the 
Iranians' behavior.
    Senator Ayotte. In other words, bad behavior.
    Admiral Gortney. Yes, ma'am.
    Senator Ayotte. Thank you.
    Chairman McCain. Senator Donnelly.
    Senator Donnelly. Thank you, Mr. Chairman.
    I would like to thank Senator Ayotte. She's been a great 
partner in this effort to try to stop the flow of heroin. I 
know what a challenge it's been in New Hampshire and in my 
State. We've both worked in a real bipartisan way to try to get 
this done. She's been a great partner.
    The Chairman mentioned, at the beginning, about the fact 
that this is an epidemic. I just want to tell you, a little 
town in my State, Connorsville, Indiana, and it's, you know, a 
little southeast of Indy. We've lost young person after young 
person after young person, older people, too, to heroin deaths. 
Six dollars per is what it's taking, in terms of each time they 
use heroin, it's 6 bucks. The extraordinary talent we're 
losing, the extraordinary family damage it causes, it takes 
your breath away, as all of you know. In some of the saddest 
cases, they are vets. They're our family in the military who 
this has happened to. We know we have a demand problem. We're 
trying to get our hands around that and get it fixed. But, as 
you look at this, how much is getting through that--you know, 
that--whether it's the heroin or the Fentanyl or whatever--that 
you look, and you go--of the percentage coming through, how 
much are we stopping?
    Admiral Gortney. I don't have the percentages in front of 
me, and----
    Senator Donnelly. I'm not looking for an exact number.
    Admiral Gortney. Yeah. I'm hesitant of using the percentage 
of our confiscation as a metric of success, because of the 
increase--you know, if you're measuring from 2 years ago or----
    Senator Donnelly. Right.
    Admiral Gortney.--or that, it's--I just don't think it's a 
very good metric that we can either hang on our hat on--that we 
would not want to hang our hat on. We have to do more. We have 
to do more throughout Central--Mexico and Central and South 
America with those mission partners, our whole-of-government 
approach with that, with the eradication effort, which, you 
know, currently 570 hectometers--hecta-acres, the Mexican--
SEDENA, the navy, has eradicated of--just in poppies last year. 
But, it's still not enough. Once again, as Admiral Tidd talked 
about, the balloon--when we think about the balloon, the 
pressure to stop the interdiction, we also have to work the 
demand piece on top of it.
    Senator Donnelly. Do we have intelligence services who are 
working this to try to find out--you know, as we talked, 
Admiral, about it's this group and that group and that group--
do we have intelligence agencies that are working to try to 
find out when this is going out, where it's going out, to try 
to help with that effort?
    Admiral Gortney. Absolutely, sir. We're working and passing 
that information with our mission partners, as well as 
developing their capability to determine that on their own.
    Senator Donnelly. Well, if you could both put together, in 
effect, almost--I don't know if this is the right term--a wish 
list saying, ``Look, if we had this, we could stop this much 
more. If we had this, we could prevent this portion.'' If you 
could provide that to us, I'd be very, very grateful.
    Admiral Gortney. We'll take that for a task, sir.
    Senator Donnelly. Thank you.
    Senator Donnelly. Admiral Haney, when you look at 
hypersonics, there's a wealth of open-source reporting on 
efforts by Russia, and particularly China, to develop 
hypersonic weapons that could pose a serious challenge to our 
missile defenses. Within DOD, our most advanced hypersonic 
effort is CPGS [conventional prompt global strike], and I was 
wondering what your thoughts are on the value of CPGS to 
STRATCOM and the Nation.
    Admiral Haney. I feel that the Conventional Prompt Global 
Strike is a very important----
    Senator Donnelly. I apologize, I use----
    Admiral Haney.--program----
    Senator Donnelly.--I use military-speak.
    Admiral Haney.--is also a very important approach that we 
have to continue to pursue, one, to understand that technology, 
but, as you've stated, since other nations are also pursuing 
it, our ability to counter it is also very important.
    Senator Donnelly. Admiral Gortney, I want to get your 
perspective on our missile defense priorities this year. You 
know I work with Senator Sessions and a number of our wonderful 
colleagues here in regards to this area. We have a strong 
commitment to the success of our GMD [Ground Based Midcourse 
Defense] system. I was wondering if you could let me know if 
our current GMD architecture with interceptors in Alaska and 
California provide cover for the entire continental United 
States, including the East Coast, against the threats.
    Admiral Gortney. Yes, sir, I am able to deal with rogue 
nations from any direction at this particular time with what we 
have. We appreciate the investments in making that which we've 
got, as best as we got, the improvement in sensor and, again, 
like we talked, the necessary R&D investments to get us on the 
correct side of the cost curve and continue to outpace the 
threat.
    Senator Donnelly. Well, I want to thank all of you for your 
service. As I mentioned, we have a lot of threats overseas, but 
every week, there are stories about young men and women who are 
dying from heroin, from opioids. Our EMTs are overwhelmed and 
using Narcan to try to bring people back in anti-overdose 
situations. We not only want to protect our country from our 
enemies overseas, but to keep our people safe. You're right on 
the front line. We appreciate your hard work on this. Don't 
ever think, for a minute, that we don't realize what a 
challenge it is and that you don't have our full support.
    Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Sullivan.
    Senator Sullivan. Thank you, Mr. Chairman.
    I wanted to thank you, gentlemen, for your service.
    I also want to follow up on the line of questioning that 
Senator Donnelly was just talking about, in terms of missile 
defense. He and Senator Sessions--actually, everybody on this 
committee has been a real strong supporter of that. Having both 
the two COCOM [combatant command] commanders in front of us who 
are tasked with that, I'd like to dig into some details.
    Admiral Haney and Admiral Gortney, can North Korea range 
any part of the United States right now, in terms of their 
missile capability? That's either the mainland or Alaska or 
Hawaii or any American territories in the Pacific.
    Admiral Gortney. Sir, as the Commander accountable of 
holding the trigger to defend the Nation against that 
particular threat, I assess that they have the ability to put 
an ICBM in space and range the continental United States and 
Canada. The----
    Senator Sullivan. Clearly, then, Hawaii and Alaska are in 
range.
    Admiral Gortney. Absolutely. Yes, sir.
    Senator Sullivan. Would--do we anticipate that will have 
a--you say ICBM, but nuclear capability ICBM now----
    Admiral Gortney. Yes, sir.
    Senator Sullivan.--or soon?
    Admiral Gortney. I assess, as the commander there, that 
it's the prudent decision on my part to assume that he has the 
capability to nuclearize--miniaturize and nuclearize--
miniaturize a nuclear weapon and put it on an ICBM. I have the 
ability----
    Senator Sullivan. Today.
    Admiral Gortney. Today.
    Senator Sullivan. Range the continental United States.
    Admiral Gortney. Range all of the States of the United 
States and Canada. We have the ability to engage that threat. 
Intel community gives it a very low probability of success, but 
I don't--do not believe the American people want to base my 
readiness assessment on a low probability.
    Senator Sullivan. I think you're very correct on that.
    How about Iran? Same question.
    Admiral Gortney. Iran, we do not assess they have the 
ability to do it today. Should they have the ability to do it 
today, I have the ability to engage it today.
    Senator Sullivan. When do you think they'll have the 
ability?
    Admiral Gortney. It's a decision on their part, sir, and 
it's a decision if they want to nuclearize, whether they want 
to develop--complete the development of an ICBM and then the 
reentry vehicle. We track very carefully all three of those 
pieces.
    Senator Sullivan. Do you think they're cooperating with 
North Korea on some of this right now to----
    Admiral Gortney. Absolutely. Absolutely.
    Senator Sullivan. You anticipate that that threat will 
continue to grow and probably they'll be able to reach Hawaii, 
Alaska, the East Coast, continental U.S. within----
    Admiral Gortney. The----
    Senator Sullivan.--five years?
    Admiral Gortney. Well----
    Senator Sullivan. If they continue on their current path.
    Admiral Gortney. We look at it in a one, two, and three, a 
decision to nuclearize, a decision to put it on a warhead, and 
a decision to be able to actually put the reentry vehicle all 
together. When they make that decision, it's a one-two-three 
decision on their part. We track--and we look very closely--we 
have the intel community looking very closely at each one of 
those pieces.
    Senator Sullivan. I've been supportive of the Department of 
Defense, Obama administration's missile defense budget. You 
probably saw, this committee's been very supportive of that. 
I've lately heard concerns that maybe in this year's budget 
there's not enough. Can you--either of--Admiral Haney or 
Admiral Gortney, can you talk about what you think, in terms 
of--given these threats, which are quite significant, the role 
of Fort Greeley, the role of our GBIs [Ground Based 
Interceptors]. Do we think we have enough right now? 
Importantly, do we have enough--particularly on the radar and 
ground-base interceptor element right now, but do we have 
enough to deal with the threat that certainly seems to be 
increasing? Does 41 do it, or should we anticipate having more? 
Because it doesn't look like the Iranians or North Koreans are 
going to be standing down their missile capability anytime 
soon.
    Admiral Gortney. It'll be 44 interceptors by the end of 
2017.
    Senator Sullivan. Fourty-four.
    Admiral Gortney. Fourty-four in Fort Greeley in the great 
State of Alaska, and the necessary sensors are going all in 
place of Alaska because of the strategic importance of Alaska. 
It's not going to be enough, because it's not going to be able 
to outpace the threat in the number of rate counts, the number 
that can be shot at us as----
    Senator Sullivan. Right.
    Admiral Gortney.--we project into the future, which is why 
the investments that you all have supported in our research and 
development are so important, to get us on the correct side of 
the cost curve. Because, on our current path, using the current 
technologies and a one interceptor versus one warhead in 
midcourse is a failing proposition----
    Senator Sullivan. Yeah.
    Admiral Gortney.--because they can produce more than we can 
ever possibly afford to put in the ground.
    Senator Sullivan. Do we--do you anticipate, in 5 to 10 
years, as the threat grows, as the rogue-nation missile 
capability increases, as the number of missiles they have 
increases, as their ability to nuclearize payloads--miniaturize 
the nuclear payloads increases, are we going to need more 
ground-base interceptors to keep up with that threat?
    Admiral Gortney. We're going to need more capability to 
engage the threat throughout its flight, keep them on the 
ground, kill them on the rails, kill them in boost phase, and 
then get more warheads in space in midcourse. We have to be 
able to engage it right now throughout the flight of the 
profile, not just in midcourse with a--one rocket against a 
very--one very expensive rocket against another rocket.
    Senator Sullivan. In your professional military opinion, do 
we have enough--is the current budget on these issues, given 
the threat, which you've just laid out is quite significant, 
including North Korea being able to hit the continental United 
States--does the current budget, in your professional military 
opinion, have enough resources dedicated to missile defense to 
keep us safe now and, importantly, to keep up with this growing 
threat?
    Admiral Gortney. Working very closely with Admiral Syring, 
who's in charge of developing this at the Missile Defense 
Agency. Last year's budget, we think, was adequate for us to 
improve what we have and invest in those technologies and see 
if those technologies will bear out to get us on the correct 
side of other cost curve and engage throughout the flight of 
these missiles.
    Senator Sullivan. This year's budget?
    Admiral Gortney. This year's budget, yes, sir.
    But, should--should those technologies come forward, the 
budget's not enough to put those capabilities into production 
and to deliver those capabilities. Once we prove, say, the 
laser technology that can hit their--multi-object kill vehicle 
technology that's out there--should those technologies bear 
out--and they are very, very promising--then we're going to be 
needing an increase in the budget to put those capabilities in 
place.
    Senator Sullivan. Thank you.
    Thank you, Mr. Chairman.
    Senator Reed [presiding]. On behalf of Chairman McCain, 
Senator King.
    Senator King. Thank you, Senator Reed.
    We've been talking a lot--I think the fact that you've--
practically every Senator has asked questions about drugs is an 
indication of how serious this problem is in all of our States. 
We've talked about the border. We've talked about maritime 
asset ships, intelligence. But, these drugs--you mentioned 
Colombia, Mexico--are grown in great big fields. What effort is 
being made with these other countries to put a stop to that? I 
mean, if somebody in Iowa was growing 100 acres of poppies and 
turning it into heroin, I think we'd do something about it. Is 
there any effort made, in terms of our relationship with these 
so-called partner countries, to control the production of this 
stuff?
    Admiral Tidd?
    Admiral Tidd. I'll start on that one. Senator, yes, 
Colombia has made some very significant efforts. I think you're 
familiar with their aerial eradication program. That was----
    Senator King. But, haven't they backed off----
    Admiral Tidd.--making progress----
    Senator King.--recently?
    Admiral Tidd. That is correct. As they have negotiated a--
the peace accord, one of the conditions of that peace accord 
included stopping the aerial eradication program and now going 
in for manual eradication. One of the challenges with manual 
eradication, they have to be able to put their military forces 
into and control the territory that right now has been denied 
territory to them. That's going to be one of the reasons 
they're going to be facing some very stiff fights even as the 
peace accord, if signed, comes into effect, because they will 
be going up against narcotraffickers who control that land, as 
well as the actual growers, the peasants themselves. This is 
their source of livelihood, and they are going to be giving up 
that source of livelihood. It'll be a----
    Senator King. It may be a source of livelihood, but it's a 
source of death up here.
    Admiral Tidd. Absolutely.
    Senator King. I don't understand calling somebody an ally 
who's--and having them produce these death-dealing substances.
    Same question about Mexico, Admiral Gortney.
    Admiral Gortney. Yes, sir. The--in the crop eradication, 
just SEDENA alone, their navy and marine corps, about 270,000 
hecta-acres and 500---of marijuana--and 570,000 hecta-acres of 
poppy. It's not nearly enough. As a result, they've just 
purchased more helicopters, a little bit cheaper than----
    Senator King. ``They'' being the Mexicans?
    Admiral Gortney. Mexicans--SEDENA and SEMAR--to increase 
that poppy eradication effort, as well as the other internal 
security challenges that they're confronting as they're working 
their way against the cartels.
    Senator King. Changing the subject. Admiral Gortney, your--
have jurisdiction over the Arctic, or at least a significant 
part of it. The administration proposed, this year--and I 
support the proposal--for the beginning, a downpayment, if you 
will, on a new icebreaker. That's good. The problem is, that 
icebreaker will really replace what we have; it doesn't 
increase our capacity. Isn't it true that we really need more 
icebreaker capacity as the Arctic begins to open up for trade 
and development and transport?
    Admiral Gortney. Well, speaking for my closest mission 
partner, other maritime partner, which is the United States 
Coast Guard, I would agree with them that they do need more 
icebreaker, more capacity and capability out there.
    Senator King. Yeah. I don't want to look a gift horse in 
the mouth. We've got to get this new one started. But, it's 
really--that really is replacing the----
    Admiral Gortney. Yes, sir.
    Senator King.--the Polar Star, not giving us any new 
capacity. Okay.
    Admiral Haney, deterrence has been a strategic basis of our 
nuclear strategy since 1945 or thereabouts, but deterrence 
rests on a theory of a semblance of rationality on the other 
side. Does deterrence work with North Korea? Are they concerned 
about the possibility of being obliterated if they attack?
    Admiral Haney. Senator King, I think--I can't tell you 
exactly what Kim Jung Un, the leader of North Korea, thinks 
today, this very minute, but he has to know that he faces a 
very credible response across our joint military forces if he 
decides to do the unthinkable.
    Senator King. That--the deterrence, the fact that that 
would--there would be a--assured destruction is a fact that's 
known in North Korea.
    Admiral Haney. Again, I have not had a opportunity to talk 
to the leaders of North Korea, but I am convinced they look at 
our whole joint military force. That's why we see reactions to 
some of our exercises and what have you. I think they have a 
keen appreciation to the fact of what we bring as a complete 
force, not just the nuclear capability I lead.
    Senator King. As they say, it would behoove us to let there 
be no misunderstanding. Of course, the other side of this 
question is deterrence against nonstate actors, which is even 
more of a difficult--from a theoretical point of view, 
particularly people who don't care about dying. Where do you 
strike back? Where do you--where is the retaliation? I think 
that's a--that's a second level of theoretical problem with the 
theory of deterrence as applied to current threats that we 
face.
    Admiral Haney. Senator, as you have articulated, deterrence 
is complex, and it requires a deep understanding of the 
adversary, an understanding of what feeds the adversary and, 
consequently, has to be tailored for each specific adversary. 
That requires a lot of critical thinking and overall 
comprehensive approaches in multiple domains as we see 
adversaries even--including violent extremist organizations, 
use cyberspace, for example, in order to recruit and in order 
to finance their mechanisms. Those kind of things have to 
become more costly for them to pursue, and it is still--I would 
argue that deterrence is complex, but the fundamentals still 
apply.
    Senator King. Thank you.
    I'm out of time. For the record, could Admiral Gortney and 
Admiral Tidd give us something in writing on why we should not 
join NORTHCOM and SOUTHCOM and if there's a Goldwater-Nichols 
II--not now, because I am out of time, but perhaps a written 
statement? Because I know that's a question that's going to 
come up before the committee.
    Admiral Gortney. Yes, sir. Be happy to do that.
    Admiral Tidd. Yes, sir.
    Senator King. Thank you.
    Senator Reed. On behalf of Chairman McCain, Senator Ernst.
    Senator Ernst. Thank you, Senator Reed.
    I'm disappointed that our Chairman stepped out. We have 
some wonderful naval officers here in front of us today. Thank 
you so much.
    But, Senator Reed, I would have you notice that the senior 
enlisted advisor to Admiral Tidd is an Army command sergeant 
major from Iowa.
    Thank you so much for being with us today, Sergeant Major. 
Thank you, gentlemen, for your great service to our Nation.
    Admiral Tidd, we had a wonderful conversation the other 
day, and we did talk, during our conversation, about SOUTHCOM's 
limited Active Duty capabilities due to the prioritization from 
DOD in other areas of operation. But, I am very proud of the 
job that our citizen soldiers do in that area. Our National 
Guard has done a lot of work in the SOUTHCOM AOR to support 
United States security and to build our partner capabilities in 
Central and South America. Whether, as we discussed, it's 
serving with honor and integrity at Guantanamo Bay or working 
to end the flow of narcotics into the country or partnering 
through state partnership programs with many of our allies, our 
Guard has been vital to SOUTHCOM and to our regional security.
    Sir, if you could please describe some of the ongoing 
efforts by the Guard in SOUTHCOM, please.
    Admiral Tidd. Absolutely, Senator. I think it goes without 
saying, we would not be able to execute the lion's share of our 
missions in the absence of contributions by the National Guard, 
whether in the form of units rotating through Guantanamo Bay, 
as has been so effectively accomplished, to state partnership 
programs that provide a sustained continuity of contact with 
countries over the years, building their partner capacity, 
enabling them to do the sorts of jobs, and also going to the 
Army's recently established regionally aligned force prospect 
that the lion's share of the regionally aligned force to the 
SOUTHCOM region comes out of the National Guard. It is--it's 
absolutely critical to our ability to execute our mission.
    Senator Ernst. Okay, thank you. I appreciate it so much.
    We also briefly discussed the activities of Russia, Iran, 
and China, and Central and South America. Could you just tell 
us, in this open forum, what activities you've seen in that 
area? That came as a surprise to me.
    Admiral Tidd. Thank you, Senator.
    The--as we look at the transregional nature of our 
activities, if you are interested in what Russia is engaged in, 
you don't just look at eastern Europe. If you're interested in 
what China is engaged in, you don't just look at the South 
China Sea. Iran, the same story, you don't just look at the 
Middle East. Russia, who--which, arguably, has virtually no 
strategic interests of note in the southern region, is engaged 
in a direct competition to displace the United States for 
influence within the region. They are going back in and 
redeveloping the historical contacts that they had with a 
number of countries throughout the region, developing weapon 
sales at extremely low rates--low costs. What gives us great 
concern is, they are engaging in a concerted effort to convince 
partners that the United States is not a reliable ally, that we 
are withdrawing from the region.
    Essentially, any steps that plays into that narrative that 
makes it look like the United States does not provide the 
forces or is shrinking down the presence of the United States 
or consolidating to get at--slightly, at Senator King's point 
that consolidating combatant commanders simply plays into that 
false narrative that the United States is not interested in the 
region.
    In China, it's largely an economic competition. They're 
looking for markets and resources. Iran is essentially 
establishing cultural centers and other sorts of activities, 
but, we think, at a higher level of classification, we can talk 
to some of the other activities they're engaged in.
    Senator Ernst. But, bottom line up front, you do believe 
this is something we need to keep an eye on.
    Admiral Tidd. They--if you are concerned about those 
countries on a global scale, you cannot afford not to be 
watching what they are engaged in, in the SOUTHCOM region.
    Senator Ernst. Thank you very much.
    Thank you, gentlemen.
    I'll yield back my time.
    Chairman McCain [presiding]. Senator Heinrich.
    Senator Heinrich. Thank you, Chairman.
    Admiral Gortney, we've dramatically increased resources for 
Border Patrol in recent years, and we need to continue that 
push. I think the Chairman pressed you hard on that issue. But, 
we've often neglected the equally critical role that our 
Customs and Border Protection officers play in protecting the 
overall integrity of that border. Your comments really got to 
that when you mentioned the incredible problem of manufactured 
heroin in small quantities that are actually moving through our 
ports of entry. Should we be resourcing those ports of entry as 
seriously as we resource the border overall?
    For some of our colleagues who don't come from border 
States, it's just important to remember that we have Border 
Patrol agents, the guys in the green uniforms, who are out 
there all along the border, from east to west, and then we have 
these officers, whose job it is to sit at the ports of entry 
and make sure that we stop any illegal activity, being it 
moving narcotics, cash, other contraband, back and forth across 
that border.
    Admiral Gortney. Yes, sir. We need to invest for all of 
them. When I was at the port of entry there in San Diego, I was 
extremely impressed with the dedication of the patriots that 
are doing that. A very, very difficult task. Their motivation, 
their training, their professionalism, confronting an immense 
challenge. Anything we can do to increase their capacity and 
their capability, this Nation needs to invest in.
    Senator Heinrich. Thank you for your comments on that.
    I want to follow up with Admiral Tidd and go back to 2014, 
when your predecessor, General Kelly, said that he was able to 
see 75 percent of the cocaine trafficking heading towards the 
United States, but that they had to, quote, ``simply sit and 
watch it go by,'' unquote, because of the lack of resources. 
Now, I know some of that has changed, but we should all find 
this unacceptable, especially considering that the drug cartels 
are making on order of $85 billion a year in annual profits, 
which is literally what is fueling the violence, the corruption 
in Central America, and driving the refugee crisis that we see.
    Admiral Tidd, how many interdiction assets do you have at 
your disposal? What are your requirements?
    Admiral Tidd. On a given day, on average, we tend to have 
between five and six surface ships--those are largely Coast 
Guard cutters; one to two U.S. Navy platforms. The established 
requirement in order to interdict at the established target 
level of 40 percent is up to 21 surface platforms. It is--it's 
a question of resources.
    Senator Heinrich. Right.
    Admiral Tidd. Allocation of resources and priorities across 
all of the threats the country faces is--I don't question that. 
I understand it. I was involved in it. But, it is simply a 
matter of resources.
    Senator Heinrich. I want to thank you for your work on this 
front. I asked that question specifically to shine a light on 
how wide a gap there is between how we have resourced your men 
and women who do that work, and where we would like that to be, 
which is why I asked you specifically what the requirement is. 
We're nowhere close. We've gotten better. We need to keep a 
focus on that and not let that slip.
    Let me ask you, too, What percentage of your ISR 
requirements are being met today?
    Admiral Tidd. Overall, approximately 11 percent of the 
requirement.
    Senator Heinrich. I think that--that's a pretty sobering 
number for all of us, as well, Mr. Chair.
    My time is almost done. I want to switch to Admiral Haney 
and just ask you a broad question about why you believe the 
combination of LRSO and LRSB is so important. My hope is you 
can also explain the strategic importance of nuclear 
modernization efforts and the tools that they will provide the 
combatant commanders like yourself.
    Admiral Haney. Well, to your first question, it is very 
important for our Nation to have the adequate strategic 
deterrence and assurance mechanisms and methodologies and 
capabilities. From the air leg of our triad, it's very 
important that our platforms are appropriately armed in order 
to be credible. That includes B-52 aircraft, B-2s, which we 
will be flying both of those for some time to come, as well as 
the long-range strike bomber, stealth aircraft. Even while we 
have stealth aircraft, it's important that we have standoff 
capability. As we watch our adversaries work to have better 
anti-access aerial denial kinds of capabilities, we must have 
standoff in order to manage strategic stability as we should. 
As a result, I see the long-range strike--long-range standoff 
option being critical to all of those platforms, all three of 
them.
    Senator Heinrich. Thank you very much, Mr. Chair.
    Chairman McCain. Senator Tillis.
    Senator Tillis. Thank you, Mr. Chair.
    Gentlemen, I apologize for not being in the hearing. I've 
got a competing Judiciary hearing, and I've got to run for a 
vote. Admiral Haney and Admiral Gortney, thank you for being 
here.
    Admiral Tidd, I want to focus a little bit more on your 
command in--at a couple of things. One, I think the 11 percent 
coverage for a very critical area of other region is important. 
I'd like for you to talk--I know a lot of times we talk about 
SOUTHCOM, we talk about the work we're doing in Colombia and 
down in Latin America, drug interdiction, but you and I have 
had discussions. One thing I'd like for you to expand on, and 
it relates to a question that Senator Ernst asked, and maybe 
even focus a little bit on Iran's activity in Hezbollah and a 
number of other things that we're seeing there that are 
potentially systematically over time going to change the 
environment in your sphere of influence. Can you talk a little 
bit about that?
    Admiral Tidd. With--specifically with regard to Iran, there 
has been a longstanding presence of Hezbollah, one of other 
principal surrogates of Iran in the region. Their activities 
have largely been involved in logistics support, providing 
funds back to Lebanon, to Hezbollah itself, but it also is 
available as a potential to conduct other activities. It's a 
force in being, obviously, and they watch very closely what 
the--we watch very closely what they are doing, where they are.
    The--what makes it particularly noteworthy is, there are 
not large implantations within Central and South America of 
Muslim communities. They tend to be very small. This interest 
on the part of Iran is in developing partnerships, 
relationships, in order to escape the diplomatic isolation that 
they found themselves in over the last decade--couple of 
decades.
    The greater concern that we're beginning to see now is on 
the part of Islamist extremist groups. There is now a general 
recognition throughout the region in meetings with senior 
security chiefs from across the Caribbean, in particular, but 
also Central American countries. They recognize the risk of 
radicalization--self-radicalization occurring within their 
countries. There have already been a number of fighters that 
have gone over to Iraq and Syria to fight. We have seen 
indications--there have been a number of them that have been 
killed. I think we all saw the video of the 14-year-old from 
Trinidad-Tobago that was videotaped engaged in an act of 
terrorism, executing a Syrian combatant. That is there, and the 
countries are worried about the return flow of those foreign 
fighters coming back.
    Senator Tillis. Thank you.
    I don't want you to comment, because it relates to policy, 
but, you know, you could make a logical argument that, as 
Iran's economy improves, as money returns back to Iran as a 
result of this--the Iran agreement that I opposed, that we 
could even see more shifting of resources. It could accelerate 
the pace of what they're doing in your area of responsibility. 
I think we need to make sure that we're paying attention to it. 
It's not one that you normally think about when you talk about 
the--think about the Iran threat.
    I want to, in my remaining time, have you talk about 
Guantanamo Bay, and not with respect to the detainees. But, 
there's also discussions out there about, you know, maybe we 
don't need Guantanamo Bay or our presence there at all. Could 
you give me some sense of what you think the strategic 
significance of that land mass is with respect to your area of 
responsibility and our ability to respond in that part of the 
world?
    Admiral Tidd. Senator, the first time I visited Guantanamo 
Bay was in 1979. We have significant strategic interests at the 
Naval Station Guantanamo Bay that will continue long past 
whenever detention operations end. It is a critical point to 
support Coast Guard operations and the detection and monitoring 
mission across the Caribbean Basin. It is absolutely critical 
to supporting any sort of a migrant crisis that might occur. In 
fact, as I know you're aware, there is a very small MILCON 
[military construction] request in to do some basic level 
construction. If we were to have a migrant crisis, we would 
need to be able to rapidly build up the facilities to deal with 
up to 10,000 migrants in a 72-hour period, and as many as 
45,000 beyond that. Without that MILCON, we--it--we--right now, 
we are completely incapable of meeting that timeline, should we 
have to do it, and we would need that, to be able to have a 
fighting chance of being able to do it so that we would not 
have--bring that large number of migrants into the United 
States. It's a--it is a small downpayment that we think is 
probably a prudent investment to be able to do that.
    Guantanamo Bay will remain critical long past the detention 
operations.
    Senator Tillis. I think that we just need to underscore 
that. If you talk about our ability to complete missions, the 
humanitarian missions alone, in addition to other potential 
uses, that it would be irresponsible for us to consider any 
dialogue around not having that continue to be an important 
asset for us in that part of the country.
    Gentlemen, thank you all for your time. I will--because my 
colleague here almost never misses a hearing to talk about the 
four-two-five, I will say that I still share his opinion that 
that's a very important capability that we have in Alaska. I'm 
glad that General Milley seems to have taken that position, and 
I look forward to us coming to the resolution that I think my 
colleague from Alaska hopes we get to.
    Thank you all.
    Thank you, Senator.
    Senator Reed [presiding]. Thank you.
    On behalf of Chairman McCain, Senator Hirono.
    Senator Hirono. Last, but not least. Thank you, Mr. 
Chairman.
    Thank all of you for your testimony and being here today.
    You've been asked a lot of questions, particularly, Admiral 
Gortney, on our missile defense system. I'm probably going to 
want to chat with you further, or perhaps for the record, on 
whether or not we are--in terms of our need to increase our 
capability to stop the missiles throughout the flight of the 
missile, whether we're putting our resources in the right 
proportions with regard to stopping these missiles. That--I 
just wanted to mention that to you as a follow-up later.
    Senator Hirono. Admiral Haney, cyber has become a 
significant part of the DOD establishment. The Army and the Air 
Force have laid out requirements and started establishing 
cyber-protection teams and units around the country, with many 
of them in the National Guard units. I wanted to ask, How is 
this process working? What is your forecast for when future 
units will be established to meet these requirements? I'd note 
that, in Hawaii, we have everything that is going on in the 
Asia-Pacific region and where--the home of PACOM [Pacific 
Command], NSA [National Security Agency] Hawaii, much of our 
defense infrastructure in the Pacific. I would certainly like 
to have you keep Hawaii in mind as you move forward with these 
cyber-protection units. Can you talk a little bit about how 
things are going?
    Admiral Haney. Senator Hirono, the--this initiative of 
using Guard units to also augment our Active Duty units, I 
think is critical for our future. This was a start. Clearly, 
National Guard gets a vote, in terms of how we continue to 
progress in this regard. As you know, the threats to our Nation 
and our international community of nations is pretty high 
regarding how actors, both nonstate and state actors, are 
applying malfeasance, in terms of working against us in the 
cyber domain. Critical to our critical infrastructure, critical 
to how we fight as a military, and what have you. Quite 
frankly, we continue to grow. I'm proud of the cyber-protection 
teams I, as the combatant commander, have gotten to work with. 
I know, as I've talked to other combatant commands, including 
the two to my left, we appreciate the work that they are able 
to do. We're still growing these teams. We don't have them all 
at the right level yet. More to follow.
    Senator Hirono. Of course, once you develop the teams, we 
must be ever-flexible, because they--what happens in the cyber 
arena is constantly changing. In terms of the timeframe for 
these future units to at least be put in place, what is your 
timeframe? Are we talking about 2 more years? A year?
    Admiral Haney. I'd have to take that question for the 
record, Senator. I don't have that. I know there's work going. 
We've just gotten started. In terms of how we will continue to 
build for the future, more to follow.
    Senator Hirono. Thank you very much.
    Admiral Tidd, regional epidemics like the Zika virus are 
concerning and threatening the well-being of our citizens. One 
case of the Zika virus was reported this year, so far, in 
Hawaii, and four were also reported in 2015 and 2014. Can you 
describe the role that SOUTHCOM has in dealing with epidemics 
such as these?
    Admiral Tidd. Yes, Senator. The--as a result of the initial 
Ebola outbreak, a large interagency network was put together, 
and SOUTHCOM was a key participant in that. That was 
reenergized with the outbreak of Zika that we're seeing.
    We remain postured to be able to respond to requests for 
assistance from our partner nations in SOUTHCOM, but we have 
put out specific guidance to the men and women, part of our 
command, who are operating down in that region Those--the 
policies that affect them, the protective measures, are largely 
the--exactly the same protective measures that have been in 
place to protect them from exposure to dengue fever, to the 
Chikungunya, and other mosquito-borne illnesses. We continue to 
emphasize that.
    To date, we've had only two of our military personnel--two 
males--who have been diagnosed and confirmed to have had Zika. 
They've recovered and returned to duty. We've had one family 
member--a pregnant female family member who has taken advantage 
of a policy to return to the United States. The family was--had 
been scheduled to return already, and it was a slightly 
accelerated return on her part.
    But, we're working with the countries, primarily in 
training in the mosquito eradication programs. Their militaries 
obviously are very heavily engaged in those activities. That's 
where we stand right now. We have a Navy medical unit down in 
Peru that has been doing a lot of work in the experimental 
development of vaccines and that type of work, and also in the 
detection.
    Senator Hirono. Thank you very much. Especially for places 
such as Hawaii, with so much tourist traffic from areas that 
have had these outbreaks, it is really important. Thank you 
very much for your efforts.
    Admiral Tidd. Senator.
    Senator Hirono. Thank you, Mr. Chairman.
    Senator Reed. On behalf of Chairman McCain, Senator Graham, 
please.
    Senator Graham. Thank you all.
    Admiral--I can say that to everybody. The Navy's doing well 
with these commands. Have any of you served in Iraq or 
Afghanistan?
    [A show of two hands.]
    Senator Graham. Admiral Gortney and Admiral Tidd. While 
there, did you serve with American Muslims in uniform?
    Admiral Gortney. Yes, sir, I did.
    Admiral Tidd. Yes, sir.
    Senator Graham. What is your view of the service of those 
who are Muslim in the United States military?
    Admiral Gortney. They're patriots who serve their Nation.
    Admiral Tidd. Concur.
    Senator Graham. Do you agree that we're in a war between 
radical Islam and the world at large?
    Admiral Gortney. Yes, sir. It's a generational war.
    Senator Graham. That the biggest victims of radical Islam 
are people within the faith who will not bend to their will: 
other Muslims.
    Admiral Gortney. I'd have to say they're a threat to both 
inside and outside the faith.
    Senator Graham. But, when you add up the numbers of people 
killed, there's more Muslims than anybody else.
    Admiral Gortney. That's correct.
    Senator Graham. Do you believe it's in our national 
security interest to help those in the faith who would fight 
back against radical Islam?
    Admiral Gortney. Yes, sir, I would.
    Admiral Tidd. Yes, sir.
    Senator Graham. Thank you.
    I just want to be on the record, here, that, to those 
3,500, plus or minus, American Muslims serving in uniform, I 
appreciate your service, that of your family, and I respect 
your faith.
    Admiral Gortney, in the next decade, if nothing changes in 
North Korea and potentially Iran, are we going to face more 
threats from a missile launch against the United States by a 
rogue nation, or less?
    Admiral Gortney. A greater threat, sir.
    Senator Graham. Okay. If we go back to sequestration, do we 
compromise your ability to deal with that threat?
    Admiral Gortney. I believe it would, sir.
    Senator Graham. Admiral Tidd, over the next decade, do you 
see more instability in the region in Southern Command, or 
less?
    Admiral Tidd. I see no less.
    Senator Graham. Okay.
    Admiral Tidd. I see no less.
    Senator Graham. How many ships are you supposed to have?
    Admiral Tidd. Senator, if I were to accomplish the goal of 
40 percent interdiction, I would require 21 ships.
    Senator Graham. How many do you have?
    Admiral Tidd. On average, about six to seven.
    Senator Graham. To get to where you need to go, you need 
more ships.
    Admiral Tidd. Correct.
    Senator Graham. How many Navy ships do you have available 
to you?
    Admiral Tidd. On average, one to two.
    Senator Graham. The rest are Coast Guard.
    Admiral Tidd. They are, yes, sir.
    Senator Graham. In Southern Command, the United States Navy 
is able to generate two ships?
    Admiral Tidd. In--because of the demand for surface 
platforms in other theaters that are a higher priority, yes, 
sir, that's correct.
    Senator Graham. If we sent you more ships, it wouldn't be a 
waste of money, would it?
    Admiral Tidd. Senator, it would come at the expense of 
other higher-priority theaters.
    Senator Graham. But, if we had a larger budget, it would 
make sense to build more Navy ships, at least from your 
command's point of view?
    Admiral Tidd. Sir, I would never turn down additional 
ships.
    Senator Graham. When you say you need 17--what number did 
you say?
    Admiral Tidd. Twenty-one.
    Senator Graham. Twenty-one. I'm sure somebody just didn't 
make that up. That was----
    Admiral Tidd. No, sir, there is a fairly lengthy study that 
went in to derive that requirement.
    Senator Graham. That 40 percent interdiction is drugs and 
other contraband coming to the country?
    Admiral Tidd. That's correct.
    Senator Graham. If we've got a drug problem here, we're not 
doing much to stop it, because we're certainly under-resourcing 
you. Would you agree with that?
    Admiral Tidd. I would.
    Senator Graham. It's one thing to build a wall, which makes 
sense to me. It--but, it also seems like we should build up the 
Navy to interdict the flow of drugs and other contraband into 
our country.
    If we go back to sequestration, the chance of you getting 
more ships goes down, not up. Is that correct?
    Admiral Tidd. Senator, we're still suffering from the 
hangover from the last sequestration. Ships that had delayed 
maintenance, aircraft that had delayed maintenance. Those ships 
are not available now to be able to operate in our theater. Any 
future sequestration would be catastrophic.
    Senator Graham. Admiral Haney, in your lane, what's the 
effect of going back to sequestration from your point of view?
    Admiral Haney. My point of view, going back to 
sequestration would be crippling, in that it would put 
significant risk of these programs that we need for our joint 
military force, as a whole, and particularly these long-term 
programs that are associated with my mission space.
    Senator Graham. Thank you all for your service.
    Senator Reed. Thank you, Senator Graham.
    On behalf of Chairman McCain, thank you, gentlemen, for 
your testimony and for your service.
    The hearing is adjourned.
    [Whereupon, at 12:03 p.m., the hearing was adjourned.]

    [Questions for the record with answers supplied follow:]

              Questions Submitted by Senator James Inhofe
                                northcom
    1. Senator Inhofe. How do you assess North Korea's current 
ballistic missile capabilities and how does the fiscal year 2017 budget 
request support your ability to counter the threats?
    Admiral Gortney. North Korea has been developing and producing 
ballistic missiles for over three decades. Through its space launches, 
North Korea has successfully demonstrated many of the technologies 
required for an intercontinental ballistic missile (ICBM). Meanwhile, 
North Korean military parades in recent years have showcased road-
mobile ICBMs, which we assess the regime is developing primarily as a 
means to deter external attack. Though not yet flight-tested, we assess 
they are capable of ranging the continental US, albeit with low 
reliability.
    We are well-postured against the current threat from a rogue 
nation. The Ground Based Midcourse Defense system covers all of the 
United States, including the East Coast, against missile threats from 
North Korea. Looking ahead, we must continue investments designed to 
improve our sensor architecture, enhance our kill vehicles, and 
sustain/test the entire ballistic missile defense system. Programs 
funded in the budget such as the Long Range Discrimination Radar, the 
Re-designed Exoatmospheric Kill Vehicle, discrimination improvements 
for Homeland defense, and the Space-based Kill Assessment experiment 
are key contributors.

    2. Senator Inhofe. Do you believe that Russia is testing the 
readiness of our forces along the western boundary? Will the fiscal 
year 2017 DOD budget impact your ability to protect our shores from 
these threats?
    Admiral Gortney. With regard to Russian activities on their Western 
boundary (e.g. the Baltics or Ukraine), this is really a USEUCOM 
question, but yes, I believe they are testing our forces. As the 
Commander of NORAD and USNORTHCOM, I am especially cognizant of the 
potential of Russia's Northern Fleet and its Long Range Aviation based 
in the West to reach North America. Over the past six years, I have 
seen Russia resume some of its naval operations in the approaches to 
North America, and I have seen an increase in the amount of strategic 
heavy bomber activity globally.
    With regard to Russian activities to our West (e.g. in the United 
States Arctic, Alaska and the Aleutians or the West Coast of CONUS), 
yes, I am absolutely convinced they are testing our forces, assessing 
our capabilities, and sending strategic messages (like flying strategic 
heavy bombers off the West Coast on the 4th of July).
    I also believe that the fiscal year 2017 budget request strikes a 
prudent balance among the modernization of the joint force, its size, 
and its readiness, and continues to keep faith with servicemembers and 
their families. We are countering Russia's aggressive policies through 
investments in a broad range of capabilities. The fiscal year 2017 
budget request will allow us to modify and expand air defense systems, 
develop new unmanned systems, design a new long-range bomber and a new 
long-range stand-off cruise missile, and modernize our nuclear arsenal.

    3. Senator Inhofe. With across the board military personnel 
reductions, what other contingencies will fall back on the states that 
federal elements used to support?
    Admiral Gortney. I am confident that the Department, with its total 
force of Active, Reserve, and National Guard forces, is fully ready to 
carry out its missions, including responding to contingencies. 
Therefore, I do not foresee any contingencies falling back on the 
states.

    4. Senator Inhofe. You acknowledged in your opening statement that 
sequestration cuts deeply impacted NORTHCOM's readiness, how much will 
another year of sequestered funds impact the forces of NORTHCOM?
    Admiral Gortney. The stability provided by the Bipartisan Budget 
Act of 2015 is a much-needed step in the right direction. However, what 
is needed most is a permanent fix to the Budget Control Act of 2011 to 
restore predictability and stability into the budget process. Another 
year of sequestration will impact the Services' plans and schedules to 
regenerate force readiness and modernize capabilities in order to keep 
pace with existing threats.
                                stratcom
    5. Senator Inhofe. In order to ensure one of our nuclear triad legs 
remains effective, are the DOD and Navy budgets going far enough?
    Admiral Haney. Our current Triad systems are remaining in service 
well beyond their expected service lives and we must properly resource 
our recapitalization programs across all the Services to avoid 
unacceptable gaps is our deterrence capabilities. The Triad enterprise 
is receiving strong budget support from the Navy and Air Force. 
However, our continued success depends on the Department of Defense and 
Congress providing stable and adequate funding over the long-term.
    Recapitalizing our sea-based strategic deterrent force remains a 
top Defense Department and USSTRATCOM modernization priority. The 
fiscal year 2017 President's Budget request for Ohio-class SSBN 
sustainment, Trident II D5 missile modernization, and the Ohio 
Replacement SSBN program is sufficient to support USSTRATCOM mission 
requirements. When the Ohio-class submarines begin retiring in 2027, 
they will be the longest served submarines in U.S. Navy history at 42 
years. Given the previous decision to delay the Ohio Replacement 
program, there is no additional engineering margin to extend our Ohio-
class submarines. I fully support the Navy's effort to leverage 
lessons-learned from the Virginia-class attack submarine acquisition 
program as well as manage overall force cost by transitioning the very 
capable Trident II D5 missile into the Ohio Replacement SSBN.
    Similar to our sea-based deterrent force, our land-based strategic 
deterrent is in need of recapitalization to ensure it remains credible 
in the future. The Minuteman III was initially deployed in the 1970s 
and will remain in service through 2030, nearly sixty years of service. 
While the missile has gone through multiple life extension programs, 
much of the launch infrastructure has not been modernized since initial 
deployment in the 1960s. The Ground Based Strategic Deterrent program 
is the first substantial full weapon system recapitalization effort 
since the Minuteman III entered service and must start deploying by the 
mid-2020s to prevent a strategic capability gap.
    The Air Force is upgrading and recapitalizing air-delivered 
strategic capabilities to ensure the most flexible and visible Triad 
leg will continue to fully support U.S. deterrence and assurances 
commitments worldwide. USSTRATCOM fully supports Air Force ongoing 
efforts to sustain legacy platforms (B-2/B-52) until their planned end-
of-life, and develop and field the new B-21 dual-capable bomber and 
Long Range Stand-off cruise missile to maintain an effective and 
credible air delivered nuclear deterrent.

    6. Senator Inhofe. Are the systems currently in our arsenal 
currently degrading our nuclear deterrent? If so, when were the last 
modernizations completed?
    Admiral Haney. Today, our nuclear forces are safe, secure, 
effective, and ready to support our national security challenges. 
However, our legacy Triad delivery and weapon systems are at or well 
beyond their expected service lives, with little to no margin to absorb 
additional risk. The Defense Department is faced with two formidable 
but not insurmountable challenges: sustaining our current deterrent 
systems until retirement and deploying future forces without degrading 
our deterrent capabilities. USSTRATCOM fully supports ongoing efforts 
to sustain legacy platforms and develop and field those capabilities 
required to accomplish the Deterrence and Assurance mission. 
Development of these follow-on capabilities must remain on track to 
avoid strategic capability gaps.
    The Ohio-class SSBN fleet is undergoing significant sustainment 
efforts to maintain high operational availability and extend the 
service life. Simultaneously, the Navy is conducting a Trident II D5 
missile life extension in order to transition the missile to the Ohio 
Replacement SSBN. The Ohio Replacement Program is the first sea-based 
recapitalization effort in over 30 years and must proceed on schedule 
to maintain an effective and credible sea-based deterrent. There is no 
additional engineering margin to extend our Ohio-class submarines. When 
the Ohio-class submarines begin retiring in 2027 at 42 years of service 
life, they will be the longest serving submarines in U.S. Navy history.
    The Minuteman III Intercontinental Ballistic Missile (ICBM) was 
initially deployed in the 1970s and will remain in service through 
2030. Unfortunately, much of the launch infrastructure has not been 
modernized since initial ICBM deployment in the 1960s. The Air Force 
estimates Minuteman III is sustainable until flight system attrition 
begins in the 2028. The Ground Based Strategic Deterrent (GBSD) program 
is the first substantial full weapon system recapitalization effort 
since the Minuteman III entered service and must start being fielded by 
the mid-2020s. Successfully fielding the GBSD weapon system will ensure 
our ICBM deterrent capability beyond 2030. Like the sea-based strategic 
deterrent, ICBM enterprise success depends on stable and adequate 
funding over the long-term.
    Our dual-capable B-52 and B-2 bombers and their associated weapons 
have performed their nuclear deterrent mission for over seven decades 
through significant sustainment and modernization efforts. The Air 
Force has ensured the effectiveness of these aging aircraft through 
multiple payload capabilities, survivability and communications 
upgrades. Our legacy capabilities are effective against current 
threats, but will be increasingly challenged in the 2020s as 
adversaries field more complex air defenses. The B-21 Long Range 
Strike-Bomber, Long Range Stand-off cruise missile, and B61-12 gravity 
bomb are all needed to provide the flexibility, visibility and 
capability to meet strategic mission needs and support extended 
deterrence commitments to our allies.

    7. Senator Inhofe. If it took six years to create the first 84 
teams, is it reasonable to assume that USCYBERCOM is still on track to 
create the remaining 50 in the next 30 months? How crucial is current 
funding levels to this goal?
    Admiral Haney. In 2013, my sub-unified command, USCYBERCOM, began 
to build the capability known as the Cyber Mission Force (CMF). Of the 
target total of 133 CMF teams, 123 are in varying levels of 
development. We have 33 teams that have achieved Full Operational 
Capability (FOC), and 68 have achieved Initial Operating Capability.
    USCYBERCOM, working with the Services, remains committed to 
achieving FOC for the entire Cyber Mission Force by 30 Sep 2018. The 
current funding levels and a consistent funding stream are crucial to 
meet the timelines given to USCYBERCOM. If the Defense Department is 
impacted by budget shortfalls or delays, this goal and associated 
timelines will be severely impacted.
                                southcom
    8. Senator Inhofe. Where is SOUTHCOM restricted in dealing with 
this problem prior to it reaching the United States? If you had 
additional allocations in the budget, how would you rectify this 
shortfall?
    Admiral Tidd. SOUTHCOM does not have any specific restrictions, 
however, we are limited in our ability to execute our statutory 
requirement to detect and monitor (in support of law enforcement 
interdiction) illicit traffic in maritime and sea domain en route to 
the United States due to a lack of resources. Our largest shortfall is 
not in funding, but in surface assets with which to conduct this 
mission.
    In order to meet the U.S. Government national goal to remove 40 
percent of documented cocaine movement through the transit zone, 
USSOUTHCOM requires 21 vessels. Over the last year, our average number 
of surface assets has been seven, the vast majority of which were U.S. 
Coast Guard assets. Our current ideal breakdown of the 21 vessels 
includes 14 medium range ships (similar to the Littoral Combat Ship or 
future Offshore Patrol Cutter), 3 long range ships (like a Cruiser, 
Destroyer, or National Security Cutter), and 4 coastal patrol boats. 
The most useful vessels to USSOUTHCOM are medium and long range ships 
equipped with a flight deck that provides persistent offshore presence, 
capable of conducting Airborne Use of Force (AUF), with embarked law 
enforcement teams.
    As the Services face asset shortfalls and readiness challenges, 
those shortfalls trickle down to the Combatant Commands. Frankly, 
SOUTHCOM feels the cuts associated with those shortfalls in a 
disproportionate manner. Because we cannot buy our way out of an asset 
shortfall, we use any additional funds to build our partners' capacity 
to complement our interdiction efforts and protect their own 
territorial land and waters. We also look at innovative ways to employ 
contract and experimental surface and air platforms.

    9. Senator Inhofe. Despite the excellent job our troops at GITMO 
under very difficult circumstances, a court order is denying our female 
troops from performing the jobs they are trained to do--what is the 
current status of this court order? What impact is it having on the 
morale of our service-members there?
    Admiral Tidd. Thank you for your recognition of our troops, 
Senator. All of the personnel participating in the detention operations 
mission at GTMO--to include military, civilian, male, and female--
perform their duties with the utmost professionalism, to the highest 
standards.
    This ``temporary'' court order was issued on January 7, 2015 and is 
still in effect. The court's order limits ``the use of female guards to 
physically touch the accused during movements to and from attorney-
client meetings and Commission hearings, absent exigent 
circumstances.'' It has resulted in decreased unit readiness, decreased 
unit cohesion and a negative impact on morale. Additionally, the troops 
are concerned it could impact their career progression . . . .it is our 
responsibility to ensure that does not happen.

    10. Senator Inhofe. What specifically is SOUTHCOM conducting with 
Columbia to ensure our support is evident? Is WHINSEC (Western 
Hemisphere Institute for Security Cooperation) and IMET (International 
Military Education and Training) assisting in ridding Columbia of the 
FARC rebels?
    Admiral Tidd. Colombia is a strong strategic ally, with which we 
coordinate closely every day to further security throughout the entire 
region. Colombia's transformation has been remarkable, but it will 
still face an uncertain period with many new challenges even if a peace 
accord is reached. For Colombia to successfully consolidate its hard-
earned gains, the United States must remain as fully engaged a post-
peace accord partner as we ever were during Colombia's struggles. 
United States Southern Command will continue to support Colombia's 
efforts to take the FARC off the battlefield, successfully implement a 
new counternarcotic strategy, establish state presence in areas where 
it had not previously existed, conduct humanitarian demining, and 
transform the Colombian military to adapt to an evolving security 
environment.
    As a broader United States interagency, it is also essential that 
we continue providing Colombia a robust and agile assistance package 
that will help it successfully address the new security, developmental, 
and human rights challenges posed by a post-accord environment. This 
includes the training, education, and frankly, relationship-building 
that takes place through programs such as IMET at institutions such as 
the Inter-American Air Forces Academy (IAAFA), the United States Army 
Sergeants Major Academy (USASMA), the National Defense University 
(NDU), all U. S. Service War Colleges, and WHINSEC.
    WHINSEC plays a critical security cooperation role in Colombia and 
sets conditions for future access and long term relationships--in fact, 
many WHINSEC alumni have attained key positions of prominence across 
the Colombian military. The school's curriculum is an integral 
component of the Colombian military officers and non-commissioned 
officers' development and continued professionalization, ``Preparing 
the leadership of the future.''
    -  WHINSEC plays an important academic and technical advisory role 
assisting the Colombian Army to develop new courses to support 
transformation and creation of new military occupational skills to 
perform DDR related missions.
    -  WHINSEC's instructors have done a superb job integrating into 
Colombia the same academic core values used in the WHINSEC schoolhouse. 
Through collaboration with WHINSEC, Colombian military professional 
development courses now include elements of military justice systems & 
procedures, civil-military relations, and human rights modules, all of 
which will be directly integrated into DDR initiatives.
    -  WHINSEC's U.N. Peacekeeping Operations Course is another example 
where Colombian officers are trained to support DDR challenges using 
contemporary lessons. In these courses, Officers are given instruction 
and preparation to assume DDR management and advisory roles as 
transition staff members. Additionally, the Colombians utilize this 
course as part of their ``train the trainer'' program for the newly 
established Peace Operations and Civil Affairs Training Center (ESMAI) 
located in Bogota, which will support future Colombian Military U.N. 
PKO missions as part of their transformation Regional Security Exporter 
line of effort.
    Over the years the IMET account has been one of the most effective 
security cooperation programs in the SOUTHCOM arsenal. Not only has a 
large number of the Colombian military senior and mid-level leadership 
professionally benefited from IMET courses, but the application of the 
knowledge learned during IMET funded courses has been instrumental in 
improving the overall defense capabilities of the Colombians. The IMET 
program will continue to support the DDR and Colombian Ministry of 
Defense Transformation process through these specific types of courses:
    -  Strategy and Defense Policy--provide the Colombian military the 
skills needed to formulate policy and strategy to address security, 
developmental, and human rights challenges during the DDR process.
    -  Executive programs in Defense decision making--provide the 
Colombian military the knowledge and lessons that could be applied 
during the transformation planning.
    -  Joint Operations--educate the COLMIL officers in joint 
operations, decision making, and planning processes and combined-
operations in a joint environment.
                               __________
              Questions Submitted by Senator Kelly Ayotte
                              drug tunnels
    11. Senator Ayotte. You testified that the collaboration between 
Israel and the United States with regard to tunnels has ``been very, 
very beneficial, both for us and for our partners in Customs and Border 
Patrol.'' Can you provide some details?
    Admiral Gortney. Yes, collaboration with Israel has provided 
significant gains in terms of our knowledge of tunnel issues. With 
Israel, we share similar problem sets on the border. Four specific 
areas where we have gained invaluable knowledge are: magnetic, mapping 
and borehole technologies for sensing and detecting tunnel activities; 
remediation techniques to temporarily or permanently close tunnels; 
identification of key indicators of tunnel activity and tunnel 
improvised explosive devices; and adoption of Israeli equipment (`foam 
in a bag') currently in use in Arizona to block tunnel entry and exit 
points.

    12. Senator Ayotte. Will you keep my office updated on this and let 
us know what more we can do to help you to fight drug smuggling 
generally and also to fight drug tunnels under our southern border?
    Admiral Gortney. Yes, I will keep your office updated on our 
efforts. We support the Department of Homeland Security in carrying out 
its mission to secure the Southwest Border, including through detection 
and monitoring, as well as with tunnel detection capabilities and 
analytical support. Joint Task Force North is my lead for coordinating 
our Federal military support to law enforcement counternarcotics/
counter-transnational organized crime efforts along the Southwest 
Border, providing a critical link with Federal military, National 
Guard, and law enforcement partners through their long-standing 
relationships.
                 united states naval station guantanamo
    13. Senator Ayotte. Setting aside the detention center, what is the 
strategic and operational value of United States Naval Station 
Guantanamo?
    Admiral Tidd. The Naval Station at Guantanamo Bay is an important 
strategic base, and the only one of its kind in the Western Hemisphere. 
This base supports the Department of Defense and the broader U.S. 
Interagency, to include the Department of State (DOS) and Department of 
Homeland Security (DHS) in various mission sets. From this strategic 
base of operations, the U.S. conducts detection, monitoring, and 
intercept of illicit traffic and other threats, as well as staging for 
disaster and humanitarian relief efforts. There is also an active DOS 
and DHS Migrant Operations Center at GTMO that maintains a steady-state 
migrant processing mission.
    As Secretary of Defense Carter recently stated before the House 
Appropriations Committee Subcommittee on Defense in response to a 
question about the future of the Naval Station, ``GTMO is a strategic 
location . . . The Naval Station is secure.''

    14. Senator Ayotte. Would it be a mistake to give it back to Cuba? 
If so, why?
    Admiral Tidd. I agree with the Secretary of Defense that Guantanamo 
Bay is a strategic operating base and that it would be a mistake to 
lose it. Again, it is the only one of its kind in the Western 
Hemisphere and the missions of various Departments would be compromised 
if we could no longer operate out of that facility.
                     milcon, substandard facilities
    15. Senator Ayotte. What are SOUTHCOM's MILCON requirements for JTF 
Gitmo so that we can ensure our troops there have the safe and quality 
living conditions they deserve?
    Admiral Tidd. Senator, thank you for your steadfast support of the 
personnel carrying out the important detention operations mission at 
Guantanamo Bay. I would also like to thank the Congress for funding two 
MILCON projects at GTMO that are already underway and will improve both 
the safety and quality of life of our troops--the dining facility, and 
the clinic that greatly reduces detainee movements which reduces risk 
to the guard force.
    As noted in our response to Chairman Thornberry of the House Armed 
Services Committee, we do have an unfunded requirement for 
unaccompanied personnel housing facilities at GTMO. The existing 
facilities were constructed 10 to 60 years ago. The Department has 
requested $13.7M in fiscal year 2017 Facilities, Sustainment, 
Restoration, and Modernization (FSRM) funding, but this will only 
provide a short-term fix. Full replacement of these facilities is the 
safest option, at a cost of $115M.
                               __________
              Questions Submitted by Senator Dan Sullivan
                   the arctic and the 4-25 ibct (abn)
    16. Senator Sullivan. In your best military judgment, considering 
the statements from senior military leaders below--both before and 
after the recent announcement--do you support General Milley's desire 
and best military judgment to keep the 4-25 IBCT (ABN)--in its 
entirety--in Alaska for at least another year, if not longer?
    Admiral Gortney. I support General Milley's decision to keep the 4-
25th IBCT (ABN) for another year. Alaska is a strategic location, and 
having one of the Army's five airborne brigade combat teams in Alaska 
gives the United States flexibility in a time of strategic instability. 
While not assigned to USNORTHCOM, the 4-25th IBCT (ABN) is able to take 
advantage of cold weather training facilities in an austere environment 
that are matched by few places in the world.

    17. Senator Sullivan. In your best military judgment, what kind of 
unique capabilities does the 4-25 IBCT (ABN) bring to USNORTHCOM?
    Admiral Gortney. The 4-25th IBCT (ABN) are worldwide deployable 
forces assigned to USPACOM. The 4-25th IBCT (ABN) has the capability to 
support USNORTHCOM's defense support of civil authorities and search 
and rescue missions throughout the austere conditions in the Alaska 
Joint Operations Area, when approved by the Secretary of Defense.

    18. Senator Sullivan. What kind of message does keeping the unique 
capabilities of 4-25 IBCT (ABN) in Alaska send to President Putin about 
United States resolve in the Arctic?
    Admiral Gortney. The 4-25th IBCT (ABN) is a worldwide deployable 
force assigned to USPACOM with a flexible warfighting capability for 
our nation similar to the other four airborne brigade combat teams in 
the United States. Their forward-based location in Alaska underscores 
the United States commitment to worldwide deployability and the 
capability to operate in all environments.
                               __________
                Questions Submitted by Senator Mike Lee
    19. Senator Lee. Between SOUTHCOM, NORTHCOM, the Drug Enforcement 
Agency, Department of Homeland Security, Central intelligence Agency, 
Department of Justice, and others agencies involved in the region, who 
is the lead on addressing the regional violence in Mexico and Central 
America as it pertains to U.S. security?
    Admiral Gortney. In line with the President's National Security 
Strategy of 2015, regional violence in Mexico and Central America is 
addressed through a whole-of-government approach, with U.S. military, 
intelligence, law enforcement, and other agencies working together in 
close coordination under their respective agency authorities to engage 
foreign partners and to defend the United States Homeland. I believe 
the primary threat to the U.S. security in this region stems from 
transnational criminal organizations and the violence and instability 
that results from their illicit activity. The U.S. Department of State 
and our Embassies in each country lead the coordination efforts of U.S. 
federal agencies as we support our partners in Mexico and Central 
America.
    Admiral Tidd. First and foremost, each nation has primary 
responsibility for securing its own sovereign territory, to include the 
security of its citizens. However, it is clearly in the interest of the 
U.S. to support those nations as they address internal as well as 
regional security because their security is inextricably tied to our 
own. As with all matters of foreign affairs, the State Department has 
the overall lead for U.S.engagement abroad. I can speak specifically to 
the Department of Defense's role, which is to support our partner 
nations and other U.S. Federal Agencies' efforts in the region within 
the authorities granted to the department.

    20. Senator Lee. What, if any, role has SOUTHCOM had in the United 
States' response to the Zika virus in Brazil and Latin America, and 
what role will this Combatant Command play in implementing programs or 
utilizing funding if granted by Congress?
    Admiral Tidd. The President's supplemental request of $1.9B for 
Zika response did not include any funds for the Department of Defense 
(DOD). However, the supplemental did include transfer authority to 
allow for flexibility across the Federal Government to respond to 
emerging requirements. The support that SOUTHCOM is currently providing 
to partner nations who request assistance is being funded out of our 
baseline OHDACA funds.
    To date, we have provided three minimal cost projects for Zika 
mitigation and prevention in Colombia, and one minimal cost project in 
Costa Rica. In Colombia, the projects provided for the purchase of 
basic preventative materials (i.e. mosquito repellent, mosquito nets) 
to be distributed to the local population in Zika endemic areas. In 
Costa Rica, the project will support the Ministry of Health in the form 
of laboratory reagents and supplies for Zika virus detection. In 
addition, as part of our State Partnership Program, we have provided 
Subject Matter Expert Exchanges (SMEEs) in vector control and disease 
surveillance for both Suriname and Guyana.
    Navy Medicine Research Unit-6 (NAMRU-6), located in Lima, Peru, 
developed a laboratory improvement program for partner nation military 
laboratories. PROMELA (Programa de Mejoramiento de Laboratorios de las 
Fuerzas Militares de Latinoamerica) improves partner nation military 
laboratories' capability to test for pathogens. In addition, NAMRU-6 is 
actively engaged in infectious disease research projects in the region 
through satellite sites in Colombia, Guatemala, Honduras, Paraguay, 
Bolivia, Venezuela, and Peru and has the ability to test for the Zika 
virus.
    At the request of the Government of Paraguay, SOUTHCOM will partner 
with USAID, the Pan American Health Organization, and the Ministry of 
Health to identify gaps within their institutions to effectively 
respond to the Zika virus. An entomologist and virologist from NAMRU-6 
will conduct assessments to include an evaluation of the Paraguay's 
capacity to detect and diagnose the virus as well as addressing 
treatment, surveillance, pest management, waste disposal, and vector 
control.
    If requested, SOUTHCOM could provide additional regional support to 
include vector control education, supplies and materials; laboratory 
supplies; and SMEEs on field sanitation, disease surveillance, 
epidemiology, and entomology.

    21. Senator Lee. I have read in some slightly dated material that 
SOUTHCOM, ``. . . is supporting the development of a regional maritime 
interdiction strategy, as well as providing equipment and training to 
improve maritime and air domain awareness.'' What is the status of 
developing this multinational maritime strategy, and what plans does 
SOUTHCOM have going forward with this strategy?
    Admiral Tidd. The strategy to which you are referring is an annex 
to the larger U.S. Strategy for Engagement in Central America, an 
effort being led by the International Narcotics and Law Enforcement 
Bureau at the Department of State. The purpose of this annex is to 
assist partner nation maritime forces in building comprehensive 
maintenance and logistics systems that will improve maritime 
operational readiness within their littoral waters, and build the 
systems and a culture for effective preventative maintenance within the 
respective maritime service(s). This is funded by various State 
Department foreign assistance accounts, mainly International Narcotics 
Control & Law Enforcement, Foreign Military Financing, and 
International Military Education & Training.
    SOUTHCOM contributes to this effort via a broad range of activities 
which build partner nation capacity to counter illicit trafficking. Our 
primary focus is on those partner nation units which have a clearly 
established role in directly supporting law enforcement efforts. We 
have conducted baseline assessments of these units' capabilities, and 
provide a combination of training, equipment, and infrastructure 
support as appropriate to mitigate their most critical capability gaps. 
Examples include the provision of sensors for maritime patrol aircraft, 
high-speed interceptor boats and tactical radio systems, construction 
of coastal stations and command center facilities, and training on 
maintenance/logistics support systems.

    22. Senator Lee. In addition to the detention center at Guantanamo 
Bay, there is also the critical Naval Base. Why is this base so useful 
for our operations in the Caribbean? What strategic value do we gain by 
maintaining this presence?
    Admiral Tidd. The Naval Station at Guantanamo Bay is the only 
strategic base of its kind in the Western Hemisphere. This base 
supports the Department of Defense as well as the Department of State 
(DOS) and Department of Homeland Security (DHS) in various mission 
sets. From this strategic base of operations, the U.S. conducts 
detection, monitoring, and intercept of illicit traffic and other 
transnational threats, as well as staging for disaster and humanitarian 
relief efforts. There is also an active DOS and DHS Migrant Operations 
Center at GTMO that maintains a steady-state migrant processing 
mission.
    As Secretary of Defense Carter recently stated before the House 
Appropriations Committee Subcommittee on Defense in response to a 
question about the future of the Naval Station, ``GTMO is a strategic 
location . . . The Naval Station is secure.''

    23. Senator Lee. Congress has previously taken an interest in the 
security situation surrounding the Olympic games, as they are known for 
being targets of terrorist attacks, havens for trafficking, and sources 
of international political tension. What are the security concerns 
surrounding the 2016 Olympic Games in Rio de Janeiro, and how is 
SOUTHCOM involved in addressing them?
    Admiral Tidd. We share your concern that a gathering of this size 
with a high level of media exposure providing a world-wide audience is 
a natural target. We also share Brazil and the international 
community's commitment to ensuring a safe and secure 2016 Olympic 
Games.
    All U.S. security support for the Olympics is being coordinated by 
the International Security Events Group (ISEG), which is led by the 
Department of State. In response to specific Brazilian requests, 
SOUTHCOM has provided training, subject matter expert exchanges, and 
other support to assist Brazil in expanding its capacity to deal with 
threats in preparation for the Games. Brazilian Federal Police and 
Naval Special Forces are participating in a Joint Combined Exchange 
Training (JCET) with U.S. Special Forces with a focus on security 
operations at key Olympic venues. United States Special Forces units 
have also received an invitation to observe the Brazil Federal Police 
Special Operations Units at the Integrated Tactical Center in Rio de 
Janeiro, which is a great opportunity to integrate our nations' 
counterterrorism forces. We stand ready to support our Brazilian 
partners in achieving the goal of a safe Olympic Games.

    24. Senator Lee. As the Department of Defense has struggled with 
how to fight ISIL in the Middle East and North Africa, much attention 
ahs been given to this and other terrorist organizations in that 
region. We know, however, that terror groups also seek havens in South 
and Central America and have been successful in launching attacks in 
such places as Argentina in the past. What efforts are being made to 
prevent the growth of Sunni and Shia extremist groups in South 
America--both in terms of recruitment and plotting of attacks in the 
region? Has there been any noticeable increase in activity in the 
region, or any sense of competition between Iranian sponsored groups 
and ISIL?
    Admiral Tidd and Admiral Gortney. Both Sunni and Shi'a Islamic 
extremists are present in Latin America and primarily engage in support 
activities, radicalization, and recruitment on behalf of terrorist 
organizations abroad. We asses that extremists in the region do have 
the capability to support an attack against Western interests.
    Unlike other parts of the world, however, there is relative peace 
and understanding between Sunni and Shi'a Muslims in the region. Of 
concern is the possibility that those who are returning from conflict 
zones in the Middle East could enflame religious hostilities, possibly 
leading to widespread sectarian violence within the region's currently 
moderate Muslim communities. In a worst case scenario, this could lead 
to instability in some regional nations.
    ISIL's strategic communication efforts have resonated in parts of 
Latin America and the Caribbean. We believe at least 120 foreign 
terrorist fighters have traveled from the region to join ISIL in Syria 
or Iraq. The spread of violent extremist ideology in the Caribbean has 
been a long-standing concern--not just for us, but for our friends and 
partners across the region--especially given the Caribbean's close 
geographical, cultural, and linguistic ties to the United States. This 
is especially disconcerting given that many partner nations are unable 
to monitor the potential return of foreign fighters and often lack 
robust counterterrorism laws and capabilities to confront this threat.
    It has become apparent to us that with each advancement in our 
understanding comes a corresponding increase in our awareness of the 
threat and the potential these organizations have to threaten the U.S. 
and its interests within Latin America and the Caribbean.
    Lebanese Hezbollah maintains an extensive regional network of 
supporters and sympathizers, some of whom are involved in trade-based 
money laundering and other illicit activities to generate revenue (in 
the range of tens of millions of dollars annually), a portion of which 
goes to support the parent organization in the Middle East. Lebanese 
Hezbollah also maintains an infrastructure with the capability to 
conduct or support terrorist attacks. As with every aspect of our 
counterterrorism efforts, the United States Government remains vigilant 
against these threats, working closely with our partners to protect the 
southern approaches to the United States.
    SOUTHCOM's counterterrorism (CT) efforts focus on building and 
supporting partner nation capacity to detect and disrupt terrorist 
threats within their borders. We are working with partners from across 
the region to counter extremism, recruitment, and radicalization to 
violence in vulnerable communities. Over the past year our Special 
Operations Forces (SOF) conducted multiple engagements such as subject 
matter expert exchanges, counterterrorism-focused exercises, and civil 
affairs activities. These efforts--coupled with support to U.S. Country 
Teams and interagency operations--ensure our nation and those of our 
friends remain secure. We are also exploring how counter network 
approaches might improve our counterterrorism efforts.
                               __________
            Questions Submitted by Senator Claire McCaskill
                 commander, u.s. strategic command--b-2
    25. Senator McCaskill. With the recent deployment of three B-2 
Spirits from Whiteman Air Force Base to the U.S. Pacific Command area 
of responsibility, I am pleased to know that there is a program in 
place to upgrade their communications capabilities. I know there has 
been a lot of discussion regarding the affordability of maintaining and 
upgrading the nuclear triad and I also understand next generation 
programs can be a timely matter with the length of time the acquisition 
program can take. When will this upgrade be complete?
    Admiral Haney. Bombers are the most flexible and visible leg of the 
Triad. They provide key capabilities in support of U.S. deterrence and 
assurance commitments worldwide, and play an important role in 
conventional power projection. The B-2 Stealth Bomber plays a uniquely 
important role in U.S. conventional power projection and nuclear 
deterrence. Robust and survivable communications are essential to 
execute world-wide conventional and nuclear deterrence and assurance 
missions.
    The Advanced Extremely High Frequency (AEHF) SATCOM program 
provides robust anti-jam and highly survivable connectivity to ensure 
that the nation's only penetrating stealth bomber will continue to be 
able to strike any target worldwide. The B-2's AEHF and receive-only 
very low frequency (VLF) modernization programs are instrumental in 
supporting the bomber's conventional and nuclear missions, especially 
in anti-access, area denial environments. The B-2 AEHF program is fully 
funded and on track to field in 2021.
    The B-2 is also receiving Increment 1 of the Common Very Low 
Frequency Receiver (CVR Inc 1), which directly supports nuclear command 
and control effectiveness. CVR Inc 1 will start fielding in late 2017. 
The B-2's AEHF and CVR Inc 1 programs leverage communications 
investments made in other programs to lower risk and cost and provide 
leveraging options for other strategic platforms such as the B-52 and 
RC-135. USSTRATCOM fully supports both programs, and urges that they 
continue to be fully funded to avoid any mission gaps.

    26. Senator McCaskill. What would be the consequences of a delay in 
completing the communications upgrades on the B-2?
    Admiral Haney. Bombers are the most flexible and visible leg of the 
Triad. They provide key capabilities in support of U.S. deterrence and 
assurance commitments worldwide, and play an important role in 
conventional power projection. The B-2 Stealth Bomber plays a uniquely 
important role in U.S. conventional power projection and nuclear 
deterrence. Robust and survivable communications are essential to 
execute world-wide conventional and nuclear deterrence and assurance 
missions.
    The B-2's communications modernization programs are mission-
critical enablers for both nuclear and conventional missions. Previous 
efforts to modernize B-2 communications were delayed or cancelled due 
to funding and technical issues. Current efforts are fully supported, 
but further delays will create unacceptable mission limitations.
    The B-2's Advanced Extremely High Frequency (AEHF) satellite 
communication (SATCOM) modernization will replace the bomber's legacy 
Ultra High Frequency (UHF) SATCOM capability. The UHF capability is 
vulnerable to jamming and does not effectively support the B-2's 
stealth capabilities. Furthermore, the satellite constellation which 
supports UHF SATCOM is approaching end-of-life. A previous 'just-in-
time' effort to add an AEHF capability to the B-2 was canceled in 2013 
due to technical and cost issues. Those issues have been resolved and 
the current AEHF effort is fully funded with program start in fiscal 
year 2017. This program can also be leveraged to cost-effectively meet 
Extremely High Frequency requirements for other strategic platforms 
such as the B-52 and RC-135.
    The B-2's Very Low Frequency (VLF) capability, known as Common VLF 
Receiver Increment 1 (CVR Inc 1), provides required receive only 
connectivity in support of nuclear command and control. It is fully 
funded and on schedule.
                    commander, u.s. northern command
    27. Senator McCaskill. As we look at ways to improve the efficiency 
and effectiveness of the Department of Defense, it has been suggested 
that we should relook at the Unified Command Plan which draws the 
geographical boundaries for Combatant Commands. If U.S. Northern 
Command and U.S. Southern Command were combined into one command, would 
the Commander be able to execute the missions and requirements of both 
commands?
    Admiral Gortney. From a span of control perspective, it would be 
extremely difficult for the Commander to execute the missions and 
requirements of both U.S. Northern Command and U.S. Southern Command if 
they were combined into one combatant command. Furthermore, I would be 
very concerned that this merger would dilute the Commander's focus on 
Homeland Defense, the Department's highest priority mission, as well as 
undermining the key Homeland and regional partnerships developed by 
U.S. Northern Command and U.S. Southern Command. In addition to the 
partnerships with Canada, Mexico, The Bahamas, 49 States, 2 
territories, and the District of Columbia, a merger would add an 
additional 31 countries, 15 dependencies and areas of special 
sovereignty to a merged Commander's portfolio. I believe this expanded 
span of responsibility would seriously challenge a single Commander's 
ability to sustain and develop our partnerships, with whom we share 
responsibility for the defense of North America.

    28. Senator McCaskill. What, if any, additional risks would the 
U.S. incur?
    Admiral Gortney. I believe that by combining U.S. Northern Command 
and U.S. Southern Command, the U.S. would incur risk to our Homeland 
defense mission as well as to our Homeland and regional partnerships. 
One of the many lessons learned from the terrorist attacks of September 
11, 2001 was the need for a single combatant command to be assigned the 
Homeland defense mission as its number one priority mission. U.S. 
Northern Command is responsible for defending all of the approaches to 
the US, including air, land and sea against threats, and we must 
coordinate with both of our North American neighbors who are part of 
our in-depth Homeland defense architecture. In addition, a merger would 
significantly undermine our ability to support civil authorities in 
responding to disasters and emergencies in the U.S. Homeland.
                    commander, u.s. southern command
    29. Senator McCaskill. As we look at ways to improve the efficiency 
and effectiveness of the Department of Defense, it has been suggested 
that we should relook at the Unified Command Plan which draws the 
geographical boundaries for Combatant Commands. If U.S. Southern 
Command and U.S. Northern Command were combined into one command, would 
the Commander be able to execute the missions and requirements of both 
commands?
    Admiral Tidd. If NORTHCOM and SOUTHCOM were combined into one 
command, I believe we would inevitably sub-optimize both critical 
mission sets. NORTHCOM's Homeland Defense mission and SOUTHCOM's 
external focus of Theater Security Cooperation in our shared 
neighborhood of the Western Hemisphere are very distinct in nature. 
Unless we decide as a nation that one of those missions is no longer 
important, I believe we will continue to need two separate Commands to 
focus on each unique mission.

    30. Senator McCaskill. What, if any, additional risks would the 
U.S. incur?
    Admiral Tidd. If SOUTHCOM and NORTHCOM were combined, again, we run 
the risk of sub-optimizing both unique missions. I would defer to 
Admiral Gortney to address the specific risks that would be involved in 
a suboptimization of NORTHCOM. However, I can tell you that our 
neighborhood, Latin America and the Caribbean, already perceives that 
the U.S. is losing interest in the region due to low prioritization of 
assets and resources. At the same time, extra-hemispheric actors such 
as Russia, China, and Iran are steadily increasing their engagements 
and investments in this region. Minimizing the strategic importance of 
this region by diluting the SOUTHCOM mission would only play into the 
current perception in the region and open the door to those external 
actors to gain influence in our near-abroad.
                               __________
           Questions Submitted by Senator Richard Blumenthal
                           illicit substances
    31. Senator Blumenthal. You noted during your testimony that 
USSOUTHCOM's ability to interdict flows of illicit substances is 
extremely limited. Can you please provide a list of resources--
equipment, ships, aircraft--that you believe are necessary to more 
effectively intercept and interdict the flow of illicit substances?
    Admiral Tidd. In order to meet the U.S. Government national goal to 
remove 40 percent of documented cocaine movement through the transit 
zone, USSOUTHCOM requires 21 vessels. Our current ideal breakdown of 
the 21 vessels includes 14 medium range ships (similar to the Littoral 
Combat Ship or future Offshore Patrol Cutter), 3 long range ships (like 
a Cruiser, Destroyer, or National Security Cutter), and 4 coastal 
patrol boats. The most useful vessels to USSOUTHCOM are medium and long 
range ships equipped with a flight deck that provides persistent 
offshore presence, capable of conducting Airborne Use of Force (AUF), 
with embarked law enforcement teams.
    As you know, we also face significant shortfalls in the area of 
intelligence, surveillance, and reconnaissance (ISR). To have a better 
understanding of the environment and threats in our region, we require 
persistent airborne and maritime ISR assets with precise geo-location 
and identification capabilities. Because of the geography in this part 
of the world, we would also need ISR capabilities able to collect in 
triple-canopy, adverse weather, across air, ground, and sea.

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              

                        TUESDAY, MARCH 15, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.

                 POSTURE OF THE DEPARTMENT OF THE NAVY

    The committee met, pursuant to notice, at 2:32 p.m. in Room 
SH-216, Hart Senate Office Building, Senator John McCain 
(chairman) presiding.
    Committee members present: Senators McCain, Inhofe, 
Sessions, Wicker, Ayotte, Fischer, Ernst, Tillis, Sullivan, 
Reed, Nelson, McCaskill, Shaheen, Gillibrand, Blumenthal, 
Donnelly, Hirono, Kaine, and King.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. Good afternoon.
    The committee meets today to receive testimony on the plans 
and programs of the Department of the Navy for fiscal year 
2017.
    I want to thank each of our witnesses for their 
distinguished service to the Nation, as well as the sailors, 
marines, and civilians they lead who are serving around the 
world today.
    Last month, the Director of National Intelligence provided 
this committee a candid and unsettling picture of the worldwide 
threats to our national security, which have steadily increased 
since dangerous reductions in defense spending were enacted in 
2011.
    The unwillingness of the administration and too many in 
Congress to chart a different course has forced our sailors and 
marines to try to do more with less. By any measure, today's 
fleet of 272 ships is too small to address critical security 
challenges. Even with recent shipbuilding increases, the Navy 
will not achieve its requirement of 308 ships until 2021, and 
there is no plan to meet the bipartisan National Defense 
Panel's recommendation for a fleet of 323 to 346 ships.
    The last five carrier strike group deployments have 
exceeded 8 months, taking their toll on our ships, aircraft, 
and sailors. This has forced the Navy to accept carrier 
presence gaps in order to complete deferred maintenance.
    Similarly, by the end of this fiscal year, the Marine Corps 
will be reduced to 182,000 marines, even as General Neller 
testified last year that the optimal size for the force is 
186,000. The Marines have a requirement for 38 amphibious 
ships, but they only have 30 in the fleet. Marine Corps 
aviation is in crisis. Many aircraft are down hard. Pilots are 
not flying, and nondeployed Marine aviation squadrons are short 
in the number of aircraft needed to train or respond in a 
crisis.
    Budget cuts and force reductions, together with high 
operational tempo, have forced sacrifices of vital training and 
time at home with families, putting our All-Volunteer Force 
under considerable strain.
    Given the obvious needs of our Navy and Marine Corps to 
restore readiness and modernize their ships, aircraft, and 
combat vehicles, the President should have requested a defense 
budget that reflects the scale and scope of the national 
security threats we face and the growing demands they impose on 
our sailors and marines. Instead, the President chose to 
request the lowest level of defense spending authorized by last 
year's budget agreement and submitted a defense budget that is 
actually less in real dollars than last year, despite the fact 
that operational requirements have grown.
    Even with the relief of the Bipartisan Budget Act, 
insufficient funding has forced the Navy to propose 
inactivating seven guided missile cruisers for up to 10 years. 
I am particularly concerned about the Navy's proposal to cut a 
carrier air wing, which appears to ignore the versatility of 
our air wings to rely on overly optimistic projections for its 
yet unproven optimized fleet response plan and could reduce 
operational flexibility in a time of growing uncertainty.
    The answer to our forces' readiness shortfalls is not the 
reduction of squadrons but the proper funding of flight hours, 
depot maintenance, and the procurement of new aircraft, many of 
which such as additional F-18's were not requested purely for 
budgetary reasons.
    As we consider the future of the carrier air wing, I 
continue to believe the Nation needs an unmanned carrier-based 
penetrating strike aircraft. While I am frustrated with the 
slow pace of development towards this goal, I am hopeful the 
so-called MQ-25 Stingray will be an important step in this 
direction by facilitating the rapid development of unmanned 
carrier-based tanking and ISR [intelligence, reconnaissance, 
surveillance] capabilities.
    The President's Budget includes significant funding 
requests for major Navy and Marine Corps acquisition programs, 
which require continued oversight by this committee to ensure 
these programs make the best use of limited taxpayer dollars.
    Initial cost overruns more than doubled the cost of each 
littoral combat ship [LCS] and development costs now exceed $3 
billion and counting. Meanwhile, key warfighting capabilities 
of the LCS, including mine countermeasures and anti-submarine 
warfare, have fallen years behind schedule and remain unproven.
    Because of the long-running cost, schedule, and performance 
issues with this program, I support the Department's proposal 
to down-select to one variant no later than 2019 and reduce the 
inventory objective to 40 ships. I am encouraged to see the 
Navy has begun the process of identifying the LCS replacement, 
and I hope we can transition to a more capable, small surface 
combatant expeditiously.
    I am also pleased that after more than $2 billion in cost 
overruns for each of the first three Ford-class carriers, this 
budget request reflects cost reductions of nearly $700 million 
for these ships. I expect this to be just the start of cost 
reductions in this program. Given continued technological 
challenges and schedule delays, the Navy must take all steps 
necessary to control costs in this program.
    I also look forward to reviewing the Navy's report on 
alternative carrier designs, which is due to this committee on 
April 1st, which I expect to provide alternatives to the sole 
source status quo and options to increase competition.
    The Ohio-class replacement submarine is an equally 
important program which will carry about 70 percent of the 
Nation's deployed nuclear warheads. The cost of this program 
will be second only to the joint strike fighter. Make no 
mistake. The Nation and the Navy cannot afford--literally 
cannot afford--any margin for error or growth in cost of this 
program. We must get it right the first time with lessons 
learned from past acquisition experience, including accurate 
cost estimating, technology maturity, avoiding concurrent 
design, or development with production, off-ramps for high-risk 
systems, and meeting reliability targets for critical systems.
    Similarly, given the importance of replacing our aging 
fleet of amphibious vehicles, the Marine Corps must learn the 
lessons of past failures, such as the expeditionary fighting 
vehicle, and deliver this needed capability on time and cost 
and up to expectations.
    As the Navy and Marine Corps move forward with these 
significant acquisition programs, I would like to hear from our 
witnesses how they intend to implement the new acquisition 
authorities contained in last year's defense authorization bill 
to improve acquisition outcomes and save taxpayer dollars.
    Finally, Admiral Richardson, almost 2 months ago, the 
government of Iran captured 10 Navy sailors and their vessels 
in a blatant violation of international law. Senior 
administration officials reacted as if nothing out of the 
ordinary occurred. Indeed, some even praised and thanked the 
Iranians. By failing to affirm and defend basic principles of 
international law, the administration has placed our Navy and 
Coast Guard vessels and the men and women who sail them at 
greater risk in the future. While I understand the Navy is 
continuing to investigate this matter, I request that you bring 
the committee up to date on the findings of the investigation 
and the welfare of the crew members who were detained.
    I look forward to the testimony of our witnesses on these 
and many other important issues confronting our Navy and Marine 
Corps.
    Senator Reed?

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman. Let 
me join you in welcoming Secretary Mabus and Admiral Richardson 
and General Neller. Thank you, gentlemen, for your service to 
the Nation.
    This afternoon, we will discuss the Department of the 
Navy's fiscal year 2017 authorization request. We certainly are 
grateful for your service, and I want to especially welcome 
Admiral Richardson and General Neller. This is your first 
posture hearing. welcome aboard I think they say in the Navy.
    You face a huge range of challenges as you strive to 
balance the need to support ongoing operations and sustain 
readiness with the need to modernize and keep the technological 
edge critical to our military's success.
    Last year, the Department of the Navy was facing serious 
readiness problems caused by deferred maintenance, reduced 
steaming and flying hours, and canceled training and 
deployments. The continued emphasis on readiness in this year's 
budget will address some of the Navy's most serious readiness 
problems. I am interested in hearing the witnesses' views on 
this matter, which are absolutely critical.
    All areas of our naval forces are maintaining an extremely 
high operational tempo. Demand is overwhelming for attack 
submarines, air and missile defense cruisers, destroyers and 
strike fighters. In addition, the Navy is now in its fourth 
year of operating with fewer than required 11 aircraft 
carriers. During the next decade, as a first priority, the Navy 
will need to buy a new class of strategic missile submarines to 
replace the Ohio-class submarines. I am interested in hearing 
how the Navy is managing current demands on its assets and how 
it plans to manage future modernization demands, particularly 
how it will use the National Sea-Based Deterrence Fund as we 
begin procurement funding of the Ohio replacement in fiscal 
year 2017.
    General Neller, you have stated in your words 
recapitalization of our force is essential to our future 
readiness with investments in ground combat vehicles, aviation, 
command and control, and digitally interoperable protected 
networks. The Marine Corps continues to make modernization of 
ground vehicles a priority by developing the Amphibious Combat 
Vehicle [ACV] to replace the aging inventory of Amphibious 
Assault Vehicles [AAV], as well as the Joint Light Tactical 
Vehicle [JLTV] in which the Marine Corps is partnering with the 
Army.
    Both programs awarded contracts last fall, but were 
subjected to protests. While the JLTV protest has been 
resolved, the Marine Corps is still awaiting a decision for the 
ACV. I would welcome an update from our witnesses on the status 
of these programs and if they believe there will be significant 
delays in fielding due to delays in the acquisition program.
    The Department of the Navy budget has its usual number of 
significant programs, some of which have issues with their 
execution. However, I want to note specifically one program, 
and that is the procurement of the V-22 tilt rotor aircraft. 
The Navy budget would break the current multiyear procurement 
contract. When Congress authorizes a multiyear procurement 
contract, we are agreeing to authorize the administration to 
commit future Congresses to a specific procurement program. In 
return, I believe that there is a commitment by the 
administration that absent remarkable changes in the situation, 
the administration will live up to the contract and future 
budget requests. I am very interested in hearing more about why 
the Navy proposes to break this contract.
    The Defense Department's Defense Strategic Guidance, issued 
in January 2012, followed by the 2014 QDR [Quadrennial Defense 
Review], announced a renewed strategy for United States 
military orientation on the Asia-Pacific. Consistent with that 
strategy, the Defense Department has been working to realign 
United States military forces of South Korea and Okinawa and 
plans to position Navy and Marine Corps forces in Australia, 
Singapore, and possibly elsewhere in the region.
    The Department has also begun implementing a plan to 
forward-deploy more ships, as shown by the Navy's rotational 
deployment of littoral combat ships to Singapore. I am 
interested in hearing how the Navy will ensure that the LCS 
deployments will not further delay operational testing of the 
LCS and the LCS mission modules which are both significantly 
behind schedule already.
    Again, let me thank you for your service and for your 
dedication to the men and women of the Navy and the Marine 
Corps. I look forward to your testimony.
    Chairman McCain. Secretary Mabus, welcome.

STATEMENT OF HONORABLE RAYMOND E. MABUS, JR., SECRETARY OF THE 
                              NAVY

    Mr. Mabus. Thank you, Mr. Chairman, Ranking Member Reed, 
members of the committee. Thank you for the opportunity to 
discuss the Department of the Navy.
    As you pointed out, Mr. Chairman, this is the first budget 
testimony before this committee for the Chief of Naval 
Operations [CNO], Admiral Richardson, and the Commandant of the 
Marine Corps, General Neller. In the time since they took these 
positions, I have had the privilege of their frank, 
professional, and invaluable counsel. They are officers of the 
highest caliber who expertly lead our Navy and Marine Corps 
during ever-tightening fiscal constraints and an increasingly 
dynamic threat environment.
    This is my eighth time and my last to appear before you at 
a budget hearing. For me, leading the Department of the Navy is 
the greatest honor of my life. I could not be more proud of our 
sailors, our marines, and our civilians.
    I am also proud of the many steps we have taken and the 
changes we have made to ensure that the Navy and Marine Corps 
remain the greatest expeditionary fighting force the world has 
ever known.
    First and foremost, we continue to provide presence. That 
unrivaled advantage on, above, beneath, and from the seas gives 
our leaders options in times of crisis, reassures our allies, 
deters our adversaries. There is no next best thing to being 
there. Maintaining that presence requires gray hulls on the 
horizon.
    While there has been discussion about posture versus 
presence, the simple fact is that for the Navy and Marine 
Corps, our posture is presence. In every case, from high-end 
combat to a regular warfare to disaster relief, our naval 
assets get on station faster, we stay longer, we bring whatever 
we need with us, and since we operate from our ships, which are 
sovereign American territory, we can act without having to ask 
any other nation's permission.
    Resourcing that presence depends on four fundamentals: 
people, our sailors and our marines; platforms, our ships and 
aircraft and systems; power, how we use energy to make us 
better warfighters; and partnerships, our relationship with 
international allies and most importantly with the American 
people.
    When I took this post almost 7 years ago, we had an 
incredibly committed and capable force, but each of these four 
words staring with ``P'' was under pressure. Our people were 
under stress from high operational tempo and extended 
deployments. Our fleet was shrinking and too many of our 
platforms were costing too much. Our use of power was a 
vulnerability, and our partners were seeking reassurance of our 
sustained engagement. Now our people, platforms, power, and 
partnerships are stronger than they have been in many years, 
enabling us to provide that invaluable presence.
    People. We have instituted sweeping changes in personnel 
policy. Promotions are based more on merit and less on tenure. 
Commanding officers are empowered to meritoriously promote more 
sailors and marines. We have made career paths more flexible. 
One example, thanks to Congress, is the Career and Admission 
Program, which has been greatly expanded.
    We have also increased the professional development and 
educational opportunities to bring America's best ideas to the 
fleet by adding 30 graduate school slots through our Fleet 
Scholars Education Program and sending high-performing sailors 
on SECNAV [Secretary of the Navy] industry tours to great 
American companies like FedEx and Amazon where they learn 
private sector best practices that can be applied when they 
return.
    We are absolutely committed from leadership to the deck 
plates on combating the crime of sexual assault and the tragedy 
of suicide.
    We have also revamped physical fitness assessments, making 
them more realistically aligned with the jobs we do, and we 
have promoted healthier lifestyles through better nutrition and 
a culture of fitness.
    All billets in both services are now open to women. 
Standards will absolutely not be lowered, but anyone who can 
meet the standards will be able to do the job. This will make 
us a more effective combat force.
    We are trying to mitigate stress on sailors and marines and 
their families by making deployments more predictable, 
extending hours for child care, and creating collocation 
policies.
    To tap into the innovative culture inherent in the Navy and 
Marine Corps, we established task force innovation, which takes 
good ideas from deck plate sailors and field marines, 
recognizes funds, and rapidly moves these good ideas fleet-
wide.
    On platforms, we have reversed the decline in ship count, 
and thanks to Congress and, in particular, to this committee, 
our Navy will reach, as you pointed out, Mr. Chairman, 300 
ships by 2019 and our assessed need of 308 ships by 2021.
    In the 7 years before I took office, the Navy contracted 
for 41 ships. In my 7 years, we have contracted for 84, and we 
have done so while increasing aircraft purchases by 35 percent, 
all with a smaller top line. Practices like firm fixed price 
contracts, multiyear buys, stable requirements have driven down 
costs on virtually every class of ship, and we are also in the 
process of recapitalizing nearly every naval aviation program.
    We have expanded unmanned systems on, under, and above the 
sea and put increased focus on them by establishing a deputy 
assistant secretary for unmanned and an office of unmanned 
warfare systems on the CNO [Chief of Naval Operations] staff, 
known as N-99, designed specifically to coordinate all the 
unmanned programs.
    We are also implementing advanced energy technologies like 
electromagnetic railguns and laser weapons.
    Power. To increase our lethality and operational 
flexibility, I set goals of having 50 percent of sea and shore-
based energy derived from alternative sources by 2020, 
competitive with the price of conventional power. We met that 
goal ashore by the end of last year.
    Energy efficiency has also been greatly increased on our 
bases and at sea. Since 2009, both the Navy and Marine Corps 
have achieved large drops in oil consumption.
    Partnerships. I have traveled nearly 1.2 million miles to 
144 different countries and territories, visiting our sailors 
and marines, our allies and our partners. 12 of my trips have 
been to Afghanistan where I visited every Marine Corps forward-
operating base in Helmand to be with our forward-deployed men 
and women and have actively engaged with our allies and friends 
around the world to build and maintain a network of navies with 
whom we train, operate, and trust.
    We have worked in close partnership with Congress to 
fulfill the constitutional mandate to provide for and maintain 
a navy. As President George Washington said, it follows then as 
night succeeds the day that without a decisive naval force, we 
can do nothing definitive, and with it, everything honorable 
and glorious.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Mabus follows:]

             Prepared Statement by the Honorable Ray Mabus
    Chairman McCain and Ranking Member Reed, members of the Committee, 
thank you for the opportunity to discuss the readiness and posture of 
the Department of the Navy. With Chief of Naval Operations John 
Richardson and Commandant of the Marine Corps Bob Neller, I have the 
great privilege of representing the sailors and marines who serve our 
nation around the world, the civilians who support them and all of 
their families.
    This is the first testimony before this committee for Admiral 
Richardson and General Neller in these positions. In the time since 
they took these critical posts, I have had the privilege of their 
frank, professional and invaluable counsel. They are officers of the 
highest caliber who expertly lead our Navy and Marine Corps during 
ever-tightening fiscal constraints and an increasingly dynamic threat 
environment.
    This is my eighth time, and my last, to appear before you. For me, 
leading the Department of the Navy is the greatest honor of my life. I 
could not be more proud of our sailors, marines, and civilians. I'm 
also proud of the many steps we've taken and changes we've made to 
ensure that the Navy and Marine Corps remain as they have been for over 
240 years as the greatest expeditionary fighting force the world has 
ever known
    This statement, together with those provided by Admiral Richardson 
and General Neller, presents to you and to the American people an 
overview of the Department of the Navy and highlights our priorities as 
we move forward with the fiscal year 2017 (FY17) budget process. As the 
Secretary of the Navy, I am responsible for recruiting, training, and 
equipping the sailors, marines, and civilians who spend every day 
working to defend the American people and our national interests.
    Every year, as we review our current posture, we must ask 
ourselves, as a Department, as a military, and as a nation, how to 
balance our national security demands. We face an increasing array of 
threats, conflicts and challenges around the globe, even as our fiscal 
and budgetary situation continues to strain resources. Consistently, 
when a crisis occurs, the leaders of this country want immediate 
options, so they ask for the Navy and Marine Corps, for our carrier 
strike groups and our amphibious ready groups, for our sailors and 
marines, for our presence. With 90 percent of global trade traveling by 
sea, 95 percent of all voice and data being transferred under the ocean 
and more than 80 percent of the world's population living within 60 
miles of the sea, there is no question that now, more than ever, we are 
living in a maritime century.
                         the value of presence
    What our Navy and Marine Corps uniquely provide is presence--around 
the globe, around the clock--ensuring stability, deterring adversaries, 
and providing the nation's leaders with options in times of crisis. We 
are ``America's away team'' because sailors and marines, equally in 
times of peace and war, are deployed around the world to be not just in 
the right place at the right time but in the right place all the time. 
In every case, from high-end combat to irregular warfare to disaster 
relief, our naval assets get on station faster, we stay longer, we 
bring whatever we need with us and, since we operate from our ships, 
which are sovereign American territory, we can act without having to 
ask any other nation's permission. While there has been discussion 
about posture versus presence, the simple fact is that for the Navy and 
Marine Corps, our posture is presence.
    For more than seven decades, Navy and Marine Corps presence has 
kept international sea lanes open around the world. For the first time 
in history, one nation--America--is protecting trade and commerce not 
just for ourselves and our allies but for everyone. Today, $9 trillion 
in goods are traded by sea annually, supporting 40 million jobs in the 
U.S. alone and benefiting nearly every consumer on earth. These 
statistics make it clear that the health of the world's economy depends 
in large part on the United States Navy and Marine Corps.
    The security and stability of the international system of trade and 
finance is tied irrevocably to the free movement of goods and data 
across, above and under the sea, and is more than just a military 
concern. It impacts every American in the prices we pay for goods and 
services and the very availability of those goods and services. While 
the Navy's activities often take place far away and out of sight of 
most citizens, the impact of our global naval presence isn't a 
theoretical construct; its effects are palpable throughout American 
life.
    The economic benefit is just one that comes from our sailors and 
marines doing their job across the globe. That ubiquitous presence 
reassures our allies and deters our adversaries. If conflict comes, we 
will fight and win. Our presence is an unrivaled advantage that we 
provide our nation. There is no ``next best thing'' to being there. 
Maintaining that presence requires gray hulls on the horizon.
    With each year's budget decisions, we determine what the future 
Navy and Marine Corps will look like. Just as the Fleet and Corps we 
have today are the result of decisions made a decade ago, so will 
tomorrow's Fleet and Corps be a result of the decisions we make today. 
For this reason, we have to balance the needs of our Navy and Marine 
Corps today with those of our nation tomorrow.
    Our combatant commanders understand the critical expeditionary 
capability the Navy and Marine Corps team brings to the fight. Whether 
we are conducting security cooperation around the world, deploying 
Marines in response to a humanitarian crisis or launching strikes from 
our carriers, it is clear Navy and Marine Corps presence provides great 
value to our decision makers and our nation. The emergence of a diverse 
set of challenges, including Russia, North Korea, China, Iran and ISIS 
demands continued emphasis on our Naval and expeditionary forces. We 
absolutely cannot afford to forfeit the capabilities of our future 
maritime power and superiority.
                   around the globe, around the clock
    You only need to look around the world to see our Navy and Marine 
Corps are first on-station and demonstrate an instrumental and 
prominent role in our national security strategy.
    For the first 54 days of the air campaign against Islamic State 
militants in Iraq and Syria, the only strikes came from Navy F/A-18 
Hornets off USS George H.W. Bush in the Arabian Gulf because land-based 
fighters could not participate until host nations approved.
    During a 10-month deployment ending in June 2015, USS Carl Vinson 
Strike Group conducted 12,300 sorties, including 2,383 combat missions 
against Islamic State of Iraq and Syria (ISIS).
    The operational tempo of Naval Special Operations Forces (NAVSOF) 
remains high, as they continue operations in the Middle East, Horn of 
Africa, and Central Asia. NAVSOF is manning the Combined Joint Special 
Operations Task Force-Iraq and deploying forces to Afghanistan.
    In March 2015, USS Gary intercepted a suspected narcotics-
trafficking vessel off the coast of Central America and seized 5,200 
kilograms of cocaine.
    In July 2015, USS Porter entered the Black Sea to reassure NATO 
allies of our commitment to regional stability by conducting naval 
exercises with ships from 30 different nations including Spain, 
Portugal, France, Turkey, Greece and Bulgaria.
    Last fall, as a visible demonstration of our commitment to 
maintaining freedom of navigation for everyone, USS Lassen patrolled 
the Spratly Islands and nearby artificial reefs in the South China Sea. 
USS Curtis Wilbur conducted similar freedom of navigation operations by 
patrolling near the disputed Triton Island earlier this year.
    When tensions rose in Yemen last summer, marines embarked with 
sailors onboard Navy craft to shore up security and surveillance in 
surrounding waters in preparation for a potential crisis.
    The 31st Marine Expeditionary Unit (MEU) deployed to Saipan to 
provide Defense Support to Civil Authorities after Typhoon Soudelor 
killed 30 people and displaced 150,000 others in the Commonwealth of 
the Northern Marianas.
    Within 40 hours of President Obama's order, a Special Purpose 
Marine Air-Ground Task Force deployed marines, sailors, aircraft and 
equipment to Liberia to respond to the Ebola crisis, providing critical 
airlift and surgical capability as part of U.S disaster relief efforts.
    Maritime presence has been a tenet of our democracy since its 
inception; the founding fathers wrote in the Constitution that Congress 
is authorized to ``raise'' an Army when needed, but mandated it 
``maintain'' a Navy. Maintaining our great Navy and Marine Corps is 
what assures Americans at home, our friends and allies, as well as our 
adversaries that we are ready to respond when called upon to any 
crisis, anywhere.
    Early on in my tenure as Secretary, I outlined four principles that 
enable our Navy and Marine Corps' to sustain their global presence. 
They are People, Platforms, Power and Partnerships. Those have been, 
and continue to be, the key factors in assuring the capability, 
capacity and success of our naval services, which is why they have 
been, and will remain, my top priorities.
 people--sustaining the world's most formidable expeditionary fighting 
                                 force
    The sailors, marines, and civilians serving today are the best 
force we've ever had. But for more than a decade we asked a lot of 
everyone, because unlike other services, we deploy equally in peacetime 
and wartime. There are no permanent homecomings for sailors and 
marines. Despite all we've asked, they have performed magnificently. 
We've taken steps to maintain the health and resilience of our force 
across every facet of the Department. We have addressed issues like 
operational readiness levels, personal well-being for our people and 
their families, creating more options for career flexibility, opening 
new slots for graduate education, improving our advancement process, 
and promoting equality of opportunity. We have made the Navy and Marine 
Corps stronger, focused not only on retaining the incredible expertise 
and professionalism that resides within these two services, but also 
that draws from the broadest talent pool America has to offer.
    Our sailors and marines make Navy and Marine Corps presence 
possible by operating the platforms, harnessing the power, and building 
the partnerships necessary to fulfill our national security strategy. 
Seven years ago when I took office, we had a committed and capable 
force, but our people, and our platforms, were under stress from high 
operational tempo and extended deployments.
    To return stability to our sailors, marines, their families, and to 
our maintenance cycles, one of our first priorities was to develop and 
institute the Optimized Fleet Response Plan (OFRP). This is a program 
that the Navy is using to schedule and plan our deployments and the 
maintenance of our platforms. Entering its third year since 
implementation, OFRP is beginning to fully demonstrate its advantages 
to the Fleet. USS Eisenhower Carrier Strike Group and USS Makin Island 
Expeditionary Strike Group will be first to deploy later this year 
entirely under the OFRP. Our men and women know there is no way to 
completely eliminate the unexpected, because events around the world 
can and do take on a life of their own. However, increasing the 
predictability of deployments will help improve resilience in our 
sailors and marines and their families and also has the added benefit 
of helping us properly support our maintenance requirements and 
readiness posture.
    Under the OFRP, we continue to meet all operational commitments, 
and sailors, marines, and their families are giving us positive 
feedback on this and other initiatives like increases to Hardship Duty 
Pay--Tempo (HDP-T), a pro-rated additional pay that kicks in when a 
deployment extends beyond more than 220 consecutive days, and Career 
Sea Pay, paid to those who have spent a total of three years at sea and 
Career Sea Pay-Premium for those E-6 and above who have spent a total 
of eight years in sea-going assignments. These incentives reward those 
who take the hard and challenging billets at sea, which form the 
backbone of our operations.
    Taking care of our people is about more than just operational 
stability. Through our 21st Century Sailor and Marine Initiative, 
implemented in 2012, we have provided a holistic approach to assuring 
we have the healthiest, fittest, and most resilient force in the world. 
We have focused on helping our sailors and marines maximize their 
personal and professional readiness by assisting them and their 
families with the mental, physical and emotional challenges of military 
service. Eliminating the stovepipes that existed between many of the 
programs designed to support our people allows us to better address 
issues like suicide and sexual assault in a comprehensive way that 
protects our sailors and marines and makes them stronger.
    In suicide prevention, we are continuing to accelerate our efforts 
in 2016 by becoming more assertive on early recognition, education and 
open dialogue to promote climates supportive of psychological health. 
We are expanding our Ask, Care, Treat (ACT) initiative that focuses on 
training, counseling, and intervention. To date, over 40,000 sailors 
have received training via Navy Operational Stress Control (OSC) 
courses. Our partnerships with the Navy and Marine Corps Public Health 
Center, the Defense Suicide Prevention Office, and the Bureau of Navy 
Medicine and Surgery have maximized our public health approach to 
suicide prevention. Furthermore, we are adding to the nearly 800 
Suicide Prevention Coordinators (SPC) trained in 2015, enhancing local 
suicide prevention efforts at the deckplate by having a qualified 
program advocate at nearly every command.
    Sexual assault is a crime with devastating impacts to the Navy and 
Marine Corps. Every sailor and marine deserves a working environment 
respectful of all, completely intolerant of sexual assault, and 
supported by programs of prevention, advocacy, and accountability. 
We've implemented many actions to attack this insidious threat. While 
there is still work to be done, we have instituted an increasingly 
effective Sexual Assault Prevention and Response program and Victim's 
Legal Counsel, which together encourage increased reporting and provide 
critical support to those who come forward, and I am the only Service 
Secretary who has my Sexual Assault Prevention Response Officer report 
directly to me. We are also taking steps to prevent and respond to 
perceptions of retaliation or ostracism on the part of the courageous 
people who report these crimes- whether by the chain of command or 
peers.
    Our Sexual Assault Prevention and Response programs are many and 
varied. Through our InterACT Bystander intervention training we've 
educated more than 52,000 sailors and marines at 220 training events on 
how to stop a potentially dangerous scenario from leading to an 
assault. Our Navy Chaplain Corps has teamed with clinicians to 
establish CREDO, a 48-hour retreat event with workshops focused on 
teamwork, community building, personal resiliency and reconciliation. 
In-person education is augmented by numerous interactive training tools 
available to all sailors and marines ashore and afloat. But no matter 
how much we've done and continue to do, we will not consider our 
mission a success until this crime is eliminated.
    Protecting our Department from instability and destructive and 
illegal behavior is important, but equally important is promoting 
healthy lifestyles that result in a more capable and ready fighting 
force. Our high operational tempo demands a year-round culture of 
fitness. We have completely revamped the Physical Fitness Assessment to 
focus on producing warfighters, capable of accomplishing any mission 
any time, a measure that not only improves readiness but reduces 
overall medical costs. To set sailors and marines up for success, we 
opened a 24-hour a day, seven-day a week gym on every base worldwide 
and we began issuing the Navy Fitness Suit, a uniform item the marines 
already have. sailors earn Fitness Suit patches for outstanding 
performance, and those who maintain that level of performance over 
three cycles receive the ``Outstanding Fitness Award.''
    To complement physical training with well-balanced diets, we've 
increased efforts to provide nutritious food options to sailors and 
marines at sea and ashore. In 2012, the Marines introduced the ``Fueled 
to Fight'' nutrition program, designed to promote a healthy lifestyle 
by providing more nutritious food choices. At base dining facilities, a 
labeling system identifies healthier options and enhances the Marine's 
ability to make a healthy choice. The Navy also created their version, 
called, ``Fuel to Fight,'' launched by the SEALS at Naval Amphibious 
Base Little Creek, which increases the availability of lean-proteins, 
vegetables, and complex carbohydrates in our galleys. We are further 
developing the concept at one sea-based and one shore-based unit this 
year and will implement it Fleet-wide in 2017.
    Part of overall health is emotional health. In order for sailors 
and marines to remain focused on the mission, they should not be 
distracted by concerns about their home life. The Department of the 
Navy takes very seriously its commitment to support our Navy and Marine 
Corps families, and we have taken actions to make service more family 
friendly. We established 24/7 Child Care Development Centers at three 
Fleet concentration areas and increased access to childcare by a total 
of four hours, two hours on either side of the previously existing 
timeframe, at all locations.
    In July of last year, I tripled paid maternity leave from 6 to 18 
weeks, a period subsequently reduced to 12 weeks by the Secretary of 
Defense. Meaningful maternity leave when it matters most is one of the 
best ways that we can support the women who serve our county. This 
flexibility is an investment in our people and our Services, and a 
safeguard against losing skilled servicemembers. In our line 
communities, for example, we were losing about twice as many female 
servicemembers as male, most leaving between 7-12 years of service. We 
believe extending maternity leave will save money and increase 
readiness in the Department of the Navy by keeping people in.
    Under a Congressional authorization, we piloted the Career 
Intermission Program (CIP) beginning in 2009. CIP allows a sailor or 
marine to take up to three years off, with a two-year payback for each 
year taken. When they return they compete against people who have been 
on active duty the same amount of time, as opposed to those from their 
previously assigned year-group. Career flexibility does not come at the 
cost of advancement potential. Our early participants have successfully 
rejoined the Fleet and, again due to Congressional action, we are 
expanding this program to help retain talented sailors and marines.
    While we have taken steps to provide additional services and career 
flexibility so sailors and marines can address their needs personal 
needs, we have also aggressively enhanced professional development 
opportunities to strengthen our All-Volunteer Force. In a world 
increasingly dependent on inter-service, inter-agency, and 
international cooperation, that development takes place over the entire 
span of one's career. To broaden background diversity in our officer 
corps, we re-opened NROTC units at Harvard, Yale, Columbia and 
Princeton after a 40-year hiatus.
    We also established the Fleet Scholars Education Program, adding 30 
new graduate school positions allocated by warfighting commanders to 
eligible officers. Our first participants are now studying at Harvard, 
Dartmouth, and Yale.
    Outside the classroom, we recognize the value that private sector 
ingenuity adds to American innovation, so we have also sent officers to 
work at places like FedEx and Amazon as part of SECNAV Industry Tours. 
Those who participate in these programs are our very best, and, in 
return for their experience, we expect them to bring their knowledge 
back to the Fleet and to continue to serve under the requirement that 
for every month spent away, a sailor or marine owes three months back.
    We want people to take advantage of these and other opportunities, 
and we want them to commit to a career beyond any prescribed service 
obligation. That means creating an advancement system based primarily 
on merit, not tenure. In the Navy, we removed arbitrary ``zone stamps'' 
from officer promotion boards this year which can unnecessarily create 
bias. Additionally, for enlisted, we increased the number of 
advancement opportunities available to Commanding Officers to spot 
promote their best and brightest sailors via the Meritorious 
Advancement Program. Next year, we expect those numbers to grow even 
further.
    In the Marine Corps we are revamping our manpower models to develop 
the force and address gaps in our Non-commissioned Officer ranks. Sixty 
percent of Marines are on their first tour and 40 percent are E-3 and 
below. We've implemented the Squad Leader Development Program to mature 
and further professionalize the force. This Program screens small unit 
infantry Marines, selects candidates based on performance and provides 
them with opportunities for education, qualification and assignment.
    After returning predictability to the Navy and Marine Corps and 
creating an environment that supports families and promotes 
professional development, I took actions to make a career in the 
Department attractive and viable to the broadest spectrum of American 
talent. We now actively cultivate a force representative of the nation 
it defends. Doing so maximizes our combat effectiveness, because a 
diverse force is a stronger force.
    This year, twenty-seven percent of the freshman class at the Naval 
Academy Class is comprised of women, more than a one-third increase 
from the summer of 2009 when I first took office. For the first time in 
American history, all billets in the Navy and Marine Corps will be open 
to every member of this year's graduating class, and to all others, 
officers and enlisted, throughout the Fleet.
    I started integrating women into previously closed jobs shortly 
after taking office by opening up submarines and the coastal riverines 
to women. Later, in 2013, Secretary Panetta and Chairman Dempsey 
decided that the default position would be to open all military 
positions to women or seek an exemption to the policy. When weighing 
this decision, I took a methodical and comprehensive approach. 
Ultimately, I decided that denying any individual who meets an 
established standard the opportunity to serve because of their gender 
not only goes against everything we value as Americans, but it will 
most certainly diminish our combat effectiveness. We have already 
proven that is the case with respect to things like the color of 
someone's skin or who they love.
    While we celebrate diversity in all of our people, we are uniform 
in purpose as part of an organization that prioritizes service over 
self. Rather than highlighting differences in our ranks, we have 
incorporated everyone as full-participants by moving, with some few 
exceptions, to common uniforms in both the Navy and the Marine Corps so 
that our forces have a common appearance. Now and in the future, we 
will present ourselves not as male and female sailors and marines, but 
as United States sailors and marines.
    In the Reserves, during fiscal year 2015 we mobilized 2,700 
individual Reserve sailors and marines to support operations worldwide. 
This allows us to focus our active component on filling critical sea 
billets to help ensure Fleet wholeness and readiness. This year, we 
were reminded of the sacrifices our Reserves make with the attack at 
Navy Operational Support Center (NOSC) Chattanooga that took the lives 
of five of our sailors and marines. At home, we have taken steps to 
provide force protection against these kinds of terrorist acts at off-
installation NOSCs, and as of December 2015, 70 of 71 off-installation 
NOSCs now have armed Selected Reservists. More than 150 NOSC staff 
personnel have graduated the Navy's Security Reaction Force Basic (SRF-
B) course in support of the Navy Reserve Force Protection mission. For 
Marine Corps reserve centers, 146 of 161 locations have armed duty 
personnel, and the remaining 15 sites are in the process of training 
personnel to be armed. Abroad, our Reserve sailors and marines are 
deployed globally, and we will continue to maintain a Reserve that is 
ready, relevant, and responsive to the nation's needs.
    The Department's civilian workforce supports our uniformed force 
and is critical to the success of our missions. Our civilian employees 
have endured multi-year pay freezes, a hiring freeze, furloughs and 
continued limits on performance awards that impacted morale. Results of 
a Federal Employee Viewpoint Survey indicated that, while our civilians 
appreciated the role they play in our mission, they felt recognition 
and training were lacking. Where possible, through such efforts as 
Operation Hiring Solutions, the Department has mitigated the impacts to 
Fleet readiness and operations and to increase civilian employee job 
satisfaction. Our efforts have produced tangible results, demonstrated 
by increased civilian retention rates over the last two consecutive 
years.
    This patriotic workforce is the foundation of how the Department of 
the Navy operates. In order to ensure we have the most capable people, 
in the right positions, we run a number of leadership development 
programs. Annually we select participants for senior leader, executive 
leader, and developing leader programs to provide education and 
training that will help our people tackle the issues we face now and in 
the future.
         platforms--growing our fleet despite shrinking budgets
    To provide the presence the American people and our nation's 
leaders expect and have come to rely on, our sailors and marines need 
the right number and composition of ships, aircraft, weapons, vehicles, 
and equipment to execute the missions mandated by our National Security 
Strategy. That means we must have a properly sized Fleet. Quantity has 
a quality all its own.
    When I first took office, I committed to growing the Fleet to meet 
our validated requirement and strengthen the acquisition process by 
employing stricter management and increased competition. In the seven 
fiscal years from 9/11/2001 to 2009, our Fleet declined from 316 to 278 
ships, and during that period, the Navy contracted for only 41 ships, 
not enough to keep our Fleet from declining nor keep our shipyards open 
and healthy. In the seven fiscal years following 2009, we will have 
contracted for 84 ships. We will have done so while increasing aircraft 
purchases by 35 percent, despite decreasing defense budgets.
                              shipbuilding
    Navy shipbuilding is an essential part of our country's larger 
shipbuilding and repair industry, which provides more than 400,000 jobs 
and contributes more than $37 billion to America's gross domestic 
product. Shipbuilding enhances and strengthens economic security as 
well as national security. The work we have done, and must continue to 
do, will reinforce the importance of maintaining a partnership with the 
industrial base, as well as keep our shipbuilding industry strong and 
ready to support the national security needs of our Navy and our 
country.
    Across our shipbuilding portfolio, we have employed direct, 
impactful actions including increased competition within and across 
product lines, using block buys and multi-year procurements when 
products are mature; ensuring designs are stable before entering into 
production; pursuing cross-program common-equipment buys; and achieving 
affordability through hard-but-fair bargaining. This would not have 
been possible without Congressional approval on items like multi-year 
procurements.
    Stability and predictability are critical to the health and 
sustainment of the industrial base that builds our Fleet. Changes in 
ship procurement plans are significant because of the long lead time, 
specialized skills, and extent of integration needed to build military 
ships. The skills required to build ships are perishable, and, in the 
past, we have lost talent in this critical industry when plans have 
changed. Each ship is a significant fraction of not only the Navy's 
shipbuilding budget but also industry's workload and regional 
employment. Consequently, the timing of ship procurements is a critical 
matter to the health of American shipbuilding industries, and has a 
two-to-three times economic multiplier at the local, regional and 
national levels.
    The Navy will continue to consider and, when appropriate, use 
innovative acquisition strategies that assure ship construction 
workload and sustain the vendor base while imposing cost competition. 
We will continue to invest in design for affordability, modularity and 
open systems architectures while incentivizing optimal build plans and 
shipyard facility improvements and supporting shipbuilding capability 
preservation agreements. These initiatives support affordability, 
minimize life-cycle costs, improve and ensure quality products, 
facilitate effective and efficient processes, and promote competition--
which all support Department priorities.
    Our efforts to maintain and affordably procure our Fleet's ships 
and submarines have continued through this past year. The Department 
has established a steady state Ford-class procurement plan designed to 
deliver each new ship in close alignment with the Nimitz-class ship it 
replaces. CVN 78 cost performance has remained stable since 2011 and 
this lead ship will deliver under the Congressional cost cap. The 
fiscal year 2016 National Defense Authorization Act (NDAA) reduced this 
cost cap for follow-on ships in the CVN 78 class by $100 million. 
Stability in requirements, design, schedule, and budget, is essential 
to controlling and improving CVN 79 cost, and therefore is of highest 
priority for the program. In transitioning from first-of-class to 
follow-on ships, the Navy has imposed strict configuration and cost 
controls to ensure CVN 79 is delivered below the cost cap. CVN 80 
planning and construction will continue to use class lessons learned to 
achieve cost and risk reduction. The CVN 80 strategy seeks to improve 
on CVN 79 efforts to schedule as much work as possible in the earliest 
phases of construction, where work is both predictable and more cost 
efficient.
    In our attack submarine program, we awarded the largest contract in 
Navy history, $18 billion, to build 10 Virginia-class submarines. 
Because Congress authorized a multi-year contract for these 10 boats, 
giving our shipyards stability and allowing them to order materials in 
economic quantities, we were able to save the taxpayer more than $2 
billion and effectively procured 10 boats for the price of nine.
    We are continuing procurement of two Virginia-class submarines per 
year under the Block IV 10-ship contract which runs through fiscal year 
2018. We will also continue to develop the Virginia Payload Module 
(VPM), which is planned for introduction in fiscal year 2019, as part 
of the next Virginia-class multiyear procurement (Block V).
    The Arleigh Burke-class (DDG 51) program is one of the Navy's most 
successful shipbuilding programs--62 of these ships are currently 
operating in the Fleet. We are in the fourth year of a multi-year 
procurement, and thanks to the work at shipyards in Mississippi and 
Maine and our acquisition team, the DDG 51 competitive multiyear 
contract is saving more than $2 billion. The two Arleigh Burke-class 
destroyers requested in fiscal year 2017, which will complete the 
current multiyear contracts, will provide significant upgrades to 
integrated air and missile defense and additional ballistic missile 
defense capability (Flight III) by incorporation of the Air and Missile 
Defense Radar.
    With our Littoral Combat Ships (LCS), the average ship construction 
cost, under the current block buy contracts, has decreased by nearly 50 
percent in comparison to LCS hulls contracted prior to 2009. We now 
have six ships of this class delivered, 18 currently on contract, and 
two additional ships to award this fiscal year. We are currently 
upgrading the design, which will significantly increase LCS lethality 
and survivability, to be introduced no later than fiscal year 2019, and 
potentially as early as fiscal year 2018. Because of these ships' 
enhanced counter-surface and counter-submarine capabilities, 
contributing to their role in Battle Group operations, we are re-
designating these future ships as Frigates.
    Our budget request also includes incremental funding for the next 
big deck amphibious assault ship, LHA 8. We are in the midst of an 
innovative solicitation which solicits bids for LHA 8, the replacement 
Fleet oiler T-AO(X), and early design efforts for the replacement for 
the LSD 41/49 class LX(R). These bids which uniquely support both 
stability and competition within the amphibious and auxiliary sectors 
of the industrial base, will be awarded this fiscal year
    Ohio Replacement (OR) remains our top priority program. Prior 
modernization programs, such as our first strategic deterrence 
procurement, ``41 for Freedom,'' were accompanied by topline increases. 
The Navy greatly appreciates Congressional support in overcoming the 
challenges posed by funding the OR Program.
    The fiscal realities facing the Navy make it imperative that we 
modernize and extend the service lives of our in-service ships to meet 
the Navy's Force Structure Assessment requirements. An important 
element of mitigation is the extension and modernization of our Arleigh 
Burke class destroyers and Ticonderoga class cruisers (CGs).
    The fiscal year 2017 President's Budget includes funding for the 
modernization of two destroyers to sustain combat effectiveness, ensure 
mission relevancy and to achieve the full expected service lives of the 
AEGIS Fleet. The destroyer modernization program includes Hull, 
Mechanical, and Electrical (HM&E) upgrades as well as combat systems 
improvements with upgraded AEGIS weapons systems. Advanced Capability 
Build (ACB) 12 to include open architecture computing environment, BMD 
capability, installation of the Evolved Sea Sparrow Missile (ESSM), 
integration of the SM-6 missile, and improved air dominance with 
processing upgrades and Naval Integrated Fire Control-Counter Air 
capability. This renovation reduces total ownership costs and expands 
mission capability for current and future combat capabilities.
    Cruiser modernization ensures long-term capability and capacity for 
purpose-built Air Defense Commander (ADC) platforms. Of our 22 total 
cruisers, 11 recently modernized CGs will perform the ADC function for 
deploying Carrier Strike Groups while the Navy modernizes our other 11 
ships. As these are completed, they will replace the first 11 on a one-
for-one basis as each older ship reaches the end of its service life 
(35 years) starting in fiscal year 2020. Our modernization schedule 
commenced in fiscal year 2015 on a 2-4-6 schedule in accordance with 
Congressional direction: two cruisers per year for a long-term phase 
modernization, for a period no longer than four years, and no greater 
than six ships in modernization at any given time.
    The Budget supports CG Modernization and proposes a plan that will 
save $3 billion over the FYDP by inducting the remaining cruisers into 
modernization following their current planned operational deployments. 
This differs from the current plan in that we would put a total of four 
CGs in phased modernization in fiscal year 2017. We understand that 
this request does not align with previous Congressional direction, but 
feel it is the best way to honor today's operational demands as we 
prepare for future strategic requirements.
                                aviation
    With the support of Congress, we continue to strengthen our Naval 
Aviation force. We are in the process of re-capitalizing every major 
aviation platform in the Navy and Marine Corps inventory. The MV-22B 
has replaced the CH-46E/CH-53D, and we are in the process of replacing 
all other Navy and Marine Corps aircraft. We also continue to focus on 
unmanned aviation. We are investing in the MQ-4C Triton, MQ-8C Fire 
Scout, RQ-21 Blackjack, and RQ-7B Shadow plus initiating efforts to 
provide carrier-based unmanned aviation capability with the RAQ-25 
Stingray.
    Our investments focus on developing and integrating capabilities by 
using a family of systems approach, when viable, to maintain 
superiority against rapidly evolving threats. Using current and future 
platforms, weapons, networks and technologies, we will ensure Naval 
Aviation relevance and dominance in the future. For legacy weapons 
systems, we are addressing aviation readiness by investing in 
operations and support accounts to mitigate training and platform 
readiness issues. Our procurement of new aircraft and synchronization 
of readiness enablers will improve our ability to project power over 
and from the sea.
    The Strike Fighter inventory should be viewed in two separate and 
distinct phases. The near term challenge is managing a Department of 
Navy Tactical Aviation (TACAIR) force that has been reduced in capacity 
through a combination of flying many more flight hours than planned, 
pressurized sustainment and enabler accounts, legacy F/A-18A-D Hornet 
depot throughput falling short of the required output due to 
sequestration and other factors, and the impact of delays to completing 
development of the Joint Strike Fighter program. As a result of 
aggressive efforts instituted in 2014 across the Department to improve 
depot throughput and return more aircraft back to service, fiscal year 
2015 depot throughput improved by 44 percent as compared to fiscal year 
2014, returning to pre-sequestration levels of throughput. TACAIR 
aviation depots are expected to continue to improve productivity 
through 2017, and fully recover the backlog of F/A-18A-D aircraft in 
2019 at which time the focus will shift toward F/A-18E/F service life 
extension. In the far term, the Strike Fighter inventory is 
predominantly affected by the rate at which we can procure new TACAIR 
aircraft. The fiscal year 2017 budget request increases both the F/A-
18E/F and F-35 strike fighter aircraft in order to mitigate near-term 
and far-term risks to our strike fighter inventory in the most 
affordable, effective manner possible.
    Critical to power projection from the sea, the E-2D Advanced 
Hawkeye, our new and upgraded airborne early-warning aircraft, 
completed Fleet integration and deployed with USS Roosevelt (CVN 71) 
Carrier Strike Group. We are continuing Full Rate Production under a 
multi-year contract and Fleet transition is underway. We expect to 
integrate the advanced capabilities with Forward Deployed Naval Forces 
(FDNF) by 2017. We continue to recapitalize the P-3C Orion with P-8As, 
and are on-schedule to complete the purchase within the FYDP to bring a 
total of 109 P-8As to the Fleet. Our P-8s will continue to undergo 
incremental improvements.
    Finally, we expect to complete EA-18G Growler Fleet transition in 
fiscal year 2016. As the DOD's premier tactical Airborne Electronic 
Attack / Electronic Warfare aircraft, the Growler is crucial to power 
projection ashore in a saturated electronic warfare environment. With 
Congress' addition of seven EA-18Gs in fiscal year 2016, we will have 
160 of these aircraft in 15 squadrons to support the Navy requirement. 
With the retirement of the Marine Corps' last EA-6B Prowlers in 2019, 
these highly capable aircraft take over the nation's airborne 
electronic attack mission.
    Our rotary wing and assault support communities are in the midst of 
large-scale recapitalization. In the vertical lift community, multi-
year production contracts for the MV-22 continue. We have taken 
advantage of joint service commonality in the V-22 to fill a crucial 
enabler in the Carrier On-board Delivery mission. In the Marine Corps, 
procurement of the AH-1Z continues to deliver combat proven-
capabilities. Finally, with its first flight last fall, the CH-53K King 
Stallion is poised to bring significant improvements in our heavy lift 
capabilities.
                            unmanned systems
    Currently, our warfare communities--air, sea, undersea and ground--
are all doing superb work in unmanned systems which are critical to our 
ability to be present. They increase the combat effectiveness of our 
deployed force while reducing the risk to our sailors and marines, 
allowing us to conduct missions that last longer, go farther, and take 
us beyond the physical limits of pilots and crews. Launching and 
recovering unmanned aircraft from the rolling decks of aircraft 
carriers, launching unmanned rotary-wing patrols from our small surface 
combatants, and deploying unmanned underwater vehicles globally are 
vital elements both now and in the future for maritime presence and 
naval warfare. We have enhanced our focus on unmanned systems and 
prioritized efforts under purposeful leadership at the level of the 
Deputy Assistant Secretary of the Navy for Unmanned Systems and the new 
office of Unmanned Warfare Systems of the staff of the Chief of Naval 
Operations, also known as N99.
    We are moving ahead with a number of unmanned programs in the 
effort to rapidly integrate new capability into the fleet. The MQ-8B 
Fire Scout began regular deployments in 2014. When USS Fort Worth 
deployed to Singapore recently, the ship took a mixed aviation 
detachment of a manned MH-60R helicopter and MQ-8B Unmanned Aerial 
Vehicle's (UAV). This kind of hybrid employment, pairing our manned and 
unmanned systems to take advantage of the strengths of each, will be a 
hallmark of our future approach to unmanned systems. The first 
operational variant of the larger and more capable next generation Fire 
Scout, the MQ-8C, recently completed developmental testing and a 
successful operational assessment. This aircraft is scheduled to be 
deployable by the end of 2017 and will bring double the endurance and 
double the payload of the older versions.
    The MQ-4C Triton is a key component of the Navy Maritime Patrol 
Reconnaissance Force. Its persistent sensor dwell capability, combined 
with networked sensors, will enable it to effectively meet ISR 
requirements in support of the Navy Maritime Strategy. The MQ-4C Triton 
will establish five globally-distributed, persistent maritime ISR 
orbits beginning in fiscal year 2018 as part of the Navy's Maritime ISR 
transition plan. Currently, MQ-4C Triton test vehicles have completed 
53 total flights and will continue sensor flight testing this spring.
    In 2015, the Office of the Secretary of Defense conducted a 
comprehensive Strategic Portfolio Review (SPR) of DOD ISR programs. The 
results of the SPR, and a subsequent ISR portfolio review, as reflected 
in our PB17 budget is the restructure of the Unmanned Carrier-Launched 
Airborne Surveillance and Strike (UCLASS) program. The RAQ-25 Stingray 
will deliver the Navy's first carrier-based unmanned aircraft, a high-
endurance platform that will replace today's F/A-18E/F aircraft in its 
role as the aerial tanker for the Navy's Carrier Air Wing (CVW), thus 
preserving the strike fighter's flight hours for its primary missions. 
Stingray will also have the range and payload capacity associated with 
high-endurance unmanned aircraft to provide critically-needed, around 
the clock, sea-based ISR support to the Carrier Strike Group and the 
Joint Forces Commander. The Navy envisions that the open standards to 
be employed in the Stingray design will enable future capabilities to 
be introduced to the aircraft after it has been fully integrated into 
the CVW.
    Autonomous Undersea Vehicles (AUV) are a key component of the 
Navy's effort to expand undersea superiority AUVs are conducting sea 
sensing and mine countermeasure tasks today with human-in-the-loop 
supervision. While nominal force structure requirements for fiscal year 
2025 have not been determined, the Navy is committed to growing both 
the size and composition of the AUV force. In the near-term, AUVs 
present an opportunity to increase undersea superiority and offset the 
efforts of our adversaries.
    The Large Displacement Unmanned Underwater Vehicle (LDUUV) is an 
unmanned undersea vehicle to offload ``dull, dirty, dangerous'' 
missions from manned platforms beginning in 2022. LDUUV will be 
launched from a variety of platforms, including both surface ships and 
submarines. The craft's missions will include ISR, acoustic 
surveillance, ASW, mine counter-measures, and offensive operations.
    The Surface Mine Countermeasure Unmanned Undersea Vehicle (SMCM 
UUV) commonly referred to as Knifefish employs low-frequency broadband 
synthetic aperture sonar. Knifefish is planned for incorporation into 
increment four of the LCS mine countermeasures mission package.
                                weapons
    The fiscal year 2017 budget invests in a balanced portfolio of ship 
self-defense and strike warfare weapons programs. The Navy has made 
significant strides in extending the Fleet's layered defense battle-
space while also improving the capabilities of the individual ship 
defense layers in order to pace the increasing anti-ship missile 
threat.
    Standard Missile-6 (SM-6) provides theater and high value target 
area defense for the Fleet, and with Integrated Fire Control, has more 
than doubled its range in the counter-air mission. As the Secretary of 
Defense announced a few weeks ago, we are modifying the missile to 
provide vital anti-surface capability. The Evolved Sea Sparrow Missile 
(ESSM) program awarded the Block 2 Engineering Manufacturing and 
Development contract in 2015, which will borrow from the SM-6 active 
guidance section architecture to improve ship self-defense performance 
against stressing threats and environments. Rolling Airframe Missile 
(RAM) Block 2 achieved IOC in May 2015, providing improved terminal 
ship defense through higher maneuverability and improved threat 
detection.
    For strike warfare, the Department's Cruise Missile Strategy has 
been fully implemented with the PB17 budget submission. This strategy 
sustains Tomahawk Blocks III and IV through their service lives; 
integrates modernization and obsolescence upgrades to the Block IV 
Tomahawk during a mid-life recertification program which adds 15-years 
of additional missile service life; fields the Long Range Anti-Ship 
Missile (LRASM) as the Offensive Anti-Surface Warfare (OASuW) Increment 
1 solution to meet near to mid-term threats; and develops follow-on 
Next Generation Strike Capability (NGSC) weapons to address future 
threats and to replace or update legacy weapons. This plan brings next 
generation technologies into the Navy's standoff conventional strike 
capabilities. NGSC will address both the OASuW Increment 2 capabilities 
to counter long-term anti-surface warfare threats, and the Next 
Generation Land Attack Weapon (NGLAW) to initially complement, and then 
replace, current land attack cruise missile weapon systems.
                             ground forces
    The focus of our Marine Corps ground modernization efforts 
continues to be our ground combat and tactical vehicle (GCTV) 
portfolio, along with the Command and Control (C2) systems needed to 
optimize this effectiveness of the entire MAGTF once ashore.
    The key priority within the GCTV portfolio is the replacement of 
the legacy Amphibious Assault Vehicle (AAV) with modern armored 
personnel carriers through a combination of complementary systems. The 
Amphibious Combat Vehicle (ACV) program is the Marine Corps' highest 
ground modernization priority and will use an evolutionary, incremental 
approach to replace the aging AAVs with a vehicle that is capable of 
moving Marines ashore, initially with surface connectors and ultimately 
as a self-deploying vehicle. ACV consists of two increments, ACV 1.1 
and ACV 1.2. Increment 1.1 will field a personnel carrier with 
technologies that are currently mature. Increment 1.2 will improve upon 
the threshold mobility characteristics of ACV 1.1 and deliver C2 and 
recovery and maintenance mission role variants.
    In parallel with these modernization efforts, a science and 
technology portfolio is being developed to explore a range of high 
water speed technology approaches to provide for an affordable, phased 
modernization of legacy capability to enable extended range littoral 
maneuver. These efforts will develop the knowledge necessary to reach 
an informed decision point in the mid-2020s on the feasibility, 
affordability, and options for developing a high water speed capability 
for maneuver from ship-to-shore.
    We are also investing in the replacement of a portion of the high 
mobility, multi-purpose, wheeled vehicle (HMMWV) fleet which are 
typically exposed to enemy fires when in combat. In partnership with 
the Army, the Marine Corps has sequenced the Joint Light Tactical 
Vehicle (JLTV) program to ensure affordability of the entire GCTV 
portfolio while replacing about one third (5,500 vehicles) of the 
legacy HMMWV fleet with modern tactical trucks prior to the fielding of 
ACV 1.1.
    Critical to the success ashore of the MAGTF is our ability to 
coordinate and synchronize our distributed C2 sensors and systems. Our 
modernization priorities in this area are the Ground/Air task Oriented 
radar (G/ATOR) and the Common Aviation Command and Control System 
(CAC2S) Increment I. These systems will provide modern, interoperable 
technologies to support real-time surveillance, detection and targeting 
and the common C2 suite to enable the effective employment of that and 
other sensors and C2 suites across the MAGTF.
                               innovation
    As we continue to use better procurement strategies for ships, 
aircraft, and other weapons systems, we are also using better ideas to 
enhance the utility of current assets and to accelerate future 
capabilities to the Fleet. The Navy and Marine Corps have always been 
at the cutting edge of technology. To tap into the ingenuity inherent 
in our force, I created Task Force Innovation: a group from across the 
department comprised of thinkers, experts, and warfighters with diverse 
backgrounds and from every level. The Task Force is anchored in the 
Department as the Naval Innovation Advisory Council, with a location on 
each coast. These councils rely on feedback from databases such as 
``the Hatch,'' a crowdsourcing platform that cultivates solutions from 
those who know best, our deckplate sailors and marines in the field.
    To facilitate ways for new technologies to reach the Fleet 
unhindered by the overly-bureaucratic acquisitions process, we are 
implementing Rapid Prototyping strategies. This initiative provides a 
single, streamlined approach to prototyping emerging technologies and 
engineering innovations to rapidly response to Fleet needs and 
priorities.
    We are also continuing the research and development of promising 
technologies such as 3D printing, directed energy weapons, robotics, 
adaptive force packaging at sea and unmanned vehicles to counter 
projected threats and using the entire force to prove these concepts. 
We are continuing the development and testing of the Electromagnetic 
Railgun and Hyper Velocity Projectile (HVP) as part of a broader Gun/
Projectile Based Defense strategy. We plan to demonstrate this 
capability this fiscal year in preparation for follow-on at sea 
testing. In 2014, we deployed the first operational Laser Weapons 
System (LaWS) onboard PONCE in the Arabian Gulf. Lessons-learned from 
the 30 kilowatt LaWS installation are directly feeding the Navy's 
investment in Solid State Laser weapons. The Navy is developing a 100-
to-150 kilowatt laser prototype for at-sea testing by 2018.
    To secure our superiority in cyberspace, we are building a new 
cyber warfare center of excellence at the Naval Academy, and we have 
more than doubled our cyber workforce since 2009. In addition to 
growing the cyber domain, we are also re-designating appropriate 
positions to count as part of the cyber workforce. The Department is 
diligently working on ensuring cyber workforce billets are properly 
coded in our manpower databases for tracking and community management 
efforts.
    There has been a concerted effort to protect cyber positions from 
drawdowns and maximize direct and expedited civilian hiring authorities 
to improve cyber readiness and response. Additionally, the DON is 
supporting the DOD Cyber Strategy in the stand-up of the Cyber Mission 
Force teams; 40 teams by Navy, 3 teams by Marine Corps and 1,044 cyber 
security positions within Fleet Cyber and Marine Forces Cyber commands. 
These positions require unique cyber security skills and qualifications 
to perform a multitude of cyber security functions that will enhance 
the Department of the Navy cyber security and defense capability.
              power--alternative energy fueling the fight
    Energy is a necessary commodity for modern life, and it plays a 
critical geopolitical role around the world. Access to fuel is often 
used as a weapon, as we have seen with Russian action against Ukraine, 
and threats against the rest of Europe. Although the price of oil has 
recently declined, the overall trend strongly suggests that over time, 
the prices could return to the higher levels.
    Aside from the obvious economic instability that comes with the 
volatile price of oil, being overly reliant on outside energy sources 
poses a severe security risk, and we cannot afford to limit our sailors 
and marines with that vulnerability and lack of stability. When I 
became Secretary, our use of power was a vulnerability; we were losing 
too many Marines guarding fuel convoys in Afghanistan and volatile oil 
prices were stressing many areas, particularly training.
    In 2009, the Department of the Navy set out to change the way we 
procure, as well as use, energy, with the goal of having at least half 
of naval energy--both afloat and ashore--come from non-fossil fueled 
sources by 2020. By using alternative energy sources, we improve our 
warfighting capabilities; reduce our reliance on foreign sources of 
fossil fuels; and reduce the ability of potential adversaries the 
opportunity to use energy as a weapon against us and our partners.
    Pioneering new advancements in how we power our platforms and 
systems is nothing new for the Navy and Marine Corps. For two centuries 
we have been a driver of innovation, switching from sail to steam, 
steam to coal, coal to oil, and harnessed the power of nuclear 
propulsion. Operationally, energy matters now more than ever; our 
weapons platforms today use far more energy than their predecessors. 
The new technology we develop and acquire will ensure we maintain a 
strategic advantage for decades to come. Fueling the ships, aircraft, 
and vehicles of our Navy and Marine Corps is a vital operational 
concern and enables the global presence necessary to keep the nation 
secure.
    After successfully testing the Great Green Fleet at the Rim of the 
Pacific Exercise in 2012, just last month USS John C. Stennis Strike 
Group departed on a routine operational deployment, steaming on an 
blend of conventional and alternative fuels, as well as conducting 
underway replenishments at sea with these fuels. The three stipulations 
we have for our alternative fuels are they must be drop-in, they cannot 
take away from food production, and they must be cost competitive.
    The alternative fuels powering the Great Green Fleet 2016 were 
procured from a company that makes its fuel from waste beef fats. These 
alternative fuels cost the Department of Defense $2.05 per gallon. It 
is critical we continue to use cost-competitive blended alternative 
fuels in our ships and aircraft to ensure operational flexibility. For 
example, of the three crude oil refineries in Singapore one is 50 
percent owned by China, while an alternative fuel plant is owned by a 
Finnish company.
    This past year, we surpassed the goal the President set in his 2012 
State of the Union Address, when he directed the Department of the Navy 
to have a gigawatt (one-half of our total ashore energy needs in the 
U.S.) of renewable energy by 2020. The Renewable Energy Program Office 
(REPO) coordinates and manages the goal of producing or procuring cost-
effective renewable energy for our bases, and the power we are buying 
through our REPO projects will be cheaper than our current rates over 
the life of the contract. Today, we have in procurement more than 1.1 
gigawatts of renewable energy for our shore installations--five years 
ahead of schedule.
    In August, the Department of the Navy awarded the largest renewable 
contract in federal government history with the Western Area Power 
Administration. This solar project will meet a third of the energy 
needs for 14 Navy and Marine Corps installations, bringing them 210 MW 
of renewable power for 25 years, and saving the Navy $90 million.
    In the Marine Corps, the Expeditionary Energy Office (E2O) 
continues to focus on increasing their operational reach and empowering 
Marines in the field. E2O is doing amazing work. The Marine Corps hosts 
two expos--one on each coast--every year where they ask industry 
leaders to bring their latest technology, and, if the Marines see an 
operational use for it, they can buy it. They have invested in items 
such as small, flexible and portable solar panels that can save a 
company of Marines in the field 700 pounds in batteries. The Marines 
are also working on kinetic systems for backpacks and knee braces that 
harvest energy from a Marine's own movement. These technologies are 
making our Marines lighter, faster and more self-sustainable on the 
battlefield.
    Across the Fleet and Marine Corps, we have taken numerous energy 
conservation measures that are aimed at energy efficiency, and have had 
dramatic impact on our energy use.
    For example, two of our newest amphibious ships, USS Makin Island 
and USS America use a hybrid propulsion system that has an electric 
power plant for slower speeds and traditional engines for speeds over 
12 knots. When Makin Island returned from her maiden deployment, she 
came back with almost half her fuel budget, despite the fact she stayed 
at sea an additional 44 days.
    We had a Chief suggest we change all the lightbulbs on our ships to 
LEDs. Now every time a ship comes in for overhaul, we are changing out 
the bulbs. This simple change is saving us more than 20 thousand 
gallons of fuel per year per destroyer. They also last far longer, give 
off better light, and reduce our maintenance costs.
    Our sailors are using a Shipboard Energy Dashboard that provides 
them with real-time situational awareness of the energy demand on the 
various systems that are running, allowing sailors to see the impact 
the way they operate a ship can have on fuel consumption. Sailors 
across the Fleet are taking it upon themselves to make their own 
platforms as efficient as possible, and the results are tangible.
    The Department of the Navy's efforts in energy efficiency have 
strongly contributed to a decline in the Navy's demand for oil nearly 
15 percent from fiscal 2008 to fiscal 2014, and the Marines slashed 
their oil consumption 60 percent over that same period, according to a 
recent report by the Office of the Undersecretary of Defense for 
Acquisitions, Technology and Logistics. While drawdowns in Iraq and 
Afghanistan have certainly contributed to these numbers, improvements 
in our use of energy have had an impact on our overall consumption.
    Diversifying our energy supply for our ships, our aircraft, and our 
bases helps guarantee our presence and ability to respond to any crisis 
because we can remain on station longer or extend our range, reducing 
the delays and vulnerabilities associated with refueling.
    We are a better Navy and Marine Corps for innovation, and this is 
our legacy. Employment of new energy sources has always been met with 
resistance, but in every case, adoption of new technologies enhanced 
the strategic position of our nation through improvements in the 
tactical and operational capabilities of our force. Our focus on power 
and energy is helping to ensure the United States Navy and Marine Corps 
remain the most powerful expeditionary fighting force in the world and 
enhance their ability to protect and advance American interests around 
the globe.
    partnerships--building partnerships to advance our shared values
    In this maritime century, cooperation with our international allies 
and partners is critical to defending the global system, as it broadens 
responsibility for security and stability, while diffusing tensions, 
reducing misunderstandings, and limiting conflict. It is through a 
cooperative effort that we will assure our navies can provide the 
necessary presence to maintain freedom of navigation and maritime 
security around the world.
    I have traveled almost 1.2 million miles and visited 144 countries 
and territories and all 50 states to meet with sailors and marines and 
to build partnerships both at home and abroad. International meetings 
establish the trust that helps us deter conflict and respond in a 
coordinated and effective manner to manmade or natural crises. We 
strengthen these partnerships in times of calm because, in times of 
crisis, you can surge people, you can surge equipment, but you cannot 
surge trust.
    We continue to focus our efforts on the rebalance of assets to the 
Pacific as an important part of our partnership efforts. Having the 
right platforms in the right places is a vital piece of ensuring our 
friends and allies understand our commitment to this complex and 
geopolitically critical region. We're moving more ships to the central 
and western Pacific to ensure our most advanced platforms and 
capabilities are in the region, including forward basing an additional 
attack submarine in Guam and forward stationing four Littoral Combat 
Ships in Singapore. Also, we're providing two additional multi-mission 
Ballistic Missile Defense destroyers to Forward Deployed Naval Forces 
(FDNF) in Japan and the P-8A maritime patrol aircraft are making their 
first rotational deployments in the region. Additionally, USS Ronald 
Reagan replaced USS George Washington as our carrier homeported in 
Japan.
    We are hubbing Expeditionary Transfer Docks (T-ESD) 1 and 2 in the 
vicinity of Korea/Northeast Asia, and hubbing Expeditionary Fast 
Transports (T-EPF) to Japan and Singapore. In the longer term, by 2018 
we will deploy an additional Amphibious Ready Group to the Pacific 
region and we will deploy a growing number of Expeditionary Fast 
Transports and an additional Expeditionary Sea Base there.
    The U.S. Seventh Fleet along with allies and partner nations 
combined for over 110 exercises throughout 2015 to train, build partner 
capability and relationships, and exchange information. The largest 
exercise, Talisman Sabre in the Asia-Pacific region, in July 2015, 
featured 21 ships, including U.S. Navy aircraft carrier USS George 
Washington and more than 200 aircraft and three submarines. USS Fort 
Worth participated in Cooperation Afloat Readiness and Training (CARAT) 
exercises with partner navies from Cambodia, Philippines, Malaysia, 
Indonesia, Brunei, and Bangladesh to conduct maritime security 
cooperation exercises.
    In addition to participating in many of the exercises as part of 
the Navy-Marine Corps team, the Marine Corps is also building its 
capacity to work with our Asia-Pacific partners. Marines participated 
in 46 exercises in the region in 2015. Examples include Cobra Gold, a 
crisis-response exercise with partners from Thailand, Singapore, Japan, 
Republic of Korea, Indonesia, and Malaysia, and exercise Talisman 
Saber, a United States-Australia exercise focusing on high-end combat 
operations and peacekeeping transitions. Additionally, Marine 
Rotational Force Darwin sustains more than 1,000 Marines on a revolving 
basis to conduct exercises, security cooperation and training with the 
Australian Defense Force and other countries in the region. This will 
increase over the next few years to a full Marine Air Ground Task 
Force.
    As we rebalance our expeditionary forces to the Pacific, we will 
remain focused on maintaining maritime superiority across all domains 
and geographies, ensuring we don't neglect obligations in places like 
Europe.
    As a continuation of the North Atlantic Treaty Organization's 65-
year mission to keep all nations free without claiming territory or 
tribute, we moved the fourth ballistic missile defense capable DDG, USS 
Carney, to Rota, Spain, to join USS Donald Cook, USS Ross and USS 
Porter to enhance our regional ballistic missile defense capability, 
provide maritime security, conduct bi-lateral and multilateral training 
exercises, and participate in NATO operations. We've also established 
an AEGIS ashore site in Romania to provide additional shore-based 
ballistic missile defense capability in Europe, with a second 
installation in Poland scheduled to come online in the 2018 timeframe.
    The Navy and Marine Corps continue to demonstrate support for our 
allies and friends and American interests in the European region. 
Alongside the Marine Corps' Black Sea Rotational Force's operations in 
Eastern Europe, a series of Navy ships have deployed into the Black Sea 
to ensure freedom of navigation and work with our partners there.
    This past fall USNS Spearhead completed the Southern Partnership 
Station 2015 in South America. As Spearhead sailed through the 
Americas, the sailors and marines aboard participated in subject matter 
expert exchanges and building partner capacity throughout the region. 
In October, USS George Washington and USS Chafee participated in the 
annual multinational exercise UNITAS, which was hosted by the Chilean 
Navy and included personnel from Brazil, Ecuador, El Salvador, 
Guatemala, Honduras, New Zealand and Panama to conduct intense training 
focused on coalition building, multinational security cooperation and 
promoting tactical interoperability with the participating partner 
nations. USS George Washington also deployed as part of Southern Seas 
2015, which seeks to enhance interoperability, increase regional 
stability, and build and maintain relationships with countries 
throughout the region while circumnavigating South America. A unique 
symbol of our desire to build a strong relationship is evident in 
deployments by our world class hospital ship USNS Comfort. As part of 
Continuing Promise 2015, medical and support staff from across the U.S. 
military and the region worked alongside nearly 400 volunteers to treat 
122,268 patients and conduct 1,255 surgeries. In an historic event 
during the USNS Comfort port call in Haiti, United States and Cuban 
medics worked side-by-side to treat Haiti's poor and exchange best 
medical practices. Continuing Promise is without doubt one of the U.S. 
military's most impactful missions, but future USNS Comfort deployments 
will be affected by today's budget realities. Our security is 
inextricably linked with that of our neighbors, and we continue to work 
with innovative and small-footprint approaches to enhance our 
interoperability with partners in the Americas.
    For some people around the world, sailors and marines who sail 
aboard our ships are the only Americans they will ever meet, and it is 
they who represent our country around the world.
    In December, I hosted the leaders of our partner navies from West 
Africa and from Europe and the Americas for the Gulf of Guinea Maritime 
Security Dialogue. Naval leaders from 16 nations bordering the Gulf of 
Guinea as well as 37 heads of navy, delegates and representatives from 
Europe and the Americas came to discuss collaborative solutions to 
piracy, extremism, trafficking and insecurity in the region. We 
discussed a unified code of conduct for maritime law enforcement and 
more direct cooperation in the region. As the economies in the Gulf of 
Guinea continue to grow, so does the increasing relevance of guarding 
against maritime terrorism, illicit trafficking of drugs, people and 
weapons, extremism moving from east to west, and other transnational 
crime. The United States Navy and Marine Corps will continue to work 
with our partners in West Africa and help them improve their 
capabilities and promote collaboration.
    Working alongside other navies enhances interoperability, provides 
key training opportunities, and develops the operational capabilities 
of the countries and navies with which we have shared values. As we 
look toward future operations, multinational cooperation will continue 
to be vital to suppressing global threats, and building these strong 
partnerships now seeks to enhance and ensure our operational 
superiority into the future.
    Outside of our international partnerships, the Department of the 
Navy's collaboration with industry, both in technology development and 
ship and aircraft building and repair, bolsters economic security as 
well as national security interests at home and abroad.
    Finally, our Navy and Marine Corps require the support of the 
American people to maintain presence. I continue to honor our most 
important partnership--the one with the American people--by naming 
ships after people, cities, and states, as a reflection of America's 
values and naval heritage, and to foster that powerful bond between the 
people of this country and the men and women of our Navy and Marine 
Corps.
                    fiscal year 2017 budget summary
    The Department of the Navy's proposed budget for fiscal year 2017 
is designed to achieve the President's Defense Strategic Guidance 
(DSG): protect the Homeland, build security globally, and project power 
and win decisively when called upon. In doing so we have looked across 
the FYDP to maintain our ability to conduct the primary missions listed 
in the DSG to 2021 and beyond. Overall the fiscal year 2017 President's 
Budget balances current readiness needed to execute assigned missions 
while sustaining a highly capable Fleet, all within a continually 
constrained and unpredictable fiscal climate.
    Our approach to this budget has focused on six objectives. First, 
maintain a credible and modern sea-based strategic deterrent. Second, 
sustain our forward global presence to ensure our ability to impact 
world events. Third, preserve the capability to defeat a regional 
adversary in a larger-scale, multi-phased campaign, while denying the 
objectives of--or imposing unacceptable costs on--a second aggressor in 
another region. Fourth, ensure that the force is ready for these 
operations through critical afloat and shore readiness and personnel 
issues. Fifth, continue and affordably enhance our asymmetric 
capabilities. Finally, sustain our industrial base to ensure our future 
capabilities, particularly in shipbuilding.
    Even as we deal with today's fiscal uncertainty, we cannot let slip 
away the progress we've made in shipbuilding. It takes a long time, 
measured in years, to produce a deployable ship. It is the least 
reversible thing we might do to deal with budget constraints. If we 
miss a year, if we cancel a ship, it is almost impossible to recover 
those ships because of the time involved and the inability of the 
industrial base to sustain a skilled set of people without the work to 
support them. To do the job America and our leaders expect and demand 
of us, we have to have those gray hulls on the horizon.
    Because of the long lead time needed for shipbuilding, it is not 
the responsibility of just one administration. This Administration and 
Congress, in previous budgets, have guaranteed we will reach a Fleet of 
300 ships by fiscal year 2019 and 308 by fiscal year 2021. This FYDP 
establishes a proposed shipbuilding trajectory for our Battle Force and 
its underpinning industrial base in the years following fiscal year 
2021, while maintaining decision space for the next Administration and 
Congress. As such, the fiscal year 2017 President's Budget requests 
funding for seven ships: two Virginia class attack submarines, two DDG 
51 Arleigh Burke class destroyers, two Littoral Combat Ships (LCS), and 
the LHA 8 Amphibious Assault Ship. The budget request also includes 
funding for refueling and complex overhauls (RCOH) for aircraft 
carriers USS George Washington and USS John C. Stennis.
    The plan for LCS/FF requests funding for two ships in fiscal year 
2017, preserving the viability of the industrial base in the near term 
and creating future decision space for Frigate procurement should 
operational requirements or national security risk dictate the need.
    The fiscal year 2017 President's Budget includes funding for the 
modernization of destroyers ($3.2 billion total invested in fiscal year 
2017-fiscal year 2021) to sustain combat effectiveness, to ensure 
mission relevancy, and to achieve the full expected service lives of 
the AEGIS Fleet. The budget also requests $521 million across the FYDP, 
in addition to current Ships Modernization, Operations and Sustainment 
Fund (SMOSF) funding, to support cruiser modernization. The Navy will 
continue to work with Congress to develop and evaluate funding options 
to continue this vital modernization.
    Above the sea, our naval aviation enterprise grows. Specifically, 
we continue our recapitalization efforts of all major platforms and 
increase procurement of F/A-18E/F and F-35 aircraft, and make key 
investments in current and future unmanned aviation systems and strike 
warfare weapons capabilities.
    While accelerating new platforms and capabilities to the Fleet is a 
priority, it is equally important to reduce the maintenance backlog 
created by sequestration. The fiscal year 2017 budget provides 
additional investments in shipyard and aviation depots in both civilian 
personnel and infrastructure to achieve that end. As we execute our 
readiness strategy, our focus remains on properly maintaining ships and 
aircraft to reach their expected service lives and supporting a 
sustainable operational tempo.
    The cyber domain and electromagnetic spectrum dominance remain 
Department priorities. The budget includes an increase of $370 million 
over the FYDP ($107 million in fiscal year 2017) across a spectrum of 
cyber programs, leading to significant improvements in the Department's 
cyber posture. Specific elements include funding for engineering of 
boundary defense for ship and aviation platforms and for afloat cyber 
situational awareness.
    While hardware upgrades and additions are crucial, our investment 
in people must be equally prioritized. The fiscal year 2017 budget 
includes a 1.6 percent pay raise for sailors and marines and adds 
billets for base security. Our personnel initiatives receive funding 
aimed to recruit, train, and retain America's best.
    Our priorities combine to achieve one objective--naval presence. 
That presence is weighted to meet the national security strategy. The 
fiscal year 2017 budget sustains a forward deployed presence and 
continues the rebalance to the Pacific. The number of ships operating 
in the Asia-Pacific will increase from 52 today to 65 by 2020.
    Crafting the Department of the Navy's budget did not come without 
hard choices. To achieve a balance between current and future 
capabilities, we were compelled to make several risk-informed 
decisions. We have proposed deactivating the 10th Carrier Air Wing. 
This primarily administrative move improves the alignment of carrier 
air wing and aircraft carrier deployment schedules and alleviates 
excessive time between deployments for CVWs attached to CVNs in lengthy 
maintenance phases, without losing any aircraft.
    Finally, throughout my tenure, as part of my Department of the Navy 
Transformation Plan, I have stressed the importance of accountability. 
We are moving very quickly to an audit ready environment. Congressional 
support has been critical in providing the resources we need to bring 
our systems into compliance.
                               conclusion
    As the longest-serving Secretary since World War I, I have truly 
been able to get to know the men and women of this Department, and I 
have led institutional change--from inception to reality.
    In order to provide our nation with presence, to deter our 
adversaries and assure our allies, and provide our nation's leaders 
with options in times of crisis, we have enhanced our capabilities 
across every area of this department. By focusing on our people, 
platforms, power and partnerships, we assure we remain the greatest 
expeditionary fighting force the world has ever known.
    Today there is no operational billet in the Navy or Marine Corps 
that is closed to anyone based on their gender. Men and women wear 
uniforms common in appearance so they are uniformly United States 
sailors and United States marines. Career paths are flexible and 
provide unprecedented opportunities for professional growth. We promote 
based more on merit and not just tenure. We are encouraging retention 
in the Department by creating an environment that doesn't force our 
sailors and marines to choose between serving their country and serving 
their families.
    We are seeking innovation from within the talent inherent in our 
sailors and marines. We have established an innovation network, with 
crowdsourcing platforms established to allow new ideas to get from the 
deckplates to our leaders.
    We are growing the fleet. By the end of this fiscal year, we will 
have contracted for 84 ships, which will give America a 300-ship Navy 
by 2019 and a 308-ship Navy by 2021. We stood up a new Deputy Assistant 
Secretary of the Navy and OPNAV staff for Unmanned Systems development, 
making us leaders in this emerging capability.
    The Navy has fundamentally changed the way we procure, use and 
think about energy. In the past seven years, the Navy and Marine Corps 
have significantly lowered fuel consumption. We have sailed the Great 
Green Fleet on alternative fuel blends and met our goal of having 1 
gigawatt of renewable energy powering our shore-based installations 
five years early.
    We are rebalancing our Fleet to meet the goal of having 60 percent 
of our assets in the Pacific region by the end of the decade, and we 
continue to contribute to security cooperation and international 
exercises with our friends and allies around the world.
    Since the inception of our nation, America's Navy and Marine Corps 
have paved the way forward for this country.
    As President George Washington once said, ``It follows then as 
certain as that night succeeds the day, that without a decisive naval 
force we can do nothing definitive, and with it, everything honorable 
and glorious.''

    Chairman McCain. General Neller?

STATEMENT OF GENERAL ROBERT B. NELLER, USMC, COMMANDANT OF THE 
                          MARINE CORPS

    General Neller. Chairman McCain, Ranking Member Reed, 
distinguished members of the committee, thank you for the 
opportunity to appear today to talk about the posture of the 
United States Marine Corps and your marines.
    Our marines remain forward-deployed in Iraq and Afghanistan 
embarked with their shipmates aboard Navy ships serving in 
every nation and every climb and place. Our goal and respective 
maritime character and expeditionary capability have been ably 
demonstrated during the past year.
    However, as we continue in conflict around the world, there 
really has not been what we would call an inter-war period to 
reset and reconstitute our force. Today's marines are deploying 
at a rate comparable to our commitment during Operation Iraqi 
Freedom and Enduring Freedom.
    As we focus our attention across the globe in a security 
environment where the only certainty is uncertainty, we must 
make decisions about strategy and structure that will determine 
our Nation's and our Marine Corps' capability in the future.
    History has not been kind to militaries that fail to evolve 
and change, and we see in the 21st century the potential for 
dramatic change. The character of the 21st century is rapid 
evolution, and it is imperative we keep pace with that change.
    The efforts of the 114th Congress provided sufficient 
resources to support the Marine Corps' near-term readiness, and 
we thank Congress and this committee for that stability.
    Nevertheless, as overall financial resources have been 
diminished, the Marine Corps has protected the near-term 
operational readiness of its deployed and next-to-deploy units 
in order to meet operational commitments. This means that our 
units today deploying are ready, but we do not have the depth 
on our bench for major contingencies. The Marine Corps is no 
longer in a position to simultaneously generate current 
readiness, reset our equipment, sustain our facilities, and 
modernize to ensure future readiness.
    Maintaining the quality of the men and women in today's 
Corps is our friendly center of gravity, that which we must 
protect. This is the foundation from which we make marines win 
our Nation's battles and return quality citizens to American 
society.
    As the Marine Corps draws down to 182,000 marines at the 
end of this fiscal year, we continue to assess the capabilities 
and needs of our future force, whether it be the use of the F-
35 fifth generation fighter, cyber warfare, information ops, 
special operations, embassy security guards, or our security 
cooperation group.
    Modernization is our future readiness and the 
recapitalization of our force is essential to this future 
readiness. Your continued investment in facilities sustainment, 
equipment reset, modernization, ground combat vehicles, 
aviation, command and control, and digitally interoperable 
protected networks is critical.
    The Congress' intent for your Marine Corps to serve as the 
Nation's force in readiness guides who we are and what we do, 
and being ready is central to our identity as marines. With the 
continued support of Congress, the Marine Corps will remain 
ready with ready forces today and modernize to generate 
readiness in the future.
    Again, I thank you for the opportunity to appear before you 
today, and I look forward to your questions.
    [The prepared statement of General Neller follows:]

             Prepared Statement by General Robert B. Neller
the commandant's posture of the united states marine corps president's 
                              budget 2017
                                prologue
    The United States Marine Corps is the Nation's expeditionary force 
in readiness. The intent of the 82nd Congress defined and shaped our 
culture, organization, training, equipment, and priorities. Marines 
appreciate the leadership of the 114th Congress in reaffirming that 
role, especially as the strategic landscape and pace of the 21st 
Century demands a ready Marine Corps to buy time, decision space, and 
options for our Nation's leaders. Congress and the American people 
expect Marines to answer the call, to fight, and to win.
    Our global orientation, maritime character, and expeditionary 
capability have all been ably demonstrated during the past year. The 
capabilities of our total force are the result of the planning and 
execution of committed marines and sailors operating under the 
leadership of my predecessors. These capabilities and the posture of 
our force would not be possible without the support and actions of the 
Congress. As our attention is spread across the globe in a security 
environment where the only certainty is uncertainty, we must make 
decisions about our strategy and structure that will determine our 
Nation's military capability in the future. Today's force is capable 
and our forward deployed forces are ready to fight, but we are fiscally 
stretched to maintain readiness across the depth of the force, and to 
modernize, in order to achieve future readiness.
                               situation
    The current global security environment is characterized by 
violence, conflict and instability. Multidimensional security threats 
challenge all aspects of our national power and the international 
system. The expansion of information, robotics, and weapons 
technologies are causing threats to emerge with increased speed and 
lethality.
    Over the last 15 years, the United States fought wars in the Middle 
East, and your Marines continue to respond to crises around the globe. 
There has not been an ``inter-war period'' to reset and reconstitute 
our force. Your marines and sailors have remained operationally 
committed at the same tempo as the height of our operations in Iraq and 
Afghanistan. As we have remained engaged in the current fight, our 
enemies and potential adversaries have not stood idle. They have 
developed new capabilities which now equal or in some cases exceed our 
own.
    This unstable and increasingly dangerous world situation is further 
complicated by a constrained resource environment from which we must 
continue current operations, reset our equipment, maintain our 
warfighting readiness, and at the same time, modernize the force. 
Therefore, it has become necessary that we continually balance our 
available resources between current commitments and future readiness 
requirements. This requires pragmatic institutional choices and a 
clear-eyed vision of where we need to be in 10-20 years.
                   what marines are doing today . . .
    Today, Marines remain forward deployed in Iraq and Afghanistan, and 
ready to respond to crisis around the world. Marines and sailors are 
presently managing instability, building partner capacity, 
strengthening allies, projecting influence, and preparing for major 
theater combat operations. In 2015, Marines executed approximately 100 
operations, 20 amphibious operations, 140 theater security cooperation 
events, and 160 major exercises.
    Our Nation has Marines on the ground in Iraq and Afghanistan today, 
and we anticipate our commitment could grow in the future. Marines 
continue to advise, train and enable the Iraqi Security Forces and 
other designated Iraqi forces with peer-to-peer advising and infantry 
training. In Afghanistan, Marines continue to serve as advisors with 
the Republic of Georgia's Liaison Teams (GLTs) in support of Operation 
Resolute Support. From forward-deployed locations afloat and ashore, 
Marine tactical aviation squadrons continue to support operations in 
Syria and Iraq. In 2015, aviation combat assets executed over 1,275 
tactical sorties and 325 kinetic strikes that have killed over 600 
enemy combatants and destroyed over 100 weapons systems and 100 
technical vehicles.
    Our Amphibious Ready Group/Marine Expeditionary Unit (ARG/MEU) 
Teams continue to show their capability a flexible and agile maritime 
force. In 2015, the Marine Corps deployed over 12,000 Marines with our 
shipmates on Navy warships. This past year, five separate MEUs 
supported every combatant commander, participating in exercises and 
executing major operations. The 31st MEU, our Forward Deployed Naval 
Force in the Pacific, performed disaster relief operations on Saipan 
after Typhoon Soudelor passed through the Commonwealth of the Northern 
Mariana Islands (CNMI). Marines were ashore to support the relief 
effort within 12 hours of notification and delivered a total of 11,000 
gallons of fresh water and 48,000 meals.
    As part of the New Normal your Corps deployed two Special Purpose 
Marine Air Ground Task Forces--Crisis Response (SPMAGTF-CR) to US 
Central Command and US Africa Command. These forces are tailored to 
respond to crises and conduct security cooperation activities with 
partner nations, but they do not provide the same flexibility and 
responsiveness of an ARG/MEU. Our SPMAGTF assigned to CENTCOM today 
provides dedicated Tactical Recovery of Aircraft and Personnel (TRAP) 
support to Operation Inherent Resolve, in Iraq and Syria, and 
simultaneously provides a flexible force for crisis and contingency 
response. In AFRICOM, our SPMAGTF supported Embassies through 
reinforcement, evacuation, and operations to reopen a previously closed 
Embassy in Central African Republic. Your Marines also supported 
operations during the Ebola crisis and assisted with elections. 
Finally, a SPMAGTF deployed to the US Southern Command in 2015. 
SPMAGTF-SC's primary focus was the reconstruction of a runway in 
Mocoron Airbase, Honduras and theater security cooperation and training 
in Honduras, El Salvador, Guatemala and Belize.
    The Marine Corps' activities in the Pacific are led by Marine 
Forces Pacific (MARFORPAC) headquartered in Honolulu, Hawaii, with a 
forward stationed Marine Expeditionary Force (MEF), III MEF, 
headquartered in Okinawa, Japan. III MEF contributes to regional 
stability through persistent presence and Marines remain the Pacific 
Command's (PACOM) forward deployed, forward stationed force of choice 
for crisis response. The Marine Corps continues to rebalance its force 
lay-down in the Pacific to support Defense Strategic Guidance (DSG), 
with 22,500 Marines West of the International Date Line, forward-based, 
and operating within the Asia-Pacific Theater. The planned end state 
for geographically distributed, politically sustainable and 
operationally resilient MAGTFs in the Pacific is a long-term effort 
that will span the next 15 years. The Marine Rotational Force-Darwin 
(MRF-D), based in Australia's Robertson Barracks, is in its fourth year 
of operation. This year we will deploy approximately 1,200 Marines to 
Darwin for a six-month deployment.
    The Marine Corps continues to work closely with the State 
Department to provide security at our Embassies and Consulates. Today, 
Marines are routinely serving at 174 Embassies and Consulates in 146 
countries around the globe. Approximately 117 Embassies have increased 
support in accordance with the 2013 NDAA. We have added 603 Marines to 
the previously authorized 1,000 Marine Security Guards; 199 in new 
detachments, 274 towards increased manning at current detachments, and 
130 towards the Marine Security Augmentation Unit (MSAU). Additionally, 
the US Embassy in Havana, Cuba was reopened on July 2015, with Marines 
serving at this Embassy as they do in any other.
    Our partnering capabilities assure allies, deter adversaries, build 
partner capacity, and set conditions for the readiness to surge and 
aggregate with a Joint, Coalition or Special Operations force for major 
theater combat operations. Partnering also trains our Marines for 
environments in which we are likely to operate. In 2015, the Marine 
Corps, in conjunction with combatant commanders and the Marine Forces 
Component Commands, conducted more than 140 security cooperation 
activities, including exercises, training events, subject matter expert 
exchanges, formal education key leader engagements, and service staff 
talks. Your continued support has allowed the Marine Corps to operate 
throughout the world today; now we must ensure our readiness tomorrow.
                          five areas of focus
    Today, in addition to supporting the combatant commander's 
requirements, the Marine Corps is focused on near-term efforts in five 
interrelated areas that are vital to achieving our future success: 
People, Readiness, Training, Naval Integration, and Modernization. 
Across these five areas, three major themes run throughout: maintaining 
and improving the high quality people that make up today's Marine 
Corps; decentralizing the training and preparation for war while 
adhering to Maneuver Warfare principles in the conduct of training and 
operations; and modernizing the force, especially through leveraging 
new and emerging technologies. The future requires Marines to embrace 
change to leverage the rapid advancements in technology at the pace of 
the 21st Century in order to gain an operational advantage over any 
potential adversary we may face in the future.
                                 people
    The success of the Marine Corps hinges on the quality of our 
Marines. This is the foundation
    from which we make Marines, win our Nation's battles, and return 
quality citizens to American society. The Marine Corps will maintain a 
force of the highest quality which is smart, resilient, fit, 
disciplined and able to overcome adversity. Maintaining the quality of 
the men and women in today's Corps is our friendly center of gravity. 
Our goal is to ensure every Marine is set up for success on the 
battlefield and in life, and understands their value to the Marine 
Corps and the Nation.
    The Marine Corps continues to benefit from a healthy recruiting 
environment that attracts quality people who can accomplish the 
mission. Our recruiting force continues to meet our recruiting goals in 
quantity and quality and is postured to make this year's recruiting 
mission. We are on track to meet our active duty end strength goal of 
182,000 Marines in fiscal year 2016, and we will look to maximize the 
capabilities of each and every Marine. Where it makes sense, we will 
look to leverage the unique skills of our Reserve Marines to align what 
they bring from the civilian sector and better enable the readiness of 
our Total Force.
    As the Marine Corps completes our current draw down, competition 
for retention will continue. We will strive to retain the very best 
Marines capable of fulfilling our leadership and operational needs. 
This is accomplished through a competitive career designation process 
for officers and a thorough evaluation process for enlisted Marines 
designed to measure, analyze, and compare Marines' performance, 
accomplishments, and future potential. The Marine Corps continues to 
retain quality Marines in a majority of occupational fields while 
others, like aviation and infantry, are more challenging. An additional 
challenge for all Marines is remaining focused on training for war 
balanced against the volume of mandatory ``top down'' training 
requirements not directly associated with warfighting.
    Marine Leaders have a moral obligation to ensure the health and 
welfare of the Nation's Marines from the day they make the commitment 
to serve. We take this responsibility very seriously and strive to 
maintain the trust and confidence of Congress and the American People 
by immediately addressing any challenge to Marine Corps readiness and 
finding solutions through our people and readiness programs. We have 
reinvigorated the Marine for Life Program and continue to progress with 
our Marine Corps Force Integration Plan (MCFIP), Sexual Assault 
Prevention and Response Program (SAPR), Protect What You've Earned 
Campaign (PWYE), Suicide Prevention and Response Program, our Wounded 
Warrior Regiment, Marine and Family Programs, and Transition Assistance 
Programs. The Marine Corps remains focused on solutions to address the 
destructive behavior of sexual assault, suicide and hazing. The abuse 
of alcohol has proven to be a contributing factor across the spectrum 
of force preservation issues that impact the readiness of our force. 
Our goal continues to be the elimination of this destructive behavior 
from our ranks, and we believe that preserving our commanders' ability 
to lead in this area is a vital element to reaching this objective.
                               readiness
    The Congressional intent to serve as the ``Nation's Force in 
Readiness'' guides who we are and what we do--being ready is central to 
our identity as Marines. As a force, we will remain ready to fight and 
win across the range of military operations and in all five warfighting 
domains--maritime, land, air, cyber and space. The fiscal reductions 
and instability of the past few years have impacted our readiness. As 
resources have diminished, the Marine Corps has protected the near-term 
operational readiness of its deployed and next-to-deploy units in order 
to meet operational commitments. This has come at a risk.
    The Marine Corps will continue to prioritize the readiness of 
deployed and next-to-deploy units over non-deployed units. The majority 
of our units are deploying ready while our non-deployed commands lack 
sufficient resources to meet the necessary personnel, training, and 
equipment readiness levels in order to respond today. However, to meet 
Congress' intent that we remain the nation's force in readiness, the 
Marine Corps requires a ``ready bench'' that is able to deploy with 
minimal notice and maximum capability.
    Our aviation units are currently unable to meet our training and 
mission requirements primarily due to Ready Basic Aircraft shortfalls. 
We have developed an extensive plan to recover readiness across every 
type/model/series in the current inventory, while continuing the 
procurement of new aircraft to ensure future readiness. The recovery 
and sustainment of our current fleet is necessary to support both 
training and warfighting requirements. Each type/model/series requires 
attention and action in specific areas; maintenance, supply, depot 
backlog, and in-service repairs. For example, in our F/A-18 community 
we are 52 aircraft short of our training requirement and 43 aircraft 
short of our warfighting requirement due to back log and throughput at 
the Fleet Readiness Depot and our inventory of spares. If these 
squadrons were called to on to fight today they would be forced to 
execute with 86 less jets than they need. With the continued support of 
Congress, Marine Aviation can recover its readiness by re-capitalizing 
our aging fleet first as we procure new aircraft to meet our future 
needs and support our ground forces.
    Simultaneous readiness initiatives are occurring with our ground 
equipment. Our post-combat reset strategy and Equipment Optimization 
Plan (EOP) are key components of the overall ground equipment 
``Reconstitution'' effort. As of Jan 2016, the Marine Corps has reset 
78 percent of its ground equipment with 50 percent returned to the 
Operating Forces and our strategic equipment programs. This strategic 
war reserve is our geographically prepositioned combat equipment both 
afloat and ashore where it makes the most sense to respond to 
contingencies. We remain focused on this recovery effort and project 
its completion in May of 2019. This service-level strategy would not 
have been possible without the continued support of Congress and the 
hard work of your Marines.
    The Facility Sustainment, Restoration and Modernization (FSRM) 
initiative and current state of facilities is the single most important 
investment to support training, operations, and quality of life. The 
2017 budget proposes funding FSRM at 74 percent of the OSD Facilities 
Sustainment Model. This reduced funding level is an area of concern. 
FSRM is a top priority to fix.
    The sustainment of military construction (MILCON) funding is 
crucial to managing operational training and support projects. Marine 
Corps readiness is generated aboard our bases and stations. As we 
transition to new capabilities and realign our forces in the Pacific, 
adequate MILCON will be a key enabler for the Marine Corps' future 
success.
    Readiness is not just in our equipment supply and maintenance, but 
in the quality and challenging nature of our training through the 
mental, spiritual and physical readiness of marines and sailors across 
the force. Readiness is the result of a variety of factors: commitment 
by leadership, standards-based inspections, evaluated drills and 
training exercises, and an understanding by all marines and sailors 
that the call can come at any time. We must be ready and able to 
answer.
                training, simulation and experimentation
    The Marine Corps' training and education continuum requires 
parallel and complementary efforts, from Squad Leader to MAGTF 
Commander. Organizing and executing high quality training is a 
difficult task. It takes time, deliberate thought, and effort. Our 
approach to training must evolve. It will emphasize the basics: 
combined arms, competency in the use of our weapons and systems, and 
expeditionary operations; but it must reemphasize operations in a 
degraded command, control, communications, computers and intelligence 
(C41) environment, camouflage/deception, operations at night, 
operations in a nuclear, biological and chemical (NBC) environment, and 
decision-making in rapidly unfolding and uncertain situations. We must 
provide opportunities to experiment and work with the latest 
technological advances.
    Our war gaming supports the combat development process in order to 
develop and refine emerging concepts, conceptualize force design, and 
identify future capabilities and deficiencies within the future 
operating environments. War gaming achieves this purpose by permitting 
the dynamic, risk free consideration of disruptive ideas and 
capabilities which enable innovation and inform Service priorities. War 
gaming also supports the development of operating concepts and 
facilitates analysis of alternatives across the ROMO. The Marine Corps 
is committed to the future development of a war gaming facility at 
Marine Corps Base Quantico to enhance the study of the evolving 
characteristics of, and the requirements for, successful warfighting in 
the future. The Marine Corps is working to leverage virtual and 
constructive training environments with better tools to train higher 
level staffs and a focus on our leaders, from the Battalion to the 
Marine Expeditionary Force level. Enabled by technology, we will 
increase the amount of training each unit can accomplish in mentally 
and physically stressing environments for all elements of the MAGTF 
before they execute on a live training range or in combat.
    Our current training schedule of major events will all focus on 
building on our maritime based operational capability and at the same 
time providing venues for experimentation. We will emphasize and 
increase opportunities for force-on-force training and operations in 
degraded environments in order to challenge Marines against a 
``thinking enemy'' and maximize realism.
    Demanding and challenging Professional Military Education (PME) is 
the best hedge against uncertainty and its purpose is to prepare for 
the unknown. Marines and sailors of all ranks have the responsibility 
to educate themselves. The Marine Corps University (MCU) educates over 
75 percent of Marine Corps' Captains and Majors and provides PME 
opportunities for 100 percent of our enlisted force. Our training and 
education initiatives contribute to our readiness and enhance our 
ability to integrate with the Naval and Joint Force.
               integration with the naval and joint force
    In order to be the Nation's expeditionary force in readiness the 
Marine Corps must remain a naval combined arms expeditionary force. Our 
naval heritage is based on more than tradition; it is mandated by law 
as our primary service responsibility. Marines will reinforce our role 
as a naval expeditionary force to create decision space for national 
leaders and assure access for the Joint force as part of a naval 
campaign. As the service with the primary Department of Defense 
Directive and Title 10 responsibility for the development of amphibious 
doctrine, tactics, techniques, and equipment, our capabilities are 
reliant on the Nation's investment in our partnered Navy programs. This 
requires the proper balance of amphibious platforms, surface 
connectors, and naval operating concepts to shape our force explicitly 
as part of the Joint Force, understanding where we will both leverage 
and enable the capabilities of the Army, Air Force and Special 
Operations Forces.
    The Navy and Marine Corps Team require 38 amphibious warships, with 
an operational availability of 90 percent, to support two Marine 
Expeditionary Brigades, in order to provide the Nation a forcible entry 
capability. The Marine Corps fully supports the Secretary of the Navy 
and Chief of Naval Operations' efforts to balance amphibious platforms 
and surface connectors that facilitate operational maneuver from the 
sea and ship-to-objective maneuver. The Long Range Ship Strategy (LRSS) 
increases the amphibious warship inventory to 34 by fiscal year 2022. 
We appreciate Congress providing the funding to procure a 12th LPD and 
the funding for a second ship with the same hull form.
    The LPD and the LX(R) represent the Department of the Navy's 
commitment to a modem expeditionary fleet. L-class ships with aircraft 
hangars and the command and control capabilities for the distributed 
and disaggregated operations that have become routine for our ARG/MEU 
teams. The Marine Corps fully supports the Navy's decision to use the 
LPD-17 hull for the LX(R) program. This decision is an acquisitions 
success story that provides a more capable ship, at lower cost, with 
increased capacity, on a shorter timeline to better support how Marines 
are operating today and are likely to in the future.
    Steady state demand and crisis response sea basing requirements 
must be met through creative integration of all platforms and 
formations. This requires an integrated approach that employs warships, 
alternative shipping and landing basing in a complementary manner. 
Corresponding to the amphibious ship effort is our investment in 
tactical ship-to-shore mobility because at some point in the naval 
campaign, the landing force is going to land. The Amphibious Combat 
Vehicle (ACV) is critical in the conduct of protected littoral maneuver 
and the projection of Marines from sea to land in permissive, 
uncertain, and hostile environments. Our planned investments are framed 
by our capstone service concept, Expeditionary Force 21 (EF-21). 
Working with our naval partners, we are aggressively exploring the 
feasibility of future and existing sea based platforms to enhance the 
connector capabilities of our LCACs and LCUs. We have a need to modify 
traditional employment methods and augment amphibious warships by 
adapting other vessels for sea-based littoral operations. Maritime 
Prepositioning Ship squadrons have one Maritime Landing Platform (MLP) 
that is effectively a ``pier in the ocean.'' These ships can move pre-
positioned war reserves into theater and serve as afloat staging bases 
to receive and transfer equipment and supplies as part of an integrated 
MAGTF or regionally oriented MEB. The end-state is a ``family of 
systems'' designed to enhance mobility, interoperability, 
survivability, and independent operational capabilities to further 
enhance sea basing and littoral maneuver capabilities well into the 
21st Century. The Marine Corps will continue to work closely with the 
Navy to implement the 30-year ship building plan and to address the 
current readiness challenges of the amphibious fleet.
    The continued development of Information Warfare and Command and 
Control capabilities are also required for the Marine Corps to operate 
against increasingly sophisticated adversaries. This requires 
investments in interoperable combat operations centers. We are 
identifying and developing command and control systems and information 
technology architecture to support operations and ensure our ability to 
maneuver. Framed by service-level concepts like the Navy's Cooperative 
Strategy 21 (CS-21), we will collaborate with the Navy on a Naval 
Operating Concept revision in order to shape future naval campaigning 
and naval expeditionary operations. This concept will include a greater 
Marine Corps contribution to Sea Control operations through 
interoperability with the Navy Composite Warfare Commander (CWC) 
structure in order to disrupt, dismantle and defeat Anti Access/Area 
Denial (A2/AD) threats and optimize the single naval battle success on 
and from the sea. Since Marines and Special Operations Forces (SOF) 
remain forward deployed, we must create true integration models to 
maximize the capabilities of the sea-based MAGTF, including command and 
control (C2), alongside our SOF partners. The end state is a fully 
integrated and ready Navy and Marine Corps team, trained and resourced 
to support our joint operating concept.
                      modernization and technology
    History has not been kind to militaries that fail to evolve, and 
the change we see in the 21st Century is as rapid and dramatic as the 
world has ever known. That said the Marine Corps' modernization and 
technology initiatives must deliver future capabilities and sustainable 
readiness. Marines will continue working to do what we do today better, 
but equally important, must be willing to consider how these same tasks 
might be done ``differently.'' The Marine Corps must continue to 
develop and evolve the MAGTF, ensuring it is able to operate in all 
warfighting domains. To do so Marines are invigorating experimentation 
of new concepts in order to advance our capabilities.
    We will continue to develop our concepts to take advantage of the 
capabilities of the F-35 Joint Strike Fighter and all of our emerging 
aviation platforms, particularly in regard to sensor fusion and 
electronic warfare. Marines will continue to experiment with and 
exercise new ways to get the most out of the MV-22 and challenge 
previous paradigms in order to provide the most effective MAGTFs to our 
combatant commanders.
    We will establish and define, in doctrine, our distributed 
operations capability in our MAGTFs by the end of fiscal year 2016. 
With distributed capabilities, we must also ensure our forces are not 
constrained at the littoral seams between combatant commanders. You can 
also expect the Marine Corps to continue to pursue technologies that 
enhance our warfighting capabilities such as unmanned aerial systems 
(UAS) and robotics, artificial intelligence, 3-D printing, and 
autonomous technologies that provide tactical and operational 
advantage.
    The Marine Corps Warfighting Lab leads our experimentation effort 
to capitalize on existing and emerging technology and MAGTF level 
exercises. In conjunction with our coalition partners, the Navy and 
Marine Corps team has experimented with dispersed sea based SPMAGTFs, 
integrated MAGTFs in Anti-Access/ Area Denial environments, 
incorporated emerging digital technologies with aviation platforms and 
our ground forces, and conducted naval integration with interoperable 
Special Operations Forces during Joint Exercises. We will continue to 
emphasize experimentation during our exercises as a way to inform the 
development of distributed doctrine and future operating concepts. 
Exercises serve as a test bed for experimentation as we search for 
faster, cheaper and smarter acquisition processes and programs.
    The following equipment platforms and acquisition initiatives 
require special mention:
                    amphibious combat vehicle (acv)
    The ACV is an advanced generation eight-wheeled, amphibious, 
armored personnel carrier that will support expeditionary maneuver 
warfare by enhancing tactical and operational mobility and 
survivability. The Marine Corps plans to procure 694 vehicles: 204 in 
the first increment and 490 in the second increment. Our plan is to 
have our first battalion initially capable in the 4th quarter of fiscal 
year 2020 and all battalions fully capable by the 4th quarter of fiscal 
year 2023. Your investment in this program provides the Marine Corps 
with an advanced ship to shore maneuver capability for the Joint Force.
                      joint strike fighter (f-35)
    The F-35 is a fifth generation fighter that will replace the Marine 
Corps' aging tactical aviation fleet of F/A-18 Hornets, AV-8B Harriers, 
and EA-6B Prowlers. The F-35 will have a transformational impact on 
Marine Corps doctrine as we work to both do what we're doing today 
better and ``differently.'' The Marine Corps plans to procure 420 
aircraft: 353 F-35Bs and 67 F-35Cs. The first F-35B squadron achieved 
initial operating capability in July 2015, and our second squadron will 
become operational in June 2016. The Marine Corps plans to complete its 
F-35 transition by 2031. We believe the Congressional support 
investment in this program will pay significant dividends for the 
capabilities of the Marine Corps and the Joint Force.
                                 ch-53k
    The Marine Corps' CH-53K ``King Stallion'' helicopter will fulfill 
the vertical lift requirement for amphibious and Joint Forcible Entry 
Operations. This CH-53 transition is critical to increasing the 
degraded readiness of the CH-53E community and decreasing the 
platform's operations and maintenance costs. The Marine Corps plans to 
procure 200 aircraft. The program achieved Milestone B in December 
2005. The CH-53K's first flight occurred in October 2015 and our two 
aircraft have flown 25.8 hours.
   command, control, communications, computers and intelligence (c41)
    The modernization and technology effort of the Marine Corps 
requires an integrated network that is deployable, digitally 
interoperable, and supportive of rapid advancements in technology and 
the evolution of combat capabilities. The Marine Corps Enterprise 
Network (MCEN) establishes a comprehensive framework requiring the 
development of command and control architecture to simplify and enable 
operating forces to use services in a deployed environment. The 
priority is to provide worldwide access to MCEN services from any base, 
post, camp, station network, tactical network and approved remote 
access connection. Our goal is to provide an agile command and control 
capability with the right data, at the right place, at the right time.
    Digital Interoperability (DI) is the effective integration of 
Marines, systems, and exchange of data, across all domains and networks 
throughout the MAGTF, Naval, Joint, and Coalition Forces, to include 
degraded or denied environments, in order to rapidly share information. 
This is a vital step in linking the MAGTF and the Joint Force to get 
the vast amount of information collected on all platforms into the 
hands of the warfighters that need it; in the air, on the ground and at 
sea.
    The Marine Corps' goal is to retain our tactical advantage across 
the range of military operations with today's and tomorrow's systems. 
Our end state is to field and operationalize ongoing programs and 
continue to develop solutions that will enhance institutional 
capabilities and retain our tactical advantage across the ROMO.
                             our challenges
    The character of the 21st Century is rapid evolution. Our potential 
adversaries have not stood still, and it is imperative that we keep 
pace with change. Two years ago, the 35th Commandant, came before 
Congress and testified that:

    ``...the 36th Commandant will reach a point, probably two years 
from now, where he's going to have to take a look at that readiness 
level and say, I'm going to have to lower that so that I can get back 
into thesefacilities that I can't ignore, my training ranges that I 
can't ignore, and the modernization that I'm going to have to do 
eventually. Otherwise we'll end up with an old Marine Corps that's out 
of date. `` \1\
---------------------------------------------------------------------------
    \1\ Gen Amos. Posture of the United States Marine Corps. CMC, Mar 
2014.

    This is where we find ourselves today. The Marine Corps is no 
longer in a position to generate current readiness and reset our 
equipment, while sustaining our facilities, and modernizing to ensure 
our future readiness. The efforts of the I 14th Congress have provided 
sufficient resources to support the Marine Corps' near-term readiness 
and we thank the Congress for this fiscal stability. However, PB17 
increasingly stretches the Nation's Ready Force. We are deploying 
combat ready-forces at a rate comparable to the height of our 
commitment to Operations Iraqi Freedom and Enduring Freedom; we are 
facing future facilities challenges as we try to sustain our current 
installations; and we are struggling to keep pace as our potential 
adversaries rapidly modernize. This is not healthy for your Marine 
Corps or for the security of our Nation.
    The Marine Corps is now on its way down to 182,000 Marines by the 
end of fiscal year 2016. Although our recruiting force continues to 
meet our recruiting goals we are challenged to retain certain 
occupational fields like infantry and aviation. The 21st Century 
demands capabilities in 5th Generation Fighter Aircraft (F-35), Cyber 
Warfare, Information Operations, Special Operations, Embassy Security 
Guards, and the Security Cooperation Group that advises and assists our 
allies and partner nations. The Marine Corps must continue to develop 
and retain these capabilities with quality Marines.
    In last year's fiscal year 2015 budget we were compelled, due to 
fiscal pressures, to limit and reduce training for our operating 
forces. In this year's fiscal year 2016 budget our operation and 
maintenance funding was further reduced by 5.6 percent. This reduction 
has been carried forward into our fiscal year 2017 budget. Two years of 
fiscally constrained operation and maintenance funds will force us to 
employ a prioritized readiness model for our deploying forces and 
prevents us from our desired readiness recovery, both in operational 
training and facilities sustainment. This means the Marine Corps will 
not have as deep and as ready a bench to draw from for a major 
contingency.
    Modernization is future readiness. The recapitalization of our 
force is essential to our future readiness with investments in ground 
combat vehicles, aviation, command and control, and digitally 
interoperable protected networks. We have important combat programs 
under development that need your continued support. The Amphibious 
Combat Vehicle (ACV) will replace our Amphibious Assault Vehicle (AAV), 
which is now over four decades old. The Joint Strike Fighter will not 
only replace three aging platforms, but provides transformational 
warfighting capabilities for the future. Our ground combat vehicles 
like the Light Armored Vehicle (LAV) have an average age of 33 years 
and our Ml Al tanks have an average age of 26 years. The Marine Corps 
is grateful for Congress' support of our wartime acquisition and reset 
efforts of the MRAP, HMMWV, and the contracting of the Joint Light 
Tactical Vehicle (JLTV). In summary, the increasingly lean budgets of 
fiscal year 2016 and fiscal year 2017 will provide increased readiness 
challenges and cause shortfalls in key areas. This reality will force 
tradeoffs.
                               conclusion
    ``Onefact is etched with clarity; the Marine Corps, because of its 
readiness tofight, will have a vital role in anyfuture war.'' \2\ 
Senator Mike Mansfield
---------------------------------------------------------------------------
    \2\ Honorable Mansfield. Fixing the Personnel Strength of the 
United States Marine Corps, Adding the Commandant of the Marine Corps 
as a Member of the Joint Chiefs of Staff. 82nd Congress, 1st Session, 
House of Representatives, HR 82-666, 30 Jun 1951.
---------------------------------------------------------------------------
    Marines will continue to meet the high standards the American 
people have set for us. As responsible stewards of the Nation's 
resources, the Marine Corps remains committed to its auditability in 
order to provide the best Marine Corps the Nation can afford. We will 
therefore continue to produce highly trained Marines, formed into 
combat-ready forces, and provide the capabilities the Joint Force 
requires. The wisdom of the 82nd Congress as reaffirmed by the 114th 
Congress remains valid today--the vital need of a strong force-in-
readiness. Marines are honored to serve in this role.

    Marines are innovators and the history of the Marine Corps is 
replete with examples of innovation out of necessity. With the 
continued support of Congress, the Marine Corps will maintain ready 
forces today and modernize to generate readiness in the future because 
when the Nation calls, Marines answer and advance to contact.

    Chairman McCain. Admiral Richardson?

 STATEMENT OF ADMIRAL JOHN M. RICHARDSON, USN, CHIEF OF NAVAL 
                           OPERATIONS

    Admiral Richardson. Mr. Chairman and Ranking Member Reed, 
distinguished members of the committee, I am honored and 
humbled to appear before you today as your CNO on behalf of our 
more than 500,000 active and Reserve sailors, our civilians, 
and families to discuss the Navy's budget request.
    To start, I want to thank you for your leadership in 
keeping our Nation secure and in keeping our Navy the strongest 
that has ever sailed the seas. This year's budget continues 
that important work.
    It is always good to start by framing the problem. America 
is a maritime nation, and our prosperity is tied to our ability 
to operate freely in the maritime environment. Today's 
strategic environment is increasingly globalized and 
increasingly competitive. Global systems are used more, 
stressed more, and contested more.
    The maritime system has seen explosive growth. For the 
first time in 25 years, there is competition for control of the 
seas. From the sea floor to space, from deep water to the 
shoreline, and in the information domain, things are 
accelerating. The global information system has become 
pervasive and has changed the way we all do business, including 
at sea. Technology is being introduced at an unprecedented rate 
and is being adopted by society just as fast.
    Finally, a new set of competitors are moving quickly to use 
these forces to their advantage, and for the first time in 25 
years, the U.S. is facing a return to great power competition. 
These new forces have changed what it means for the Navy and 
Marine Corps to provide maritime security.
    While the problems are much more numerous and complex, our 
responsibility remains the same. Naval forces must provide our 
leaders credible options to protect America from attack, 
advance our prosperity, further our strategic interest, assure 
our allies and partners, and deter our adversaries, which rests 
on the ability of the Navy and our sister services to win 
decisively if conflict breaks out. If we do not adapt, we will 
perform below our potential and worse, we may fall behind our 
competitors.
    To do this, the Navy is focusing on four lines of effort. 
We are going to strengthen our Navy team, strengthen our 
operating and warfighting at and from the sea, expand and 
strengthen our partnerships, and achieve high-velocity learning 
at every level.
    Unquestionably, the most part of our Navy is our team. 
Everything we do starts and ends with our sailors, civilians, 
and their families. As our platforms and missions become more 
complex, our need for talented people continues to be a 
challenge. We need to recruit, train, and retain the right 
people, and our sailor 2025 initiatives are aimed squarely at 
that challenge. These efforts are based on our core values of 
honor, courage, and commitment and demonstrated through four 
core attributes of integrity, accountability, initiative, and 
toughness. That team is committed to our mission, which 
requires us to strengthen naval power at and from the sea.
    This budget reflects some very tough choices as we achieve 
this aim. We have prioritized shipbuilding and the industrial 
base. First in that effort is the Ohio replacement program, 
which I believe is vital to our survival as a Nation. We are 
taking steps to more deeply engrain information warfare. We are 
also investing in our naval aviation enterprise, rapidly 
integrating unmanned systems, and bolstering our investments in 
advanced weapons.
    In addition to these investments, we are adjusting our 
behaviors to keep pace with a world that continues to 
accelerate. We are doubling down on an approach that relies 
more heavily on experimentation and prototyping. We are 
pursuing multiple avenues to drive shorter learning cycles into 
all that we do. We must learn faster.
    To close, I want to mention that recently I had the honor 
to spend time with Senior Chief Ed Byers, who was awarded the 
Medal of Honor by the President on behalf of the Congress. 
Senior Chief Byers represents the very best of our service men 
and women. He is emblematic of this generation's continued 
commitment to our core values and to their fellow Americans. 
The SEAL [Sea, Air, Land] ethos reads in part, my loyalty to 
country and team is beyond reproach. I humbly serve as a 
guardian to my fellow Americans, always ready to defend those 
who are unable to defend themselves. I do not advertise the 
nature of my work nor seek recognition for my actions.
    Mr. Chairman, all our people want to do is protect their 
great Nation. It is my job to lead them well and prepare them 
for that task. The 2017 Navy budget is this year's best 
approach to solving the problems and seizing the opportunities 
that face the Navy today.
    I thank you and look forward to your questions.
    [The prepared statement of Admiral Richardson follows:]

            Prepared Statement by Admiral John M. Richardson
    Chairman McCain, Ranking Member Reed, and distinguished members of 
the Committee, it is an honor to appear before you today. This is my 
first of hopefully many chances to discuss the future of the United 
States Navy with you, and as your Chief of Naval Operations, I look 
forward to continuing to work closely with you to ensure that your Navy 
is best postured to defend America's interests around the globe.
    Prior to my confirmation, I testified that my most serious concern 
was the gap between challenges to America's security and prosperity and 
the resources available to protect them. In January of this year, I 
outlined this gap in more detail when I released A Design for 
Maintaining Maritime Superiority (the ``Design''), which describes an 
increasingly competitive environment and the lines of effort the Navy 
will pursue to execute our mission in that environment. The thinking in 
the Design reflects inputs from leaders inside and out of the Navy and 
is guiding our way forward. It shaped our budget submission and shapes 
my testimony below.
    The 2017 budget is this year's best approach to solving the 
problems and seizing the opportunities that face the Navy today. The 
budget reflects some constants; America has been a maritime nation 
since we began. Our prosperity continues to depend on our maritime 
security--over 90 percent of our trade is shipped over the seas--and 
this linkage will only tighten in the future. Against the backdrop of 
this historical truth, current problems and opportunities are growing 
rapidly. The maritime environment has remained remarkably constant 
since man first put to sea thousands of years ago. The oceans, seas, 
shipping lanes and chokepoints are physically unchanged in the modern 
era, but the maritime system has seen explosive growth in the past 25 
years. Traffic over the seas has increased by 400 percent since the 
early 1990's, driving and outpacing the global economy, which has 
almost doubled in the same period. Climate change has opened up trade 
routes previously closed. Access to resources on the seafloor has also 
increased, both as Arctic ice has receded and as technology has 
improved. Just as it has in the past, our future as a nation remains 
tied to our ability to operate freely on the seas.
    That maritime freedom is coming under increasing pressure and 
stress. For the first time in 25 years, there is competition for 
control of the seas. Nations like China and Russia are using their 
newfound maritime strength not only to advance their national goals, 
but also to challenge the very rules and standards of behavior upon 
which so many nations since the end of World War II have based their 
growth. We should interpret this challenge to international rules and 
order as a challenge to our own security and prosperity, and to the 
security and prosperity of all who support an open, fair architecture.
    It is against this background that I consider the gravity of the 
Navy's mission statement, as reflected in the Design:

        ``The United States Navy will be ready to conduct prompt and 
        sustained combat incident to operations at sea. Our Navy will 
        protect America from attack and preserve America's strategic 
        influence in key regions of the world. U.S. naval forces and 
        operations--from the sea floor to space, from deep water to the 
        littorals, and in the information domain--will deter aggression 
        and enable peaceful resolution of crises on terms acceptable to 
        the United States and our allies and partners. If deterrence 
        fails, the Navy will conduct decisive combat operations to 
        defeat any enemy.''

    To me these words are not an abstraction, and are easiest to 
appreciate in the context of what naval forces do every day. As just 
one example, there was a day last fall when:

      The destroyer USS Donald Cook transited the 
Mediterranean, following an 11-nation multinational exercise in the 
Black Sea and a port visit to Odessa, Ukraine--demonstrating our 
commitment to our NATO allies;
      Sailors at the Navy Cyber Defense Operations Command in 
Suffolk, VA monitored intrusion prevention sensors that actively 
mitigated almost 300,000 instances of unauthorized or adversary 
activity across the Navy network enterprise, including more than 60,000 
threats to afloat networks;
      The Kearsarge Amphibious Readiness Group, with the 26th 
Marine Expeditionary Unit aboard, participated in a Turkish-led 
amphibious exercise, demonstrating our combined capability and 
physically displaying our commitment to U.S. allies and partners;
      Five ballistic missile submarines patrolled the oceans 
(the latest in over 4,000 patrols since 1960), providing 100 percent 
readiness in providing strategic deterrence;
      USS Fort Worth, a Littoral Combat Ship, swapped crews in 
Singapore after participating in a Cooperation Afloat Readiness And 
Training (CARAT) exercise with the Bangladesh Navy, developing 
cooperative maritime security capabilities that support security and 
stability in South and Southeast Asia.
      Sailors from a Coastal Riverine Squadron and an Explosive 
Ordnance Disposal unit participated in an exercise in Cambodia, 
increasing maritime security cooperation and interoperability between 
the two navies;
      Navy SEALS trained and advised Iraqi forces in the fight 
against ISIL extremists, facilitating, mentoring, and enhancing their 
ability to secure their territory;
      Members of the Navy Expeditionary Combat Command provided 
tactical intelligence training to Ghanaian Maritime Law Enforcement and 
Naval servicemembers at Sekondi Naval Base, increasing our partners' 
capacity and capability to secure their territorial waters;
      The aircraft carrier USS Ronald Reagan launched four F/A-
18 fighters to intercept and escort two approaching Russian TU-142 Bear 
aircraft that approached as the carrier was operating in the Sea of 
Japan, operating forward to preserve freedom of action; and
      The fast-attack submarine USS City of Corpus Christi 
operated in the Western Pacific, after participating with the Indian 
and Japanese Navies in Exercise Malabar 2015, increasing our level of 
engagement with our partners across the Indo-Asia Pacific.

    All of these events occurred on a single day: October 27, 2015. But 
none were in the headlines. That is because on that day the guided 
missile destroyer USS Lassen conducted a freedom of navigation 
operation in the South China Sea, one of the many visible 
demonstrations of our international leadership and national commitment 
to preserving a rules-based international order that the Navy conducts 
routinely around the world.
    Your Navy's ability to execute these responsibilities--our 
mission--is becoming more difficult as three interrelated forces act on 
the global economic and security environments, and as new actors rise 
to challenge us. I have already described the first force--the force 
exerted by the expanding use of the maritime domain, on, over, and 
under the seas. This global system is becoming more used, stressed, and 
contested than perhaps ever before, and these trends show no signs of 
reversing.
    The second force is the rise of the global information system. 
Newer than the maritime system, the information system is more 
pervasive, enabling an even greater multitude of connections between 
people and at a much lower cost of entry. Information, now passed in 
near-real time across links that continue to multiply, is in turn 
driving an accelerating rate of change.
    The third interrelated force is the rising tempo at which new 
technologies are being introduced. This is not just information 
technologies, but also those that incorporate advances in material 
science, increasingly sophisticated robotics, energy storage, 3-D 
printing, and networks of low-cost sensors, to name just a few 
examples. The potential of genetic science and artificial intelligence 
is just starting to be realized, and could fundamentally reshape every 
aspect of our lives. As technology is developed at ever-increasing 
speeds, it is being adopted by society more quickly as well--people are 
using these new tools as quickly as they are produced, in new and novel 
ways.
    Our competitors and adversaries are moving quickly to use these 
forces to their advantage, and they too are shifting. For the first 
time in decades, the United States is facing a return to great power 
competition. Russia and China demonstrate both the advanced 
capabilities and the desire to act as global powers. This past fall, 
the Russian Navy operated at a pace and in areas not seen since the 
mid-1990's, and the Chinese PLA(N) continued to extend its reach around 
the world. Their national aspirations are backed by a growing arsenal 
of high-end warfighting capabilities, many of which are focused 
specifically on our vulnerabilities. Both nations continue to develop 
information-enabled weapons with increasing range, precision and 
destructive capacity, and to sell those weapons to partners like Iran, 
Syria, and North Korea.
    From a strategic perspective, both China and Russia are also 
becoming increasingly adept in coercion and competition below the 
thresholds of outright conflict, finding ways to exploit weaknesses in 
the system of broadly accepted global rules and standards. For example, 
Russia has continued its occupation and attempted annexation of another 
nation's territory. As perhaps the most startling example, China's land 
reclamation and militarization of outposts amidst the busiest sea lanes 
on the planet casts doubt on the future accessibility of our maritime 
domain. China is literally redrawing the map in the South China Sea by 
creating artificial islands, to which they then claim sovereign 
territorial rights, now complete with surface to air missiles and high 
performance radars. Their activity creates great uncertainty about the 
intentions and credibility of their leadership.
    Russia and China are not the only actors seeking to contest United 
States and global interests in the emerging security environment. 
Others are also pursuing advanced technology, including military 
technologies that were once the exclusive province of great powers; 
this trend will persist. Coupled with an ongoing dedication to 
furthering its nuclear weapons and missile programs, North Korea's 
provocative actions continue to threaten security in Northeast Asia and 
beyond. Iran's advanced missiles, proxy forces and other conventional 
capabilities pose threats to which the Navy must remain prepared to 
respond. Finally, international terrorist groups such as ISIL and al 
Qaeda have proven their resilience and adaptability and pose a long-
term threat to stability and security around the world.
    In summary, these new forces have changed what it means for the 
Navy and Marine Corps to provide maritime security; the problems are 
more complex, demanding, and numerous than ever before. But our 
responsibility remains the same. Naval forces must provide our leaders 
credible options that allow them to advance the nation's prosperity, 
defend its security, further its strategic interests, assure its allies 
and partners, and deter its adversaries--which rests on the ability of 
the Navy and our sister services to decisively win if conflict breaks 
out. The breadth of challenges we face demands a range of options, and 
they must be credible. Only then can the United States effectively 
advocate as a maritime power for the system of global rules and 
standards that underpin shared prosperity now and in the future.
    It is becoming increasingly difficult for the Navy to present a 
sufficient number of credible options for leadership. While the 
predictability provided by the 2015 Bipartisan Budget Act is greatly 
appreciated, the Navy's fiscal year 2017 budget submission comes on the 
heels of four prior years' budgets that collectively provided $30 
billion less than requested levels to the Department of the Navy. It 
represents yet another reduction of almost $5 billion from 2016 funding 
levels. We have started the last six years with a continuing 
resolution, with an average duration of 120 days. In response, we have 
had to modify our behaviors with a host of inefficient practices, the 
use of short-term contracts offering less than best value to the 
government, and the associated increased workload on our shrinking 
headquarters staffs. Continuing Resolutions can also delay critical 
programs, including those with little to no margin for delay, such as 
the Ohio Replacement Program. It's worse than that: the fiscal 
uncertainty sends ripples through the entire system--the industrial 
base is hesitant to invest, and our people remain concerned about the 
next furlough or hiring freeze or overtime cap. This unpredictability 
adds to the burden on our Navy team and drives prices up.
    The challenges are increasing and funding is decreasing. America 
remains the primary leader of the free world, with the most capable 
military force on the planet. We remain a maritime nation whose future 
is inextricably tied to the seas. Our Navy has tremendous 
responsibilities to ensure that future is secure and prosperous. Within 
those constraints, our fiscal year 2017 budget proposal reflects the 
best portfolio of credible options to achieve our mission. Budget 
constraints are forcing choices that limit our naval capability in the 
face of growing and rising threats. The Navy's budget addresses our 
gaps on a prioritized basis, and starts to accelerate our capabilities 
so that we can maintain overmatch relative to our adversaries.
                strengthen our navy team for the future
    Without question, the most important part of our budget is our 
investment in our Navy Team--our Active and Reserve sailors, our Navy 
civilians, and their families. I am pleased that we were able to 
provide a 1.6 percent pay raise for our sailors this year, outpacing 
inflation and 0.3 percent more than last year. Just as important are 
the investments we are making to improve the environment for the Team. 
As the Design makes clear, some of the biggest impacts that we can make 
on our warfighting capability do not involve a lot of money, but 
instead are changes to how we do business.
    These changes can't come soon enough. As our platforms continue to 
become more technologically advanced and missions become more complex, 
our need for talented, qualified recruits will grow. Further, the 
competition for that talent grows more intense every day. This budget 
keeps us on a good path. Our sailor 2025 program is a dynamic set of 
initiatives, process improvements and management tools designed to 
increase career choice and flexibility, provide advanced, tailored 
learning, and expand support to our Navy families. In fiscal year 2017, 
we begin to fully invest in the Sailor 2025 Ready Relevant Learning 
initiative, which will begin to create a new way of training our 
sailors through mobile, modular learning, re-engineered content, and an 
improved IT infrastructure.
    In this budget, we fund a wide range of initiatives to strengthen 
our sailors individually and as a team. The Design highlights the 
importance of our core values of honor, courage and commitment, as 
demonstrated through four core attributes--integrity, accountability, 
initiative, and toughness. We are implementing a strategy, headed up by 
our 21st Century Sailor Office, to inculcate these attributes 
throughout the fleet and improve sailor readiness and resilience. We 
continue to further develop a climate of dignity and respect throughout 
the Fleet. We also look to eliminate the toxic behaviors that destroy 
the fabric of the team--including sexual harassment and assault, hazing 
and alcohol abuse. We have increased funding over the FYDP to address 
sexual assault prevention and response, adding 24 new positions to the 
Naval Criminal Investigative Service--on top of 127 additions in the 
previous two years--to speed investigations while continuing our 
support for programs aimed at prevention, investigation, 
accountability, and support for survivors such as the Victim Legal 
Counsel Program.
    As we seek greater efficiencies, planned adjustments allow us to 
take modest reductions (3,600 sailors in fiscal year 2017) in our 
active duty end strength. These are consistent with advances in 
training methods and with standing down the Carrier Air Wing 14. There 
will be no reductions in force or any other force-shaping initiatives--
we will achieve this through natural attrition. Nobody will lose their 
job.
    One of my observations since taking office is that we can do more 
to increase the synergy between our military and civilian workforces. 
Your Navy civilians are integral to all that we do. They work in our 
shipyards and aviation depots, provide scientific and technical 
expertise in our labs, and guard our bases and other facilities. To 
respond to increasing security concerns, we have invested this year in 
increased force protection measures, including in those civilians who 
keep our people and property safe. Some of the maintenance and 
readiness shortfalls we are still digging out from were made worse by 
civilian hiring and overtime freezes and a furlough in fiscal year 
2013. Worse, these actions strained the trust within our team. This 
budget adds a net of over 1,300 civilian positions in fiscal year 2017 
to support additional maintenance, enhance security, and operate our 
support ships, and continues the investments in our civilian shipmates 
that help to forge one seamless team. Even as we implement these key 
initiatives to address security and to recover readiness, we balance 
that growth with reductions over the FYDP of 3,200 FTE (1.8 percent), 
for a net reduction of 1,900.
               strengthen naval power at and from the sea
    That team, with our Marine Corps partners, is committed to our 
mission, which must be conducted in the environment I described above. 
The Design calls for us to strengthen naval power at and from the sea 
to address the growing scale, congestion, and challenge in the maritime 
domain. The Ohio Replacement Program (ORP) is paramount to that effort, 
and remains our top priority. In my opinion, it is foundational to our 
survival as a nation. This budget funds the ORP; construction is 
planned to start in fiscal year 2021. This start date is vitally 
important to prevent any impact to continuous at-sea deterrence at a 
time when it could be even more relevant than today.
    To the maximum extent possible, we have also prioritized 
shipbuilding and the industrial base that supports it. Our current 
fleet of 272 ships is too small to meet the array of mission 
requirements our nation demands. In this budget, we remain on a path to 
achieve 308 ships by 2021. This year, we are funding two advanced 
guided missile destroyers with upgraded radars (DDG Flight IIIs with 
SPY-6), two Virginia-class attack submarines, two Littoral Combat 
Ships, and the procurement of an amphibious assault ship replacement 
(LHA(R)). The Ford carrier remains under its cost cap and will deliver 
in 2016; we are continuing to exercise strong oversight and discipline 
to ensure the cost of her sister ships Kennedy and Enterprise also 
remain under budget. We have exceeded our shipyard investment goal--
we're at 8.1 percent, well beyond the 6 percent legislative 
requirement.
    As the Design emphasizes, we are fully committed to further 
ingraining information warfare into our routine operations. This is 
essential to the Navy's future. For example, we are increasing 
procurement of the Surface Electronic Warfare Improvement Program 
(SEWIP) Block II and III by 45 units. We are also investing in network 
modernization afloat and ashore through 10 installations of the 
Consolidated Afloat Networks and Enterprise Services (CANES) system in 
fiscal year 2017.
    To help remediate one of our most stressed areas, we have enhanced 
our investments in the naval aviation enterprise. We are investing in 
bringing fifth generation aircraft to the fleet, adding ten F-35Cs over 
the FYDP. We are also replacing F-18 airframes that are meeting the end 
of their projected service lives faster than projected, adding 16F/A-18 
E/Fs over the next two years. Further, we are adding upgrades to the 
Super Hornet to make it more capable in a high-end fight. We are 
updating our strategy to more rapidly integrate unmanned aerial 
vehicles into our future air wing. Revisions to our unmanned carrier-
launched airborne surveillance and strike (UCLASS) program will help us 
to meet current mission shortfalls in carrier-based surveillance and 
aerial refueling capacity, and better inform us about the feasibility 
of future additional capabilities we desire.
    To meet an increasingly lethal threat, this budget bolsters our 
investments in advanced weapons across the FYDP. We are buying 100 
additional tactical Tomahawks, 79 more air-to-air AMRAAM missiles, 
additional sea-skimming targets, and accelerating our investments in 
SM-6 missile development in order to provide a full range of capability 
enhancements to the fleet. However, budget pressures also caused us to 
cut other weapons investments such as the Mk-48 torpedo and AIM-9X air-
to-air missile. Many of our production lines are at minimum sustaining 
rates, and the low weapons inventory is a continuing concern.
             achieve high velocity learning at every level
    All of these investments will deliver important capabilities to 
better posture us for the current and future environment. But, as or 
more importantly, we must also adjust our behavior if we are to keep 
pace with the accelerating world around us.
    This budget reflects some of that increase in pace. We are changing 
how we approach training and education to take advantage of new tools 
and to push learning out to where our sailors spend the bulk of their 
time--their units. The intent is not to burden those units more, but to 
empower their leaders and give sailors the best tools to support what 
science is increasingly revealing about how people learn most 
effectively.
    It also means that Navy leaders, up to and including me as the CNO, 
must exercise full ownership of how we develop and acquire new 
capabilities for the future. That ownership has four elements: 
authority, responsibility, accountability, and technical expertise. I 
am committed to exercising that ownership, and to creating or 
supporting new ways to exercise it faster.
    We are doubling down on an approach that relies more heavily on 
experimentation and prototyping, connected at the hip with the Fleet, 
to help meet mission needs while simultaneously helping us to better 
define our requirements. We are pulling our more ambitious projects 
closer to the present so we can learn our way forward, faster and with 
better information. We are taking this approach with the Remote 
Minehunting System, Large Displacement Unmanned Undersea Vehicle 
(LDUUV), and UCLASS programs, and we will continue to seek additional 
programs to which it can be applied.
    We are also reexamining our processes and organization to ensure 
they are best aligned to support a faster pace. This budget includes a 
small amount of funding for the Rapid Prototyping, Experimentation, and 
Demonstration initiative, a process we have already begun to implement 
that ``swarms'' technical experts to Fleet problems, rapidly generates 
operational prototypes, and gets them into the hands of sailors and 
marines so we can continue to refine and improve them. We also are 
standing up a capability along the lines of the Air Force's Rapid 
Capabilities Office; we'll call it the Maritime Accelerated 
Capabilities Office (MACO). This will concentrate requirements, 
technical, and acquisition expertise on high-priority projects to fast-
track their development and fielding.
    Finally, Congress has rightly pressed us to reexamine whether we 
are being as efficient as we can be. Our budget reflects some of the 
efforts that we are taking in that regard, but fundamentally, we are 
focused on making every dollar count. I am taking a personal role in 
that process, asking hard questions and pushing us to become more cost-
effective and agile as we apply a learning-based approach to all that 
we do.
                               conclusion
    This year's budget request represents a portfolio of investments 
that employ our available resources to best effect. The gap between our 
responsibilities and our funding levels represents risk--risk of 
sailors' lives lost, of a weakened deterrent, of a slower response to 
crisis or conflict, of greater financial cost, of uncertainty for our 
international partners--all of which affect the security and prosperity 
of America. While it is impossible to quantify this risk precisely, I 
believe the balance reflected in this proposal improves our prospects 
going forward.
    Such improvements are much needed. Concurrent with increasing 
global challenges, budget pressures have led the Navy to reduce our 
purchases of weapons and aircraft, slow needed modernization, and 
forego upgrades to all but the most critical infrastructure. At the 
same time, maintenance and training backlogs--resulting from continued 
high operational tempo and exacerbated by sequestration in 2013--have 
delayed preparation for deployments, which in turn has forced us to 
extend units already at sea. Since 2013, eight carrier strike groups, 
four amphibious readiness groups, and twelve destroyers have deployed 
for eight months or longer. The length of these deployments itself 
takes a toll on our people and the sustainability and service lives of 
our equipment. Further, these extensions are often difficult to 
anticipate. The associated uncertainty is even harder on sailors, 
marines, and their families and wreaks havoc on maintenance schedules, 
complicating our recovery still further.
    We cannot continue to manage the risks we face absent broader 
change. As CNO, I will strive to keep the U.S. Navy on the road to 
remaining a force that produces leaders and teams who learn and adapt 
to achieve maximum possible performance. We will achieve and maintain 
high standards to be ready for decisive operations and if necessary, to 
prevail in combat. We will fight for every inch of advantage. In this 
way, we will provide sufficient, credible, options to leadership in 
order to guarantee America's security and prosperity now and into the 
future. I very much look forward to working with you and your fellow 
Members of Congress as we proceed.

    Chairman McCain. Thank you.
    Admiral Richardson and General Neller, the fiscal year 
request for the Navy is 5 percent less than last year, $8 
billion less. What does that do to readiness, Admiral?
    Admiral Richardson. Sir, our readiness continues to be 
challenged. I prioritized, in terms of allocating our readiness 
dollars, that our forward-deployed forces will be ready to 
deploy. In terms of achieving readiness in our Reserve forces, 
those forces that will provide reinforcements, we continue to 
see that recovery date move out to the right as we are able to 
meet our current bills projecting a current-day readiness. 
Digging out of that debt is something that moves forward.
    Chairman McCain. General?
    General Neller. In order to make up the delta, Chairman, we 
took some risk in the facilities and some other things also in 
O&M [Operations and Maintenance]. There was some reduction in 
some exercises that we are able to do. But we did our very best 
to fund our readiness accounts for both ground and aviation so 
that we can sustain and improve our overall readiness. I 
think----
    Chairman McCain. General Dempsey testified before this 
committee that if we continued sequestration, it would put us 
on the ragged edge of readiness and ability to defend the 
Nation. Do you agree with what General Dempsey said?
    General Neller. I would agree that if we end up at 
sequestration levels, yes, Chairman, that we will be there.
    Chairman McCain. We put you into the acquisition equation, 
both you and Admiral Richardson. Has that been a good thing?
    General Neller. I think it has been a good thing, Chairman. 
I spend a lot of time talking to our acquisition people and Mr. 
Stackley, the acquisition professional for the Department of 
the Navy, and we have conversations whether it is amphibious 
ships or amphibious combat vehicles or ground tactical 
vehicles. I spend a lot of time talking about where we are 
programmatically, and I understand----
    Chairman McCain. It has helped.
    General Neller. It has.
    Chairman McCain. Admiral?
    Admiral Richardson. Senator, I would agree with General 
Neller. It has helped a great deal, and I look forward to 
taking some major steps in exercising those authorities, and I 
look forward to doing more.
    Chairman McCain. Admiral, the LCS, the Remote Multi-Mission 
Vehicle--we have spent over $700 million of taxpayers' money 
over the last 17 years. Is your new role in acquisition going 
to cure outrages such as this $700 million over 17 years? It is 
still not ready.
    Admiral Richardson. Sir, you have got my complete 
commitment that I will be involved in the details and will do 
everything I can to prevent those types of decisions.
    Chairman McCain. We can count on the carrier not to 
experience continued cost overruns?
    Admiral Richardson. Sir, I think for the last few years, we 
have seen that the carrier cost has come under control. The 
future carriers are also coming in under their cost caps. We 
have the disciplined processes in place and the oversight to 
keep it that way.
    Chairman McCain. There has been a proposal for a separate 
kind of fund to accommodate for all the new construction, 
particularly the new submarine. Do you support such an idea?
    Admiral Richardson. Sir, the National Sea-Based Deterrence 
Fund--I have got to say that I really endorse what that fund 
stands for, which is that we are taking this extremely 
important program, a nationally important program and elevating 
the discussion to a national level.
    Chairman McCain. Well, we want the discussion to be at a 
national level, but I am not sure every new weapon system then 
would not warrant the same kind of special treatment. That is 
the dilemma here.
    Admiral, there is a new report out just today. Iran state 
TV says the country has retrieved thousands of pages of 
information from devices used by 10 United States Navy sailors 
briefly detained by Iran in January. The Tuesday report quotes 
General Ali Razmjou saying the information was retrieved from 
laptops, GPS [Global Positioning System] devices, and maps. 
Razmjou is naval commander [of the Second Naval Zone] in the 
powerful Revolutionary Guard. General Razmjou said the move 
falls within Iran's rights under international regulations. Do 
you agree with that?
    Admiral Richardson. I do not, sir. According to 
international law, there was no authority to board those 
vessels. Those were sovereign U.S. vessels. They had the right 
to be where they were, and they should not have been seized.
    Chairman McCain. As you mentioned, against international 
law. They interviewed a military man apologizing. They put them 
on their knees with their hands behind their heads. They then 
also videoed an individual crying. Then they decorated the 
people--the Iranians that did it. Then they had a parade.
    What do you think we should have done in response to all 
that, Admiral Richardson? Would you not agree that this was a 
humiliation for the most powerful nation on earth, the United 
States of America?
    Admiral Richardson. Sir, I think the Navy has been very 
clear in terms of expressing our complete protest----
    Chairman McCain. That was sufficient, expressing a protest.
    Senator Reed?
    Senator Reed. Well, thank you very much, Mr. Chairman.
    I want to first thank the Secretary for his distinguished 
service over many years. I was just thinking. Are you the 
longest serving Secretary of the Navy or will you be?
    Mr. Mabus. I am the longest serving since World War I. 
Josephus Daniels, who served during World War I, has the record 
that I do not think anybody will touch.
    Chairman McCain. He became famous for banning alcohol on 
board Navy ships.
    [Laughter.]
    Mr. Mabus. I am hopeful my legacy will be a little brighter 
than that.
    Senator Reed. I think he was most famous because his 
assistant secretary of the Navy was Franklin Roosevelt, but 
that is another story entirely.
    Mr. Mabus. It is where sailors would say very sarcastically 
let us go get a cup of Josephus. It is where ``a cup of Joe'' 
came from because alcohol got replaced with coffee, as you as a 
Navy veteran and me as a Navy veteran know very well.
    Senator Reed. Thank you, Mr. Secretary.
    I also note that the Petty Officer of the Navy, Master 
Chief Stevens is here. Chief, thank you and thank you for all 
of the non-commissioned officers that make up our Navy and all 
the men and women of the Navy.
    I want to follow up on a point, Mr. Secretary, that the 
chairman raised, which is critical, which is the need for the 
Ohio-class replacement, but the need also for a scrupulous 
budget process that ensures we do not see some of the 
repetition of cost overruns we saw in other programs.
    Last year, in the Defense Authorization Act at section 
1022, we took the fund, which the Admiral was just asked about, 
and expanded authorities to include incremental funding, 
economic order quantity, et cetera. We also asked for a report 
from the Navy with respect to the fund.
    Let me just--several issues for both you and Admiral 
Richardson.
    First, it has been, I presume--but I would like you to 
confirm. This is the number one modernization priority of the 
Navy. Is that correct, Mr. Secretary?
    Mr. Mabus. Yes.
    Senator Reed. Then the expanded authorities under the 
National Sea-Based Deterrence Fund--Admiral Richardson and Mr. 
Secretary, you support those enthusiastically I hope.
    Admiral Richardson. Sir, I think that to recapitalize this 
extremely important program, our number one program--I look 
forward to the combination of appropriations and authorities to 
get this job done.
    Senator Reed. The point I think you made, Admiral 
Richardson, is this sort of falls outside the just traditional 
Navy shipbuilding because this is part of our nuclear triad, 
which is the strategic defense of the United States. In fact, I 
would anticipate down the line, as other components, the air 
and land components, come on, they would have the benefit of 
some type of national defense support also.
    Admiral Richardson. Sir, it seems to make sense.
    The other thing that sets this apart, not only its 
importance, but the fact that we only do this generationally. 
It is something that happens about--it has been 40 years since 
we built the Ohio-class.
    Senator Reed. Is there any idea about when we can expect 
that report coming up under section 1022 of the Defense Act?
    Mr. Mabus. I will give you a definitive answer very soon.
    Senator Reed. Yes, thank you.
    Mr. Mabus. But on the cost, I do want to point out that so 
far we have taken $10 billion out of this program going 
forward: $8 billion in terms of construction costs, about a 
billion dollars in operational maintenance, and about a billion 
dollars in non-recurring engineering. We want every one of 
these boats to come in under $5 billion in then-year dollars.
    Senator Reed. Thank you, Mr. Secretary.
    Mr. Secretary, also I mentioned in my opening comments the 
difficult choice with respect to the V-22. Can you give us some 
context? I know none of these choices are easy because of the 
constraints that you face.
    Mr. Mabus. Senator, it is my understanding that while the 
Marine part of the V-22 contract is ending, the Navy part, the 
carrier onboard delivery, the COD replacement, is picking up. 
It was certainly not our intent to break the multiyear. In 
fact, we thought we were folding this under the multiyear. If 
we inadvertently are breaking the multiyear, that was certainly 
not our intent. The Marines in their unfunded priority list 
have additional V-22's that they would also like to procure.
    Senator Reed. Finally, General Neller, let me just thank 
you for your service and the service of the men and women in 
the Corps.
    Just a comment is that you are right now trying to get the 
ACV out the door, and it builds on our experience with the 
expeditionary fighting vehicle, which was not a happy time. 
Like the chairman, I hope your personal involvement in the 
acquisition process and your efforts can get this system to the 
Corps as quickly and as cost-effectively as possible.
    General Neller. Senator Reed, I was involved with the EFV 
[Expeditionary Fighting Vehicle] and I understand the concern 
on the cost. This is a totally different approach using 
commercial, off-the-shelf vehicles. We are hopeful that the 
protest will get resolved so that the two vendors will be able 
to provide 16 vehicles each and we will be able to down-select 
to a single vehicle from there and buy these vehicles. I will 
be watching very closely the schedule and the cost of these 
vehicles.
    Senator Reed. Thank you very much, sir. Thank you, General.
    Chairman McCain. Senator Sessions?
    Senator Sessions. Thank you, Mr. Chairman.
    Admiral Richardson, it is conventional thought, is it not, 
that the triad is important? This administration supports the 
entire triad, but the Ohio submarine replacement program would 
be critical to that and perhaps the most important part of it 
for our national security.
    Admiral Richardson. Sir, I think all the legs of the triad 
are critically important. Ours is obviously--the one we are 
focused on is the sea-based leg, which will carry 70 percent of 
the warheads in the future.
    Senator Sessions. I know that we have challenges with 
financing because we are going to have a number of big programs 
that are going to arise at that same time.
    But, Mr. Secretary, you would remain committed to moving 
forward, would you not, with the Ohio replacement? Also the 
fact that it is now not going to have to be refueled would be 
another cost saver in the years to come.
    Mr. Mabus. That is correct. We only have to build 12 
instead of 14 because it does not have to be refueled.
    Senator Sessions. Now, Mr. Secretary, the Navy analysis for 
the littoral combat ship has gone on for quite a long time. It 
started in the 1990's. I remember Admiral Vern Clark, CNO, 
advocated this. We had the requirement of 55, and then we went 
to 52. This is a requirement that arose in the Navy and has 
been maintained by every CNO and every Secretary of the Navy 
since, I guess, the program began.
    How do you decide that this is a requirement for the Navy? 
Is there not a formal process you go through?
    Mr. Mabus. There is, Senator. It is called the Force 
Structure Assessment. The last one we did--well, we did one in 
2012, which revalidated the need for 52. That was refreshed in 
2014, which also validated the need for 52 small surface 
combatants. We are in the process now of doing another Force 
Structure Assessment.
    Senator Sessions. Well, you had the fleet recommendations, 
the combatant commander's recommendations, worldwide 
requirements all considered. Is that correct?
    Mr. Mabus. That is correct. All requirements are 
considered.
    Senator Sessions. Well, how is the production on the ship 
going now? Is it at or below the congressional cap for cost?
    Mr. Mabus. It is a good bit below. The first concern--and 
rightfully so--was on cost. The price of ships coming off the 
line today is about 50 percent of the first ones that came off 
the line.
    Senator Sessions. Historically the first ship in its class 
and the second one probably are more expensive than when you 
move along. It seems to me, having seen that shipyard line 
being produced, that ship being produced now, it is moving out 
at a really fine pace. The bugs are getting out of it, 
virtually all gone. It is coming through an assembly line 
almost like an automobile.
    I fear that we are going to end up raising the cost per 
copy if we reduce the number of ships and we end up like we did 
with the B-2 and a lot of other programs. Congress says we are 
going to do this. The Navy sets out to achieve the goal, and 
then we alter the plan. Is there a danger that cost per copy 
would go up?
    Mr. Mabus. I think it is almost a certainty, that if you 
reduce numbers, the cost per copy will go up.
    Senator Sessions. There are a lot of capabilities that the 
ship has. They are putting modules on it. One of the modules is 
the anti-submarine capability. Admiral Richardson, I know you 
are not happy with where we are on that. Does this strike a 
blow first at the validity of the ship? Number two, is it a 
challenge you think cannot be overcome? It is a technological, 
high-tech challenge. Is it something that we can fix?
    Admiral Richardson. Sir, we can fix this. We are behind on 
the testing there. It is not where I want it to be. I just 
commissioned, with Secretary Stackley, a 60-day study on the 
future of the program to incorporate the lessons that we have 
learned to date, but this is nothing that cannot be overcome.
    Senator Sessions. We absolutely have to have an improved 
anti-mine system. Do we not?
    Admiral Richardson. We do, yes, sir.
    Senator Sessions. That is one of the bases for the littoral 
combat ship in its original plan.
    Admiral Richardson. That is one of its missions, yes, sir.
    Senator Sessions. Well, I hope we can get to the 308-ship 
Navy, but I do not know how we will get there if we lose 
another 12 ships. If you replace it with a ship that costs two 
or three times as much, that is going to be difficult. It also 
is lean in terms of fuel use and low crew, 40-60 crew to 
operate the ship compared to 200 or so for the next destroyer 
type ship. I am concerned about this and I hope that we can 
continue to discuss it as time goes by.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Shaheen?
    Senator Shaheen. Thank you all very much for being here 
today and for your service to the country.
    Admiral Richardson, I want to start with you and ask about 
the status of the Virginia payload module because I understand 
that the hope is that it will address the loss of strike 
capability with the retirement of four guided missile 
submarines. Can you talk about that a little bit and what the 
current status of the program is?
    Admiral Richardson. Yes, ma'am. That is exactly right. Our 
SSGNs, the submarines that carry large loads of Tomahawk 
missiles, are going to retire in the mid to late 2020's, and 
our plan is that by building Virginia-class submarines with the 
payload module installed, we increase the Tomahawk load by 28 
missiles per submarine. That program is on track to be 
incorporated in the Virginia-class program in fiscal year 2019. 
We will do one in that year and two per year after that, 
consistent with the Virginia-class buy. That is really just the 
beginning of that program, ma'am. Not only will it allow us to 
reconstitute our strike capacity, but with that much payload 
volume and large ocean interfaces, we can also do special 
operations forces, unmanned vehicles, a host of other options.
    Senator Shaheen. Can you talk about the cost effectiveness 
of doing that?
    Admiral Richardson. It is extremely cost-effective to add 
that type of capability into a program that is healthy. We need 
to make sure that we abide by those practices which allow us to 
achieve and maintain cost-effectiveness.
    Senator Shaheen. Give me a comparison, if you would. Why 
does that make more sense than some other options we might 
have?
    Admiral Richardson. Well, you are just really talking about 
a smaller incremental cost on an already healthy program by 
inserting that module rather than designing in a completely new 
program to reconstitute that. As well, by distributing these 
over more than the four SSGNs we have right now, you not only 
do it in a fiscally responsible but you increase the options to 
the warfighter as well.
    Senator Shaheen. Thank you.
    Secretary Mabus, in your recent testimony before the House 
Appropriations Subcommittee, you pointed out that the Navy has 
a maintenance backlog problem. Obviously, one of the areas that 
has been challenging has been in our public shipyards, and as 
someone who represents the Portsmouth Naval Shipyard, I know 
that that has been an issue, but one that I was very pleased to 
see that the administration put in more than the goal of 6 
percent for maintenance.
    Can you talk about what you expect this year in the budget 
and whether you will actually be able to use that entire 
recommendation from the administration for the 7 percent?
    Mr. Mabus. Thank you, Senator.
    First, Portsmouth and all our public shipyards are doing a 
terrific job. They were caught, as were so many other things, 
in sequester, the hiring freeze, and there was this maintenance 
backlog that built up that we are gradually reducing. As you 
pointed out, we went above the mandatory 6 percent to try to 
ease that. We are also hiring to the level that those public 
shipyards need: 33,500 total employees in those shipyards. We 
will certainly be able to use these monies in Portsmouth and in 
the other public shipyards. It will allow us to reduce that 
backlog. Right now, under the current budget, we think we will 
be completely out from that backlog by 2019, so 3 years from 
now.
    Senator Shaheen. That is great.
    You also have talked about, from the posture hearing last 
week, that SOUTHCOM [United States Southern Command] is short 
on surface vessels. As you may know, we have had a real 
challenge in the State of New Hampshire and throughout the 
country in terms of heroin and the extent to which heroin is 
affecting our communities and families. I just wonder if you 
could talk about what progress in combating trafficking of 
narcotics you have seen with the Navy's involvement and whether 
the shortfall of surface ships in SOUTHCOM might help with 
this, if we could address that shortfall.
    Mr. Mabus. Well, it one of the reasons that we remain so 
committed to building the fleet to get to that force structure 
assessment of 308 ships because certainly drug interdiction, 
the other things we do with our partners in South America and 
in the Caribbean is a large part of that.
    We simply have not had the fleet, as the chairman pointed 
out. It takes a long time to build a Navy ship and to build a 
fleet. Once it declines, it takes a long time to turn it 
around. But we are trying using different types of ships, 
things like the expeditionary fast transport down there which 
has the speed to interdict. As the fleet grows, you are going 
to see more naval assets in SOUTHCOM.
    Senator Shaheen. Well, thank you. Obviously, that will be 
very important to help us deal with this epidemic.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Ayotte?
    Senator Ayotte. Thank you, Chairman.
    I want to thank you, Secretary Mabus and Admiral 
Richardson, for including in your request for funding for 2017 
for the new junior enlisted barracks at Portsmouth Naval 
Shipyard. Thank you for really making sure that we prioritize 
that because I know the conditions were not good there. I am 
very appreciative of that and thank you.
    I also wanted to ask both of you. You both mentioned in 
your written testimony the large displacement unmanned 
underwater vehicles. Secretary Mabus, I note that you said in 
your prepared testimony that you are going to begin to have 
these vehicles take on some missions in 2022.
    As these UUV's are fielded to ensure that we are using our 
resources wisely, I would encourage the Navy to utilize 
existing public shipyard infrastructure where possible to 
support the engineering, technical problems, logistics, and 
maintenance because you have some expertise there that I think 
you can take advantage of. Obviously, with the budget 
situation, to the extent we can use the expertise that exists 
at our shipyards--and obviously, the Portsmouth Naval Shipyard 
has some tremendous expertise.
    Admiral Richardson and Secretary Mabus, will you be looking 
for opportunities to use our existing capabilities and 
expertise as we continue to develop the unmanned underwater 
vehicles that I know that we are going to be developing to help 
defend the Nation?
    Mr. Mabus. Yes.
    Senator Ayotte. Great.
    Admiral Richardson. Yes, we have absolutely. Particularly 
the team at Portsmouth has some deep skills in deep 
submergence, submarine rescue types of things, exquisite types 
of capability there that we will be turning to.
    Senator Ayotte. That would be great, Admiral. I know they 
are anxious to partner with you on this and hope to be able to 
give some assistance to you as we further develop this area to 
defend the Nation. I appreciate it.
    I also wanted to ask about a report that, Admiral 
Richardson--in October of 2015, the New York Times reported 
that Russian submarines and spy ships are aggressively 
operating near the vital undersea cables that carry almost all 
of our global Internet communications, raising concerns among 
some American military and intel officials that the Russians 
might be planning to attack those lines in times of tension or 
conflict.
    What is your assessment of what is happening in terms of 
Russian intentions and activity related to undersea cables? 
Obviously, this is very important in terms of our 
communications system. To the extent you can talk about it in 
this setting, what are we doing from the Navy perspective to 
protect those assets?
    Admiral Richardson. Ma'am, you are exactly right. About 99 
percent of our international transatlantic Internet traffic 
rides on those cables, and that cannot be reconstituted if that 
gets disrupted. We are, obviously, taking that threat very 
seriously. It is extremely difficult to talk about any of that 
in this forum, but I would welcome the chance to talk to you 
and give you the full classified brief.
    Senator Ayotte. We will set that up. I appreciate it.
    Admiral Richardson. Yes, ma'am.
    Senator Ayotte. Also, not to pick on you today, but I did 
have a follow-up question either to you or Secretary Mabus, and 
that is related to our attack submarine fleet.
    What I wanted to understand is what our current 
requirements are for the attack submarine fleet and when the 
requirement was established and also what percentage of 
combatant commander requests for attack submarines is the Navy 
currently meeting.
    Admiral Richardson. Yes, ma'am. Our current requirement is 
for 48. That level I think was established in 2006. Whether I 
am off by a year or 2, it was a long time ago, and the security 
environment has changed a great deal since then. I commissioned 
a study to reassess that level this year.
    Currently, as you know, ma'am, the attack submarine profile 
will dip below that requirement of 48 submarines in the 2020's. 
That has got us very concerned. We able to meet about 50 to 60 
percent of combatant commander demands right now, and so it is 
a very high demand asset.
    Senator Ayotte. Mr. Secretary?
    Mr. Mabus. It is an example, Senator, of when you miss a 
year building a ship, because we missed some years--we only 
built one submarine instead of two--you just do not make that 
up. That is why we are committed to two submarines per year. We 
have got a multiyear----
    Senator Ayotte. That is what is critical as we look at 2022 
where we dip to one Virginia-class, that we have got to figure 
out that we can build two.
    Mr. Mabus. One of the things that we are trying to figure 
out----
    Senator Ayotte. Sorry. 2021.
    Mr. Mabus. 2021 because that is the year the Ohio-class 
replacement starts. But you are absolutely right. We are 
working on how to get the capability and the capacity to do two 
Virginia's- and the Ohio-class at the same time. I am confident 
that will part of the 2018 budget.
    Senator Ayotte. That is excellent. We look forward to 
working with you on that. I think it is critical as well, as we 
look at the need out there.
    I appreciate, Admiral, that you are already undertaking a 
reexamination because, as you have rightly pointed out, 
conditions have completely changed since 2006, and we know of 
existing threats that are out there that really increase our 
need for capacity. We appreciate it.
    Thank you, all of you.
    Chairman McCain. Senator Donnelly?
    Senator Donnelly. Thank you, Mr. Chairman.
    I thank all the witnesses for your being here and for the 
Master Chief as well.
    Admiral Richardson, as you know, Indiana is home to Naval 
Surface Warfare Center-Crane. The foremost mission of the lab 
is supporting the Navy's strategic weapons system, and given 
the priority of nuclear modernization, I wanted to invite you 
to Crane, if you can make it out there.
    Admiral Richardson. Sir, I will put it on the list as a 
priority.
    Senator Donnelly. Thank you very much.
    Secretary Mabus, in regards to mental health, I am 
concerned our services are not adequately staffed to provide 
troops with ready and timely access to mental health care. 
Every quarter, the Navy submits reports that use the current 
number of Navy mental health providers for both the number of 
providers required and the number authorized. As we look at 
this, I would like to see the Navy's last four quarterly 
reports on mental health requirements and staffing, if you can 
provide that for us.
    Mr. Mabus. I will do that right away, Senator.
    Senator Donnelly. Very good. We would also like an 
explanation, as you look at that, on how you calculate your 
mental health staffing requirements and your recommendations 
for whether and how we can modify the PHRAMS [Psychological 
Health Risk-Adjusted Model] or another model to better meet the 
Navy's needs, if you can do that.
    Mr. Mabus. We will do that, Senator.
    [The information referred to follows:]

    Senator Donnelly, as you requested, here are the last four 
quarterly reports on our mental health requirements. In addition, I 
believe that it is important to discuss our approach and growth in 
mental health staffing over the past server years, which is included 
below the reports.
    The fiscal year 2015 second quarter staffing numbers are:

 
----------------------------------------------------------------------------------------------------------------
                                                              MIL                 CIV             CONTRACTOR
----------------------------------------------------------------------------------------------------------------
Psychologist........................................      84% (140/166)       78%  (95/122)       84% (102/122)
Psychiatrist........................................      91% (108/119)        86%  (37/43)       99%  (24/25)
Social Worker.......................................      99%  (73/74)        82%  (85/104)       80%  (73/91)
Mental Health Register Nurse........................     145%  (64/44)        33%  (12/36)        92%  (81/88)
Mental Health Nurse Practitioner....................     133%  (32/24)        33%   (1/3)        100%   (9/9)
Other Licensed MH Provider..........................  ..................      70%  (19/27)        93%  (39/42)
Technician/Counselor................................     116% (434/373)      158%  (38/24)        90% (200/221)
----------------------------------------------------------------------------------------------------------------

    The fiscal year 2015 third quarter staffing numbers are:

 
----------------------------------------------------------------------------------------------------------------
                                                              MIL                 CIV             CONTRACTOR
----------------------------------------------------------------------------------------------------------------
Psychologist........................................      87% (146/167)       79%  (97/122)       84% (100/119)
Psychiatrist........................................      98% (118/120)       91%  (39/43)        81%  (21/26)
Social Worker.......................................      99%  (73/74)        83%  (86/104)       82%  (71/87)
Mental Health Register Nurse........................     136%  (60/44)        33%  (12/36)        88%  (76/86)
Mental Health Nurse Practitioner....................     146%  (35/24)        33%   (1/3)        100%   (8/8)
Other Licensed MH Provider..........................  ..................      59%  (16/27)        95%  (39/41)
Technician/Counselor................................     114% (426/373)      154%  (37/24)        90% (199/220)
----------------------------------------------------------------------------------------------------------------

    The fiscal year 2015 fourth quarter staffing numbers are:

 
----------------------------------------------------------------------------------------------------------------
                                                              MIL                 CIV             CONTRACTOR
----------------------------------------------------------------------------------------------------------------
Psychologist........................................      87% (148/167)       79% (103/132)       81%  (93/114)
Psychiatrist........................................      94% (113/120)       86%  (38/48)        77%  (24/31)
Social Worker.......................................     101%  (75/74)        78%  (83/106)       70%  (62/89)
Mental Health Register Nurse........................     136%  (60/44)        38%  (14/37)        88%  (71/81)
Mental Health Nurse Practitioner....................     146%  (35/24)        25%   (1/4)         99%  (10/11)
Other Licensed MH Provider..........................  ..................      61%  (17/28)        94%  (30/32)
Technician/Counselor................................     115% (428/373)      132%  (37/28)        88% (177/202)
----------------------------------------------------------------------------------------------------------------

    The fiscal year 2016 first quarter staffing numbers are:

 
----------------------------------------------------------------------------------------------------------------
                                                              MIL                 CIV             CONTRACTOR
----------------------------------------------------------------------------------------------------------------
Psychologist........................................      98% (164/166)       88% (105/132)       77%  (96/124)
Psychiatrist........................................      84% (109/129)       86%  (36/48)        61%  (17/28)
Social Worker.......................................     101%  (77/76)        76%  (81/106)       78%  (70/90)
Mental Health Register Nurse........................     134%  (59/44)        33%  (12/36)        92%  (81/88)
Mental Health Nurse Practitioner....................     133%  (32/24)         0%   (0/4)         99%   (9/10)
Other Licensed MH Provider..........................  ..................      64%  (18/28)        95%  (35/37)
Technician/Counselor................................     107% (409/380)      132%  (37/28)        91% (188/206)
----------------------------------------------------------------------------------------------------------------

    Our end strength is driven by Operation Plans. We assign the active 
duty staff in locations where they can best serve active duty needs, 
and concurrently maintain skills and proficiencies needed for an 
operational assignment. As part of this effort, we place providers, 
including mental health staff, in operational units to improve access 
and service.
    We augment AD staff with civilians, either Government Service or 
contract, based on enduring demands; for example, our ability to 
recruit in specific markets to meet in-garrison demand by monitoring 
patient workload, access, and the capacity of the TRICARE network. As 
such and in response, we have grown 195 active duty and GS civilian 
mental health staff in the specialties of psychiatry, clinical 
psychology, social worker, mental health nurse practitioner, and mental 
health nurses from fiscal years 2009 through 2015. This has enabled us 
to meet the fiscal year 2010 NDAA section 714 requirement to grow 
mental health providers by 25 percent.
    Senator Donnelly, thank you for the question on how we calculate 
our mental health staffing requirements. It is important that Congress 
understands that the Operation Plans drive our uniformed requirements 
and our Military Treatment Facilities serve as our readiness platforms 
to provide a ready force at a moment's notice. This requirement is 
complemented with the need to maintain skills and proficiencies at our 
Military Treatment Facilities needed for an operational assignment and 
ensure that we are optimizing our wartime requirement when in garrison.
    Over this past year, the Tri-Service Manpower Workgroup, the 
Manpower and Personnel Operations Group and the Medical Deputies Action 
Group have worked to develop metrics to optimize and synchronize our 
manpower requirements across the MHS for peacetime service to the 
warfighter.
    While there are workload-based outputs, the Tri-Service Manpower 
Workgroup has determined that the Psychological Health Risk Adjusted 
Model for Staffing (PHRAMS) does not accurately project the mental 
health needs of each Service's total overall mission, nor does it 
accurately account for operational requirements or emerging mental 
health needs.
    The Navy recommends that the Services continue to evaluate the 
existing PHRAMS tool as a potential supplemental methodology to support 
and/or assist with mental health manpower resource allocation decisions 
within each Service and across the MHS for peacetime optimization.

    Senator Donnelly. Great.
    This is probably for Admiral Richardson. You know, when I 
was younger, I remember the Pueblo incident in North Korea, and 
that boat is still there. I remember, in reading and following 
it, one of the biggest problems we had was when it was taken, 
there were really no assets around to try to help out from what 
was indicated. We saw what happened with the riverine boats.
    You know, obviously, there is an investigation going on. 
But from what is read and how much is true we do not know. Talk 
about cannibalizing parts from a third boat to try to put a 
second boat together, problems with satellite gear, problems 
with other things that were involved. What we want to try and 
do, obviously, is to avoid these kinds of scenarios in close 
border areas and in places especially like North Korea and the 
Iranian border.
    What is being done to ensure this does not happen again? 
That is question one, and then question two is, if it does, 
what are doing to make sure they do not take the boat and bring 
it to wherever they are going?
    Admiral Richardson. Right. All of those questions are very 
valid questions. Those are the exact questions I have and about 
100,000 more. That is what the investigation is getting after. 
We intend that to be comprehensive to address all of those 
factors.
    But we are not waiting for that to get done in terms of 
moving out and starting to improve the way that we operate, 
support those ships, particularly those ones that are forward-
deployed. The team and 5th Fleet and really around the Navy has 
taken a look at how that system works and where the 
vulnerabilities are and shoring those up.
    With respect to the support that those boats had, they were 
in the middle of the Persian Gulf, as you know. There were two 
carriers there. There was no shortage of support. It happened 
on a very quick timeline. But the response was--the details of 
that will be part of the investigation, and we look forward to 
a briefing you on that when it is done.
    Senator Donnelly. Is one of the things that we are checking 
on the status of our riverine inventory, the quality of it, 
what shape it is in, maintenance of it, all of those kind of 
things? Because one of the things that concerned me was to see 
to get two going, we needed three. You are in a position where 
neither--two out of three could not do it on their own. It had 
to kind of be put together to put one together. I was wondering 
where we are with that.
    Admiral Richardson. Absolutely. We are looking at every 
aspect of the readiness generation of that part of our Navy and 
the rest. You say you do not want it to happen in forward-
deployed places near threat countries. I do not want it to 
happen anywhere in our Navy. We are looking comprehensively.
    Senator Donnelly. Because one of the things is, as you well 
know and as you all care so much about, you do not want to put 
these sailors in a position of having to make almost impossible 
decisions.
    Admiral Richardson. Absolutely right, sir.
    Senator Donnelly. General Neller, I want to ask you. We 
just saw Vladimir Putin talk about the number of troops in 
Syria that he is supposedly going down now. We do not know if 
he is actually going to do it, if he is not going to do it. You 
are the leader of a lot of extraordinary soldiers in that 
neighborhood, you know, in the area. I was wondering what your 
opinion is of what is going on with him and what the 
appropriate response is and how you think this plays out.
    General Neller. Senator, I can only take it face value. We 
all found out yesterday that he decided he is going to withdraw 
because he said he accomplished his mission. Obviously, there 
is a political piece to this.
    As far as on the battle space, cessation of hostilities was 
honored to some degree by his forces. I think it potentially 
creates an opportunity for some forces, to include those that 
we support. If the amount of aviation support that they are 
getting from the Russians is going to go down, it should 
enhance their ability to maneuver.
    There has been some progress. The one town, Shaddadi, was 
taken by YPJ [Women's Protection Units]. There is other 
progress going on. I know a little bit more about what is in 
Iraq, but I think Iraq is a different case than Syria. But I 
think--and I have not talked to the Chairman about this, but my 
personal opinion is that I think it creates some opportunity 
for those forces that we have been supporting to possibly make 
a little more progress.
    Senator Donnelly. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Ernst?
    Senator Ernst. Thank you, Mr. Chair.
    Gentlemen, thank you for being here today.
    General Neller, as you know, the Marine Corps just 
completed an exercise, Ssang Yong, and it was a multilateral 
amphibious assault exercise conducted in the Pacific by Navy 
and Marine forces with the Republic of Korea and other allies. 
This exercise successfully demonstrated full spectrum combined 
amphibious operations and was a powerful reassurance measure to 
a number of our allies and, of course, a strong statement of 
power projection to our adversaries, which is very important I 
feel.
    We have yet to see the requisite number of amphibious ships 
underway to test the full capacity of a baseline expeditionary 
strike group, Marine Expeditionary Brigade in the training 
environment. With that as an intro, we know that there is a 
shortage of amphibious ships.
    Can you provide further insights on how these shortfalls 
impact the readiness of the Corps and your ability to provide 
scaleable MAGTFs [Marine Air-Ground Task Forces] as your 
contribution to the joint force? If you would please expound on 
that, please.
    General Neller. Well, Senator, thank you for the question.
    If you went by COCOM [Combatant Commands] requests for 
forces, the requirement for amphibs would be close to 50. The 
stated requirement between Admiral Richardson and my 
predecessor was 38 to come up with a number of 34, which is 
what you need to embark two Marine expeditionary brigades, 
which is what is at the high end for a forcible entry 
capability.
    The landing at Ssang Yong combined two Marine Expeditionary 
Units. It was commanded by the 3rd Marine Expeditionary 
Brigade, General Jansen out of Okinawa. But it was comprised of 
six of our ships and then a number of ROK [Republic of Korea] 
Marine ships, and there were also Australian and New Zealand 
soldiers that were part of the landing force.
    Right now, we have 30 amphibious ships. Based on the 
readiness of those ships, we could probably get--it has 
actually improved. The fleet readiness plan is--because we have 
worked really closely with the Navy, the fleet readiness plan 
is improving the overall readiness of the amphibious fleet, but 
it has to be that in conjunction with procurement of more new 
ships.
    We will be up to 34 ships by 2024 and up to 38 by 2028, and 
then we will go back down on the other side if there is not a 
change.
    That is what our requirement is. We cannot meet all the 
requirements of the combatant commanders today, which is why we 
have two land-based special purpose MAGTFs to provide a 
comparable capability for crisis response.
    I appreciate the question. We are working very hard. This 
budget and this Congress has funded the 12 LPD [landing 
platform/dock], LPD-28, and they are in budget. The FYDP 
[Future Years Defense Program] is the LX(R), first class of a 
new ship, which would start to be built in 2020, which gets us 
to this number of 34.
    Senator Ernst. I appreciate that.
    Is that your best advice to us, General Neller, is simply 
funding, or is there more that we can be doing as Congress?
    General Neller. I hate to say that things can be solved by 
money, but as we talked about and the Secretary mentioned, if 
you buy ships en bloc and you have an overlap, the cost of the 
ship goes down. That is an overall greater commitment of 
resources, but once you skip a year, the workforce degrades, 
the cost of the construction goes up. You cannot procure 
materials, early materials. There is money in this budget and 
then fiscal year 2018 plan to buy lead materials for the LX(R). 
The best way and the most cost effective way to build ships is 
to, when you decide on a design, block them out and have an 
overlap so you build them and there is no gap.
    Senator Ernst. Thank you, General.
    Secretary Mabus, on February 2nd, the last time that you 
appeared in front of the committee, we discussed the fact that 
the Director of Naval Intelligence, the Navy's top intelligence 
officer, has been without an active security clearance for over 
2 years. Is this individual still in that position?
    Mr. Mabus. Yes, he is, Senator. Let me give you some detail 
about that.
    When I was informed in late 2013 that Admiral Branch was 
possibly connected to the GDMA [Glenn Defense Marine Asia] 
case, I thought because of his position, I should remove his 
security clearance in an excess of caution. I was also told, 
though--assured--at that time that a decision would be made 
within a very short time, a matter of weeks I was told, as to 
whether he was involved and what would be the disposition of 
the case. We continued to check on that over and over and over 
again and got nothing.
    By the early fall, September of 2014, I decided that we had 
to nominate a successor, which we did, but because of some 
intervening events, that nomination did not get up here until 
last fall. At the same time that nomination got up here, we had 
a new Chief of Naval Operations who rightfully wanted to make 
sure that flag officers were in the positions with the best 
skill set and the best qualifications.
    Senator Ernst. I understand.
    Mr. Mabus. One other thing that I do think is important. 
During this entire time, I have been checking with General 
Clapper, the head of national intelligence, to ask him if there 
is any degradation of naval intelligence, if there is any 
concern about how we are operating or the quality of 
information that we are gathering or how we are processing 
that. I have been assured that we are not--that there is not 
any.
    Admiral Branch's two deputies, each of whom has more than 
30 years experience, both are taking up the part of his job 
that requires the classification access. He also has a lot of 
other hats, including managing a 55,000 strong force, which he 
continues to do.
    Senator Ernst. I do understand that. I still do have a 
problem with it. I think to lead a Department, you need to lead 
from the front, and if you have deputies that are doing your 
job, you are not leading. I still have an issue with that, and 
I think we will follow up at another time because I am over 
time.
    Thank you, Mr. Chair.
    Chairman McCain. Senator Kaine?
    Senator Kaine. Mr. Chairman, with your position, I would 
like to swap places with Senator King so he can get to an Intel 
meeting.
    Chairman McCain. No.
    [Laughter.]
    Senator King. That was the answer I was expecting somehow. 
Thank you, Mr. Chairman.
    First, I want to welcome back our colleague, Senator 
McCaskill. Great to see you back at our committee and wish you 
good health.
    Admiral Richardson, General Neller, welcome to your first 
of these hearings. Admiral Richardson, I was at Naval Reactors 
yesterday, your former command, and I can assure you it is in 
good hands and really an impressive operation.
    Secretary Mabus, you have done an extraordinary job. I was 
sitting here thinking when you took this job, there were 
certain words and terms that either were not heard of at all or 
certainly did not have the meaning that they have today. I made 
a short list: ISIS [the Islamic State of Iraq and Syria], South 
China Sea, the Ukraine, nuclear North Korea, Syria, cyber 
attack. All of those are things that have come to fruition as 
challenges since you have been Secretary. You have confronted 
extraordinary challenges, not the least of which is 
sequestration, all the kinds of budget problems that we have 
had, and this accelerating threat environment that we are in. I 
just want to thank you for really I think extraordinary service 
over a very difficult period. I want to acknowledge that. I 
hope some day there is a ship named after you and it is built 
in Bath just because I know you are from Mississippi.
    [Laughter.]
    Senator King. I could not resist.
    Mr. Mabus. Talk to some successor of mine about that.
    Senator King. Yes, I will. I will remember that.
    Admiral Richardson, to follow up, the decision about naval 
forces and planning and looking into the future, many of those, 
if not all, were made before that list I read, before those 
changes. Are we adequately addressing the change in the world 
that is affecting the necessity and the needs of the Navy of 
the future? I worry, to use a tired analogy, that we have got 
an aircraft carrier moving and we may not be necessarily 
turning it to respond to new challenges.
    Admiral Richardson. Senator, you have hit right at the 
heart and soul of where I am trying to get the Navy. One is to 
be more agile so that we can keep pace with the accelerating 
security environment. But to your point, a number of those 
concerns were not even on the list of things when we did our 
last force structure assessment, which is why I have 
commissioned a new one this year.
    Senator King. I think you mentioned earlier in your 
testimony there are a couple of other studies you are doing of 
adequacy of forces and shipbuilding and those kinds of things.
    Admiral Richardson. Yes, sir. In addition to the force 
structure assessment, which will get to sort of the composition 
and the overall force, I am looking--and General Neller is my 
partner in this in terms of are we looking at and appreciating 
all of the creative opportunities and combining the fleet we 
have right now in new and effective ways to make sure that we 
do not miss a trick in terms of doing that. We have got some 
fleet design studies that we owe this committee and we had 
started on our own, and so we look forward to working together 
with General Neller on that.
    Senator King. I appreciate that.
    We have been talking some about the Ohio-class replacement 
which, of course, the bow wave is starting in about 5 years 
right outside of this FYDP. It bothers me the way we budget 
around here, and we have no capital budget. You are talking 
about a 40- or a 50-year asset. You know, we borrow money to 
pay park rangers? salaries and we pay cash for 40-year assets. 
I mean, that is upside down from the way any business or other 
rational organization would do. You do cash for operations and 
you borrow for capital assets. Should we not be thinking about 
this when you are building something and trying to pay for it 
in 3 or 4 years that is going to last 40 or 50 years?
    Admiral Richardson. Sir, I think we should take a look at 
all of that. We have got plused up for the fiscal year 2021 
start of that program. It is going to be important to see those 
additional funds going forward, or we are going to decimate our 
shipbuilding budget.
    Then, as has been talked about, the National Sea-Based 
Deterrence Fund. That could provide us some options in terms of 
not only doing sensible things fiscally but, by virtue of doing 
that, also achieve some significant savings on the order of 10 
or more percent. I think that the combination of the 
appropriations and the authorities would allow us to do exactly 
what you say, sir.
    Senator King. Well, I hope we can talk. I have been talking 
with Chairman Enzi on the Budget Committee about rethinking how 
we do our Federal budget so that we can have a capital budget. 
Of course, that presupposes we know what we own, but that is a 
separate question.
    Secretary Mabus, do you have a comment on this funding 
problem?
    Mr. Mabus. Just to reemphasize what the CNO said. We have 
known for quite a while and the three CNOs I have been 
privileged to serve with have all testified that we have to 
have additional funds for the Ohio-class replacement because, 
as Admiral Richardson said, it is a once in a generational 
thing. The two times we have done this before, 41 for Freedom 
in the 1950s and 1960s, the Ohio-class in the 1970s and 1980s, 
we have added additional funds because it is a national level 
program.
    Admiral Richardson. Sir, if I could, throughout that, we 
have got to commit to, as you implied, full transparency and 
auditability of that money as it is applied to this extremely 
important program. Even as we consider these options, we are 
committed to that level of transparency and auditability.
    Senator King. Thank you, Mr. Chairman.
    Chairman McCain. Senator Fischer?
    Senator Fischer. Thank you, Mr. Chairman.
    General Neller, you and the Admiral have both discussed the 
importance of technological innovation in this year's budget. 
Can you talk about the role that the 3rd Battalion of the 5th 
Marines will have in testing the prototype technologies this 
year?
    General Neller. Senator, thanks for that question.
    We are going to take 3rd Battalion, 5th Marines, or 3-5. 
They are currently deployed in Okinawa. When they come back, 
they will have at least a year and a number of exercises. One 
will be Rim of the Pacific, or RIMPAC, and then we will put 
them out at Yuma in support a Marine air weapons tactics 
squadron out in training. We are going to give them certain 
capabilities. We are also going to reorganize certain elements 
of their force in a different way to work on the ability to 
distribute them across the battlefield. There will be a 
communication piece. There will be an ISR piece with unmanned 
systems. There will be different ways to move them around the 
battlefield because we will have the aviation assets that will 
be out there for that exercise.
    We are using them rather than creating a unit because they 
will be a cohesive unit, and we are very confident that the 
young marines in that unit will take advantage of whatever 
capabilities we give them and they will tell us whether they 
are effective or not and/or they will come up with their own 
ideas. We are counting on the youth and the familiarity with 
technology, having grown up in part of the digital generation, 
to help us do that. We will test and learn and give them 
everything we can give them, and they will come up with new 
ideas.
    Senator Fischer. Do you think there is going to be a 
continuing need for this sort of testing, or are you going to 
consider dedicating a specific unit to this role? Is it 
temporary? Is it going to be continual?
    General Neller. I think we will use every exercise that we 
have with large formations like the MEF [Marine Expeditionary 
Force], our Corps level headquarters or brigades. There will be 
a number of amphibious exercises on both the east and west 
coast. We will, as we have in the past, have them experiment 
with different operational designs, as Admiral Richardson 
talked about, different ways to embark the force, different 
ways to deploy ashore. We will take advantage of the existing 
exercises and training opportunities, and if we find something 
that works, then we will adopt it and we will see how it goes.
    We have got to change, and the world is changing very 
quickly. My concern is that we change faster than our 
adversaries, and I think exercises and taking units like this 
to practice or play with this stuff is going to help us.
    Senator Fischer. Admiral Richardson, can you discuss the 
Maritime Accelerated Capabilities Office? Specifically, how is 
it going to work, and what is it going to focus on?
    Admiral Richardson. Yes, ma'am. We are setting that up as 
sort of a speed lane for acquisition. This is one of the areas 
where I am trying to take advantage of those additional 
authorities that were granted to Service Chiefs. It will be 
based on the Air Force's Rapid Capability Office, which has 
assembled all of the decision and approval authorities in a 
very streamlined package so that for those programs for which 
it is appropriate, we can just move quickly move through the 
milestones and the acquisition process, get those technologies 
into production, and then out to the fleet very quickly.
    My goal is that we start by setting that speed lane up. We 
have a couple test cases go through that. I would say that the 
Stingray, the unmanned carrier-based aircraft, would be one of 
those very first ones. Then as we adapt, we move more and more 
programs out to that speed lane and overall speed the process 
up.
    Senator Fischer. Thank you, sir.
    General Neller, I understand that the majority of the 
Marine Corps budget goes towards the personnel costs. We spoke 
about this the other evening, and that is even before the Force 
of the Future initiatives that Secretary Carter has recently 
announced. How do these initiatives factor into how you are 
going to manage the force, and what challenges are they going 
to present to you?
    General Neller. Like all the services, Senator, we have 
worked very closely with OSD [the Office of the Secretary of 
Defense] on the Force of the Future. Some of the things we are 
already doing, and so it will have no impact, as far as we 
think we have a proper way to recruit. There are certain things 
like additional educational opportunities where there will be 
potentially some expense, and there are other things I do not 
think we know yet.
    A lot of these things are going to be in a pilot program 
and will not be immediately adopted. But there is going to be 
some expense with some of them, and we will just have to figure 
out how we are going to do that.
    Senator Fischer. I know every military person who is 
protecting our freedoms--they want to play a meaningful role. I 
do not think it is just--as we look to the Force of the Future 
initiatives, I do not think it is just that. I think that they 
also want to have the training and they want to have the 
resources that they need to complete the mission. They want to 
have the new technologies that we spoke about earlier. Could 
address that just in a few sentences, please?
    General Neller. We are in a unique position in that we 
continue to deploy forces to meet combatant commanders' 
requirements. We have to sustain the legacy force that we have, 
and at the same time, we want to modernize. There is pressure 
on that.
    It was mentioned in unfunded requirements. One of the first 
things we would probably do is put money back in the current 
operations and maintenance and sustainment. We have protected, 
to the best of our ability, the modernization because keeping 
old legacy gear sustainable is fine, but what we really need is 
we need to get the new gear not just because the marines like 
the new gear, because they need another gear, whether it is a 
joint light tactical vehicle or the amphibious combat vehicle 
or the ground-air task-oriented radar of any of the command and 
control stuff or the new aircraft that we are going to buy. We 
need that to be successful on the battlefield in the future 
because our adversaries have done the same thing. They have 
recapitalized while we have been focused on the fights that we 
have been in in the last 15 years.
    Senator Fischer. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Kaine?
    Senator Kaine. Thank you, Mr. Chair.
    Thanks to the witnesses. Secretary Mabus, congratulations 
to you and to all. We had a hearing this morning in the 
Readiness Subcommittee, a readiness posture hearing, and I will 
say that Admiral Howard and Assistant Commandant Paxton 
performed admirably. We learned that the Assistant Commandant 
is the longest serving Assistant Commandant of the Marine Corps 
since 1950. We are in a day of witnesses before us with long 
tenures.
    The readiness hearing was a shocking one. I had a 
classified briefing about readiness issues last week, and what 
I am going to say now is not classified material. This is open 
material. We talked about it at the hearing.
    Today, less than half of our Marine Corps units are ready 
to perform their, quote, wartime missions, despite having a 
congressionally mandated role as the Nation's crisis response 
force. Especially on the aviation side--and I will get to this, 
General Neller--80 percent of aviation squadrons do not have 
the required number of aircraft to train. General Paxton talked 
a bit about that.
    On the Navy side, less than half of our Navy's ships are 
ready to meet wartime plans. Deferred and unplanned maintenance 
continues to delay training timelines and prolonging 
deployments. That prolonging of deployments, which used to be 6 
months to now 8 to 10, means that ships come back that are 
significantly more challenged in terms of maintenance issues. 
These are some of the issues that we talked about this morning.
    I know this committee is really interested in this topic 
and request. Senator McCain has written a letter to the Service 
Chiefs asking for the fiscal year 2017 unfunded requirements 
priorities list. I think some of those letters are coming back 
to us or maybe some early drafts are coming back to us. I would 
encourage on the unfunded priorities requirements list, they in 
fact be prioritized rather than just a big list because that 
will help us as we grapple with the NDAA [National Defense 
Authorization Act] challenge. I am going to make that a 
question for the record as well.
    What is the status right now on the aviation side, naval 
and marine, the status of aircraft awaiting repair at the 
aviation depots? Has there been any improvements in this 
awaiting-repair category, and how are we funding depots? What 
is our ability to bring down that amount of aircraft awaiting 
repair?
    Admiral Richardson. Sir, I will take the first stab at 
that. This is something that General Neller and I are working 
very closely on because this affects both of us. This divot in 
backlog in ready basic aircraft, really the backlog in the 
aircraft depots, goes back a few years, really exacerbated by 
fiscal year 2013 and the sequestration that happened then.
    We are doing a very systematic appraisal of that process 
and we are seeing improvements. We improved 44 percent this 
year over last year, and so we are seeing the throughput of 
that--the depots improve. General Neller and I were at the 
fleet readiness--the depot in California. We walked through the 
entire line. They have got a very systematic approach that 
looks at all of the limiting lines, and we look forward to sort 
of continuing to improve that throughput.
    Additionally, we are looking forward--these are the legacy 
aircraft, particularly the strike legacy Hornets. We are 
looking forward to when the Super Hornets come through, we are 
learning all of the lessons. We are starting to get prepared 
for when they come through in the depots. Then as has been 
submitted with our budget and also on the unfunded list that 
you mentioned is the request for buying additional Super 
Hornets in both 2017 and 2018 to help to mitigate that. We are 
taking a full court press. We are funding those depots to 
pretty much the maximum executable capacity right now, and we 
are leaning that system out to get everything we can out of 
that.
    Senator Kaine. Great.
    General Neller?
    General Neller. Senator, as the CNO said, I think these 
accounts are fully funded. There is a number of fleet readiness 
centers. We have also contracted with additional vendors like 
Boeing and L3 to do more for the fixed wing aircraft. If they 
can fulfill their contract--and they did last year--and they do 
it again and the fleet readiness centers improve their 
processes--I think at the initial when all these planes kind of 
descended on them, you know, the processes they had were not 
effective. The planes sat and they waited. They have gotten 
much better. I get this not from my own observation but from 
talking to other people that had visited them a year ago, 
saying the process here is much improved. They got a much 
better flow. I believe that we are--in that particular model 
type series of airplane for F-18A and D, we are at the bottom 
and we are on our way up and we are going to get better.
    Every model type series of aircraft in the Navy and the 
Marine Corps is a little bit different. Right now, we are in 
the middle of recapitalizing every one of those, F-35 to 
replace the F-18, the AV-8B, and the EA-6B. We are still in the 
procurement process for MV-22 Osprey. We are buying Hueys and 
Cobra attack helicopters. The Hueys are almost complete, and 
there have been some issues with that. Then we are just in the 
experimentation and the prototyping and flying of the 53 
replacement.
    I would say right now, the 53 is probably in the worst 
place because of a number of things that are going to get fixed 
by this new airplane, but this new airplane is not going to be 
ready for probably 3 or 4 more years. That procurement will 
have to be something that goes back to the acquisition that we 
are going to have to watch and we are going to have to guard.
    If we can get more parts, we can get the sustainment at the 
depots. We are going to get more basic aircraft on the line. 
Our pilots will fly more hours. Our readiness will go up, and 
the marines and the sailors that fly these aircraft will do 
what they want to do, which is fly. There is even a retention 
piece to this that we have talked about because if you are not 
flying, then you are not doing what you came in to do. There is 
a whole lot of things, even maintainers.
    It is very complicated, but I think we got a comprehensive 
plan. We met with our leadership of the aviation enterprise, 
the Navy and Marine Corps, the other day. The money is there. 
It is just we are going to have to watch it and press it, and 
it is going to take a little bit of time.
    Senator Kaine. Great. Thank you very much.
    Thanks, Mr. Chair.
    Chairman McCain. Senator Wicker?
    Senator Wicker. Thank you.
    Admiral Richardson, our most recent 30-year shipbuilding 
plan has a target size of 308 ships for the Navy. Chairman 
McCain touched on this in his opening statement.
    I am interested in the methodology behind the Navy's 
shipbuilding requirements. What year was the 308-ship 
determination made?
    Admiral Richardson. Sir, that was made in 2012 and it was 
updated in 2014.
    Senator Wicker. What was the number in 2012 and what was 
the number in 2014?
    Admiral Richardson. It was 308 throughout. The 2014 just 
validated the 2012 assessment.
    Senator Wicker. Has anything happened around the world 
since that determination was made that would make us revise 
that force structure?
    Admiral Richardson. Yes, sir. At the time we did that 
original assessment, we were not contending with the resurgent 
Russia, ISIL was not on the map, and the Peoples Liberation 
Army and Navy was in a much different place. The security 
environment has changed.
    Senator Wicker. Three major developments.
    Admiral Richardson. At least, yes, sir.
    Senator Wicker. Will you be pushing for a revised force 
structure assessment, and when might we see that?
    Admiral Richardson. Sir, I have already commissioned that 
to start. We intend for that to briskly get done through the 
spring and look forward to seeing that done in the summer.
    Senator Wicker. All right. Right now we are on pace to get 
to 308 when?
    Admiral Richardson. In 2021.
    Senator Wicker. Well, we look forward to seeing an accurate 
force structure based on the current threats.
    Admiral Richardson. Yes, sir. I look forward to briefing 
you on that.
    Senator Wicker. Thank you very much.
    Let me ask you, General Neller, about amphibious ships. You 
recently told the House Armed Services Committee that the 
Marine Corps needs ships cheaper and faster. I think we 
certainly agree with that.
    As you know, Congress added an additional LPD amphibious 
ship after feedback from your predecessor, General Amos. We 
appreciate his input and his service as we do yours, sir.
    The Navy is now looking to develop the LX(R) class of 
amphibious ships that will replace our aging dock landing 
ships. The Navy has made a decision that the LX(R) vessels will 
use the current LPD-17 hull form. Do you believe that the LPD-
17 hull form provides all the capability that you need to 
replace our legacy dock landing ships?
    General Neller. Senator, thanks for the question.
    Yes, I do. We have got a lot of confidence in the LPD-17 
class ship, and again, we appreciate the funding for the 12th 
ship of that class, LPD-28. There was discussion, before I 
assumed this post, of whether just to go to an LPD-28 repeat. 
Their was a costing figure for LX(R) that we did not believe 
LPD-28 could meet at that time. The decision was made to go 
with the hull form and come up with a new design that would be 
similar to that, but it would meet the costing of about $1.6 
billion and then to further drive down the cost of the ship 
down to $1.4 billion.
    That is going to be competed between two shipyards, and I 
am confident that they will come up with a design that is 
similar to the LPD-17 class ship and we can make it in time. 
The first class of that ship is supposed to be put under 
contract in 2020.
    Senator Wicker. If we could find the money, sir, would you 
support acceleration of the LX(R) ship competition?
    General Neller. Absolutely, Senator. If we could find the 
money and we could do a block buy where these ships would be--
as Secretary Mabus said, anytime we can build them year after 
year, we keep the workforce employed. They get faster, they get 
better. The ship is a better quality. It is put out faster and 
then generally comes in at a lower price.
    Senator Wicker. Thank you.
    Admiral Richardson, in the short time we have left, tell us 
what the future holds for the autonomous surface vessels.
    Admiral Richardson. Sir, I would say that the autonomous 
surface vessel is one of, I would say, a suite of unmanned 
capabilities that really, behind the Secretary's leadership, 
the Navy is doubling down on. I think that these autonomous 
surface vessels provide a capability that can be used in a 
number of different areas. I have got my eye on it with respect 
to the mine hunting mission. I think that that and a number of 
other areas--but I would be happy to brief you in a classified 
setting--are real opportunities for the unmanned in general and 
the surface vessel in particular.
    Senator Wicker. Secretary Mabus, do you have anything you 
would like to add in 20 seconds?
    Mr. Mabus. It is the reason that we have stood up the 
Deputy Assistant Secretary for Unmanned, N-99, on the CNO's 
staff is to make sure that we are utilizing all the 
technologies in a comprehensive way in unmanned because we are 
the only service that does it under, on, and above the sea and 
to make sure that as we move forward, because these are going 
to play such a huge role in the future, that we have the 
technology right and that we are not duplicating, we are not 
using any money unnecessarily but that we are pushing forward 
to do the things the CNO just talked about.
    Senator Wicker. Thank you, and I look forward to that 
classified briefing, Admiral. Thank you.
    Chairman McCain. Senator Hirono?
    Senator Hirono. Thank you, Mr. Chairman.
    Secretary Mabus, I too want to add my thanks to you for 
your service and wish you the very best going forward.
    General Neller, in early March, Japan's Prime Minister Abe 
announced that he has decided to temporarily suspend 
preliminary work on the Futenma replacement facility in Henoko 
on Okinawa. He stated that talks between the local government 
and Tokyo on the relocation of the base would continue.
    How do you see this situation in Japan, Okinawa, playing 
out? What impact will this have on our overall relocation 
strategy, including what we are doing in Guam and what we need 
to be doing in CNMI [the Commonwealth of the Northern Mariana 
Islands] and going forward?
    General Neller. Well, Senator, first, there is no linkage 
between Guam and what is going on with the Futenma replacement. 
I see that, even though we have pushed some number of projects 
to the right, I think we are still on track to move the number 
of marines to Guam and do that work.
    As far as Okinawa, because part of the judgment is that 
there will be no work at the Futenma replacement up at Camp 
Schwab vicinity in Henoko during this time, and they would 
expect that they are going to reconvene a court rule--or 
whatever adjudicating authority is going to review this thing 
until March.
    There was not a whole lot of work being done because we 
were not able to get concrete in. We were going to build a 
concrete plant there. That buys us some time to do that. But 
some of the work that was being done out on the reef to get 
ready to fill in the landfill in--so right now there is nothing 
going on.
    But we continue to support the Japanese Government trying 
to get an agreement with the prefecture of Okinawa to build the 
FRF [Futenma Replacement Facility]. We will have to wait and 
see what happens in March.
    Senator Hirono. You are talking about a year from now?
    General Neller. That is what the agreement was, as I 
understand.
    Senator Hirono. As a time frame for them to decide one way 
or the other.
    General Neller. The judge asked them to try to come up with 
an agreement, and then the government of Japan issued what was 
called a corrective action order, which gave the government of 
Okinawa, the governor, until March to reply. Until that time, 
there is no work being done up there.
    Senator Hirono. More delays. Well, it is what it is.
    Secretary Mabus, I believe that U.S. energy security is a 
vital component of our overall national security. I have had 
conversations with Department officials who agree that our 
country's energy security needs are closely tied to our overall 
national security. The amount of operational energy the Navy 
needs to carry out its mission is significant, and while fuel 
costs are low right now, as we know from history, prices do 
fluctuate and they will probably go up.
    I know that the Navy has done significant work in this 
area, and I commend your leadership on this issue. Can you 
update us on how the fiscal year 2017 budget affects your 
efforts to reduce energy consumption, use cleaner alterative 
sources, and increase U.S. energy security?
    Mr. Mabus. Thank you, Senator.
    First, the goal is to have at least 50 percent of our 
energy needs met by alternative sources afloat and ashore.
    Ashore, we are there. We got there by the end of 2015, and 
it is making us more resilient. We are beginning to now move to 
things like microgrids so we can pull ourselves off the grid. 
In case something happens, we can still do our military 
mission. We are doing this almost exclusively through public-
private ventures.
    At sea, the Great Green Fleet is deployed now. It is 
sailing on a mixture of marine diesel and biofuels. These 
biofuels were procured by the Defense Logistics Agency under a 
regular RFP [Request For Proposal]. They are competitively 
priced as the law requires and as we require. It is becoming 
the new normal for that.
    The example that I give is in Singapore, you have got an 
oil refinery--one of their oil refineries there that is owned, 
a majority, by the Chinese. Right down the road is a biofuels 
plant owned by a Finnish company. We need to not be dependent 
on one type or one location of fuel.
    Finally, we are also making a lot of headway in terms of 
efficiencies, reducing the amount of energy that we use. The 
Navy is down in terms of oil usage by 16 percent since 2009. 
The Marine Corps is down about 60 percent. Part of that is 
fewer operations in Afghanistan and Iraq, but the Marines have 
also been leaders in terms of energy efficiency and making 
energy where you fight so that you so that you do not have to 
resupplied.
    Senator Hirono. Thank you.
    General Neller, thank you for your efforts in this regard.
    Chairman McCain. Senator Tillis?
    Senator Tillis. Thank you, Mr. Chair.
    Gentlemen, welcome and thank you for your service.
    General Neller, I had a question for you that relates to 
personnel. I think you are down about 20,000--by the end of the 
year, about down 20,000 Active marines from the 2012 numbers. I 
am kind of curious how that reduction has affected your 
deployment-time-to-home ratio and any other issues related to 
retention, morale, or effects on families.
    General Neller. Well, Senator, when we grew the force to 
202,000 to meet the operational demand and provide adequate 
depth-to-dwell when we were fully engaged in Iraq and 
Afghanistan. As we have withdrawn the bulk of that force and we 
are bringing the force down to 182,000, that is as 2-to-1 
force. In some cases, based on the type of unit, it is inside 
that.
    It remains to be seen what that is going to do to families 
and retention. It does give us a very short time to get ready 
to go. We would prefer to be a three-to-one force, which is why 
the optimal force, based on the current force structure, was 
said to be 186.8, which gave us a 3-to-1 for aviation squadrons 
and infantry battalions, which is the normal deployment.
    We think 2-to-1 is the minimum. As General Paxton mentioned 
today in the readiness hearing, we are going to have to cut 
back some of the capabilities we provide to combatant 
commanders in order to reduce some of the tempo and pressure on 
the force, particularly in aviation, and we are prepared to do 
that not because we want to but we have to give the forces 
enough time to reset and we have to give them enough time to do 
the training that they need so that when they do deploy, they 
are ready to go.
    We are watching this very closely. It has our attention, 
but I think right now it has not been a factor, but I am 
concerned about it.
    Senator Tillis. It seems to me when you have got threats 
going in the other direction, to touch on what Senator King 
discussed and I think what Senator Fischer alluded to, you 
know, we have got threats today that we did not have in 2012. 
Admittedly we are not as engaged in, say, Iraq and other areas 
of the world. But it seems like while the threat profile is 
going up, our ability to actually provide the combatant 
commanders what they need is going down. It just does not seem 
like the right trend lines. We need to continue to watch it.
    This may be for Secretary Mabus or Admiral Richardson. I 
read a news report the other day. Believe me, I do not believe 
anything I read, and I knew that I was going to come here and 
see you guys. I thought I would ask you. The Navy is reported 
to have, in reaction to, I guess, some failing their physical 
fitness standards tests and not necessarily achieving the 
existing body mass index requirements, that there have been a 
change in those requirements. Is that report true? A simple yes 
or no answer is okay if it is no.
    Mr. Mabus. The answer is they have been changed but not for 
that reason.
    Senator Tillis. Can you give me an idea of why they have 
been changed?
    Mr. Mabus. Yes, because first we would measure people to do 
the body fat analysis. We would measure their neck and their 
waist. If they did not pass that, they did not get to take the 
physical fitness test until they got into spec. One of the 
things that that penalized were weightlifters, people that were 
in great shape, because their necks were big. It did not make 
much sense. We were removing more people for failing the 
physical fitness test than we were for drugs.
    Senator Tillis. Secretary Mabus, I completely get that. I 
think that that would make sense.
    The other part of the report--maybe it is not accurate--is 
that some of the physical fitness test standards had also been 
changed because of some challenges that we were having. Is that 
true or false?
    Mr. Mabus. They have not been lowered. Some of them have 
been changed to make them more realistic in terms of what we 
do. I mean, the Marines have the combat fitness test. The Navy 
wanted to move toward making it job-related.
    But we have also gone to--people were training for the 
test. We were doing it every 6 months. They would not get in 
shape until the last couple weeks. They would go on these crash 
diets and it was going to be dangerous. Now we are doing spot 
tests. You know, you show up one day and it is your lucky day 
and you get to put on your PT [physical training] gear and you 
go out and do the PFT [Physical Fitness Test]. What we are 
trying to do is have a culture of fitness that you stay fit all 
the time, not just for the test, and that the physical fitness 
requirements have something to do with the military 
requirements of your job.
    Senator Tillis. Thank you, Mr. Chair.
    Senator Reed [presiding]. On behalf of Senator McCain, 
Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Gentlemen, thank you for your public service. Mr. 
Secretary, your public service, long and distinguished 
governor, Ambassador to Saudi Arabia, and now a very long-
serving 7 years as Secretary. Thank you.
    Today the administration walked back its plans for drilling 
off of the east coast of the Atlantic. It is my understanding 
that the Pentagon was one of the ones that objected, as the 
Pentagon objected years ago to the drilling off of the coast of 
Florida where we have the largest testing and training range in 
the entire United States.
    Do any of you all want to give us some insight into the 
Pentagon's objection that caused the administration to walk 
this back this morning?
    Mr. Mabus. We, as the Navy, had some concerns, particularly 
on our test ranges and our ability to do exercises in the 
affected areas. We made those concerns known. There were 
concerns about both aircraft and ships in the affected areas.
    Senator Nelson. Well, that sounds like the similar concerns 
that were voiced by all branches several years ago in the Gulf 
of Mexico. In that particular case, it is also a test and 
evaluation area for the development of new weapon systems 
because they have got a range that they can go 300 miles over 
water and even onto land if they need to. It sounds like 
similar objections.
    Mr. Mabus. I know what the objections are this time. The 
other one, believe it or not, preceded my service, which 
evidently dates back to World War I now.
    [Laughter.]
    Mr. Mabus. But my understanding is the concerns were 
similar.
    Senator Nelson. For the Admiral or the Secretary, what do 
you see as the future for the LCS and particularly the fast 
frigate?
    Mr. Mabus. Let me take the first crack at that and then 
turn it over to the CNO.
    We have got a validated need for 52 small surface 
combatants. As the CNO testified, that was done in 2012. That 
was redone in 2014. We are currently doing another one. This 
will be the only mine hunting platform that we have. This is a 
crucial part of the fleet going forward for both counter-
surface and counter-submarine.
    There was a concern about lethality and survivability a 
couple years ago. We did a yearlong study, came up with the 
frigate program that substantially increases survivability, 
substantially increases lethality on this ship, while 
maintaining the modular concept, the open architecture so that 
as technology improves, we can improve. It is one of the 
critical programs as we go forward to meet the needs that we 
have.
    The final thing I would say is that our deployments of this 
ship to Singapore have been very successful both in terms of 
operationally, both in terms of testing things in real-world 
environments and also in terms of reassurance to our allies and 
our friends in that region. Our plans continue to be to forward 
deploy four LCSs/frigates to Singapore.
    Admiral Richardson. Senator, the Secretary covered it 
pretty comprehensively. I would just add that this frigate 
plays a vital role in the fleet going forward in terms of 
contributing to maritime security in the fullest sense, 
operating alone in concert with allies and also operating as 
part of the large battle force. The enhancements that will go 
into this frigate will not only make that a much more lethal 
and survivable platform, but to the best of our ability, we 
will back-fit those into the other ships of the class so that 
we improve the capability of the whole class.
    Senator Nelson. Admiral, in the pecking order of importance 
to the country, where do you put the dispersal of surface 
assets with regard to home ports so that you do not get them 
all in one place?
    Admiral Richardson. Sir, we go through a very comprehensive 
process called our Strategic Laydown Process which addresses 
that concern. We update that annually. Dispersal is a key part 
of that to make sure that all of our ships are placed around 
the world to not only maximize their utility but also to 
minimize their vulnerabilities. That dispersal is a very 
important aspect of that.
    Senator Nelson. Is that why on the Pacific that you have 
three home ports for the carriers?
    Admiral Richardson. That would be one element of it. Yes, 
sir.
    Senator Nelson. Why do we only have one home port instead 
of the two that used to be for our carriers on the Atlantic?
    Admiral Richardson. Yes, sir. Really the answer, based 
completely on a strategic laydown, I think would easily lead us 
to two home ports on the east coast for our aircraft carriers. 
When the fiscal situation allows us to appreciate the capital 
investment required to develop that second port, we look 
forward to achieving that.
    Senator Nelson. Have you got any ideas when that might 
occur?
    Admiral Richardson. Sir, we are making some extremely tough 
choices in the current budget environment, and so as long as 
this type of an environment persists, it is going to be very 
difficult.
    Senator Nelson. Well, at least the long lead item is done, 
and that is the dredging. You got that done all the way out, a 
mile and a half out, into the Atlantic.
    Admiral Richardson. Yes, sir.
    Senator Nelson. Thank you, Mr. Chairman.
    Senator Reed. Thank you.
    On behalf of Chairman McCain, Senator Sullivan, please.
    Senator Sullivan. Thank you, Mr. Chairman.
    Thank you, gentlemen for your service and testimony today.
    I wanted to follow up on an issue that this committee has 
been very focused on and that is the activities in the South 
China Sea, what China is doing with regard to militarizing 
certain reefs, what we have been doing as part of our strategy. 
You know, Admiral Harris was testifying recently and talked 
about how China--he stated China had militarized these 
formations. As you know, Secretary Carter gave a very strong 
policy speech that many of us were out at the Shangri-La 
Dialogue in Singapore last year about American broader policy. 
I think that was very strongly supported by members of this 
committee on both sides of the aisle.
    I think, though, there has been some sense of confusion by 
the implementation of that policy. Admiral Richardson, do you 
believe in your professional military opinion that we should be 
increasing the level of United States naval activity in the 
South China Sea within the 12-mile radius or zone of the 
militarization of some of these island formations? Should we be 
doing that on a regular basis and with some of our allies? I 
will leave it up to you or the Secretary.
    If you can articulate--you know, there is some confusion 
sometimes. Is it innocent passage? Is it freedom of navigation 
operations? When we are going within the 12-mile zone, which we 
have on occasion, what has been the policy from the Navy's 
perspective?
    Admiral Richardson. Sir, I think just to reiterate what the 
President and the Secretary of Defense has said is the policy 
is that we will continue to advocate for the current 
international rules that govern behavior at sea and that we 
will continue to sail, fly, and operate wherever international 
law allows. That is worldwide. This freedom of navigation 
program is a worldwide program, but because of the activity and 
the importance of the South China Sea--30 percent of the 
world's trade goes through that body of water--and because of 
the activity of the Chinese, there has been a lot of attention 
there.
    My advice is that we would continue to advocate for that, 
and we are ready to do more of those types of freedom of 
navigation operations in the South China Sea. When decision-
makers are ready to do that, the Navy is ready to do that.
    Senator Sullivan. Do we do those, for example, on a routine 
basis? Do we transit the Taiwan Strait now on a routine basis?
    Admiral Richardson. We do, yes, sir, that and other places. 
Wherever there are excessive maritime claims, part of program's 
purpose is to challenge those maritime claims.
    Senator Sullivan. Let me ask just another quick question. 
It is a different part of the world, but there has been a lot 
of interest in this committee by members, not just myself, but 
on the Arctic and what is happening in the Arctic, how it is a 
very strategic location, how there are new sea lanes opening 
up. The Russians have undertaken a massive military buildup in 
that part of the world, not only for new BCTs [Brigade Combat 
Teams] and a new Arctic military command, but as you know, 
significant increases in icebreakers. They have 40. They are 
looking to add 12 more. We have two. One is broken.
    If there was a policy decision made to do freedom of 
navigation operations in the Arctic or, alternatively, let us 
say the Russians with all their capability tried to shut down 
sea lanes in the Arctic in the summer when they are opening, do 
we even have the capability right now to conduct FONOPs 
[Freedom of Navigation Operations] in the increasingly 
important area of the Arctic with one and a half icebreakers?
    Admiral Richardson. Sir, it would depend on the conditions 
that are there. As you pointed out, that has become an 
increasingly strategic area of the world, one that we are 
focused on. As we do this renewed look at the demands and the 
force structure assessment to meet those demands this summer, 
the increasing strategic importance of the Arctic will be a key 
part of that.
    Senator Sullivan. Are we looking at increasing maritime 
operations there, looking at perhaps the importance of an 
Arctic port. There are issues that I think can demonstrate 
America's resolve in an increasingly important area.
    We have had discussions of how there is this battle between 
the Coast Guard and the Navy on who is in charge of 
icebreakers. But what it seems to do is just get us to the 
point of indecision, and we do not seem to be moving forward on 
it. Even the President, when he was in Alaska, talked about an 
icebreaker gap that we need to close, but we do not see the 
services kind of coming to any kind of agreement on why it is 
important or who is going to do it.
    Admiral Richardson. I think it is collaboration and 
cooperation between the Navy and the Coast Guard in terms of 
how we provide access and security in the Arctic. The 
icebreaker mission is clearly theirs, and I know Admiral 
Zukunft is focused on that very clearly.
    Senator Sullivan. Well, they do not have the budget for a 
new icebreaker.
    Admiral Richardson. Sir, we are making hard choices in our 
budget as well.
    Senator Sullivan. Again, I see this stalemate between the 
Navy and the Coast Guard on the issue of icebreakers. That is 
kind of demonstrated even by your testimony, Admiral.
    Admiral Richardson. Sir, I do not see it as a stalemate. 
This mission is clearly--right now, the icebreaker mission is a 
Coast Guard mission, and we look forward to collaborating and 
cooperating with them on that.
    Senator Sullivan. Mr. Chairman, do I have time for one more 
question? Oh, I am sorry. I did not see Senator Blumenthal.
    I just wanted to follow up on Senator McCain's question on 
the Iranian capture of our sailors. I know he already asked it, 
but you know, these are well trained American sailors. They 
have at least a 50-caliber in terms of weapons on their naval 
vessels. What were the ROEs [Rules of Engagement] that enabled 
our sailors to even be captured? I mean, if a hostile Iranian 
patrol boat is approaching a United States naval ship in 
international waters, is the ROE not to not be captured? How 
did that happen?
    Admiral Richardson. Sir, clearly international law would 
prohibit boarding U.S. sovereign territory, which those 
riverine craft were.
    Senator Sullivan. Did we try to resist being boarded?
    Admiral Richardson. There is always the inherent right to 
self-defense in our rules of engagement. The specific ROE and 
what exactly unfolded as that happened will be part of the 
detailed investigation. When that is complete and reviewed, I 
look forward to briefing you on the details there.
    Senator Sullivan. Okay, thank you.
    Thank you, Mr. Chairman. Thank you, Senator Blumenthal.
    Senator Reed. Thank you.
    On behalf of Chairman McCain, Senator Blumenthal, please.
    Senator Blumenthal. I want to second all my colleagues in 
thanking each of you for your extraordinary service to our 
Nation over so many years and also your commitments in terms of 
undersea warfare capability to both the Virginia and Ohio 
replacement programs.
    I know, Secretary Mabus, you have been asked this question 
before, but do we not need to consider building, in effect, 
three submarines a year, two Virginia-class and one Ohio 
replacement program? I would like you to perhaps clarify what 
you have said on this topic. I believe that Senator Ayotte may 
have asked you this question.
    Mr. Mabus. Yes, we do. Right now, the plan is, starting in 
2021 when the Ohio-class replacement begins to be built, we 
would drop to one Virginia-class that year. However, we are 
undertaking a look right now--and a pretty intensive look 
because we do think it is important to continue the two 
Virginia-class ships a year. It is a capacity issue, capacity 
for our shipyards, the ability to do it. It is a capability 
issue. But we clearly have the need for the two Virginia-
classes.
    Those boats are coming in at the cost they are, at the 
schedule they are, which is sometimes up to a year ahead of 
schedule because we are able to buy them two a year as a 
multiyear buy. As I mentioned to Senator Ayotte, this will be 
part of the 2018 budget submission. I am confident that that 
will go in there. We are trying every way we can, working with 
you, working with Congress to figure out a way to have that 
three submarine a year build because if we do not, if we miss a 
year on the Virginia, it is going to make the attack submarine 
situation, particularly in the late 2020s/early 2030s, even 
more significant.
    Senator Blumenthal. As I understand your answer, there is a 
need to build those three submarines a year, and the question 
really is whether the shipbuilders have the capacity. If they 
were to tell you--I am certainly not speaking for them--that 
they can do it, you would, in effect, make a decision to go 
forward, assuming that the funding is there because our 
national defense is well served by it and because it would 
provide those boats at the lowest possible per-unit price.
    Mr. Mabus. I think that is a very good summary. The 
shipyards--and that is what we are dealing with them now. We 
think they can have the capacity to do this so that little 
clause you put in, ``assuming the funding is there,'' becomes 
the critical part.
    Senator Blumenthal. Admiral Richardson?
    Admiral Richardson. Senator, if I could just pile on a 
little bit there. Just from the warfighting need, as you know, 
sir, we dip below the stated requirement for 48 attack 
submarines in the 2020s. That boat, because it comes on line 
pretty early, if we get that in 2021, does a tremendous amount 
to mitigate the volume of that trough. It has a very asymmetric 
effect, which is why we are considering every possibility to 
get that done.
    Senator Blumenthal. When we talk about the need for a 
certain number of Virginia-class submarines and the need for 
the Ohio replacement program, this need is not an abstract, 
hypothetical, theoretical need. It is a matter of our potential 
adversaries building their own undersea warfare capability, 
particularly China and Russia moving ahead on their plans. Is 
that correct?
    Admiral Richardson. Sir, that is exactly correct. That 
number comes from, I believe, a 2006 study and we are 
refreshing that requirement this year as part of our force 
structure assessment, which takes into account those threats 
that you just mentioned.
    Senator Blumenthal. There is no reason to believe that the 
intentions of Russia and China, who are our most advanced 
competitors in this sphere, are in any way moderating or 
reducing their plans to build their undersea warfare 
capability.
    Admiral Richardson. Sir, that is our understanding. Yes, 
sir.
    Senator Blumenthal. Will that need also contemplate other 
means of undersea warfare capability besides submarines?
    Admiral Richardson. Sir, we are looking at the full host of 
undersea capabilities to include not only manned submarines, 
both the Ohio replacement and Virginia-class attack submarines. 
We are going to enhance the capability of the Virginia-class by 
putting in the Virginia payload modules starting in fiscal year 
2019, and we are also looking at unmanned technologies undersea 
as well.
    Senator Blumenthal. I think I am the last questioner, but I 
want to close again by simply thanking you for your dedication 
to the submarine program, which means so much to our Nation, 
for your frequent visits to Groton. We would welcome you back 
anytime you are able to come. I will be extending invitations 
to you. I hope you can be there because we learn from your 
presence there, as well as from your commitment to this 
program. Thank you very much.
    Senator Reed. Thank you, Senator Blumenthal.
    Gentlemen, thank you for your testimony. Thank you for your 
extraordinary service to the Nation and to the Navy and the 
Marine Corps.
    On behalf of Chairman McCain, let me declare the hearing 
adjourned. Thank you.
    [Whereupon, at 4:37 p.m., the hearing was adjourned.]

    [Questions for the record with answers supplied follow:]

                 Questions Submitted by Senator McCain
                             lcs way ahead
    1. Senator McCain. The President's Budget request includes a down-
select to one Littoral Combat Ship variant no later than 2019 and to 
cap procurement at 40 ships. Can you explain the benefits of this 
program restructuring?
    Secretary Mabus. and Admiral Richardson. The Navy's requirement for 
52 Small Surface Combatants was validated through the 2014 Force 
Structure Assessment (FSA) and no subsequent analysis has revised this 
requirement.
    The truncation to 40 Small Surface Combatants reflects a 
consequence of the hard choices that had to be made to deliver the PB17 
budget in compliance with the Bipartisan Budget Act. Secretary Carter 
concluded that the Navy could accept risk associated with slowing the 
rate of ship construction in the near term in order to rebalance its 
investments towards other warfare systems and advanced capabilities.
    In accordance with Secretary Carter's decision, the Navy plans to 
competitively award one LCS to each shipbuilder in 2017, and proceed 
with completion of respective Frigate designs to support a competitive 
down-select to a single shipbuilder in 2018 based on the proposed 
Frigate design. This acquisition strategy sustains competition for the 
single ship awards in 2017 and delivers the desired Frigate capability 
ahead of the original, approved schedule. However, it is recognized 
that this down-select decision also places one of our shipbuilders and 
much of the support industrial base at risk of closure. The Navy will 
use this current period of stable production--prior to the down-select 
decision--to thoroughly assess the impact of such potential closure on 
our strategic shipbuilding industrial base, the cost of our 
shipbuilding program, and our ability to support in-service ships, in 
order to identify appropriate actions to mitigate these impacts to the 
extent practical.
                         ohio-class replacement
    2. Senator McCain. In terms of program cost, the Ohio replacement 
submarine program will be second only to the Joint Strike Fighter. 
These submarines will carry about 70 percent of the nation's deployed 
nuclear warheads. If the Ohio replacement program turns into an 
acquisition debacle, the consequences will be dire for the Navy and for 
the Nation. What steps are you taking to ensure you get it right the 
first time with lessons learned from past acquisition experience, such 
as the CVN-78 aircraft carrier program, including: accurate cost 
estimating, technology maturity, avoiding concurrent design or 
development with production, off-ramps for high risk systems, and 
meeting reliability targets for critical systems?
    Secretary Mabus. and Admiral Richardson. The Navy recognizes the 
critical national importance of the Ohio Replacement (OR) program and 
is taking proactive steps to ensure that the program is successfully 
executed. Program measures include tight control over requirements, 
high degree of design completion prior to construction, maximum 
practical critical technology reuse, aggressive design for 
affordability program, detailed risk management program, extensive 
employment of engineering development models to retire risk, and 
continuous active review of program cost to enable timely course 
correction, if required. This will provide the Navy, the Department of 
Defense and the Nation confidence in long-term successful program 
execution.
    The OR program commenced with significant effort to establish the 
right warfighting requirements for the program. In June 2015 the Chief 
of Naval Operations approved OR's Capabilities Development Document 
(CDD) defining the authoritative, measurable, and testable capabilities 
needed to perform the mission and in August 2015 the Joint Requirements 
Oversight Council validated OR's CDD. The program completed the Navy's 
Gate 4 in November 2015 to confirm that the proper requirements have 
been established for the technical baseline for steady design maturity. 
The OR program has instituted formal and rigorous change control to 
manage the program's technical baseline and ensure the requirements are 
maintained and controlled at the appropriate level.
    Maximizing design maturity at the start of platform construction is 
a critical lesson learned from other shipbuilding programs. Increased 
design maturity will limit many of the complications that negatively 
impact both cost and schedule resulting from simultaneous design and 
production. To illustrate the effect of design maturity (i.e., drawings 
released to the shipbuilder) on various programs, the lead Seawolf-
class submarine achieved design maturity of 6 percent, and the lead 
Virginia-class submarine reached approximately 43 percent at 
construction start. The target design maturity for OR is 83 percent at 
start of construction.
    Technical maturity is another major focus area for the OR program 
and will reuse many of the proven technologies from both the Virginia- 
and Ohio-class programs. It will also re-host the Trident D5 Strategic 
Weapon System, limiting the potential impact that immature 
transformational technologies could have on the program. The reuse of 
proven technologies mitigates technical risk and ensures a credible and 
survivable sea-based strategic deterrent.
    To ensure maximum cost and schedule savings, the OR program has 
initiated prototyping and pre-construction testing of key systems. 
These efforts are critical to address potential technical risks and 
include the Strategic Weapons System Ashore in Cape Canaveral, Launcher 
Test Facility at China Lake, and the Compatibility Test Facility in 
Philadelphia for propulsion system testing. Manufacturing risk 
reduction prototyping, including the Missile Tube and its outfitting, 
Quad Pack of Missile Tubes and Missile Tube Module (MTM), is also in 
process.
    The OR program will also leverage Virginia's extensive experience 
with modular construction. The Virginia program successfully improved 
schedule through modifying construction plans by using super-lifts, 
reducing 10 modules into 4. OR will implement a six super-module build 
plan based off the Virginia program to significantly reduce 
construction schedule and costs. The government, design yard, and 
shipbuilder are working together conducting detailed construction 
planning efforts to determine the optimal build sequence. The program 
is also continuing to identify opportunities to further acquisition 
efficiency, reduce schedule risk, and improve program affordability.
    Credible detailed cost estimates are critical to the OR program's 
success to achieve the appropriate cost targets. The program 
established an initial lead ship cost estimate and affordability 
targets for follow-on ships in December 2010 in support of the 
Milestone A. An updated cost estimate, largely based on actual data 
from the Ohio- and Virginia-class programs, will be done to support the 
program's Milestone B decision in August 2016. The updated cost 
estimate will incorporate all cost reduction initiatives to date and 
adjust affordability targets if necessary.
    The Navy is committed to recapitalize the nation's sea-based 
strategic deterrent by ensuring the right requirements are established 
and implemented, design maturity is maximized and the technical 
baseline is strictly managed. The program's incorporation of mature and 
proven technologies, prototyping initiatives, and focus on 
affordability, are integral to successful execution. These efforts will 
ensure the OR program is successful, assure our Nation's strategic 
deterrence and ensure best value for the American taxpayers.
                      next amphibious ship (lx(r))
    3. Senator McCain. The Navy's shipbuilding plan lists LX(R) as 
planned for a fiscal year 2020 authorization. To what extent could this 
ship be accelerated while still preserving competition and is 
acceleration to fiscal year 2019 reasonable? Would accelerating this 
ship to fiscal year 2018 result in a non-competitive, sole-source 
situation?
    Secretary Mabus. The Department of the Navy plans to execute a 
competitive acquisition strategy for the LX(R) program. The Navy will 
review proposals leading to source selection for the lead ship in 
fiscal year 2018, award detail design and advance procurement in fiscal 
year 2019, and exercise the option for construction in fiscal year 
2020. The Preliminary Design and Systems Engineering Technical Review 
have been completed and Contract Design efforts will begin shortly 
after contract award. Twelve months are required to complete Contract 
Design efforts in order to further refine and incorporate affordability 
initiatives into the design to meet both lead ship and average follow-
on ship affordability targets. With the authority provided by Congress 
in the fiscal year 2016 NDAA which authorizes the use of Advance 
Procurement (AP) funding for design work and material, the Navy is 
evaluating opportunities for accelerating the detail design contract to 
late fiscal year 2018, as well as acceleration of the lead ship start 
of construction.
                                  f-35
    4. Senator McCain. Can you certify that all F-35s procured in 
fiscal year 2016 will be delivered with the full Block 3F capability, 
including hardware, software and weapons carriage?
    Secretary Mabus. The F-35 program currently plans to deliver F-35A 
aircraft with full Block 3F capability (hardware, software and weapons) 
before the end of fiscal year 2017. However, before the Services can 
certify this, there are two challenges that must first be addressed: 1. 
Resolving F-35 BLK 3i software instability; and 2. Developing a 
suitable plan to complete the Weapons Delivery Accuracy (WDA) test and 
analysis in time for full weapon envelope and clearance. At this time, 
the Department of the Navy, in coordination with the Department of the 
Air Force and the F-35 Program Office are continuing to resolve these 
challenges. Once the test results from the latest software stability 
fixes are known (late April 2016 timeframe) and the new weapons test 
plan is laid out, the F-35 Joint Program Office will be able to provide 
evidence to the Services for certification of Full Block 3F capability, 
and specifically, to the Secretary of the Air Force for F-35A aircraft 
procured in fiscal year 2016. This certification is expected in the 
early/mid-May 2016 timeframe.
                                 mv-22
    5. Senator McCain. In your judgement, would procuring 16 MV-22 in 
fiscal year 2017 be in breach of the multi-year procurement contract 
which stipulates 18 aircraft would be procured? What would be the 
effect of procuring only 16 aircraft in fiscal year 2017?
    Secretary Mabus. The quantity reduction of two aircraft in fiscal 
year 2017 would breach the terms and conditions of the MYPII contract 
in its final year. This would effectively create a partial termination 
for convenience of the contract to which Industry would have the 
ability to seek compensation. Two mitigation strategies are in-work. 
The first is an fiscal year 2017 Unfunded Priority List (UPL) request 
for two aircraft. Second is the opportunity to replace the two aircraft 
with pending international orders from Japan and/or an fiscal year 2016 
CV-22 plus up aircraft by the United States Air Force. The Government 
of Japan's request for four aircraft is anticipated by March 2016. The 
program office intends to exercise the MYPII Fiscal Year 2016 Variation 
in Quantity contract clause by June 30, 2016.
    The impact to cost and schedule resulting from an fiscal year 2017 
reduction of two aircraft is unknown at this time. A partial 
termination for convenience proposal from industry and dialogue with 
industry would be required to assess the specific impacts. The areas of 
impact would include Overhead/Labor rates, direct/indirect labor and 
material, and termination costs for: Economic Order Quantity 
components, Long Lead components, and suppliers. A preliminary 
assessment from within the government indicates a minimum of a $17 
million cost impact resulting from a termination of two aircraft 
without consideration of possible alternatives to mitigate these 
impacts. The program office has engaged with industry on the viability 
of replacing the two aircraft of concern with potential international 
requirements from Japan with generally favorable response. However this 
mitigation is contingent on a Japan procurement case that is not 
anticipated before June 2016. The contractual commitment for full 
funding of the fiscal year 2017 MYPII procurement is by December 31, 
2016.
                            carrier air wing
    6. Senator McCain. The Navy has indicated that the long periods 
between deployments for some carrier air wings is one reason the Navy 
would like to deactivate one air wing. Has the Navy considered 
deploying air wings, in whole or in part, in an expeditionary manner to 
alleviate long periods between deployments. Why or why not?
    Admiral Richardson. The Carrier Air Wing is tailored for maximum 
effectiveness when employed as an integrated warfighting unit in 
conjunction with a Carrier Strike Group (CSG) complement of warships. 
However, there are some instances where Carrier Air Wing assets can be 
employed in an expeditionary manner. The Navy currently employs 
electronic attack, helicopter, and strike fighter assets in support of 
individual unit deployment programs and the Department continually 
evaluates all opportunities to best support combatant commander demand.
                               __________
             Questions Submitted by Senator Senator Ayotte
          industrial base--dependency on sole source suppliers
    7. Senator Ayotte. To what degree are key programs in the Navy 
dependent on sole source suppliers?
    Admiral Richardson. In the context of major weapon systems 
procurement (e.g., MDAPs), the Navy is dependent on sole source 
suppliers to the extent we are unable to establish a viable competitive 
environment throughout the entire life cycle of a particular program. 
Major weapon systems are very complex--the costs to design and develop 
the weapon system, as well as to establish and qualify a manufacturing 
source can be considerable--often exceeding several billion dollars. 
Therefore, while initial design and development efforts are commonly 
contracted using full and open competitive procedures, once a source is 
selected, that source is typically the only viable source through the 
production and manufacturing phase of the program. This is due to the 
high investment costs required to become a duplicate manufacturing 
source; typically so large as to preclude other members of industry 
from making a return on that considerable investment.
                               __________
                Questions Submitted by Senator Sullivan
                          fonops in the arctic
    8. Senator Sullivan. If a policy decision was made to do so, does 
the U.S. Navy currently have the capability to conduct surface FONOPs 
in the Arctic? Specifically, under what sea-ice conditions can FONOPs 
of all types be conducted or not conducted?
    Admiral Richardson. The Navy's surface combatants are currently not 
designed to operate in sea-ice conditions. Surface combatants 
participate in Arctic and sub-Arctic exercises, but they are not ice-
hardened and operate only in open water conditions found in limited 
areas during the summer melt season. In any Arctic operation there are 
many environmental risk factors including sea ice, wind, ice 
accumulation on equipment, and impacts to communications and satellite 
coverage. Therefore, surface ship operations, including FONOPS, will be 
limited to open water conditions and executed only after a rigorous 
assessment of the operating environment and application of the 
principles of operational risk management (ORM).

    9. Senator Sullivan. With only two aging icebreakers--one medium 
one and one heavy one that is always deployed to Antarctica--what are 
the risks to U.S. Naval vessels to conducting surface FONOPs in the 
Arctic without icebreaker support?
    Admiral Richardson. The Navy's surface combatants are not designed 
to operate in sea-ice conditions. Surface combatants participate in 
Arctic and sub-Arctic exercises, but they are not ice-hardened and 
operate only in open water conditions found in limited areas during the 
summer melt season. In any Arctic operation there are many 
environmental risk factors to consider. Risk factors include sea ice, 
wind, ice accumulation on equipment, and impacts to communications and 
satellite coverage.
    After assessing all risk factors associated with operating in the 
Arctic extremes, a combatant commander would require extraordinary 
circumstances before directing a Naval Component Commander to conduct a 
FONOP with a surface vessel in conditions where ice breakers would be 
required.

    10. Senator Sullivan. Given Russia's increased aggressiveness 
across the globe and their militarization of the Arctic, including 
their recent investments in icebreakers and Arctic ports, is our 
deficiency in icebreakers a capability gap for the U.S. Navy, current 
and in the future, for future U.S. involvement in the Arctic? How does 
this capability gap affect U.S. Arctic strategic interests?
    Secretary Mabus. and Admiral Richardson. The current U.S. 
deficiency in icebreaker capability is not a capability gap for the 
U.S. Navy for current and future Navy operations in the Artic. The U.S. 
Navy has no defense requirement for polar icebreaking capability. U.S. 
Navy defense requirements for operational forces in the Artic are 
currently provided by its undersea and air assets. The Navy's existing 
posture is appropriate to address the near-term defense requirements of 
the U.S. in the Artic. Moreover, no combatant commanders have 
identified a requirement for icebreaking capability.
    The national requirement for this capability is provided by the 
U.S. Coast Guard. The U.S. Navy supports the U.S. Coast Guard's request 
for moedernization of the national icebreaking capability. U.S. 
national interests from a defense perspective are not affected by this 
icebreaker capability gap. From a non-defense perspective, this 
capability gap affects U.S. national interests in the Arctic regarding:

      the conduct and support of scientific research,
      the protection of U.S. economic interest in the U.S. 
Exclusive Economic Zone
      the conduct of search and rescue law enforcement and 
protection of marine resources.

    11. Senator Sullivan. Do you agree that we need a more robust 
Arctic strategy--one that does a better job of assessing the new 
threats in the region and one that reflects Russian as a potential 
adversary?
    Secretary Mabus. The National Strategy for the Arctic Region, the 
Department of Defense Arctic Strategy, the U.S. Coast Guard Arctic 
Strategy, and the Navy Arctic Roadmap remain valid and relevant 
strategies that have guided our security and safety efforts to date. 
Additionally, Arctic nations have demonstrated a desire to leverage 
existing international frameworks to resolve disputes peacefully. As 
directed by section 1068 of the National Defense Authorization Act for 
Fiscal Year 2016, the Department of Navy is prepared to work with the 
Department of Defense on the update to their Arctic Strategy.

    12. Senator Sullivan. Secretary Mabus, do you agree that the Navy 
should relook and potentially rewrite the Navy's 21st Century Arctic 
Roadmap following the completion of the new DOD Arctic Strategic, 
required in section 1068 of the fiscal year 2016 NDAA?
    Secretary Mabus. The U.S. Navy Arctic Roadmap 2014-2030 remains 
aligned with National and DOD strategies and outlines the U.S. Navy's 
strategic approach to the Arctic region in step with changing 
environmental conditions. While balancing all of our global defense 
responsibilities, the Navy will continually assess our preparedness in 
response to changes in the Arctic environment or changes in the 
security environment.
                               __________
                Questions Submitted by Senator McCaskill
                            f/a-18 inventory
    13. Senator McCaskill. You've stated the Navy has a strike fighter 
inventory issue. Last year, the President's Budget requested no funding 
to procure Super Hornets, yet the Congress funded five Super Hornets in 
the fiscal year 2016 Omnibus. This year the Navy is requesting two 
Super Hornets and projects requesting 14 Super Hornets in the fiscal 
year 2018 request. The Navy has also included a request for 14 Super 
Hornets as their number one priority on this year's Unfunded 
Requirements List. Why has the Navy made F/A-18s the number one 
priority on its unfunded requirement request?
    Admiral Richardson. The Department of the Navy (DON) remains 
challenged with end of life planning for F/A-18 aircraft that reach the 
end of their service life before replacement aircraft (F-35B/C) are 
delivered into service. The near-term challenge is due to a combination 
of reduced strike fighter aircraft procurement, higher than planned 
TACAIR utilization rates, and F/A-18A-D depot production falling short 
of the required output. The mid-term challenge encompasses F/A-18E/F 
service life extension efforts to sustain inventory capacity to meet 
warfighting requirements. In the far-term, inventory capacity is 
predominantly affected by new aircraft procurement, particularly the F/
A-18E/F and F-35.
    Although the fiscal year (FY) 2017 President's Budget request takes 
many steps towards addressing the gap between aircraft supply and the 
Department's Master Aviation Plan demand with legacy aircraft 
sustainment, new aircraft procurement, and fleet utilization, an 
additional 14 aircraft in fiscal year 2017 will reduce risk in the 
near-term, and address a long-term inventory shortfall by assuring 
aircraft with useful life into the 2030s. I have included these 
additional aircraft as the number one priority on this year's Unfunded 
Priorities List to highlight the need to address this critical gap in 
warfighting requirements.

    14. Senator McCaskill. Why did you make the decision to signal that 
you will request 14 Super Hornets in your fiscal year 2018 request?
    Admiral Richardson. The Fiscal Year 2017 President's Budget request 
continues to address the requirement for an additional two to three 
operational squadrons of F/A-18E/F aircraft to sustain the strike 
fighter inventory. Congressionally authorized and appropriated aircraft 
in fiscal year (FY) 2016 begin to reduce the shortfall, but nonetheless 
the Department of the Navy (DON) is still experiencing risk in our 
Strike Fighter Inventory Management strategy.
    The additional aircraft will reduce risk in near and mid-term 
inventory capacity as we begin to assess service life extension 
requirements to sustain the F/A-18E/F inventory into the future. The 
aircraft requested in the base budget, Overseas Contingency Operations 
(OCO) budget, and Unfunded Priority List (UPL) would alleviate near-
term demand on the F/A-18E/F Super Hornet fleet which has experienced 
higher than planned utilization in support of current operations.
    Furthermore, as we study the service life extension plan for the F/
A-18E/F Super Hornet fleet, current forecast models predict Out Of 
Reporting (OOR) figures will exceed what was originally expected, 
inducing additional risk to inventory management.
    The F/A-18E/F Super Hornet will be the mainstay of the Navy's 
strike fighter force into the 2030's. Accordingly, the DON has 
requested the continued procurement of these aircraft to simultaneously 
maintain operational readiness and reduce risk in our strike fighter 
inventory.

    15. Senator McCaskill. What will be the effect on future Navy 
operations if Congress does not approve funding for the 14 Super 
Hornets on the fiscal year 2017 Unfunded Requirements List?
    Admiral Richardson. The Navy will be unable to close the gap 
between inventory capacity and operational demand without Congress' 
support for additional F/A-18E/F aircraft. These aircraft alleviate 
near-term overutilization challenges with the existing Super Hornet 
fleet and decrease risk in the F/A-18E/F service life extension plan by 
improving F/A-18E/F pipeline aircraft availability.

    16. Senator McCaskill. What will be the effect on future Navy 
operations if Congress does not approve funding for the 14 Super 
Hornets you plan to request in the fiscal year 2018 budget?
    Admiral Richardson. The Navy will be unable to close the gap 
between inventory capacity and operational demand without Congress' 
support for additional F/A-18E/F aircraft. These aircraft alleviate 
near-term overutilization challenges with the existing Super Hornet 
fleet and decrease risk in the F/A-18E/F service life extension plan by 
improving F/A-18E/F pipeline aircraft availability.
                       defense acquisition reform
    The National Defense Authorization Act of 2016 required each of the 
Service Chiefs to review their individual defense acquisition 
authorities and make recommendations to the Armed Services Committees 
changes they believe are necessary to strengthen their role in the 
development of requirements, acquisition processes, and budget 
practices.

    17. Senator McCaskill. Based on your review, do you have any 
recommendations to improve the management of the Navy acquisition 
workforce?
    Admiral Richardson. Acquisition involves professionals in the areas 
of requirements generation, program management, and financial 
management. The three areas are critical in ensuring we define, 
resource, and deliver the needed capability to our warfighters. The 
training and development pipelines for our program management and 
financial management workforce are well defined and well managed. 
Congress has been instrumental in providing tools to strengthen our 
program management workforce by providing the Defense Acquisition 
Workforce Development Fund (DAWDF) (enacted in fiscal year 2008) and 
the Acquisition Demonstration performance management system (Acq Demo). 
DAWDF is now an enduring fund and authorities for Acq Demo have been 
extended through fiscal year 2020 so we can demonstrate the value of 
this tool and consider extension or permanence. I am working with my 
leadership team on professionalizing our requirements generation 
workforce. I do not anticipate additional authorities needed at this 
time.

    18. Senator McCaskill. Based on your review, do you have any 
recommendations to improve the management of the Marine Corps 
acquisition workforce?
    General Neller. This is an interim reply. We will follow-up with a 
completed response no later than 25 May by submitting our Report to 
Congress under the National Defense Authorization Act for fiscal year 
2016. Specifically, this refers to section 808, Report on Linking and 
Streamlining Requirements, Acquisition and Budgets Processes of the 
Armed Services. The report will include recommendations to Congress to 
increase funding flexibility and stability, consider ideas to effect 
protest reform, and streamline oversight. It will also provide details 
on the following discussion.
    The Marine Corps continues to implement management actions that 
integrate and synchronize our capability and material developers while 
resourcing staff and their processes. These processes, and the people 
who manage and execute them, can make key differences individually or 
collectively in our modernization programs. We will also undertake a 
comprehensive review of our acquisition workforce structure with a 
focus on our military acquisition professionals as well as civilian 
leadership. We are looking closely at the new roles and relationship of 
the Principal Military Deputy, established in section 802, NDAA fiscal 
year 2016. We will define a more detailed understanding of how this 
works for the CMC and our leadership team, including the requirements, 
acquisition and budget process owners. Related to the workforce review, 
we will evaluate how best to sustain the momentum of focus on and 
improvement to our processes. This evaluation is to produce an 
institutional solution for sustained acquisition improvement, including 
all associated supporting and supported processes.
    We look forward to providing a more in-depth and comprehensive 
answer next month.
                       f-35 joint strike fighter
    19. Senator Kaine. Both the Marine Corps and the Air Force have 
conducted their Environmental Impact Studies (EIS) for their F-35 
basing plan. In light of the continued requests by the Administration 
to conduct a BRAC, an indication of your basing plan would be 
beneficial. Could you provide a rationale as to why the Navy has not 
yet conducted a study? When does the Navy anticipate it will conduct an 
EIS?
    Secretary Mabus. The Department's F-35 procurement plan determines 
the timeline for basing action. In line with the rebalance to the 
Pacific, the Department completed the F-35C West Coast home basing 
actions first. In 2014, Navy selected Naval Air Station Lemoore as the 
future West Coast home base for F-35C squadrons after the preparation 
of a West Coast EIS. Military construction projects are currently 
underway to support the first F-35C arrival in January 2017.
    The Navy is currently developing future basing requirements for 
2022 and beyond. East Coast basing actions will follow consistent with 
other aircraft home basing efforts. Once requirements are established, 
the basing decision process will include an EIS. The EIS along with 
required construction will take several years. Based on this timeline, 
the Navy will not begin the EIS process prior to fiscal year 2018 and 
may begin later depending on the F-35 procurement plan.
                       unfunded priorities lists
    20. Senator Kaine. Please provide your services prioritized, 
unfunded priorities list.
    General Neller. Attached is the Marine Corps' prioritized, unfunded 
priority list.
      
    
    
      
    Admiral Richardson. Attached is my fiscal year 2017 unfunded 
priorities list.
      
    
    
      
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
      
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              

                        THURSDAY, MARCH 17, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.

                  DEPARTMENT OF DEFENSE BUDGET POSTURE

    The committee met, pursuant to notice, at 9:40 a.m. in Room 
SD-G50, Dirksen Senate Office Building, Senator John McCain 
(chairman) presiding.
    Committee members present: Senators McCain, Inhofe, 
Sessions, Wicker, Ayotte, Fischer, Cotton, Rounds, Ernst, 
Tillis, Sullivan, Lee, Graham, Reed, Nelson, Manchin, Shaheen, 
Gillibrand, Blumenthal, Donnelly, Hirono, Kaine, King, and 
Heinrich.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. Good morning. Good morning, all.
    The Senate Armed Services Committee meets this morning to 
receive testimony on the Department of Defense's Fiscal Year 
2017 Budget Request, the associated Future Years Defense 
Program, and the posture of U.S. Armed Forces.
    We welcome our witnesses. We thank each of you for your 
service to our Nation and to the soldiers, sailors, airmen, and 
marines serving here at home and around the world.
    Before I proceed with my statement, let me just say that, 
yesterday, disturbing statement made a senior executive of the 
United Launch Alliance [ULA] were reported in the media. These 
statements raise troubling questions about the nature of the 
relationship between the Department of Defense and ULA. This 
committee treats with the utmost seriousness any implication 
that the Department showed favoritism to a major defense 
contractor or that efforts have been made to silence Members of 
Congress.
    Mr. Secretary, I expect that you will make a full 
investigation into these statements and take action, wherever 
appropriate.
    Last month, the Director of National Intelligence provided 
this committee a candid and unsettling picture of our worldwide 
threats. Just consider what has occurred over the past 5 years. 
While al Qaeda remains a real and potent threat, the vanguard 
of global terrorism is increasingly led by ISIL [Islamic State 
of Iraq and the Levant], which has metastasized across the 
Middle East, Africa, and South Asia, and which has already 
launched attacks into the heart of Europe and inspired an 
attack here in the United States. Russia has invaded Ukraine, 
annexed Crimea, menaced our NATO [North Atlantic Treaty 
Organization] allies, intervened militarily in Syria, and is 
now regarded by Chairman Dunford, and many of our military 
leaders say, as our Nation's greatest threat. China has 
continued its rapid military modernization, steadily 
militarized the South China Sea, and used coercion and the 
threat of force to bully our Asian allies and partners. North 
Korea has launched brazen cyberattacks against the United 
States, continued to advance and test its nuclear weapons 
program, and conducted provocative missile tests, including a 
potential ICBM [intercontinental ballistic missile] capability. 
Rather than moderating its malign activities in the Middle 
East, as advocates of the nuclear agreement predicted, Iran has 
instead increased its support for its terrorist proxies from 
Syria to Yemen, conducted advanced missile tests, in violation 
of U.N. [United Nations] Security Council resolutions, and 
fired rockets near a U.S. aircraft carrier. More recently, Iran 
seized two U.S. Navy vessels, detained 10 U.S. sailors, and 
propagandized the entire incident, in total violation of 
international law and centuries of maritime tradition.
    These are the growing threats we face in the world. The 
Department of Defense remains guided by a strategy that 
predates all of these developments. It is based on assumptions 
about the world that no longer apply. What's worse, the same is 
true about our Nation's defense spending. While the 
requirements for our military have grown, the Budget Control 
Act [BCA] arbitrarily capped defense spending back in 2011. 
Despite periodic relief from these caps, each of our military 
services remain undersized, unready, and underfunded to meet 
the current and future threats.
    This translates into real things that our military, as 
remarkable and determined as it is, simply cannot do for our 
Nation. Our aircraft carriers no longer provide constant 
presence in the Middle East or the western Pacific. Just one-
third of Army brigade combat teams are ready to deploy and 
operate decisively. The Air Force is the smallest it's ever 
been, and more than half of its squadrons are not combat 
mission-ready. Marine Corps aviation is in crisis, and the 
Assistant Commandant testified this week that his forces cannot 
execute our Nation's defense strategy.
    The effects on the present force are bad enough. The 
effects on the future force are worse. Years and years of 
deferred maintenance and delayed modernization are creating a 
mountain of bills that will soon come due. From 2018 to 2021 
alone, the Department of Defense needs $100 billion above the 
BCA caps just to meet current requirements. In reality, those 
requirements are inadequate, additional resources will be 
needed, and the longer we try to delay that bill, the bigger 
and worse it gets, and the more we run the risk of a return to 
sequestration.
    This is a crisis of our own making. I'm speaking of the 
Congress, as well. It is why many of us are so concerned about 
the President's Budget request for fiscal year 2017. There's a 
lot to like about this request. Many of the investments, 
especially related to the so-called ``third offset strategy'' 
are critical and long overdue. That said, though our Nation is 
asking our military to do more over the next fiscal year, the 
President's defense budget request, in real dollars, is 
actually less than it is this year. As a result, the Department 
was forced to cut $17 billion it said it needed last year, 
purely for budget reasons. To be sure, the temporary effects of 
more positive economic assumptions and lower fuel prices soften 
the blow. Nevertheless, the Department cut over $10 billion in 
real military capability to mitigate this shortfall.
    Nothing in the Bipartisan Budget Act prevented the 
President from requesting more than he did. He did not have to 
fund our growing operational requirements by cutting 
modernization and procurement. He chose to do so. These are 
just some of the consequences. The Army had to cut 24 UH-60 
Black Hawk helicopters. The Air Force had to cut 5 F-35As this 
year and 45 over the next 4 years. The Navy plans to lay up an 
additional 5 Ticonderoga-class cruisers. The Marine Corps cut 
77 joint light tactical vehicles, $1.3 billion in military 
construction, and family housing has been cut. Certain critical 
nuclear modernization efforts, including an ICBM replacement 
and the B61 nuclear bomb tail kit, have been further delayed.
    The unfunded requirements of the military services now 
total nearly $18 billion. That represents the additional ships, 
airplanes, helicopters, fighting vehicles, training, and other 
programs that our military leaders say they need simply to 
carry out our increasingly antiquated defense strategy and an 
acceptable level of risk. Last year, the former Chairman of the 
Joint Chiefs, General Dempsey, described the Future Years 
Defense Plan as, quote, ``the lower ragged edge of manageable 
risk in our ability to execute the defense strategy.'' Now, 
here were are, 1 year later and $17 billion less than what our 
military needed and planned for. I do not know what lies 
beneath the, quote, ``lower ragged edge of manageable risk,'' 
but this is what I fear it means, that our military is becoming 
less and less able to deter conflict, and if, God forbid, 
deterrence does fail somewhere and we end up in conflict, our 
Nation will deploy young Americans into battle without 
sufficient training or equipment to fight a war that will take 
longer, be larger, cost more, and ultimately claim more 
American lives than it otherwise would have.
    This is the growing risk we face, and we can't change 
course soon enough. We should not threaten the stability 
provided by the budget--Bipartisan Budget Act. We should build 
on it. Therefore, we make a virtue out of stability. Let's 
recall, this budget agreement ends this year, and defense 
spending over the next 4 years is capped by a law at $100 
billion less--less than what our witnesses will testify our 
military needs. That kind of stability is not the answer, it is 
the problem. If we cut into our military muscle again this 
year, our looming budget problems just get worse.
    Finally, another priority of this committee will remain the 
defense reform effort that we began last year, including a 
review of the Goldwater-Nichols legislation that is now 
making--marking its 30th anniversary. Over the past year, 
Senator Reed and his staff and I and my staff, we have held 
hearings and conducted interviews with dozens of former and 
currently serving military and civilian defense leaders, 
including discussions with our distinguished witness today. The 
result is that I believe we have a rather clear definition of 
the challenge that we all must address. The focus of Goldwater-
Nichols was operational effectiveness, improving our military's 
ability to fight as a joint force. The challenge today is 
strategic integration. By that I mean improving the ability of 
the Department of Defense to develop strategies and integrate 
military power globally to confront a series of threats, both 
states and nonstate actors, all of which span multiple regions 
of the world and numerous military functions. Put simply, our 
competitors are catching up, and our defense organization must 
be far more agile and innovative than it is.
    As the committee considers what steps may be necessary to 
improve our defense organization, we are committed to work 
closely with both of you, and we would welcome any thoughts and 
recommendations you are prepared to share today.
    Senator Reed.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman.
    Let me join you in welcoming our witnesses and thanking 
them for their service.
    The President's Fiscal Year 2017 Budget submission for 
Department of Defense includes nearly $583 billion in 
discretionary spending and complies with the funding levels 
included in the Bipartisan Budget Act of 2015 [BBA]. Of this 
amount, $523.9 billion is included in the base budget, and 
$58.8 billion is designated for the overseas contingency 
operations account.
    As the committee considers the Department's funding 
request, we must always be mindful of the risks facing our 
country and our national security challenges. Russia's 
increasingly aggressive posture in eastern Europe and the 
Middle East must be monitored, contained, and, when necessary, 
countered. China continues to invest aggressively in its 
military, particularly in capabilities that allow them to 
project power and deny access to others. North Korea recently 
conducted a rocket launch, in violation of multiple United 
Nations Security Council resolutions, and continues to be an 
immediate and present danger to global security. Finally, Iran 
is a significant concern to the committee, particularly its 
recent missile tests and ongoing support to nonstate actors 
across the Middle East. Our Nation's counterterrorism fight 
continues to be a top priority. It has been a year of 
significantly--security and political transition in 
Afghanistan, and we must continue to evaluate how we can best 
enable efforts by the government of Afghanistan to protect and 
govern its people. In Iraq, ISIL has how lost significant 
territory, but difficult tasks remain, including evicting ISIL 
from population centers. Furthermore, the dangers posed by the 
disrepair of the Mosul Dam must be addressed. In Syria, ISIL 
maintains control of many areas while the world evaluates what 
Russia's recent announcement of a withdrawal means for 
negotiations. As ISIL loses ground in some areas, it gains 
footholds in new nations, like Libya.
    In light of these ongoing national security challenges we 
face around the world, we must closely scrutinize the budget 
request to ensure critical priorities have sufficient funding, 
scarce resources are not devoted to underperforming programs, 
and, where possible, allocate money to those areas that need 
additional funds.
    With regard to our military forces, after nearly a decade 
and a half of continuous military operations, we must take a 
hard look at the readiness levels across all the services. In 
fact, this committee has repeatedly heard testimony from senior 
military leaders that rebuilding readiness levels is their 
highest priority.
    The fiscal year 2017 budget request makes needed 
investments in readiness accounts that will help the military 
services, but it will take time to rebuild readiness. That is 
why it is vitally important that readiness accounts be 
protected from cuts. I would welcome any comments from our 
witnesses on the importance of rebuilding readiness and if they 
believe the services are on track to meet their full-spectrum 
readiness goals.
    Another challenge is the modernization of military 
platforms and equipment. While the readiness of our troops is 
paramount, we cannot neglect investments in modernization. 
Building and maintaining readiness levels requires that our 
forces have access to equipment that is properly sustained and 
upgraded. However, in order to meet the top-line funding levels 
set by the 2015 BBA, the Department's budget request modified 
base budget funding for some procurement and modernization 
efforts. While difficult choices must be made, we must ensure 
that this budget does not jeopardize shipbuilding and aviation 
procurement accounts, as well as targeted investments in 
research and development and that foster new technology. I 
would like to know if our witnesses feel confident that the 
reductions in the procurement accounts will not adversely 
impact these programs by adding substantial cost to the overall 
program or extensively delaying the fielding of any platform.
    The well-being and quality of life of our men and women in 
uniform, and that of the civilian workforce, remain a priority 
concern. We are mindful that we must support and maintain a 
high quality of life, but also a high quality of service. The 
administration's request includes a 1.6 percent pay raise for 
both the military and civilian employees, and a robust array of 
benefits. These funds are critical to ensuring that military 
and civilian pay remains competitive in order to attract and 
retain the very best for military and Government service.
    The committee also understands, however, that military and 
civilian personnel costs comprise nearly one-half of the 
Department's budget, and we are committed to implementing 
reforms that will slow that growth.
    Finally, we need to address the long-term budget situation 
that we find ourselves in. Last year, the Senate had a healthy 
debate on how to manage the needs in light of the Budget 
Control Act. At the time, I argued that meeting our national 
security challenges required relief for the Department of 
Defense as well as other agencies that contribute to the 
defense and prosperity of the Homeland. It is a daunting task 
to decide how to allocate finite resources for a myriad of 
priorities, and I recognize the Department had to make hard 
choices in order to comply with the 2015 budget agreement. I 
believe the Senate, in a bipartisan fashion, should repeal the 
BCA and establish a more reasonable limit on discretionary 
spending in an equitable manner that meets all of our needs as 
a Nation.
    I look forward to this morning's testimony.
    Thank you again, Mr. Chairman.
    Chairman McCain. Welcome, Mr. Secretary. We look forward to 
hearing from you and General Dunford. Thank you for appearing.

STATEMENT OF HONORABLE ASHTON B. CARTER, SECRETARY OF DEFENSE; 
ACCOMPANIED BY HONORABLE MICHAEL J. McCORD, UNDER SECRETARY OF 
       DEFENSE (COMPTROLLER) AND CHIEF FINANCIAL OFFICER

    Secretary Carter. Thank you, Chairman. Thanks for the 
opportunity. Chairman, Secretary--excuse me--Senator Reed, all 
the members of the committee, thank you so much for the 
opportunity to be here, for me, the Chairman, and for our Under 
Secretary, and, above all, for your steadfast support to our 
DOD [Department of Defense] men and women all over the world, 
military and civilian alike, who serve and defense us. I'm very 
pleased to be here.
    I'm pleased to be here with Chairman Dunford. We will be 
discussing the President's 2017 defense budget and other 
matters, the--a budget which marks a major inflection point for 
the Department of Defense.
    In this budget, we're taking the long view. We have to, 
because, even as we fight today's fights, we must also be 
prepared for what might come 10 and 20 and 30 years down the 
road.
    Last fall's Bipartisan Budget Act gave us some much needed 
stability after years of gridlock and turbulence. I want to 
thank you and your colleagues for coming together to help pass 
it. That budget set the size of our budget, and, with this 
degree of certainty, we focused on its shape, changing that 
shape in fundamental but carefully considered ways to adjust to 
a new strategic era and to seize opportunities for the future.
    Let me describe the strategic assessment that drove our 
budget decisions. First of all, it's evident that America is 
still today the world's foremost leader, partner, and 
underwriter of stability and security in every region of the 
world, as we've been since the end of World War II. That's 
thanks, in large part, to the unequivocal strength of the 
United States military. As we continue to fulfill this enduring 
role, it's also evident that we're entering a new strategic 
era, as has been noted. Today's security environment is 
dramatically different from the last 25 years, requiring new 
ways of investing and operating. Five evolving strategic 
challenges--namely Russia, China, North Korea, Iran, and 
terrorism--are now driving DOD's planning and budgeting, as 
reflected in this budget.
    I want to focus first on our ongoing fight against 
terrorism, and especially ISIL, which we must and will deal a 
lasting defeat, most immediately in its parent tumor in Iraq 
and Syria, but also where it's metastasizing. We're doing that 
in Africa and elsewhere, and also in Afghanistan, where we 
continue to stand with the Afghan Government and people. All 
the while, we're continuing to help to protect our Homeland. As 
we're accelerating our overall counter-ISIL campaign, we're 
backing it up with increased funding this year. We're 
requesting 50 percent more than last year.
    We've gained momentum against ISIL since the Chairman and I 
last appeared before you. Notably, the Iraqis took--retook 
Ramadi and are now reclaiming further ground in Anbar Province. 
In Syria, capable and motivated local forces, supported by the 
United States and our global coalition, have retaken the east 
Syrian town of Shaddadi, severing the last major northern 
artery between Raqqa and Mosul, and therefore between ISIL in 
Syria and ISIL in Iraq.
    Meanwhile, 90 percent of our military coalition partners 
have committed to increase their contributions to help defeat 
ISIL. We have increased strikes on ISIL-held cash depots and 
oil revenues. We've conducted targeted strikes against ISIL in 
Libya. We've also recently killed ISIL's Minister of War, the 
Chechen fighter Omar al Shishani.
    Now, before I continue, I want to say a few words about 
Russia's role. Russia said it was coming into Syria to fight 
ISIL. But, that's not what it did. Instead, their military has 
only prolonged the civil war, propped up Assad; and, as of now, 
we haven't seen whether Russia retained the leverage to find a 
diplomatic way forward, which is what the Syrian people need. 
One thing is clear, though: Russia's entry into Syria didn't 
impact our campaign against ISIL. Along with our coalition 
partners, we're intensifying our campaign against ISIL in both 
Iraq and Syria, and we'll continue to do so until ISIL is dealt 
a lasting defeat.
    Two of the other four challenges reflect a return, in some 
ways, to great-power competition. One is in Europe, where we're 
taking a strong and balanced approach to deter Russian 
aggression. We haven't had to devote a significant portion of 
our defense investment to this possibility for a quarter 
century, but now we do.
    The other challenge is in the Asia-Pacific, where China is 
rising, which is fine, but behaving aggressively, which is not. 
There, we're continuing our rebalance to the region to maintain 
the stability we've underwritten for the past 70 years, 
allowing so many nations to rise and prosper in this, the 
single most consequential region for America's future.
    Meanwhile, two other longstanding challenges pose threats 
in specific regions. North Korea is one. That's why our forces 
on the Korean Peninsula remain ready, as they say, to ``fight 
tonight.'' The other is Iran, because, while the nuclear accord 
is a good deal for preventing Iran from getting a nuclear 
weapon, in other respects our concerns with Iran persist.
    While I'm on the subject of Iran, and given this 
committee's particular interest in this matter, I want to say a 
few words about Iran's treatment of our sailors on Farsi 
Island, back in January. As I made clear then, Iran's actions 
were outrageous, unprofessional, and inconsistent with 
international law. Nothing we've learned about the 
circumstances of this incident since then changes that fact. 
It's because of Iran's recklessness and destabilizing behavior 
in that part of the world, the DOD remains full speed ahead in 
our investments, our planning, and our posture to ensure we 
deter Iran's aggression, counter its malign influence, and 
uphold our ironclad commitments to our regional friends and 
allies, especially Israel, to whom we maintain an unwavering 
and unbreakable commitment.
    Now, addressing all of these five challenges requires new 
investments on our part, new posture in some regions, and also 
new and enhanced capabilities. For example, we know we must 
deal with all these five challenges across all domains, not 
just the usual air, land, and sea, but also especially in 
cyber, electronic warfare, and space, where reliance on 
technology has given us great strength and great opportunities, 
but also led to vulnerabilities that adversaries are eager to 
exploit.
    Key to our approach is being able to deter our most 
advanced competitors. We must have, and be seen to have, the 
ability to ensure that anyone who starts a conflict with us 
will regret doing so. In our budget, our capabilities, our 
readiness, and our actions, we must, and we will, be prepared 
for a high-end enemy, what we call ``full-spectrum.'' In this 
context, Russia and China are our most stressing competitors, 
as they've both developed and continue to advance military 
systems that seek to threaten our advantages in specific areas. 
We see it in the South China Sea and in Crimea and Syria, as 
well. In some cases, they're developing weapons and ways of war 
that seek to achieve their objectives rapidly, before they 
think we can respond. Because of this, DOD has elevated their 
importance in our planning and budgeting.
    In my written testimony, I've detailed how our budget makes 
critical investments to help us address better these five 
evolving challenges. We're strengthening our deterrence posture 
in Europe by investing $3.4 billion for our European 
Reassurance Initiative, quadruple what we invest--what we 
requested last year. We're prioritizing training and readiness 
of our ground forces, as has been noted, and reinvigorating the 
readiness and modernization of our fighter aircraft fleet. 
We're investing in innovative capabilities, like the B-1--B-21 
long-range strike bomber, microdrones, the arsenal plane, as 
well as advanced munitions of all sorts. In our Navy, we're 
emphasizing not just increasing the number of ships, which 
we're doing, but especially their lethality, with new weapons 
and high-end ships, and extending our commanding lead in 
undersea warfare with new investments in unmanned undersea 
vehicles, for example, and more submarines, with the versatile 
Virginia payload module that triples their strike capacity from 
12 Tomahawks to 40. We're doing more in cyber, electronic 
warfare, and space, investing in these three domains a combined 
total of $34 billion in 2017, to, among other things, help 
build our cyber mission force, develop next-generation 
electronic jammers, and prepare for the possibility of a 
conflict that extends into space. In short, DOD will keep 
ensuring our dominance in all domains.
    As we do this, our budget also seizes opportunities for the 
future. That's a responsibility I have to all my successors, to 
ensure the military and the Defense Department they inherit is 
just as strong, if not stronger, than the one I have the 
privilege of leading today. That's why we're making increased 
investments in science and technology, innovating 
operationally, and building new bridges to the amazing American 
innovative system, as we always have, to stay ahead of future 
threats. That's why we're building what I've called the ``force 
of the future,'' because, as good as our technology is, it's 
nothing compared to our people. In the future, we need to 
continue to recruit and retain the very best talent. Competing 
for good people for an All-Volunteer Force is a critical part 
of our military edge. Everyone should understand this need, my 
commitment to it.
    Because we owe it to America's taxpayers to spend our 
defense dollars as wisely and responsibly as possible, we're 
also pushing for needed reforms across the DOD enterprise, from 
continuously improving acquisitions to further reducing 
overhead to proposing new changes to the Goldwater-Nichols act 
that defines much of our institutional organization. I know 
Goldwater-Nichols reform is a focus of this committee. 
Chairman, I appreciate that. Goldwater-Nichols was important, 
had deeply positive results, but, after 30 years, as you've 
said, it needs updates. There are some areas where the pendulum 
may have swung too far, like not involving the Service Chiefs 
enough in acquisition decisionmaking and accountability. There 
are areas, as you've noted, where subsequent world events 
suggest nudging the pendulum further, like taking more steps to 
strengthen the capability of the Chairman and the Joint Chiefs 
of Staff to help address transregional threats, threats in 
multiple domains, and multiple threats within overlapping 
timeframes.
    As you know, last fall we began a comprehensive department-
wide review of organizational issues like these to identify any 
potential redundancies, inefficiencies, or other areas of 
improvement, to help formulate--and to help formulate DOD's 
recommendations to you. I expect its internal findings by the 
end of March.
    This work is important. Though much is within our existing 
authority to do so, we look forward to working closely with 
Congress to implement needed reforms. As we discussed over 
breakfast last week, Chairman and Senator Reed, I look forward 
to working with you personally on this important matter.
    Let me close on the broader shift reflected in this budget. 
The Defense Department doesn't have, as I've said, the luxury 
of just one opponent or the choice between current fights and 
future fights. We have to do both. That's what this budget is 
designed to do, and we need your help to succeed. I thank this 
committee, again, for supporting the Bipartisan Budget Act that 
set the size of our budget. Our submission focuses on the 
budget's shape, making changes that are necessary and 
consequential. We hope you approve it. I know some may be 
looking at the difference between what we proposed last year 
and what the budget deal gave us. A net total of about $11 
billion less is provided by the Bipartisan Budget Act, out of a 
total of almost $600 billion. But, I want to reiterate that 
we've mitigated that difference, and we're prepared to explain 
how, and that this budget meets our needs.
    The budget deal was a good deal. It gave us stability. 
We're grateful for that. DOD's greatest risk is losing that 
stability this year and having uncertainty and sequester return 
in future years. That's why, going forward, the biggest budget 
priority for us, strategically, is Congress averting the return 
of sequestration, to prevent $100 billion in automatic cuts 
that are looming, so we can maintain stability and sustain all 
these critical investments over time. We've done this before. 
That same support is essential today to address the security 
challenges we face and to seize the opportunities within our 
grasp. As long as we work together to do so, I know our 
national security will be on the right path, and America's 
military will continue to defend our country and help make a 
better world for generations to come.
    Thank you.
    [The prepared statement of Secretary Carter follows:]

         Prepared Statement by Secretary of Defense Ash Carter
                      i. purpose of this testimony
    Chairman McCain, Ranking Member Reed, Members of the Committee: 
Thank you for inviting me here today, and for your steadfast support 
for the men and women of the Department of Defense (DOD), military and 
civilian alike, who serve and defend our country all over the world. 
I'm pleased to be here with Chairman Dunford to discuss President 
Obama's fiscal year (FY) 2017 budget submission for the Defense 
Department.
    At this time last year, we were all facing the bleak prospect of 
looming budget sequestration, and the damage its return would do to our 
people and our mission. I'm grateful that our country's leaders were 
able to come together last fall to avert that dismal future, and reach 
a budget deal that--after several years of fiscal turmoil and 
reductions--has allowed for greater investment in all our elements of 
national security and strength. That was what I urged since becoming 
Secretary of Defense, including in last year's budget testimony before 
this committee, and given the threat environment we face around the 
world, forging that deal was the responsible thing to do. It allows our 
military personnel and their families to know their future more than 
just one year at a time, which they deserve. It lets our defense 
industry partners be more efficient and cutting edge, as we need them 
to be. Perhaps most importantly, it sends a signal to the world--to 
friends and potential foes alike--of our nation's strength and resolve.
    The President's Budget submission accordingly adheres to that 
budget deal--requesting a total of $582.7 billion for the Defense 
Department in fiscal year 2017, for both the base budget and Overseas 
Contingency Operations (OCO) funds combined. How we plan to invest 
those funds, along with our planned investments for the next five 
years--as detailed in the customary Future Years Defense Program (FYDP) 
that's included in the President's Budget submission--are critical to 
DOD's ability to carry out our mission of national defense with the 
excellence the American people expect of their military, which is today 
the finest fighting force the world has ever known.
    As you know, no one got everything they wanted in the budget deal--
I said last year that we needed to rise above our differences, and I'm 
glad many members of Congress were able to do that--so in budgeting and 
programming for fiscal year 2017, we had to make responsible choices. 
The President's Budget submission reflects those choices, and we need 
your support for them. This is particularly true for prudent and 
necessary reforms--some of which the Congress has long denied, in spite 
of the cost to both DOD and to America's taxpayers. Indeed, while DOD 
is grateful to this and the other defense committees for your support 
for the budget deal, it is also the defense committees that in recent 
years have been tying our hands on reform, as I will address later in 
this testimony.
    We should remember, however, that the budget deal only covered two 
years. Unless Congress addresses the years beyond it and heads off 
sequestration, DOD will face $100 billion in cuts from 2018 to 2021, 
which would introduce unacceptable risks. Washington will need to come 
together once again--not unlike last year, and two years before that--
to provide stability and protect our national security.
    That's important, because in this budget submission, we're taking 
the long view. We have to, because even as we must fight and win 
today's fights, we must also be prepared to deter and if necessary 
fight and win the fights that might come 10, 20, or 30 years down the 
road. Last fall's budget deal set the size of our budget, and with this 
degree of certainty we focused on changing its shape in fundamental 
ways--making choices and tradeoffs to adjust to a new strategic era, 
and seize opportunities for the future.
        ii. a strategic turning point for the defense department
    Let me now describe the strategic assessment that drove our budget 
decisions. First of all, it's evident that America is still today the 
world's foremost leader, partner, and underwriter of stability and 
security in every region across the globe, as we have been since the 
end of World War II. As we fulfill this enduring role, it's also 
evident that we're entering a new strategic era.
    Context is important here. A few years ago, following over a decade 
when we were focused on large-scale counterinsurgency operations in 
Iraq and Afghanistan, DOD began embarking on a major strategy shift to 
sustain our lead in full-spectrum warfighting. While the basic elements 
of our resulting defense strategy remain valid, it's also been 
abundantly clear to me over the last year that the world has not stood 
still since then--the emergence of ISIL, and the resurgence of Russia, 
being just the most prominent examples.
    This is reflective of a broader strategic transition underway, not 
unlike those we've seen in history following major wars. Today's 
security environment is dramatically different--and more diverse and 
complex in the scope of its challenges--than the one we've been engaged 
with for the last 25 years, and it requires new ways of thinking and 
new ways of acting.
    Accordingly, five evolving challenges are now driving the focus of 
DOD's planning and budgeting.
    Two of these challenges reflect a recognition of--return to, in 
some ways--great power competition. This is something we haven't seen 
for some time, and that requires heightened focus given its potential 
impact on our nation and the world. The first such challenge is in 
Europe, where we're taking a strong and balanced approach to deter 
Russian aggression--we haven't had to devote a significant portion of 
our defense investment to this possibility for 25 years, and while I 
wish it were otherwise, now we do. The second is in the Asia-Pacific, 
where we haven't faced great power competition since the end of World 
War II, and where China is rising, which is fine, but behaving 
aggressively, which is not. There, we're continuing our rebalance, in 
terms of weight of effort, to maintain the regional stability we've 
underwritten for the past 70 years, allowing so many nations to rise 
and prosper in this, the single most consequential region for America's 
future.
    Meanwhile, two other longstanding challenges pose threats in 
specific regions. One is North Korea, which remains dangerous to both 
us and our allies--that's why our forces on the Korean Peninsula remain 
ready, as they say, to ``fight tonight.'' The other is Iran--because 
while the nuclear accord is a good deal for preventing Iran from 
getting a nuclear weapon, and doesn't limit DOD in any way, we must 
still deter Iranian aggression and counter Iran's malign influence 
against our friends and allies in the region, especially Israel, to 
whom we maintain an unwavering and unbreakable commitment.
    Challenge number five, no less important than the other four, is 
our ongoing fight to counter terrorism, and especially defeat ISIL--
most immediately in its parent tumor in Iraq and Syria, and also where 
it is metastasizing, in Afghanistan, Africa, and elsewhere--at the same 
time as we're protecting our Homeland. While ISIL must and will be 
defeated now, in the longer perspective and in our budgeting we must 
also take into account that as destructive power of greater and greater 
magnitude falls into the hands of smaller and smaller groups of people, 
countering terrorists will be a continuing part of the future 
responsibilities of DOD and other national security leaders.
    DOD must and will address all five of these challenges as part of 
its mission to defend this country. Doing so requires some new 
investments on our part, new posture in some regions, and also new and 
enhanced capabilities.
    Key to our approach is being able to deter the most advanced 
adversaries while continuing to fight terrorist groups. This means we 
must have--and be seen to have--the ability to impose unacceptable 
costs on an advanced aggressor that will either dissuade them from 
taking provocative action, or make them deeply regret it if they do. To 
be clear, the U.S. military will be ready to fight very differently 
than we have in Iraq and Afghanistan, or in the rest of the world's 
recent memory. We will be prepared for a high-end enemy--what we call 
full-spectrum. In our budget, our plans, our capabilities, and our 
actions, we must demonstrate to potential foes that if they start a 
war, we are able to win, on our terms. Because a force meant to deter 
conflict can only succeed in deterrence if it can show that it will 
dominate a conflict.
    We have this ability with respect to North Korean and Iranian 
military forces, as well as in executing the military aspects of 
countering terrorists, as we're doing now against ISIL. That won't 
change, even as we know that military power alone cannot prevail 
without capable and motivated local forces to sustain ISIL's defeat--
nor can the United States alone deliver a lasting defeat--against the 
toxic ideology of terrorists like ISIL that have so little regard for 
the lives of fellow human beings.
    In this context, Russia and China are our most stressing 
competitors, as they've both developed and are continuing to advance 
military systems that threaten our advantages in specific areas, and in 
some cases, they're developing weapons and ways of war that seek to 
achieve their objectives in ways they hope would preempt a response by 
the United States. Because of these facts, because the implications of 
any great-power conflict would be so dire for the United States and the 
world, and because of those nations' actions to date--from Ukraine to 
the South China Sea--DOD has elevated their importance in our defense 
planning and budgeting to ensure we maintain our advantages in the 
future.
    While we do not desire conflict with any of these nations--and, to 
be clear, though they pose some similar defense challenges, they are 
very different nations and situations--we also cannot blind ourselves 
to the actions they choose to pursue. That is the responsible course of 
action for the Defense Department. Our military is first and foremost a 
warfighting force, and even as we seek to deter wars, we must also be 
prepared to fight and win them, which is itself a key part of 
deterrence.
    Our military must be balanced with the proper size and capability 
to defeat any attack against U.S. Forces and our allies. Because of the 
decisions in this budget, our military will be better prepared for both 
present and future challenges, and better positioned to deter, and if 
necessary fight and win, wars against even the most high-end of 
potential adversaries.
    As this budget addresses those five evolving challenges, it also 
seizes great opportunities--in supporting new and innovative 
operational concepts; in pioneering and dominating technological 
frontiers, including undersea, cyber, space, electronic warfare, and 
other advanced capabilities; in reforming the defense enterprise; and 
in building the force of the future. I will address the investments 
we're making to do so later in this testimony.
  iii. supporting the strength and wellness of today's fighting force
    Before I address how this budget ensures we meet those challenges 
and seize those opportunities, I want to first emphasize our enduring 
commitment to supporting the men, women, and families of the world's 
finest fighting force. Above all, this means exercising the utmost care 
in decisions involving the deployment and employment of our troops. It 
also requires devoting a significant share of our budget every year 
toward supporting the people, military and civilian alike, who execute 
DOD's missions around the world.
    To ensure we have a force that's ready to carry out today's 
missions, this budget invests in the four main things that every 
soldier, sailor, airman, and Marine needs to do their job--the right 
training; the right equipment; the right force size, meaning the right 
number of people alongside them; and the right compensation.
The Right Training
    In fiscal year 2017 and beyond, the budget makes critical 
investments in training throughout the force to rebuild toward full-
spectrum combat readiness and continue recovering from the damage 
caused by sequestration in recent years--though, it's important to 
remember that restoring readiness requires not only sufficient funding, 
but also time. The budget maximizes use of the Army's decisive action 
Combat Training Centers, funding 19 total Army brigade-level training 
rotations. It provides robust funding to sustain the Navy and Marine 
Corps' current training levels and readiness recovery plans for fiscal 
year 2017--optimizing Navy training while maximizing the availability 
of naval forces for global operations, and fully funding the Marine 
Corps' integrated combined arms exercises for all elements of its 
Marine Air-Ground Task Forces. Because recent operational demands like 
the fight against ISIL have slowed the Air Force's return to full-
spectrum readiness, the budget increases funding--as part of a $1 
billion increase over the FYDP to support Air Force readiness--to 
modernize and expand existing Air Force training ranges and exercises 
here at home, providing pilots and airmen with more realistic training 
opportunities when they're not deployed.
The Right Equipment
    The budget also makes important investments to provide our men and 
women in uniform with functioning, well-maintained equipment so that 
when we send them into the fights of today, they're able to accomplish 
their mission and come home safely. For example, to address the Navy 
and Marine Corps' growing maintenance backlog in tactical aviation, the 
budget funds a 15 percent increase in F-18 depot maintenance capacity, 
and it buys an additional 16 F/A-18 E/F Super Hornet fighter jets 
between now and fiscal year 2018--providing a significant boost to the 
health of the Navy and Marine Corps' 4th-generation fighter aircraft 
fleet so it's ready and capable for today's missions. To help ensure 
the Air Force has enough ready and capable aircraft for both combat 
missions and intelligence, surveillance, and reconnaissance (ISR), the 
budget funds improvements in the avionics and electronic warfare 
systems of legacy fighter and bomber aircraft, and it supports the Air 
Force's `get well plan' for remotely-piloted aircraft.
    The budget also makes critical investments in every domain to 
research, develop, test, evaluate, and procure the right technology and 
equipment our military will need to deter and if necessary fight and 
win full-spectrum conflicts in the future. I will detail those 
investments later in this testimony.
The Right Force Size
    The flexibility provided by last fall's budget deal allowed us to 
maintain DOD's desired targets across the FYDP for end-strength and 
active-reserve mix for our ground forces--without it, sequestration 
likely would have forced further reductions. Therefore, the budget 
stabilizes our total ground force end-strength by the end of fiscal 
year 2018 with an Army of 450,000 active-duty soldiers, 335,000 
soldiers in the Army National Guard, and 195,000 soldiers in the Army 
Reserve--comprising 56 total Army brigade combat teams and associated 
enablers--and a Marine Corps of 182,000 active-duty Marines and 38,500 
Marine reservists. For the Navy, the budget continues to grow the size, 
and importantly the capability, of the battle fleet--providing for 
380,900 Active Duty and Reserve sailors in fiscal year 2017, and an 
increase from 280 ships at the end of fiscal year 2016 to 308 ships at 
the end of the FYDP. The budget also supports an Air Force of 491,700 
Active Duty, Reserve, and National Guard airmen--maintaining 55 
tactical fighter squadrons over the next five years, and providing 
sufficient manpower to address high operating tempo and shortfalls in 
maintenance specialists for both tactical fighters and remotely-piloted 
aircraft.
The Right Compensation
    In fiscal year 2017, the budget provides $177.9 billion in pay and 
benefits--including health care, housing allowances, commissaries, 
retirement, and other benefits--for DOD's 2.1 million military 
personnel and their families. I will discuss DOD's proposed reforms to 
some of these areas later in this testimony. To help make sure DOD is 
competitive for the best talent, the budget includes a department-wide 
pay raise of 1.6 percent in fiscal year 2017. This is an increase above 
fiscal year 2016's pay raise of 1.3 percent.
    It's important to note that of all the cuts we've taken to our 
previously-planned budgets since the Budget Control Act was passed, 
including cuts from sequestration--altogether so far totaling at least 
$800 billion over ten years--less than 9 percent of those reductions 
came from military compensation proposals. This should make clear that 
we've worked extremely hard to protect our people, and that we do need 
to address some places where savings can be found, such as through 
modernizing and simplifying our military healthcare system, which I 
address later in this testimony.
More Than Military Readiness
    Beyond ensuring the combat readiness of America's military, our 
commitment to the force of today also encompasses what we're doing to 
ensure the dignity of our people. We're putting a priority on 
preventing and eliminating sexual harassment and sexual assault in the 
military, investing $246 million in fiscal year 2017 to help support 
survivors, reduce retaliation for reporting, and eradicate these crimes 
from our ranks--and soon, DOD will deliver to Congress our strategy on 
addressing retaliation, in particular. We're also helping provide 
transition support and advocating for employment opportunities for 
veterans, investing a total of $109 million in fiscal year 2017 so our 
people can make the most of their potential and keep making a 
difference when they complete their service in uniform. We're fostering 
greater diversity of our force, because our strength depends on being 
open to the widest possible pool of talent that can meet our 
standards--young Americans today are more diverse, open, and tolerant 
than past generations, and if we're going to attract the best among 
them to contribute to our mission, we ourselves have to be more 
diverse, open, and tolerant, too. It's the only way to compete in the 
21st century.
    That's one reason why we're opening all remaining combat positions 
to women, so that we have access to 100 percent of our population for 
every position in the All-Volunteer Force and every American who can 
meet our exacting standards has the full and equal opportunity to 
contribute to our mission. That said, since the declaration that opens 
all career fields to women is by itself not sufficient for their full 
integration, I've asked the military services to mitigate any concerns 
about combat effectiveness by incorporating my seven guiding 
principles--transparent standards, population size, talent management, 
physical demands and physiological differences, operating abroad, 
conduct and culture, and assessment and adjustment--into their 
implementation plans, which I have reviewed and approved and are now 
being carried out. First and foremost, this means the services will 
continue to apply objective standards for all career fields to ensure 
leaders assign tasks and career fields throughout the force based on 
ability, not gender. This may mean in some cases, equal opportunity may 
not always equate to equal participation. Integration provides equal 
opportunity for men and women who can perform the tasks required; it 
does not guarantee women will fill these roles in any specific number 
or at any set rate, as adherence to a merit-based system must continue 
to be paramount. Also, we must incorporate concrete ways to mitigate 
the potential for higher injury rates among women, and leverage lessons 
learned from Iraq and Afghanistan to address concerns regarding 
operating in areas where there is cultural resistance to working with 
women. We must address attitudes toward team performance through 
education and training, including making clear that sexual assault or 
harassment, hazing, and unprofessional behaviors are never acceptable. 
Our core beliefs in good order, discipline, leadership, and 
accountability are foundational to our success in integration. It is 
absolutely critical that we embark on integration with a commitment to 
the monitoring, assessment, and in-stride adjustment that enables 
sustainable success.
    Finally, it's important to remember that our commitment to the 
force of today is not limited to those who serve in uniform. In fiscal 
year 2017, it also includes $79.3 billion to support our civilian 
workforce of 718,000 Americans--men and women across the country and 
around the world who do critical jobs like helping repair our ships and 
airplanes, providing logistics support, developing and acquiring weapon 
systems, supporting survivors of sexual assault, and helping care for 
our military's wounded, ill, and injured personnel. The budget includes 
$7.7 billion to support our military families, because they serve too. 
It includes $3.1 billion to help take care of our wounded warriors, to 
whom our commitment is and must remain as strong as ever. It includes 
our enduring pledge to support the families of the fallen, whose loved 
ones made the ultimate sacrifice on behalf of our country.
                   iv. adjusting to strategic change
    Another significant portion of our budget goes toward DOD's current 
operations all around the world, in every domain, to help defend our 
country, our allies, and our interests. Our budget's investments and 
programming decisions in this area reflect my commitment to helping the 
President address key national security challenges, and my priorities 
for how we must adjust to strategic change--in countering terrorists, 
whether ISIL, al Qaeda, or others; in taking a strong and balanced 
approach to deter Russian aggression; in operationalizing our rebalance 
to the Asia-Pacific; in deterring Iranian aggression and malign 
influence; in standing alert on the Korean Peninsula; and in addressing 
threats from multiple directions in cyber, space, and electronic 
warfare. We don't have the luxury of choosing between these challenges; 
we must and will address them all, and not only be prepared across the 
spectrum of conflict, but also for the possibility of multiple 
conflicts in overlapping timeframes.
Countering Terrorism
    It is clear that our mission of countering terrorists and other 
violent extremists around the world will be with us for some time. The 
Department of Defense has strong counterterrorism capabilities, and we 
continue to deploy them to protect America.
Dealing ISIL a Lasting Defeat
    We must and will deal ISIL a lasting defeat, which is why the 
budget provides $7.5 billion in fiscal year 2017 for Operation Inherent 
Resolve. This investment will be critical to continuing to implement 
and accelerate the coalition military campaign plan that the United 
States has developed, that our key allies support, and that focuses on 
three military objectives: One, destroy the ISIL parent tumor in Iraq 
and Syria by attacking its two power centers in Mosul, Iraq and Raqqa, 
Syria; these cities constitute ISIL's military, political, economic and 
ideological centers of gravity, which is why our plan has big arrows 
pointing toward both. Two, combat the emerging metastases of the ISIL 
tumor worldwide wherever they appear. Three, our most important 
mission, which is to protect the Homeland.
    To eliminate the parent tumor in Iraq and Syria, DOD is enabling 
local, motivated forces with critical support from a global coalition 
wielding a suite of capabilities-ranging from airstrikes, special 
forces, cyber tools, intelligence, equipment, mobility and logistics, 
training, advice and assistance. It must be local forces who deliver 
ISIL a lasting defeat, because only they can secure and govern the 
territory by building long-term trust within the populations they 
liberate. We can and will enable such local forces, but we cannot 
substitute for them. Accordingly, the budget's investment in the 
counter-ISIL campaign includes $630 million for training and equipping 
the Iraqi Security Forces, and $250 million for enabling Syrian anti-
ISIL forces.
    This is a worthy investment, as we've already started to see our 
investments over the last several months start to pay off. For example, 
it was Iraqi soldiers who took back the Ramadi city center, reversing a 
loss the Iraqi army suffered last spring. Our support to them included 
advanced training, tactics, air support, and the portable bridges that 
carried the Iraqi military across the Euphrates River and into the 
decisive fight. Ramadi, like recent Iraqi gains in Bayji, Tikrit, and 
Sinjar, demonstrates that the approach we are taking is having an 
effect as Iraqis prepare for what will be a tough fight for Mosul. 
Likewise in Syria, local anti-ISIL forces we've enabled with equipment 
and ammunition have had successes in Tal Abyad, al-Hawl, the Tishreen 
Dam, and Shaddadi. It is imperative to keep building on this momentum.
    As we work with our partners to destroy ISIL's parent tumor in Iraq 
and Syria, we must also recognize that ISIL is metastasizing in areas 
like North and West Africa and Afghanistan. Having taken out ISIL's 
leader in Libya in November, we are also now prepared to step up 
pressure on ISIL in Afghanistan to check their ambitions there as well.
    Finally, at the same time that we accelerate our campaign, so must 
every one of our coalition partners--there can be no free riders. 
That's why last month in Brussels I convened the first-ever meeting of 
defense ministers from 27 other countries involved in the military 
coalition to defeat ISIL to follow up after I personally reached out to 
dozens of defense ministers to urge them to consider filling critical 
military and non-military needs in the campaign. I'm gratified to 
report that coalition members responded to our challenge--and not only 
NATO allies like Canada and the Netherlands, but also Gulf nations, 
including Saudi Arabia and the United Arab Emirates. In sum, nearly 90 
percent of the countries participating in the coalition's military 
campaign have either stepped up their role or committed to do so in the 
coming days. Their decisions to expand air operations, send more 
trainers, provide logistical support, help with reconstruction, or make 
other contributions will all help our coalition intensify the counter-
ISIL campaign and bring about ISIL's lasting defeat.
    None of this changes the fact that our counter-ISIL campaign is a 
hard and complex fight. We have tactical and strategic goals, but they 
will take time--and, as is often said, the enemy gets a vote. For our 
part, we will remain focused, committed, and resilient because this is 
a fight we can, must, and will win, as our efforts to accelerate our 
campaign are already producing real and promising results.
Ensuring Long-Term Stability in Afghanistan
    After more than a decade of war in Afghanistan, we have to make 
sure our gains there stick, which is why the budget continues to 
support our two missions in Afghanistan--countering terrorism, and 
training, advising, and assisting the Afghan National Defense and 
Security Forces (ANDSF). In support of those two missions, the 
President announced last fall that the United States will maintain a 
continued presence of 9,800 troops through most of 2016 before drawing 
down to 5,500 troops by January 2017. As I told our troops there when I 
visited them this past December, while Afghanistan remains a dynamic 
fight, we are determined to ensure that terrorists--regardless of 
whether they're al Qaeda or ISIL--never have or find safe haven there 
again.
    The budget provides $41.7 billion in fiscal year 2017 for Operation 
Freedom's Sentinel--including funding to support our posture in U.S. 
Central Command, the full funding of $3.4 billion to support the ANDSF, 
and $1.4 billion to support other coalition partners. Importantly, this 
allows us to continue strengthening and developing the ANDSF's 
aviation, logistics, intelligence, and special operations capabilities, 
with the intent of reducing their dependency on us over time. Also, in 
addition to upholding our commitments to Afghanistan, the Afghan 
people, and other partners, the budget reflects that the United States 
will retain several key locations in 2016 and beyond, including 
facilities in Kabul, Bagram, Jalalabad, and Kandahar. As we do so, the 
United States will support the continuation of the NATO mission in 
Afghanistan in 2016 and beyond, and continue to consult with our NATO 
allies and partners to ensure that the U.S. and NATO missions in 
Afghanistan are mutually supportive.
    Our continued presence in Afghanistan is not only a sensible 
investment to counter threats that exist and stay ahead of those that 
could emerge in this volatile region; it also supports the willing 
partner we have in the government of Afghanistan. It is in the United 
States' interest to help them succeed, for the benefit of their 
security, our security, the region and the world.
Establishing an Alternative to the Detention Facility at Guantanamo
    The Defense Department is resolutely committed to responsibly 
closing the detention facility at Guantanamo Bay through the 
establishment of an alternative detention facility. I share the 
President's belief--and the belief of many in Congress--that doing so 
would benefit our national security, which is why DOD will continue to 
transfer Guantanamo detainees to other countries when we have 
substantially mitigated any security risks to the United States.
    Over the last four months, we completed transfers for 16 detainees, 
bringing the population to 91. Like every transfer that came before 
them, the decision to transfer these detainees happened only after a 
thorough review by me and other senior security officials of our 
Government.
    That said, because many of the remaining detainees currently cannot 
be safely transferred to another country, we need an alternative to 
this detention facility. Therefore, I support the President's plan to 
establish and bring those detainees to an appropriate, secure, 
alternative location in the United States. I appreciate that Congress 
has indicated a willingness to consider such a proposal, and, in 
accordance with the 2016 National Defense Authorization Act, DOD 
delivered that plan to Congress in February. We look forward to working 
with Congress to identify the most appropriate design, legislative 
foundation, and geographic location for future detention and to lift 
the restrictions preventing the responsible closure of the facility at 
Guantanamo.
Supporting and Maintaining our Counterterrorism Capabilities
    In addition to the specific funds outlined above, the budget also 
reflects other investments we're making in DOD's posture to ensure we 
can counter terrorism effectively wherever it challenges us. For 
example, the budget sustains our robust funding for U.S. Special 
Operations Command, allocating $10.8 billion in fiscal year 2017. To 
bolster our partners in fighting terrorism, it requests $1 billion for 
our Counterterrorism Partnerships Fund. It supports the development of 
DOD's transregional counterterrorism strategy, which I'd like to 
outline now.
    The terrorist threat is continually evolving, changing focus, and 
shifting location, requiring us to be flexible, nimble, and far-
reaching in our response. Accordingly, the Defense Department is 
leveraging the existing security infrastructure we've already 
established in Afghanistan, the Middle East, East Africa, and Southern 
Europe, so that we can counter transnational and transregional 
terrorist threats like ISIL and others in a sustainable, durable way 
going forward. From the troops I visited in Moron, Spain last October 
to those I visited in Jalalabad, Afghanistan last December, these 
locations and associated forces in various regions help keep us 
postured to respond to a range of crises, terrorist and other kinds. In 
a practical sense, they enable our crisis response operations, counter-
terror operations, and strikes on high-value targets, and they help us 
act decisively to prevent terrorist group affiliates from becoming as 
great of a threat as the main entities themselves. This transregional 
approach is already giving us the opportunity and capability to react 
swiftly to incidents and threats wherever they occur, and it maximizes 
our opportunities to eliminate targets and leadership. An example of 
this in action was our November strike on Abu Nabil, ISIL's leader in 
Libya, where assets from several locations converged to successfully 
kill him. To help implement this strategy, including in the fight 
against ISIL and its metastasis beyond Iraq and Syria, the budget 
includes an additional $175 million in fiscal year 2017--$9 million to 
help bolster our posture in the Levant, and $166 million to help us 
better address threats in North and West Africa in conjunction with our 
European partners.
    Because the accelerating intensity of our precision air campaign 
against ISIL in Iraq and Syria has been depleting our stocks of some of 
the GPS-guided smart bombs and laser-guided rockets we use against 
terrorists the most, the budget invests $1.8 billion in fiscal year 
2017 to buy over 45,000 more of them. Furthermore, DOD is also 
exploring increasing the production rate of these munitions in our 
industrial base--calling on America's great arsenal of democracy to 
help us and our partners finish the job of defeating ISIL.
    Also, because our remotely-piloted intelligence, surveillance, and 
reconnaissance (ISR) aircraft play an important role in countering 
terrorism, the budget includes $1.2 billion for fiscal year 2017 and 
$4.5 billion over the FYDP to increase the number of around-the-clock 
permissive ISR combat air patrols from 70 today to 90 by the end of 
fiscal year 2018. Using a mix of MQ-9 Reapers, Extended Range Reapers, 
and MQ-1C Advanced Gray Eagles--and comprising 60 patrols from the Air 
Force, 16 from the Army, and 14 that are Government-owned and flown by 
contractors for the Air Force and U.S. Special Operations Command--
these investments will be critical as the need for ISR continues to 
increase around the world.
    Finally, because it helps us maintain a larger Air Force fighter 
fleet that can drop more smart bombs in our counter-ISIL air campaign, 
the budget also further defers the A-10 Thunderbolt's final retirement 
until 2022. I saw some of the A-10s that are flying bombing missions 
against ISIL when I was at Incirlik Air Base in Turkey last December, 
and we need the additional payload capacity they can bring to the 
fight. Accordingly, we are also changing the rate at which we will 
phase out the A-10 as we approach 2022, as I will explain later in this 
testimony.
A Strong and Balanced Strategic Approach to Deter Russia
    Despite the progress we've made together since the end of the Cold 
War, Russia has in recent years appeared intent to erode the principled 
international order that has served us, our friends and allies, the 
international community, and also Russia itself so well for so long. In 
Europe, Russia continues to violate the sovereignty of Ukraine, 
Georgia, and Moldova, and actively seeks to intimidate its Baltic 
neighbors. In Syria, Russia has been pouring gasoline on a civil war, 
fueling the very extremism Russia claims to oppose. At sea, in the air, 
in space, and in cyberspace, Russian actors have engaged in challenging 
international norms. Most disturbing, Moscow's nuclear saber-rattling 
raises questions about Russia's leaders' commitment to strategic 
stability, their respect for norms against the use of nuclear weapons, 
and whether they respect the profound caution that nuclear-age leaders 
showed with regard to brandishing nuclear weapons.
    To be clear, the United States does not seek a cold, let alone hot 
war with Russia. We do not seek to make Russia an enemy, even as it may 
view us that way. But make no mistake--we will defend our interests, 
our allies, the principled international order, and the positive future 
it affords us all. That's why the United States is taking a strong and 
balanced strategic approach in response to Russia's aggression: 
strengthening both our allies and ourselves, including through 
investments in this budget, while also giving Russia the opportunity, 
if it chooses, to rejoin the international community and work with us 
where our interests align.
    Since Russia began its illegal attempted annexation of Crimea a 
little over two years ago, DOD's budgets have made valuable investments 
in reinforcing our NATO allies; for example, contributing to NATO's 
Very High Readiness Joint Task Force, and stepping up our training and 
exercises under Operation Atlantic Resolve. This budget builds on that 
significantly, and breaks new ground by re-envisioning and recommitting 
to deterring--and, if deterrence fails, defeating--any aggression 
against our allies in the future. The 20th century NATO playbook was 
successful in working toward a Europe whole, free and at peace, but the 
same playbook would not be well-matched to the needs of the 21st 
century. Together with our NATO allies, we must write a new playbook, 
which includes preparing to counter new challenges like cyber and 
hybrid warfare, better integrating conventional and nuclear deterrence, 
as well as adjusting our posture and presence to adapt and respond to 
new challenges and new threats.
    To further reinforce our NATO allies and build our deterrence 
posture in the face of Russia's aggression, this budget significantly 
increases funding for our European Reassurance Initiative to make a 
total investment of $3.4 billion for fiscal year 2017--more than 
quadrupling the $789 million that we requested last year--allowing us 
to increase the amount of prepositioned equipment sets in Europe as 
well as the number of U.S. Forces, including Reserve forces, rotating 
through Europe to engage with friends and allies. This increase 
supports the persistent rotational presence of an armored brigade 
combat team for 12 months out of the year, which will give us a total 
of three brigade combat teams continuously present in Europe. It 
supports more training and exercises with our European friends and 
allies. It supports more warfighting gear, including forward-stationing 
equipment for an additional armored brigade combat team by the end of 
2017. It supports prepositioning equipment for a division headquarters 
and other enablers in Europe, such that this equipment--along with 
assigned Army airborne and Stryker brigade combat teams and Marine 
Corps heavy vehicles and equipment already in Europe--will allow us to 
rapidly form a highly-capable combined-arms ground force of division-
plus strength that can respond theater-wide if necessary. It helps 
strengthen our regional air superiority posture--among other things, 
allowing us to keep an additional F-15C tactical fighter squadron based 
in Europe, and also improve airfield infrastructure to enhance 
operations for Air Force fighters and Navy maritime patrol aircraft.
    In addition, the budget reflects how we're doing more, and in more 
ways, with specific NATO allies. Given increased Russian submarine 
activity in the North Atlantic, this includes building toward a 
continuous arc of highly-capable maritime patrol aircraft operating 
over the Greenland-Iceland-United Kingdom gap up to Norway's North 
Cape. It also includes the delivery of Europe's first stealthy F-35 
Joint Strike Fighters to our British allies. Given Russia's use of 
hybrid warfare--exemplified by the so-called `little green men' in 
Ukraine--the budget supports more rotational presence of U.S. special 
operations forces exercising in Europe.
    The budget also significantly funds important new technologies 
that, when coupled with revised operational concepts, will ensure we 
can deter and if necessary win a high-end conventional fight in an 
anti-access, area-denial environment across all domains and warfighting 
areas--air, land, sea, space, cyberspace, and the electromagnetic 
spectrum. While I will address these areas in greater detail later in 
this posture statement, investments that are most relevant to deterring 
Russia include new unmanned systems, enhanced ground-based air and 
missile defenses, new long-range anti-ship weapons, the long-range 
strike bomber, and also innovation in technologies like the 
electromagnetic railgun, lasers, and new systems for electronic 
warfare, space, and cyberspace. The budget also invests in modernizing 
our nuclear deterrent.
    Consistent with our strong and balanced approach, the door will 
remain open for Russia to reassume the role of respected partner going 
forward. While that would be greatly welcomed by the United States, and 
the Department of Defense, it's up to the Kremlin to decide--first by 
demonstrating a willingness to return to the international community.
Operationalizing the Rebalance to the Asia-Pacific
    The budget also supports operationalizing our rebalance to the 
Asia-Pacific region. In a region home to nearly half the world's 
population and nearly half the global economy, for 70 years the United 
States has helped underwrite a stable security environment that allowed 
the people, economies, and countries in the Asia-Pacific to rise and 
prosper. We fully intend to continue these efforts so that bright 
future can be possible for everyone in this important region.
    Accordingly, the budget helps improve DOD's geographically 
distributed, operationally resilient, and politically sustainable 
posture in the region, through which the United States seeks to 
preserve peace and stability, and maintain our strategic advantage in 
an area that's critically important to America's political, economic, 
and security interests. Investments in the budget reflect how we're 
moving more of our forces to the region--such as 60 percent of our Navy 
and overseas Air Force assets--and also some of our most advanced 
capabilities in and around the region, from F-22 stealth fighter jets 
and other advanced tactical strike aircraft, to P-8A Poseidon maritime 
surveillance aircraft, to our newest surface warfare ships. They also 
reflect how we're developing and implementing new posture initiatives--
in places like Guam, the Northern Marianas, the Philippines, Australia, 
and Singapore, as well as modernizing our existing footprint in Korea 
and Japan--and continuing to strengthen existing partnerships and 
develop new ones, from India to Vietnam. They reflect our efforts to 
support and strengthen a regional security architecture that benefits 
everyone--from strengthening and modernizing our alliances, to 
bolstering our ties with the Association of Southeast Asian Nations 
(ASEAN), to building the security capabilities of our many friends and 
allies, who increasingly want to do more with us in the region. In 
support of this effort, the budget fully supports our five-year, $425 
million Southeast Asia Maritime Security Initiative begun in fiscal 
year 2016.
    For this region, as it does with Europe, the budget also 
significantly funds important new technologies to ensure we can deter 
and if necessary win a high-end conventional fight in an anti-access, 
area-denial environment across all domains and warfighting areas--air, 
land, sea, space, cyberspace, and the electromagnetic spectrum. These 
investments--which I will outline later in this testimony--are 
important for ensuring our forces can go anywhere, at any time, and 
succeed in whatever mission we ask of them.
    It's important to remember that America's rebalance has never aimed 
to hold any nation back or push any country down. The United States 
wants every nation to have an opportunity to rise, because it's good 
for the region and good for our collective interests. That includes 
China. As we welcome the growth and prosperity of all Asia-Pacific 
nations, it is clear that the United States-China relationship will be 
complex as we continue to balance our competition and cooperation. 
There are opportunities to improve understanding and to reduce risk 
with China--for example, we've agreed to four confidence-building 
agreements, including one meant to prevent dangerous air-to-air 
encounters. But there remain areas of concern.
    For one, the United States joins virtually everyone else in the 
region in being deeply concerned about the pace and scope of land 
reclamation in the South China Sea, the prospect of further 
militarization, as well as the potential for these activities to 
increase the risk of miscalculation or conflict among claimant states. 
U.S. military presence in the region is decades-old, has been 
instrumental in upholding the rules-based international system, and has 
laid the foundation for peace and security in the region. Our interest 
is in maintaining freedom of navigation and overflight, full and 
unimpeded lawful commerce, and that disputes are resolved peacefully. 
To accomplish this, we will continue to fly, sail, and operate wherever 
international law allows. We also expect China to uphold President Xi's 
pledge not to pursue militarization in the Spratly Islands of the South 
China Sea.
    Also, we are closely watching the long-term, comprehensive military 
modernization program that China, as well as other countries, continues 
to pursue. While there is no question that the United States retains a 
decisive military edge in the Asia-Pacific today, China is investing in 
capabilities to counter third-party--including the United States--
intervention during a crisis or conflict. These capabilities include 
ballistic and cruise missiles of increasingly greater range and 
accuracy, counter-space and offensive cyber capabilities, and 
electronic warfare systems. To maintain a lasting competitive 
advantage, DOD is taking prudent steps to preserve and enhance 
deterrence for the long term. The budget reflects this, including with 
investments to continue adapting our forces, posture, operations, and 
capabilities to deter aggression, defend our allies, and sustain our 
military edge in the Asia-Pacific.
Deterring North Korea
    The budget also supports investments necessary to deter North 
Korean provocation and aggression, ensure our forces on the Korean 
Peninsula remain ready and capable to `fight tonight' if necessary, and 
defend against threats emanating from North Korea against the United 
States and our allies. This includes threats posed by North Korea's 
nuclear and missile programs, against which DOD is fully capable of 
defending the U.S. Homeland. Our position has been, and remains, that 
North Korea must abide by its international obligation to abandon its 
nuclear and missile programs and stop its provocative behavior.
    North Korea's nuclear test on January 6th and its ballistic missile 
launch on February 7th were highly provocative acts that undermine 
peace and stability on the Korean Peninsula and in the region. The 
United States condemns these violations of U.N. Security Council 
resolutions and again calls on North Korea to abide by its 
international obligations and commitments. We are monitoring and 
continuing to assess the situation in close coordination with our 
regional partners.
    DOD remains fully capable of fulfilling U.S. treaty commitments to 
our allies in the event of a North Korean attack, and we're working 
with our Republic of Korea allies to develop a comprehensive set of 
alliance capabilities to counter the growing North Korean ballistic 
missile threat. I spoke with my South Korean counterpart shortly after 
the nuclear test, and reiterated our commitments as strong and 
steadfast allies. Also, a few hours after the ballistic missile launch, 
the United States and the Republic of Korea jointly announced the start 
of formal consultations to discuss the feasibility of deploying a 
Terminal High-Altitude Area Defense (THAAD) system to the Korean 
Peninsula at the earliest date.
Checking Iran's Malign Influence while Strengthening Regional Friends 
        and Allies
    The Middle East presents a kaleidoscope of challenges, but there, 
as everywhere, DOD's budget--and accordingly our actions and strong 
military posture--is guided by our North Star of what's in America's 
interests. Defeating ISIL in Iraq and Syria, which I discussed earlier, 
is of course one of those interests, but amid this region's complexity 
and uncertainty, we also have other interests of great importance, 
which are to deter aggression; to bolster the security of our friends 
and allies, especially Israel; to ensure freedom of navigation in the 
Gulf; and to check Iran's malign influence even as we monitor the 
implementation of the Joint Comprehensive Plan of Action. That's why 
DOD maintains tens of thousands of American personnel ashore and afloat 
in the region, along with our most sophisticated ground, maritime, and 
air and ballistic missile defense assets.
    While the Joint Comprehensive Plan of Action places significant 
limitations on Iran that will effectively cut off its pathways to the 
fissile material for a nuclear bomb, it does not limit in any way what 
DOD can and will do to pursue our defense strategy in the region. It 
places no limits on our forces, our partnerships and alliances, our 
intensive and ongoing security cooperation, or on our development and 
fielding of new military capabilities--capabilities we will continue to 
advance in order to provide all options, as the President has directed, 
should Iran walk away from its commitments under this deal. If Iran 
were to commit aggression, our robust force posture ensures we can 
immediately respond and rapidly surge an overwhelming array of forces 
into the region, leveraging our most advanced capabilities married with 
sophisticated munitions that put no target out of reach.
    This budget invests in maintaining those abilities going forward, 
which is important, because Iran and its proxies will still present 
security challenges. Iran supports Assad in Syria, backs Hezbollah in 
Lebanon, and is contributing to disorder in Yemen, while still 
directing hostility and violence to our closest ally in the region, 
Israel. To continue to meet our commitments and enhance our cooperation 
with our friends and allies in the region, especially Israel, the 
budget makes critical investments--including $146 million to support 
Israel in fiscal year 2017. This reflects our unshakeable commitment to 
Israel and its security, with funding for Iron Dome, David's Sling, 
Arrow, and other cooperative defense programs--not only ensuring that 
Israel can defend itself, but also preserving and enhancing Israel's 
qualitative military edge, which is a cornerstone of our defense 
relationship.
    Meanwhile, with critical investments in other areas, the budget 
enables DOD to continue to advance our preparations, posture, 
partnerships, and planning to preserve the President's options for any 
contingency. It strengthens the regional security architecture in a way 
that blunts Iran's ability to coerce its neighbors. It helps us stay 
ahead of the risks posed by Iran's ballistic missiles, naval forces, 
cyber capabilities, and support for terrorists and others in the 
region.
Addressing Threats in Cyber, Space, and Electronic Warfare
    Even as we make adjustments in our budget to address the five 
evolving challenges posed by Russia, China, Iran, North Korea, and 
terrorist groups like ISIL and al Qaeda, we are also making adjustments 
to address emerging and increasing threats that transcend individual 
nations and organizations. That's because, as we confront these five 
challenges, we know we'll have to deal with them across all domains--
and not just the usual air, land, and sea, but also particularly in the 
areas of cyber, space, and electronic warfare, where our reliance on 
technology has given us great strengths, but also led to 
vulnerabilities that potential adversaries are eager to exploit.
    As I made clear when I released DOD's new cyber strategy last 
April, we have three missions in cyberspace--first and foremost, to 
defend our networks, systems, and information; second, to help defend 
the nation and our interests from cyberattacks of significant 
consequence, working with other departments and branches of Government; 
and third, to provide options that can augment our other military 
systems. Given the increasing severity and sophistication of the 
threats and challenges we're seeing in cyberspace--ranging from ISIL's 
pervasive online presence to the data breaches at the Office of 
Personnel Management--the budget puts a priority on funding our cyber 
strategy, investing a total of $6.7 billion in fiscal year 2017 and 
$34.6 billion over the FYDP. This is a $900 million increase over last 
year's budget. While these funds will help us continue to develop, 
train, and equip our growing Cyber Mission Force, and also make new 
technological investments to strengthen our cyber defenses and 
capabilities--both of which I address later in this testimony--the 
budget also reflects our efforts to make a fundamental shift toward a 
culture of accountability in cyberspace, from instituting a DOD-wide 
cybersecurity scorecard to monitor our progress to increasing 
individual knowledge about practical ways to defend against cyber 
intrusions. Our people understandably hold themselves to very high 
standards when it comes to caring for, attending to, using, and being 
accountable for the weapons they carry into battle, and we must do the 
same when it comes to interacting with our networks and cyber 
capabilities--not only among our cyber warriors and IT professionals, 
but throughout the DOD workforce.
    While at times in the past space was seen as a sanctuary, new and 
emerging threats make clear that's not the case anymore, and we must be 
prepared for the possibility of a conflict that extends into space. 
This means that as we continue to ensure our access to space so we can 
provide capabilities like reconnaissance, GPS, and secure 
communications that enable and enhance our operations in other domains, 
we must also focus on assuring and defending these capabilities against 
aggressive and comprehensive counter-space programs of others. Though 
competitors may understand our reliance on space, we will not let them 
use it against us, or take it away. As I will discuss later in this 
testimony, this budget makes important investments to do just that--
sustaining and building on the major shifts DOD began funding in last 
year's budget submission--with a total of more than $22 billion for 
space in fiscal year 2017. With the presence of so many commercial 
space endeavors, we want this domain to be just like the oceans and the 
Internet: free and open to all.
    Finally, high-end competitors have also invested in electronic 
warfare systems as a cost-effective way to challenge the United States 
and try to blunt our technological advantage. By jamming our radars, 
communications, and GPS, these systems would seek to disrupt the 
integrated capabilities that allow our forces to identify, target, 
reach, and destroy an enemy with precision. We cannot allow that to 
happen, which is why this budget deliberately invests in buying more 
electronic protection and resiliency for our current systems as well as 
developing more advanced capabilities. I will address these investments 
in more detail later in this testimony.
                v. seizing opportunities for the future
    The other significant share of our budget goes toward making sure 
DOD will be ready for the future. Our budget's investments and 
programming decisions in this area reflect my commitment to create a 
Defense Department that's open to change and new ideas to ensure a 
better future for both DOD and the nation, and my priorities in doing 
so. These are best understood through the four key pillars of this 
commitment--namely, updating and refining warfighting strategies, 
operational concepts, and tactics; driving smart and essential 
technological innovation; building the force of the future; and 
reforming the DOD enterprise.
    While I will describe what we're doing in each of those areas 
momentarily, the dynamic strategic environment I described earlier in 
this testimony explains why such change is so important--not for the 
sake of change, but for the security of this country. We cannot let 
those challenges overtake us; we have to stay ahead of them and stay 
the best. That's why as Secretary of Defense I've been pushing the 
Pentagon to think outside our five-sided box.
Updating and Refining Warfighting Strategies, Operational Concepts, and 
        Tactics
    Because our military has to have the agility and ability to win 
both the fights we're in, the wars that could happen today, and the 
wars that could happen in the future, we're always updating our plans 
and developing new operational approaches to account for any changes in 
potential adversary threats and capabilities, and to make sure that the 
plans apply innovation to our operational approaches--including ways to 
overcome emerging threats to our security, such as cyberattacks, anti-
satellite weapons, and anti-access, area denial systems. We're building 
in modularity that gives our chain of command's most senior decision-
makers a greater variety of choices. We're making sure planners think 
about what happens if they have to execute their plan at the same time 
as another contingency is taking place, so they don't fall into the 
trap of presuming the contingency they're planning for would be the 
only thing we'd be doing in the world at that time. We're injecting 
agility and flexibility into our processes, because the world, its 
challenges, and our potential opponents are not monolithic, and we must 
be just as dynamic to stay ahead of them.
    As I mentioned earlier, DOD is continuing to embark on a force-
wide, all-service transition from an era focused on counterinsurgency 
operations to an era focused on the full spectrum of military 
operations. While we do so for many important reasons, it's also 
important to note that we don't want to forget or turn our back on 
counterinsurgency, but rather enable most of our forces to be capable 
of doing a lot more than just that. A smaller segment of our force will 
still specialize in these skills, and DOD will retain the ability to 
expand our operational capacity for counterinsurgency missions should 
it become necessary.
    The transition to full-spectrum operations is and will be coupled 
with demonstrations to clearly signal it and make that signal credible, 
which is key to conventional deterrence. The same is true for our 
investments in capabilities--in new technologies, new operational 
concepts, and also innovative ways for how we use what we already 
have--these must and will be demonstrated as well. This is accounted 
for in the budget, as are other investments we're making to recommit 
ourselves to deterrence across the strategic, operational, and tactical 
levels of conflict.
    Recognizing the immense value that wargaming has historically had 
in strengthening our force in times of strategic, operational, and 
technological transition--such as during the interwar years between 
World War I and World War II, when air, land, and naval wargamers 
developed innovative approaches in areas like tank warfare and carrier 
aviation--this budget makes significant new investments to reinvigorate 
and expand wargaming efforts across the Defense Department. With a 
total of $55 million in fiscal year 2017 as part of $526 million over 
the FYDP, this will allow us to try out nascent operational concepts 
and test new capabilities that may create operational dilemmas and 
impose unexpected costs on potential adversaries. The results of future 
wargames will be integrated into DOD's new wargaming repository, which 
was recently established to help our planners and leaders better 
understand and shape how we use wargames while also allowing us to 
share the insights we gain across the defense enterprise.
Driving Smart and Essential Technological Innovation
    The investments this budget makes in technology and innovation, and 
the bridges it helps build and rebuild, are critical to staying ahead 
of future threats in a changing world. When I began my career, most 
technology of consequence originated in America, and much of that was 
sponsored by the Government, especially DOD. Today, not only is much 
more technology commercial, but the competition is global, with other 
countries trying to catch up with the advances we've enjoyed for 
decades in areas like precision-guided munitions, stealth, cyber, and 
space. Now, as we have in the past, DOD must invest to ensure America 
pioneers and dominates these and other technological frontiers.
    DOD is therefore pursuing new technology development along with new 
operational concepts, and new organizational constructs--all of which 
are reflected in or supported by this budget submission--to maintain 
our military's technological superiority and ensure we always have an 
operational advantage over any potential adversary. How we do this is 
important, because while the Cold War arms race was characterized 
mostly by strength, with the leader simply having more, bigger, or 
better weapons, this era of technological competition is uniquely 
characterized by an additional variable of speed, such that leading the 
race now depends on who can out-innovate faster than everyone else. 
It's no longer just a matter of what we buy; what also matters is how 
we buy things, how quickly we buy them, whom we buy them from, and how 
quickly and creatively we're able to upgrade them and repurpose them to 
be used in different and innovative ways to stay ahead of future 
threats.
    In particular, this means leveraging the capability of current and 
emerging technologies, including commercial technologies wherever 
appropriate. It means demonstrating and seeding investments in new 
capabilities and concepts to counter advanced anti-access, area-denial 
challenges across all domains and in every region where they persist--a 
particular focus of DOD's effort to develop a third offset strategy. It 
means investing in and operationalizing our security by leveraging 
advances in cyber, space, electronic warfare, biotechnology, artificial 
intelligence, and other areas. Our technologies and capabilities must 
be able to operate so that no matter what any of our enemies might 
throw at them, they are able to defeat attempts to be hacked.
    Accordingly, this budget invests a total of $183.9 billion in 
fiscal year 2017, and $951 billion over the FYDP, to help research, 
develop, test, evaluate, and procure the right technology and 
capabilities our military will need to deter and if necessary fight and 
win full-spectrum conflicts in the future. For the second year in a 
row, the budget increases funding for our research and development 
accounts, which total $71.8 billion in fiscal year 2017. That includes 
$12.5 billion specifically invested in science and technology to 
support groundbreaking work happening in the military services, in our 
dozens of DOD labs and engineering centers across the country, and in 
the Defense Advanced Research Projects Agency (DARPA) to develop and 
advance disruptive technologies and capabilities in areas like undersea 
systems, hypersonics, electronic warfare, big data analytics, advanced 
materials, energy and propulsion, robotics, autonomy, and advanced 
sensing and computing.
    At the same time that DOD is making investments in technologies 
themselves, we're also investing in building and rebuilding bridges 
with America's vibrant, innovative technology community and forging 
more connections with the commercial technology base--and it's 
reflected in our budget. In fiscal year 2017, this includes $45 million 
for our Defense Innovation Unit-Experimental (DIUx), which we opened in 
Silicon Valley last August to build relationships and better tap into 
the region's innovation ecosystem. It also includes $40 million for our 
pilot program with the independent, non-profit startup backer In-Q-Tel, 
leveraging its venture capital model to help find innovative solutions 
for some of our most challenging problems. It includes $137 million to 
support our public-private partnership-funded Manufacturing Innovation 
Institutes, including the one focused on flexible hybrid electronics 
that I announced in Silicon Valley last August. In all these areas, 
similar to how DOD's historic investments in things like GPS and the 
Internet later went on to yield great benefits for not just our 
security but also our society, we hope the investments we're making in 
some of these fields along with our partners in the technology industry 
will lead to incredible advances that today we can only imagine.
    Importantly, technological innovation must be done in concert with 
operational innovation. It's not enough to have or create new 
technologies or weapon systems; how they are used is key. The budget 
reflects work DOD has been undertaking in this area though multiple 
lines of effort. First, there's our Long-Range Research and Development 
Planning Program--an effort named after the mid-1970s project that 
brought together a cross-section of military, academic, and private-
sector experts who paved the way to a future of GPS-guided smart bombs, 
battle networks, and stealth--and also our Advanced Capability and 
Deterrence Panel. Both focus on identifying and charting longer-term, 
leap-ahead investments for strategies and capabilities that will give 
us an advantage several decades from now, and together they make up 
nearly 60 percent of our science and technology investments in this 
budget submission.
    Now, to focus on maintaining our near-term advantage, DOD has an 
office that we don't often talk about, but that I want to highlight 
today. It's called the Strategic Capabilities Office (SCO). I created 
SCO in 2012 when I was Deputy Secretary of Defense to reimagine 
existing DOD, intelligence community, and commercial systems by giving 
them new roles and game-changing capabilities to confound potential 
opponents. I picked a talented physicist to lead it. SCO is incredibly 
innovative, but also has the rare virtue of rapid development and the 
even rarer charter to keep current capabilities viable for as long as 
possible. It's good for both troops and taxpayers alike.
    SCO is focused on thinking differently, which is incredibly 
important to innovation when it comes to technological capabilities. 
Thinking differently put us in space and on the moon. It put computers 
in our pockets and information at our fingertips. It's how we came to 
have airplanes that take off from the decks of ships, nuclear 
submarines beneath the seas, and satellite networks that take pictures 
of the world and show us where we are in it. This kind of bold, 
innovative thinking isn't lost to history. It's happening every day, in 
SCO and many other places throughout the Department of Defense.
    Most people don't often hear about it because most of its work is 
classified; however, SCO has been a tremendously useful part of DOD. 
It's received large support from all the services, as well as our 
combatant commands, the Joint Chiefs of Staff, the intelligence 
community, and also Congress--with its budget growing from $140 million 
in its first year, fiscal year 2014, to reaching $845 million for 
fiscal year 2017 in this year's budget submission. To show the return 
we're getting on those investments, I'd like to highlight some projects 
SCO has been working on that we're funding in the budget.
    First is a project focused on advanced navigation, where SCO is 
taking the same kinds of micro-cameras and sensors that are littered 
throughout our smartphones today, and putting them on our Small 
Diameter Bombs to augment their targeting capabilities. This will 
eventually be a modular kit that will work with many other payloads--
enabling off-network targeting through commercial components that are 
small enough to hold in your hand.
    Another SCO project uses swarming, autonomous vehicles in all sorts 
of ways, and in multiple domains. For the air, they've developed micro-
drones that are really fast, and really resilient--they can fly through 
heavy winds and be kicked out the back of a fighter jet moving at Mach 
0.9, like they did during an operational exercise in Alaska last year, 
or they can be thrown into the air by a soldier in the middle of the 
Iraqi desert. For the water, they've developed self-driving boats, 
which can network together to do all sorts of missions, from fleet 
defense to close-in surveillance--including around an island, real or 
artificial, without putting our sailors at risk. Each one leverages the 
wider world of technology. For example, the micro-drones use a lot of 
commercial components and 3D printing. The boats build on some of the 
same artificial intelligence algorithms that NASA's Jet Propulsion 
Laboratory wrote for the Mars lander.
    SCO also has a project on gun-based missile defense, where we're 
taking the same hypervelocity smart projectile developed for the 
electromagnetic railgun, and using it for point defense by firing it 
with artillery we already have in our inventory--including the five-
inch guns at the front of every Navy destroyer, and also the hundreds 
of Army Paladin self-propelled howitzers. This way, instead of spending 
more money on more expensive interceptors, we can turn past offense 
into future defense--defeating incoming missile raids at much lower 
cost per round, and thereby imposing higher costs on the attacker. In 
fact, we tested the first shots of the hypervelocity projectile out of 
a Paladin earlier this year, and we found that it also significantly 
increases the range.
    There's also a SCO project that we're calling the arsenal plane, 
which takes one of our oldest aircraft platforms, and turns it into a 
flying launch pad for all sorts of different conventional payloads. In 
practice, the arsenal plane will function as a very large airborne 
magazine, networked to fifth-generation aircraft that act as forward 
sensor and targeting nodes--essentially combining different systems 
already in our inventory to create wholly new capabilities.
    The last SCO project I want to highlight is how we're creating a 
brand new capability with the SM-6 missile, an interceptor that's 
designed to launch from our Navy's surface ships and be highly 
maneuverable and aerodynamic to stop incoming ballistic and cruise 
missiles in the atmosphere. It's one of our most modern and capable 
munitions--and thanks to work done by SCO, we've been able to modify 
the SM-6 so that in addition to missile defense, it can also target 
enemy ships at sea. This new anti-ship mode makes the SM-6 doubly 
useful, taking the defensive speed and maneuverability already sitting 
in our Aegis destroyers' launch cells and leveraging it for offensive 
surface warfare lethality. That makes it a potent new capability for 
our fleet, and also a good deal for the taxpayer by using the same 
thing twice. We already know this works; it was fully tested this past 
January to great success. As I will address later in this testimony, 
this new operational concept is strongly reflected in our 2017 budget.
    Those are just a few projects that SCO has worked on so far--and 
they're working on a lot more, including some surprising ones.
    Now, with all of that in mind--from why we need to invest in 
technological innovation, to how we're doing it--let me address the 
specific investments this budget makes in technologies and capabilities 
to deter, and if necessary fight and win, a full-spectrum conventional 
war against even the most high-end of adversaries. In concert, they 
will help maintain our military's edge both under and on the sea, on 
land, in the air, in space, in cyber and electronic warfare, and in the 
modernization and maintenance of our nuclear enterprise.
Maritime Investments
    In the maritime domain, the budget refocuses our Navy on building 
lethality for high-end conflicts while continuing to grow the battle 
fleet to meet, but not exceed, the department's warfighting posture 
requirement of 308 ships. Our investments reflect an emphasis on 
payloads over platforms, on the ability to strike from sanctuary 
quickly so that no target is out of reach, and on closing capability 
shortfalls that have developed over the last several years.
    First, the budget maximizes our undersea advantage--leveraging and 
growing our commanding lead in an area where the U.S. military should 
be doing more, not less, going forward. It provides funding for 
important payloads and munitions, including $170.8 million in fiscal 
year 2017 and $1.5 billion over the FYDP for an improved heavyweight 
torpedo as well as research and development for an advanced lightweight 
torpedo to stay ahead of existing and emerging undersea challenges. It 
includes $5.2 billion in fiscal year 2017 and $29.4 billion over the 
FYDP to buy nine Virginia-class attack submarines over the next five 
years; four of those submarines--up from three in last year's budget--
will be equipped with the versatile Virginia Payload Module that can 
more than triple each submarine's strike capacity from 12 Tomahawk land 
attack missiles to 40. The budget also invests $500 million in fiscal 
year 2017, and $3.4 billion over the FYDP, to upgrade 49 of our 
submarines' combat systems and enhance underwater acoustics on nine of 
our existing Virginia-class submarines. It increases funding for 
unmanned undersea vehicles (UUVs) by over $100 million in fiscal year 
2017, part of a total $173 million in fiscal year 2017 and $1.2 billion 
over the FYDP that invests in, among other areas, rapid prototyping of 
UUVs in multiple sizes and diverse payloads--which is important, since 
UUVs can operate in shallow waters where manned submarines cannot. It 
includes $2.2 billion in fiscal year 2017 and $6.4 billion over the 
FYDP to continue procuring the advanced P-8A Poseidon maritime patrol 
and surveillance aircraft. Together, all these investments--totaling 
$8.2 billion in fiscal year 2017, and $41.9 billion over the next five 
years--will ensure we continue to have the most lethal undersea and 
anti-submarine force in the world.
    Second, the budget makes significant investments to bolster the 
lethality of our surface fleet forces, so they can deter and if 
necessary prevail in a full-spectrum conflict against even the most 
advanced adversaries. It invests $597 million in fiscal year 2017, and 
$2.9 billion over the FYDP, to maximize production of the SM-6 missile, 
one of our most modern and capable munitions, procuring 125 in fiscal 
year 2017 and 625 over the next five years--and this investment is 
doubly important given the SM-6's new anti-ship capability. It also 
invests in developing and acquiring several other key munitions and 
payloads--including $1 billion in fiscal year 2017, and $5.8 billion 
over the FYDP, for all variants of the SM-3 high-altitude ballistic 
missile interceptor; $340 million in fiscal year 2017, and $925 million 
over the FYDP, for the Long-Range Anti-Ship Missile; $221 million in 
fiscal year 2017, and $1.4 billion over the FYDP, for the Advanced 
Anti-Radiation Guided Missile, including its extended range version; 
and $435 million in fiscal year 2017, as part of $2.1 billion over the 
FYDP, for the most advanced variant of the Tactical Tomahawk land-
attack missile, which once upgraded can also be used for maritime 
strike.
    Third, the budget reflects decisions we've made to ensure that we 
look at our overall warfighting posture, rather than only the presence 
that contributes to it, in determining whether our maritime forces can 
deter and if necessary fight and win a full-spectrum conflict. Having 
grown the size and the capability of our surface and subsurface fleet 
over the last seven years, this budget will continue to do both. It 
will ensure we meet the department's 308-ship posture requirement--
indeed, growing the battle fleet to 308 ships by the end of the FYDP--
and it will make our naval forces as a whole more capable, more 
survivable, and more lethal than they would have been otherwise.
    The budget invests $3.4 billion in fiscal year 2017 and $18.3 
billion over the FYDP to continue to buy two DDG-51 Arleigh Burke-class 
guided missile destroyers each year over the next five years--a total 
of 10 over the FYDP--as well as $400 million in fiscal year 2017 and 
$2.8 billion over the FYDP for modernizing our destroyers, 12 of which 
will also receive upgrades to their combat systems. It continues to 
support 11 carrier strike groups, investing $2.7 billion in fiscal year 
2017 and $13.5 billion over the FYDP for new construction of Ford-class 
carriers, as well as $2 billion in fiscal year 2017 and $8.9 billion 
over the FYDP for midlife reactor refueling and overhauls on our 
current carrier fleet. As I will discuss in the reform section of this 
testimony, it supports modernizing our guided missile cruisers--
providing them with more capability and a longer lifespan while freeing 
up significant funds that can be put toward a variety of uses.
    I'd like to now address the Littoral Combat Ship (LCS), where we 
made an important tradeoff so we could put more money in submarines, 
Navy fighter jets, and many other critical areas. As such, the budget 
takes a new approach to the LCS and its associated frigate--buying a 
total of 40, not the 52 or more that were planned starting back in 
2002. Let me explain why. First, to be clear, we're investing in LCS 
and frigates because we need the capability they provide, and for 
missions like minesweeping and anti-submarine warfare, they're expected 
to be very capable. But now, in 2016, we have to further balance our 
shipbuilding investments among guided missile destroyers and Virginia-
class attack submarines. We face competitors who are challenging us on 
the open ocean with new submarines, ships, aircraft, and missiles--
advanced capabilities we haven't had to contend with in a long time, 
meaning that we must now invest more in higher-end capabilities across 
our own fleet. The department's warfighting analysis called for 40 
small surface combatants, so that's how many we're buying. Over the 
next 10 years, this will let us invest almost $8 billion more into 
highly lethal ships and capabilities--all the while increasing both the 
number of ships and the capability of our battle fleet. While this will 
somewhat reduce the number of LCS available for presence operations, 
that need will be met by higher-end ships, and it will ensure that the 
warfighting forces in our submarine, surface, and aviation fleets have 
the necessary capabilities to defeat even our most advanced potential 
adversaries. Under this rebalanced plan, we will still achieve our 308-
ship goal within the next five years, and we will be better positioned 
as a force to effectively deter, and if necessary defeat, even the most 
advanced potential adversaries.
Land Investments
    To ensure our ground forces have the capabilities to counter 
emerging threats and the demonstrated ability to deter and if necessary 
fight and win a full-spectrum conflict, the budget will help provide 
our Army, Marine Corps, and special operations forces with greater 
lethality in several forms. This includes a next-generation shoulder-
launched weapon, a life extension program as well as a replacement for 
the Army Tactical Missile System (ATACMS) that can be used for improved 
counter-battery and long-range strike, and increased firepower for 
Stryker armored fighting vehicles. Together these investments comprise 
$780 million in fiscal year 2017 and $3.6 billion over the FYDP.
    Additionally, the budget invests $735 million in fiscal year 2017, 
and $6.8 billion over the FYDP, in the Joint Light Tactical Vehicle 
intended to replace the military's Humvees--procuring more than 2,000 
vehicles in fiscal year 2017, and a total of more than 17,700 vehicles 
over the next five years. It also invests $159 million in fiscal year 
2017, and $1.7 billion over the FYDP, in the Amphibious Combat Vehicle, 
which will replace the Marine Corps' aging Amphibious Assault Vehicle--
helping procure over 200 vehicles over the next five years. As I 
discuss later in the reform section of this testimony, it supports the 
Army's ongoing Aviation Restructure Initiative--investing $1.1 billion 
for 52 AH-64 Apache attack helicopters in fiscal year 2017, and $5.7 
billion for 275 Apaches over the FYDP, as well as $1 billion for 36 UH-
60 Black Hawk utility helicopters in fiscal year 2017, and $5.6 billion 
for 268 Black Hawks over the FYDP.
    The budget also invests $9.1 billion for missile defense in fiscal 
year 2017, and $47.1 billion over the FYDP. This reflects important 
decisions we've made to strengthen and improve our missile defense 
capabilities--particularly to counter the anti-access, area-denial 
challenge of increasingly precise and increasingly long-range ballistic 
and cruise missiles being fielded by several nations in multiple 
regions of the world. Instead of spending more money on a smaller 
number of more traditional and expensive interceptors, we're funding a 
wide range of defensive capabilities that can defeat incoming missile 
raids at much lower cost per round, and thereby impose higher costs on 
the attacker. The budget invests in improvements that complicate enemy 
targeting, harden our bases, and leverage gun-based point defense 
capabilities--from upgrading the Land-Based Phalanx Weapons System, to 
developing hypervelocity smart projectiles that as I mentioned earlier 
can be fired not only from the five-inch guns at the front of every 
Navy destroyer, but also the hundreds of Army M109 Paladin self-
propelled howitzers. Additionally, the budget's missile defense 
investments maintain DOD's commitment to improving our Homeland and 
theater defense systems--as we're increasing the number of deployed 
Ground-Based Interceptors (GBIs) from 30 to 44, redesigning the exo-
atmospheric kill vehicle to improve the reliability of the Ground-Based 
Midcourse Defense system, and funding improvements and follow-on 
concept development for the Terminal High-Altitude Area Defense (THAAD) 
system. Specifically, we're investing $1.2 billion in fiscal year 2017 
and $5.8 billion over the FYDP for the Ground-based Midcourse Defense 
program; for THAAD, we're spending $640 million in fiscal year 2017 and 
$3.6 billion over the FYDP, which includes procuring 24 interceptors in 
fiscal year 2017 and 149 over the FYDP; and, to research, develop, and 
deploy a new Long-Range Discrimination Radar, we're investing $317 
million in fiscal year 2017 and $1 billion over the FYDP.
Air Investments
    To ensure the U.S. military's continued air superiority and global 
reach, the budget makes important investments in several areas--and not 
just platforms, but also payloads. For example, it invests $2.4 billion 
in fiscal year 2017 and $8 billion over the FYDP in a wide range of 
versatile munitions--including buying more Small Diameter Bombs, JDAMs, 
Hellfires, and AIM-120D air-to-air missiles. We are also developing 
hypersonics that can fly over five times the speed of sound.
    The budget continues to buy the stealthy, fifth-generation F-35 
Lightning II Joint Strike Fighter. It includes $10.1 billion in fiscal 
year 2017 and $56.3 billion over the FYDP to procure a total of 404 F-
35s across the force through 2021--43 F-35As for the Air Force in 
fiscal year 2017 as part of 243 to be purchased over the FYDP, 16 F-
35Bs for the Marine Corps in fiscal year 2017 as part of 97 to be 
purchased over the FYDP, and 4 F-35Cs for the Navy and Marine Corps in 
fiscal year 2017 as part of 64 to be purchased over the FYDP. This 
represents a slight deferral in Air Force F-35 procurement, which we're 
doing in order to free up funds to maintain a larger-size Air Force of 
55 tactical fighter squadrons, and to improve avionics, radar, and 
electronic warfare systems in legacy bomber and fighter aircraft like 
the F-15, F-16, B-1, B-2, and B-52 fleets--increasing their lethality, 
survivability, and therefore usefulness in a full-spectrum conflict. At 
the same time, it also represents an increase in the Navy and Marine 
Corps' F-35 procurement, which is important to ensure sufficient high-
end capability and numbers in our aircraft carriers' tactical fighter 
fleet.
    Additionally, the budget invests $1.4 billion in fiscal year 2017 
and $12.1 billion over the FYDP for continued development of the B-21 
Long-Range Strike Bomber, as well as $3.1 billion in fiscal year 2017 
and $15.7 billion over the FYDP to continue upgrading our aerial tanker 
fleet--buying 15 KC-46A Pegasus refueling tankers in fiscal year 2017 
as part of 75 aircraft to be purchased over the FYDP.
    The budget also reflects important decisions regarding future 
unmanned aerial systems, such as the Navy's Carrier-Based Aerial 
Refueling System (CBARS), formerly known as the Unmanned Carrier-
Launched Air Surveillance and Strike (UCLASS) program--by focusing in 
the near-term on providing carrier-based aerial refueling, we're 
setting the stage for a future unmanned carrier air wing. With this 
approach, the Navy will be able to quickly and affordably field the 
kinds of unmanned systems that its carrier air wings need today, while 
laying an important foundation for future, more capable unmanned 
carrier-based platforms. We know we need to ensure aircraft can operate 
off the carrier in high-threat environments, and we're working hard to 
make them unmanned--it's just that the UCLASS program as previously 
structured was not the fastest path to get us there. This approach will 
allow us to get started integrating unmanned aircraft onto our aircraft 
carriers affordably and as soon as possible.
    Furthermore, to maximize the capabilities and extend the reach of 
all our airborne systems, the budget reflects how we're expanding 
manned-unmanned teaming--from buying Navy MQ-4C Triton unmanned 
maritime surveillance and patrol aircraft, which can be paired with our 
P-8A Poseidon aircraft for a variety of missions; to buying Army AH-64 
Apache attack helicopters that can pair with MQ-1C Gray Eagle scouts; 
to buying Air Force F-35s that can network with both payloads and 
platforms.
Cyber and Electronic Warfare Investments
    This budget significantly increases our cyber capabilities, with 
new investments totaling over $900 million in fiscal year 2017 compared 
to last year's budget.
    Because defending our networks is and must be DOD's number-one 
mission in cyberspace, the budget makes significant investments to 
improve our defensive capabilities to deny a potential attack from 
succeeding. These include $336 million over the FYDP to support more 
capable network perimeter defenses, as well as $378 million over the 
FYDP to train and strengthen DOD's Cyber Protection Teams to respond to 
security breaches, grow our cyber training and testing ranges, and 
support tool development that will let our Cyber Mission Force quickly 
respond to cyberattacks against our networks regardless of where they 
are stationed around the world.
    Reflecting our renewed commitment to deterring even the most 
advanced adversaries, the budget also invests in cyber deterrence 
capabilities, including building potential military response options. 
This effort is focused on our most active cyber aggressors, and is 
based around core principles of resiliency, denial, and response.
    As part of DOD's second cyber mission--defending the nation--the 
budget invests in an advanced capability to disrupt cyberattacks of 
significant consequences. To support DOD's third cyber mission--
providing offensive cyber options that if directed can augment our 
other military systems--the budget invests $347 million over the FYDP 
to help provide cyber tools and support infrastructure for the Cyber 
Mission Force and U.S. Cyber Command.
    DOD has a unique level of resources and cyber expertise compared to 
the rest of the federal government, and following the recent data 
breaches of the Office of Personnel Management's information technology 
systems, DOD has undertaken responsibility for the development, 
maintenance, and cybersecurity of the replacement background 
investigation systems and their data infrastructure. To provide proper 
support and a dedicated funding stream for this effort, the President's 
Budget includes $95 million for DOD in fiscal year 2017. Also, on a 
separate but related note, the budget invests $454 million over the 
FYDP to ensure DOD will continue to have access to the trusted 
microelectronic components needed in our weapon systems. By developing 
alternative sources for advanced microchips and trusted designs, this 
funding will help ensure the long-term security of our systems and 
capabilities.
    Meanwhile, to protect our platforms and ensure U.S. freedom of 
maneuver in contested environments, the budget also continues to 
support research, development, testing, evaluation, and procurement of 
advanced electronic warfare capabilities--totaling $3.7 billion in 
fiscal year 2017 and $20.5 billion over the FYDP. To enhance the 
electronic survivability and lethality of fighter and bomber aircraft 
like the F/A-18, F-15, and B-2, we're investing in both offensive and 
defensive airborne capabilities, including the Air Force's Defensive 
Management System modernization and Eagle Passive Active Warning 
Survivability System, and also the Navy's Integrated Defensive 
Electronic Countermeasures and Next Generation Jammer. We're upgrading 
the radar on our E-3 Sentry AWACS with enhanced electronic protection 
to make adversary jammers less effective. Investments in the Navy's 
Surface Electronic Warfare Improvement Program will help our ships 
protect themselves better. To help protect our ground forces, the 
budget invests in the Army's Common Infrared Countermeasures and 
Electronic Warfare Planning and Management Tool, as well as the Marine 
Corps' Intrepid Tiger pod.
    While cyber and electronic warfare capabilities provide, for the 
most part, different techniques to achieve similar mission objectives, 
an integrated approach can yield additional benefits. This is reflected 
in our budget, including investments intended to ensure we can hold 
even the most challenging targets at risk.
Space Investments
    As I mentioned earlier, this budget continues and builds upon 
important investments in last year's budget to help secure U.S. access 
to space and address space as an operational domain.
    After adding over $5 billion in new investments in DOD's 2016 
budget submission to make us better postured for contested military 
operations in space--including over $2 billion in space control efforts 
to address potential threats to U.S. space systems--this budget largely 
sustains those investments over the FYDP. While there is much more work 
ahead, we are on a good path in our efforts to complicate an 
adversary's ability to defeat our systems while also enhancing our 
ability to identify, attribute, and negate all threatening actions in 
space.
    Meanwhile, the budget also supports strengthening our current 
space-based capabilities, and maturing our space command and control. 
It invests in more satellites for our Space-Based Infrared System to 
maintain the robust strategic missile warning capability we have today. 
It allocates $108 million over the FYDP to implement the Joint 
Interagency Combined Space Operations Center (JICSpOC), which will 
better align joint operations in space across the U.S. Government.
    DOD must have assured access to space through multiple reliable 
sources that can launch our critical national security satellites, 
which is why the budget invests $1.8 billion for space launch in fiscal 
year 2017 and $9.4 billion over the FYDP. Because we want to end the 
use of the foreign RD-180 engine as soon as possible, because we have a 
strong desire to preserve competition for space launch in order to 
ensure multiple launch service providers can sustain uninterrupted 
access to space, and to control costs, the budget includes funds for 
competitive public-private partnerships to help develop new launch 
services, which we believe is the most responsible way forward. Merely 
developing a new engine would not give us the assured access to space 
that we require. We plan to take advantage of the emerging commercial 
space launch marketplace using an innovative, more commercial 
approach--investing through competition in new launch services in 
return for priced options for future launches.
Nuclear Enterprise Investments
    The budget also makes reforms and investments needed to continue 
providing a safe, secure, and effective nuclear deterrent. Compared to 
last year's budget submission, it adds $10 billion over the next five 
years, for a total of $19 billion in fiscal year 2017 and $108 billion 
over the FYDP for maintaining, and modernizing the nuclear force and 
associated strategic command, control, and communications systems. This 
reflects DOD's continuing commitment to the nuclear triad and its 
critical mission.
    In addition to making an array of investments across the nuclear 
enterprise--from increased funding for manpower, equipment, vehicles, 
and maintenance, to technological efforts that improve the 
sustainability of our bomber fleet--the budget also fully funds the 
first stages of our key nuclear modernization effort, in particular the 
replacement of our Ohio-class ballistic missile submarines. The Ohio 
Replacement Program is allocated $1.9 billion in fiscal year 2017 and 
$13.2 billion over the FYDP, which in addition to research and 
development will allow the first year of construction on an 
incrementally-funded first ship to begin in fiscal year 2021.
    We expect the total cost of nuclear modernization to be in the 
range of $350-$450 billion. Although this still presents an enormous 
affordability challenge for DOD, we believe it must be funded. Previous 
modernizations of America's strategic deterrent and nuclear security 
enterprise were accomplished by topline increases to avoid having to 
make drastic reductions to conventional forces, and it would be prudent 
to do so again. I hope DOD can work with Congress to minimize the risk 
to our national defense.
Building the All-Volunteer Force of the Future
    While we have the finest fighting force in the world today, that 
excellence is not a birthright, and we can't take it for granted in the 
21st century. We have to earn it again and again, starting with our 
most enduring advantage--our people.
    That's what building the force of the future is all about: making 
sure that long into the future, my successors will be able to count on 
the same excellence in people that I do today. We have several 
overarching priorities to help us do that, like attracting a new 
generation of talented Americans, promoting diversity, and rewarding 
merit; carving tunnels through the walls between DOD, the private 
sector, our reserve force, and other agencies across the Government; 
and updating and modernizing our personnel management systems with 
technology and data analysis to help improve the choices and decisions 
we make related to our people.
    I made this commitment to President Obama when he asked me to serve 
as Secretary of Defense, and so shortly after I was sworn in, I visited 
my old high school in Abington, Pennsylvania to outline my vision for 
the force of the future. I talked about how, in the face of 
generational, technological, and labor market changes, we in the 
Pentagon must try to make ourselves even better at attracting talent 
from new generations of Americans. In the months that followed, I went 
to places like Silicon Valley and St. Louis, and heard from companies 
like Facebook, Boeing, and LinkedIn about what they're doing to compete 
for talent in the 21st century. This past December, I announced that 
we're opening all combat positions to women, to expand our access to 
100 percent of America's population for our All-Volunteer Force.
    Throughout this process, we've always been mindful that the 
military is a profession of arms. It's not a business. We're 
responsible for defending this country--for providing the security that 
allows our friends and family members and fellow citizens to go to 
school, go to work, to live their lives, to dream their dreams, and to 
give the next generation a better future.
    The key to doing this successfully is leveraging both tradition and 
change. While the military cannot and should not replicate all aspects 
of the private sector, we can and should borrow best practices, 
technologies, and personnel management techniques in commonsense ways 
that work for us, so that in future generations, we'll keep attracting 
people of the same high caliber we have today--people who will meet the 
same high standards of performance, leadership, ethics, honor, and 
trust we hold our force to today.
    Last spring I asked DOD's Personnel and Readiness chief to lead a 
team in developing a package of bold proposals, which they did--
building on the great work the military services were already doing, 
and also coming up with some new ideas. Subsequently, a senior 
leadership team led by Deputy Secretary of Defense Bob Work and Vice 
Chairman of the Joint Chiefs of Staff General Paul Selva has been 
working with the Service Vice Chiefs to closely analyze each proposal 
and make recommendations before I decide. While this process is still 
ongoing for some proposals, I've decided to announce my decisions on 
other proposals as I've made them, which I will now detail.
Greater Permeability and Talent Management
    I outlined the first link we're building to the force of the future 
at George Washington University last November, announcing over a dozen 
new initiatives in several categories that are intended to make our 
future Defense Department better connected to 21st century talent.
    First, we're creating what we call `on-ramps' for people who aren't 
involved with DOD but want to try contributing to our mission. One way 
we're doing this is by having better managed internship programs that 
more effectively transition promising interns into employees. Another 
is our new Defense Digital Service, which brings in talent from 
America's vibrant, innovative technology community for a time to help 
solve some of our most complex problems. We're also going to bring in 
resident entrepreneurs, who will work with senior leaders on 
challenging projects for a year or two. We're going to hire a chief 
recruiting officer to bring in top executives for stints in civilian 
leadership roles, as we had in the past with people like Dave Packard, 
co-founder of HP, who also served as Deputy Secretary of Defense.
    Second, we're creating short-term `off-ramps' for those currently 
in DOD, so they can gain new skills, experiences, and perspectives from 
outside and then bring them back in to help keep us strong, creative, 
and forward-thinking. One way we're doing this is by expanding and 
broadening the Secretary of Defense Corporate Fellowship program, 
including by opening it up to qualified enlisted personnel. Another 
example is the Career Intermission Pilot Program, which lets people 
take a sabbatical from their Military Service for a few years while 
they're getting a degree, or learning a new skill, or starting a 
family. DOD plans to seek authorities to make this program permanent, 
and looks forward to working with Congress to do so--similar to how we 
were able to partner last year to update and modernize retirement 
benefits and ensure that the 80 percent of our force that doesn't serve 
20 years will get the benefits they earned whenever they move on to 
whatever's next in life.
    Third, we're going to use 21st century data and technology to 
improve and modernize our talent management systems. We're launching 
LinkedIn-style pilot programs to help give servicemembers and units 
more choice in matching up for future assignments. We're creating an 
Office of People Analytics to leverage big data to inform our personnel 
policies. We're finally implementing exit surveys, so we can have 
quantitative data on why people decide to leave. To help us keep 
bringing in the best people, we're looking at ways to evaluate recruit 
performance, improve outcomes, and better analyze trends that if left 
unchecked could indicate or lead to our military's insularity from the 
rest of society.
Family Support and Retention
    Next, in January, I announced our so-called second link to the 
force of the future, a set of several initiatives with a singular 
focus: strengthening the support we provide our military families to 
improve their quality of life. They were developed keeping in mind 
DOD's recruiting, retention, and career and talent management needs, as 
well as our closely-linked readiness and warfighting demands, which 
must always guide us.
    We know that our All-Volunteer Force is predominantly a married 
force--52 percent of our enlisted force is married, and 70 percent of 
our officer force is married. We also have another 84,000 military-to-
military marriages, with 80 percent of them stationed within 100 miles 
of each other. While we recruit a servicemember, we retain a family. 
This means that what we do to strengthen quality of life for military 
families today, and what we do to demonstrate that we're a family-
friendly force to those we want to recruit, is absolutely essential to 
our future strength. While we often speak of commitments to family and 
country in the same breath, the stresses of Military Service on our 
families are heavy and well known; among the stresses military families 
face, having and raising children is near the top. We also know that at 
10 years of service, when women are at their peak years for starting a 
family, women are retained at a rate 30 percent lower than men across 
the services. We know that a high level of work and family conflict is 
one of the primary reasons they report leaving service.
    To build the force of the future, tackling these problems is 
imperative, especially when the generation coming of age today places a 
higher priority on work-life balance. These Americans will make up 75 
percent of the American workforce by 2025. Nearly four-in-five of them 
will have a spouse or a partner also in the workforce--twice the rate 
of baby boomers. These Americans wait longer to have children, and when 
they do have children, they want to protect the dual earning power of 
their families to provide for their children accordingly.
    That's why, for starters, we're providing a more competitive 
standard for maternity and paternity leave across our joint force--
setting 12 weeks of fully paid maternity leave as the standard across 
the joint force, and working with Congress to seek authorities to 
increase paid paternity leave for new fathers from 10 to 14 days, which 
they can use in addition to annual leave. These changes put DOD in the 
top tier of institutions nationwide, and will have significant 
influence on decision making for our military family members. For both 
mothers and fathers alike, this establishes the right balance of 
offering a highly competitive leave policy while also maintaining the 
readiness of our total force. While I don't take lightly that 12 weeks 
of maternity leave represents a downshift from what the Navy pursued 
last summer, we will be at the forefront in terms of competition, 
especially as part of the comprehensive basket of family benefits we're 
providing across the joint force. This will be an increasingly 
important factor as current and future generations of parents have 
different views and expectations in parenting, and we must continue to 
be able to attract and retain the best talent among them.
    Additionally, we're expanding the childcare we provide on our 
bases, because whether for single parents, for families in which both 
parents work outside the home, or for every mother or father in our 
military, childcare hours should be as responsive as possible to work 
demands. Based on feedback from pilot programs, and in the interest of 
responding to typical work hours at our installations, we will increase 
childcare access to 14 hours a day across the force. By providing our 
troops with childcare they can rely on -from before reveille to after 
taps--we provide one more reason for them to stay on board. We show 
them that supporting a family and serving our country are by no means 
incompatible goals.
    We're also making relatively inexpensive improvements so that our 
workplaces are more accommodating to women when they return from 
maternity leave, with a focus on making it easier for them to continue 
breastfeeding if they choose. To make the transition between maternity 
leave and returning to work for military mothers smoother, to enhance 
our mission effectiveness, and to comply with standards that apply to 
nearly every organization outside the military, we're requiring the 
installation or modification of mothers' rooms throughout all 
facilities when there are more than 50 women regularly assigned.
    Furthermore, we can also be more creative about making reasonable 
accommodations for members of our force who face difficult family 
geographic situations while at the same time preserving our force's 
effectiveness. Data indicates that allowing family members to trade the 
ability to remain at a station of choice in exchange for an additional 
Active Duty service obligation is one approach that could increase 
retention, while preserving readiness. DOD will be seeking legislative 
authority to this effect--when the needs of the force permit a 
servicemember to stay at their current location, we will seek to 
empower commanders to make reasonable accommodations, in exchange for 
an additional service obligation.
    Finally, as a profession of arms, we ask our men and women to make 
incomparable sacrifices. We ask them, potentially, to place themselves 
at risk of sacrificing their ability to have children when they return 
home. To account for this more fully in the benefits we provide our 
troops, DOD will cover the cost of freezing sperm or eggs through a 
pilot program for active-duty servicemembers--a benefit that will help 
provide our men and women, especially those deployed in combat, with 
greater peace of mind. This investment will also provide greater 
flexibility for our troops who want to start a family, but find it 
difficult because of where they find themselves in their careers.
    Each of these initiatives is significant in its own right. Taken 
together, they will strengthen our competitive position in the battle 
for top talent, in turn guaranteeing our competitive position against 
potential adversaries. The initiatives approved to date total $867 
million across the FYDP; we've included this in our budget because it's 
a worthy investment that will yield great returns.
More Still to Come
    While these first two links are important, we will have more to 
announce on the force of the future in the coming months. For example, 
we're taking a serious look at some commonsense reforms in our officer 
promotion system, and I greatly appreciate Congressional leaders from 
both parties who have indicated their support for such reforms in 
principle. We're also looking at ways to improve how we manage our 
civilian personnel, working with the Government-wide Office of 
Personnel Management as well as federal employee unions. In both of 
these efforts, working with Congress will be essential to ensure that 
our force of the future is as strong as the force of today.
Reforming the DOD Enterprise
    As I've said consistently from the moment I became Secretary of 
Defense, I cannot ask for more taxpayer dollars for defense without 
being candid about the fact that not every defense dollar is spent as 
wisely or responsibly as it could be, and also being determined to 
change that and make our department more accountable. That's why 
reforming the DOD enterprise is so important--from improving how we're 
organized so we can best respond to the challenges and opportunities of 
the future security environment, to continuing to improve our 
acquisition and enterprise-wide business and audit practices, to 
reducing excess infrastructure and overhead, to modernizing the 
military healthcare system.
    Before I address the reforms in this budget submission, it's 
important to consider the recent history of defense reform--how DOD has 
been embarked on a reform path for much of the last seven years, and 
how we appreciate Congress's work with us over the last year on 
acquisition and modernized retirement reforms.
    Despite what some may think, this administration hasn't been 
dragging its feet when it comes to defense reform--the reality has been 
quite the opposite. Beginning in 2009, we reduced the number of senior 
executives and general and flag officers, while working with Congress 
to trim management headquarters staffs by 20 percent, and move DOD 
toward auditability. We've done three iterations of the Better Buying 
Power initiative I established to continuously improve our 
acquisitions, with Better Buying Power 3.0 incorporated into this 
budget, and we're seeing compelling indications of positive 
improvements, including in areas like reduced cost growth and reduced 
cycle time. We've continually submitted much-needed reforms to 
strengthen the efficiency and capability of our force--many of which 
have been continually denied, either in whole or in part, at a cost for 
both taxpayers and our troops. This last part poses a real problem, 
because every dollar Congress denies us in reform is a dollar we can't 
invest in security we need to deter and defend against today's and 
tomorrow's threats.
    Now is the time for action. DOD will work closely with Congress on 
any anticipated reform legislation, and we welcome an open and 
collaborative process. In the past, legislative reform has proven to be 
a double-edged sword--sometimes it leads to constructive change, which 
is good, but other times it just adds to bureaucracy and overhead, even 
if that was never the intent. I hope that with the focus on reform 
we've recently been seeing in this and the other defense committees in 
Congress, we can work together to do reform right. We should, because 
there's a lot that needs to be accomplished in many areas.
Continuously Improving Acquisition
    DOD has been, and still is, absolutely committed to improving 
acquisition outcomes. After five years of implementing our Better 
Buying Power (BBP) initiatives for continuous process improvements in 
the defense acquisition system, we're seeing compelling indications of 
significant improvement in acquisition outcomes--for example, annual 
growth metrics for contracted costs on our major programs have dropped 
dramatically from a peak of 9.1 percent in 2011 to a 30-year low of 3.5 
percent in 2015, and a much higher percentage of major programs are 
projecting cost reductions relative to initial baselines than in the 
past. While these developments are positive signs, we can and must do 
more to sustain and where possible accelerate our momentum to keep 
improving and deliver better military capability while protecting 
American taxpayers.
    We need to continue reducing overhead and bureaucracy associated 
with the acquisition system, making it more agile and having a faster 
flow of commercial technology into our weapon systems. DOD is 
comfortable with the reforms in the fiscal year 2016 National Defense 
Authorization Act--which included several legislative reforms that DOD 
proposed last year--and we strongly support the increased role of the 
Service Chiefs in acquisition programs, particularly on cost and 
requirements trade-offs. Going forward, it's important that we take the 
responsible approach to absorb these reforms and see their effects 
before making additional major changes.
    DOD also appreciates Congress's interest in flexibility and 
agility, because the pace of threat changes and technology development 
are not compatible with our long cycles of budget submission, 
authorization, and appropriations. DOD will be looking for 
opportunities to work with Congress to improve the efficiency and 
effectiveness of our acquisition process. In particular, we would 
welcome greater flexibility in appropriations or reprogramming to 
initiate development of urgently needed capabilities. The flexibility 
to start a program as soon as a threat is identified would save 
critical time--as much as two years under current practices--and 
position both DOD and industry to more quickly initiate development, 
without a long-term commitment, outside the traditional budget cycle. 
This step would represent a `free' two years of lead time to acquiring 
a new capability.
Leaner Business Practices and Reducing Excess Overhead and 
        Infrastructure
    The budget submission reflects several important efforts to spend 
taxpayer dollars more efficiently, generating savings that would be 
much better invested in other areas like the fight against ISIL or 
deterring Russian aggression.
    Part of this means making more reductions to overhead, and also 
adopting some commonsense business practices that are long overdue--
which in total we expect to help save nearly $8 billion over the next 
five years. By better managing the 20 percent management headquarters 
reductions I mentioned earlier, including delayering and flattening 
management organizational structures, and also by increasing the 
reduction to 25 percent, reviewing service contracts, and making 
business operations and IT more efficient, we expect to save close to 
$5.9 billion over the FYDP. We're modernizing how we manage our 
commissaries and military exchanges, to optimize their business 
practices and respond to the changing needs of their customers. Unlike 
commissary and military exchange reforms proposed in previous budgets, 
this new approach protects the benefits they provide our people while 
still generating expected savings of about $2 billion over the FYDP.
    We're also making real progress on reforming DOD's myriad systems 
and business processes to meet our commitment to be audit ready by the 
beginning of fiscal year 2018. The three military departments began 
audits of their budgets for the first time last year, and DOD financial 
audits currently cover over 75 percent of our total General Fund 
budgetary resources and just over 90 percent of the current year 
dollars.
    In addition, we need to stop spending so much money to hold onto 
bases we don't need, and implement a domestic round of Base Realignment 
and Closure (BRAC) in 2019 as we're requesting. While it's helpful that 
the fiscal year 2016 National Defense Authorization Act allowed a study 
of DOD's excess infrastructure, the bottom line is that we have more 
bases in more places than we need, with preliminary analysis indicating 
that we have over 20 percent excess infrastructure. To ignore this fact 
while criticizing DOD for wasteful spending is not only a sin of 
omission, but also a disservice to America's taxpayers. Last year's 
Congressional denial forced the BRAC round to slip from 2017 to 2019, 
further prolonging our ability to harvest savings we greatly need. By 
then it will have been 14 years since DOD was allowed to right-size its 
domestic infrastructure, which any business leader or citizen would 
think is ridiculous--and they'd be right. Now is the time to fix it.
Reexamining Goldwater-Nichols and Defense Institutional Reform
    I appreciate that Congress shares my desire to make institutional 
reform a priority. The Goldwater-Nichols Department of Defense 
Reorganization Act of 1986 was important and had deeply positive 
results, but after 30 years, it needs updates. To help formulate DOD's 
recommendations to Congress on reviewing Goldwater-Nichols reforms, I 
asked our Deputy Chief Management Officer last fall to lead a 
comprehensive review of organizational issues in DOD--spanning the 
Office of the Secretary of Defense (OSD), the Joint Staff, the 
combatant commands, and the military departments--and identify any 
potential redundancies, inefficiencies, or other areas of improvement.
    This review is currently ongoing, and preliminary internal findings 
are expected by the end of March to help shape our forthcoming 
recommendations to Congress. In addition, and without prejudging any 
outcomes, I can say our review is examining areas where the pendulum 
may have swung too far, as in not involving the Service Chiefs enough 
in acquisition decision-making and accountability; or where subsequent 
world events suggest nudging the pendulum further, as in taking more 
steps to strengthen the capability of the Chairman of the Joint Chiefs 
of Staff, the Joint Chiefs of Staff, and the Joint Staff to support 
management, planning, and execution across the combatant commands, 
including for prioritizing military activities and resources across 
combatant command boundaries, and particularly focused on trans-
regional, multi-domain, and multi-functional threats, as well as 
threats within overlapping time frames; ensuring the Chairman's ability 
to provide their best military advice to me and the President, outside 
the chain of command as conceived of in the law; eliminating 
unnecessary overlap between OSD and the Joint Staff and between the 
service secretariats and staffs; better aligning combatant command 
staffs to their mission; streamlining acquisition requirements and 
decision-making processes to remove unneeded decision-making layers; 
having more flexibility in the laws and policies that govern joint duty 
qualifications; and better aligning the Joint Staff and the combatant 
commands to produce operational advice and respond to transregional 
threats.
    I look forward to the full results of our review, and I hope you 
will too. While DOD's current organization produces sound military 
advice and operational decisions, it often does so in a needlessly 
costly and time-consuming manner--leaving plenty of room for 
organizational improvements that can make us more agile and efficient. 
While much is within our existing authority to do, we will work with 
Congressional committees to frame and seek any needed reforms in 
statute. I look forward to working with you.
Modernizing and Simplifying the Military Healthcare System
    DOD greatly appreciates that Congressional leaders have said 2016 
will be the year to reform our military healthcare system, TRICARE, 
after having passed retirement modernization reform in 2015. As you 
know, DOD has proposed various ways to reform TRICARE for several 
years, so we look forward to working very closely with Congress in the 
year ahead. The reforms reflected in the budget give beneficiaries more 
simplicity and choice in how they manage their healthcare, while also 
incentivizing the much more affordable use of military treatment 
facilities. This will not only save money, but also maximize the 
workload and readiness of our military's medical force, giving our 
doctors, nurses, medics, and corpsmen the experience they need to be 
effective at their mission. Together this should generate about $548 
million in fiscal year 2017 and almost $7 billion over the FYDP that 
can be better spent in other ways without sacrificing the care of our 
people. It's time to get this done.
Making Sure Retirement Reform Works
    DOD greatly appreciates being able to work closely with Congress 
last year in reforming the military's retirement system. In this year's 
budget submission, we are including a few modifications to military 
retirement reform to help make sure those reforms work in the best 
possible way for the future strength and success of our military.
    First, continuation pay should not be an entitlement at 12 years of 
service, but rather a vitally important force shaping tool. DOD should 
have the flexibility to determine if and when to offer this benefit so 
we can better retain the talent we need the most at any given time.
    Second, the blended retirement plan that Congress passed last year 
needs some modifications to avoid having adverse effects on retention--
in particular, slightly raising the maximum matching contribution from 
4 percent to 5 percent. To improve retention, we also propose 
increasing the number of years a servicemember has to serve before 
matching contributions begin--so instead of beginning them at the start 
of their third year of service, it would be at the start of their fifth 
year of service, after their first reenlistment. DOD looks forward to 
working with Congress to make these proposals a reality.
The Right Force Structure for Current and Future Operations
    The budget also reflects critical decisions on force structure 
reforms, all of which are vital to making sure our troops have the 
capabilities they need for both present and future missions. While 
Congress has too often rejected such reforms out of hand, our decisions 
this year show that when world events and operational demands require 
the Defense Department to change its plans, it does so. In turn, 
Congress must do the same, and recognize that with a set budget and the 
need to invest in advanced capabilities to strengthen high-end 
deterrence, it's time to seriously consider these reforms and stop 
tying our hands from implementing them.
    I mentioned earlier that we're pushing off the A-10's final 
retirement until 2022 so we can keep more aircraft that can drop smart 
bombs on ISIL; in addition to changing when A-10s will be retired, 
we're also changing how it will happen. As 2022 approaches, A-10s will 
be replaced by F-35s only on a squadron-by-squadron basis as they come 
online, ensuring that all units have sufficient backfill and that we 
retain enough aircraft needed to fight today's conflicts.
    While some members of Congress may think the Navy's phased approach 
for modernizing its guided missile cruisers is just a ploy to quickly 
retire them, that is incorrect--in fact, retiring them now or anytime 
soon would be a serious mistake. Our cruisers are the best ships we 
have for controlling the air defenses of a carrier strike group, and 
given the anti-ship missiles being developed by other nations, we not 
only can't afford to go without them; we also need them to be as modern 
and capable as possible, and for them to stay in service as long as 
they can. The Navy's plan is still smarter and more affordable than the 
approach laid out by Congress, saving us $3 billion over the FYDP that 
we're putting to good use elsewhere in the budget. To make clear that 
this is not a ploy to quickly retire our cruisers, we will be 
submitting proposed legislative language that Congress can pass to hold 
the department to its word.
    Additionally, the Army is continuing to implement its Aviation 
Restructure Initiative in accordance with the fiscal year 2015 National 
Defense Authorization Act as the Chief of Staff of the Army reviews the 
recent findings of the National Commission on the Future of the Army. 
While we will revisit the Army's aviation transfer plan when we receive 
the Chief of Staff of the Army's report, the Commission's proposal to 
keep four Apache battalions in the Army National Guard could cost over 
$2.4 billion if the Army fully equips all 20 active battalions and 
keeps all aircraft currently dedicated to its equipment set in South 
Korea. By improving the readiness of the Army's Apache attack 
helicopters, and better leveraging the diverse capabilities Black Hawk 
helicopters bring to the table for National Guard missions--both here 
at home, and around the world when called upon as an operational 
reserve--the Army's planned Aviation Restructure Initiative is in the 
best interests of both the Army as well as the taxpayers who support 
it.
The Opportunity of Reform
    Regardless of how any of our proposed reforms might be initially 
received, DOD needs Congress to work together with us on a path forward 
for all of them, because there's a real opportunity in front of us.
    With last fall's budget deal, you showed that cooperation and 
prudent compromise for the good of our future security and strength was 
actually possible. Our reform submissions on things like the A-10, 
commissaries, and TRICARE reflect the fact we've heard Congress's 
concerns about past submissions, and made adjustments accordingly.
    If we don't lead the way ahead together, both troops and taxpayers 
alike will be forced to deal with the consequences. Let's work together 
on their behalf.
   vi. requests of this committee: the imperative of working together
    Before concluding, I want to reemphasize the big picture, because 
this budget marks a major inflection point for the Department of 
Defense, and we need your support for it.
    For a long time, DOD tended to focus and plan and prepare for 
whatever big war people thought was coming over the horizon, at one 
point becoming so bad that after a while, it started to come at the 
expense of current conflicts--long-term at the expense of the here-and-
now. Thankfully we were able to realize that over the last decade, 
correct it, and with help from Congress turn our attention to the 
fights we were in.
    The difference today is that, while such a singular focus made 
sense when we were facing off against the Soviets or sending hundreds 
of thousands of troops to Iraq and Afghanistan, it won't work for the 
world we live in. Now we have to think and do a lot of different things 
about a lot of different challenges--not just ISIL and other terrorist 
groups, but also competitors like Russia and China, and threats like 
North Korea and Iran. We don't have the luxury of just one opponent, or 
the choice between current fights and future fights--we have to do 
both, and we have to have a budget that supports both. That means 
funding a force with the right size, readiness, and capabilities to 
prevail in today's conflicts while simultaneously building a force that 
can prevail in the future--recognizing that future force won't exist 
unless we take actions today. That's what this budget submission was 
designed to do, and we need your help to do it.
    I thank this committee again for supporting the Bipartisan Budget 
Act that set the size of our budget; our submission focuses on the 
budget's shape, and we hope you approve it. I know some may be looking 
at the difference between what we proposed last year and what we got in 
the budget deal, but I want to reiterate that we've mitigated that 
difference, and that this budget meets our needs. The budget deal was a 
good deal--it gave us stability, and for that we remain grateful. Doing 
something to jeopardize that stability would concern me deeply. The 
greatest risk we face in DOD is losing that stability this year, and 
having uncertainty and sequester in future years. That's why going 
forward, the biggest concern to us strategically in the Congress is 
averting the return of sequestration next year so we can sustain all 
these critical investments over time.
    By working together, I am confident we can succeed, because in many 
ways we already have. If we think back to those defense investments and 
decisions that changed the course of our nation's and our military's 
history for the better--and not just in technologies like GPS, the 
Internet, and satellite communications, but also in other areas, like 
jointness and the All-Volunteer Force--they were all able to benefit 
our security and our society because they garnered support across the 
aisle, across branches of Government, and across multiple 
administrations.
    That same support for what's in this budget is essential today to 
address the security challenges we face and seize the opportunities 
within our grasp. We need your support in the decisions that our senior 
military leaders and I are advocating for. We need you to work with us, 
and not tie our hands, when it comes to pursuing smart and critical 
reforms. We need you to provide adequate, stable, predictable 
resources, as only you can, by coming together as you have before--
including, in the coming years, to avert the return of sequestration 
once again. As long as you do, I know our national security and 
national strength will be on the right path, and America's military 
will continue to defend our country and help make a better world for 
generations to come.
    Thank you.

    Chairman McCain. Thank you.
    General Dunford.

STATEMENT OF GENERAL JOSEPH F. DUNFORD, JR., USMC, CHAIRMAN OF 
                   THE JOINT CHIEFS OF STAFF

    General Dunford. Chairman McCain, Ranking Member Reed, 
distinguished members of the committee, thank you for the 
opportunity to join Secretary Carter and Secretary McCord in 
appearing before you.
    I'm honored to represent the extraordinary men and women of 
the joint force. Our soldiers, sailors, airmen, and marines, 
civil servants, remain our single most important competitive 
advantage. Thanks to your support, the United States military 
is the most capable fighting force in the world.
    With your continued support, the joint force will continue 
to adapt, fight, and win in current operations while 
simultaneously innovating and investing to meet future 
challenges. I don't believe we ever should send Americans into 
a fair fight. Rather, we should maintain a joint force that has 
the capability and credibility to assure our allies and 
partners, deter aggression, and overmatch any potential 
adversary. This requires us to continually improve our joint 
warfighting capabilities, restore full-spectrum readiness, and 
develop the leaders who will serve as the foundation for the 
future.
    The United States is now confronted with challenges from 
both traditional state actors and nonstate actors. The 
Department has identified five strategic challenges, and 
Secretary Carter has already addressed those. Russia, China, 
Iran, and North Korea continue to invest in military 
capabilities that reduce our competitive advantage. They are 
also advancing their interests through competition with a 
military dimension that falls short of traditional armed 
conflict and the threshold for traditional military response. 
Examples include Russian actions in Ukraine, Chinese activities 
in the South China Sea, and Iran's malign activities across the 
Middle East. At the same time, nonstate actors, such as ISIL 
and al Qaeda, pose a threat to the Homeland, the American 
people, our partners, and our allies. Given the opportunity, 
such extremist groups would fundamentally change our way of 
life.
    As we contend with the Department's five strategic 
challenges, we recognize that successful execution of our 
defense strategy requires that we maintain credible nuclear and 
conventional capabilities. Our strategic nuclear deterrent 
remains effective, but it's aging, and it requires 
modernization. Therefore, we're prioritizing investments needed 
for a safe, secure, and effective nuclear deterrent. We're also 
making investments to maintain a competitive advantage in our 
conventional capabilities, and we must further develop 
capabilities in the vital and increasingly contested domains of 
cyber and space.
    As the joint force acts to mitigate and respond to 
challenges, we do so in the context of a fiscal environment 
that has hampered our ability to plan and allocate resources 
most effectively. Despite partial relief by Congress from 
sequester-level funding, the Department has absorbed 800 
billion in cuts and faces an additional 100 billion of 
sequestration-induced risk through fiscal year 2021. Absorbing 
significant cuts over the past 5 years has resulted in our 
underinvesting in critical capabilities. Unless we reverse 
sequestration, we'll be unable to execute the current defense 
strategy, and specifically unable to address the challenges 
that Secretary Carter outlined.
    The fiscal year 2017 budget begins to address the most 
critical investments required to maintain our competitive 
advantage. To the extent possible within the resources provided 
by the 2015 Bipartisan Budget Act, it addresses the 
Department's five challenges. It does so by balancing three 
major areas: investment in high-end capabilities, the 
capability and capacity to meet current operational demands, 
and the need to rebuild readiness after an extended period of 
war. In the years ahead, we'll need adequate funding levels and 
predictability to fully recover from over a decade at war and 
delayed modernization. A bow wave of procurement requirements 
in the future include the Ohio-class submarine replacement, 
continued cyber and space investments, and the long-range 
strike bomber. It will also be several years before we fully 
restore full-spectrum readiness across the services and 
replenish our stocks of critical precision munitions.
    In summary, I'm satisfied the fiscal year 2017 budget puts 
us on the right trajectory, but it will take your continued 
support to ensure the joint force has the depth, flexibility, 
readiness, and responsiveness that ensures our men and women 
never face a fair fight.
    Once again, thank you for the opportunity to appear before 
you this morning. I look forward to your questions.
    [The prepared statement of General Dunford follows:]

            Prepared Statement by General Joseph Dunford Jr.
                            i. introduction
    Chairman McCain, Ranking Member Reed, members of this Committee, 
this posture statement addresses the state of our Nation 's armed 
forces, the current security environment, and the opportunities and 
challenges that lie ahead.
    I am humbled and honored to represent the incredible men and women 
of our Joint Force. During my first five months as Chairman, I have 
engaged soldiers, sailors, airmen, marines, and coast guardsmen at 
every level. I am confident, and you should rest assured, that the 
United States' military is the most capable fighting force in the 
world. The character, ingenuity, competence, and self-sacrifice of the 
servicemembers in our All-Volunteer Force remain our single greatest 
warfighting competitive advantage. I would like to express my gratitude 
to this distinguished body for its support in ensuring that we maintain 
the best equipped, trained, and led force in the world.
    With the continued support of Congress, the Joint Force will 
continue to adapt, fight, and win in current operations while 
simultaneously innovating and investing to decisively win future 
conflicts. We must never send young Americans into a fair fight. 
Rather, we must maintain a Joint Force that assures our allies and 
partners, deters potential adversaries, and has unquestioned overmatch 
when employed. This requires us to focus on improving joint warfighting 
capabilities, restoring joint readiness, and developing leaders who 
will serve as the foundation of the future Joint Force.
                       ii. strategic environment
    The institutions and structures that have underpinned international 
order for the last several decades remain largely intact. However, the 
United States is now confronted with simultaneous challenges from both 
traditional state actors and non-state actors. The Department has 
identified five strategic challenges--Russia, China, North Korea, Iran, 
and Violent Extremist Organizations. Russia, China, Iran, and North 
Korea present two distinct challenges to our national security. First, 
they continue to invest in military capabilities that reduce our 
competitive advantage. Second, these actors are advancing their 
interests through competition with a military dimension that falls 
short of traditional armed conflict and the threshold for a traditional 
military response. This is exemplified by Russian actions in Ukraine, 
Chinese activities in the South China Sea, and malicious cyber 
activities. At the same time, non-state actors such as ISIL, al Qaida, 
and affiliated organizations are destabilizing parts of the 
international community, attacking our global interests and threatening 
the Homeland. We must address these challenges to protect the stability 
of the international order and preserve U.S. influence.
    Successful execution of our defense strategy requires that we 
maintain credible nuclear and conventional capabilities. Our strategic 
nuclear deterrence force remains safe, secure, and effective but is 
aging and requires modernization. We are prioritizing renewed long-term 
investments in early warning sensors; nuclear command, control, and 
communications; and our triad forces. Similarly, we are making 
investments to maintain a competitive advantage in our conventional 
capabilities. However, potential vulnerabilities to our national 
security extend beyond just conventional or nuclear threats. To 
preserve the security of the Homeland, we must prevent the 
proliferation and use of WMD and associated technologies. We must also 
further develop our capabilities in the vital and increasingly 
contested domains of Cyber and Space.
    Future conflict with an adversary or combination of adversaries i s 
taking on an increasingly transregional, multi-domain, and multi-
functional nature. This is a marked shift from how past conflicts were 
fought and will put significant stress on the Department's 
geographically-based organizational structure and associated command 
and control (C2) architecture. Future conflict will spread quickly 
across multiple combatant command geographic boundaries, functions, and 
domains. We must anticipate the need to respond to simultaneous 
challenges in the ground, air, space, cyberspace, and maritime domains. 
It is this type of operating environment that informed our investments 
in PB17 and our efforts to more effectively integrate joint 
capabilities.
    As the Joint Force acts to mitigate threats to U.S. interests 
against the backdrop of the Department's five strategic challenges, we 
do so in the context of a fiscal environment that hampers our ability 
to plan and allocate resources most effectively. Despite partial relief 
by Congress from sequester-level funding since fiscal year 2012, the 
Department is absorbing approximately $800B in cuts compared to the 
ten-year projection in the fiscal year 2012 Budget, and faces an 
additional $100B of sequestration-induced risk through fiscal year 
2021. Absorbing cuts of this magnitude has resulted in underinvestment 
in critical capabilities. PB17 takes necessary steps toward s balancing 
the needs of meeting current and future operational requirements, 
investing in capability development, and keeping faith with 
servicemembers and their families. We must continue to work together to 
develop future budgets which provide the investment levels and 
flexibility needed to address our national security interests.
               iii. current assessment of the joint force
    As directed in the 2014 Quadrennial Defense Review, the U.S. Armed 
Forces must be able to simultaneously defend the Homeland while waging 
a global counterterrorism campaign, deter potential adversaries, and 
assure allies. If deterrence fails, the U.S. military must be capable 
of defeating one adversary while denying a second adversary's 
objectives in a different region. Due to shortfalls in capacity and 
critical capabilities such as ISR and long-range strike, as well as 
increased timelines for force movements, the Joint Force will be 
challenged to respond to a major contingency while simultaneously 
defending the Homeland and continuing the counter-VEO mission. 
Capability and capacity shortfalls would be particularly acute if the 
force were called to respond to a second contingency on an overlapping 
timeline. Moreover, some allies and partners are less capable or 
willing to fill these gaps than in the past.
    Today, combatant command assigned missions can be accomplished, but 
all combatant commanders cite resource limitations and capability 
shortfalls that may increase casualties, lengthen response timelines, 
and extend the duration of a future conflict. There are also shortfalls 
in our ability to conduct day to day shaping activities that serve to 
mitigate the risk of conflict and properly posture the force in event 
of conflict. These shortfalls include the number of ready response 
units in the Services' non-deployed force, theater ISR assets, command 
and control, intelligence, cyber operations, precision munitions, 
missile defense, and logistics.
    Recovery of full-spectrum Joint Force readiness remains fragile. 
The adverse impact of budget reductions over the past several years 
combined with a persistently robust global demand for forces and 
capabilities continues to impede our ability to rebuild readiness after 
more than a decade of contingency operations. Regaining full-spectrum 
capabilities and appropriate levels of material readiness will take 
time, resources, and a healthy industrial base.
    The Joint Force has maintained competitive advantage in technology 
for several decades. However, this advantage has been eroded by our 
adversaries' efforts to improve their warfighting capabilities and 
avoid or counter U.S. military technological strengths. Moreover, the 
rapid pace of technological advances combined with the wide 
proliferation of new technologies has allowed our adversaries to more 
easily acquire advanced capabilities. This is highlighted by the 
increasing ease of access to cyber and space technologies and expertise 
in the commercial and private sectors. Adversaries are able to diminish 
the long-term advantage of key U.S. capabilities by leveraging access 
to commercial technology, targeting our defense industrial base with 
cyber espionage and sabotage, and developing capabilities within 
tighter development cycles than our bureaucratic acquisition cycle 
allows.
                iv. capability trends for key challenges
    The Department's five strategic challenges were the primary driver 
behind our risk assessment. For a classified analysis of these 
challenges and our response options, please review my Chairman's Risk 
Assessment and the Secretary's Risk Mitigation Plan.
    Russia--Russia's actions threaten NATO cohesion and undermine the 
international order. Russia's military modernization and doctrine 
development aim to neutralize traditional U.S. competitive advantages 
and limit strategic options.
    The Russian military presents the greatest challenge to U .S. 
interests. Russia is also the only actor aside from the United States 
that can project strategic power simultaneously in multiple regions. To 
assure our national security and reinforce international order, the 
United States and our NATO allies must improve our military capability, 
capacity, and responsiveness to deter a resurgent Russia. While Russia 
has not signaled the intent to directly attack the United States or our 
NATO allies, Russia's National Security Strategy identifies the United 
States and the expansion of NATO as threatening their national 
security. Moscow's strategic nuclear capabilities represent a potential 
existential threat to the United States, and their non-strategic 
nuclear capabilities threaten our allies and U.S. forward-based forces 
in Europe and Asia. Russia has also shown a willingness to use 
competition short of traditional military conflict--such as in 
Ukraine--to pursue its strategic goals.
    In recent years, Russia has undertaken a long-term strategic 
armaments program designed to develop military capabilities and systems 
that erode our competitive advantage across the spectrum of conflict. 
Russia has modernized its strategic nuclear forces, enhanced their 
force projection and anti-access/area denial (A2/AD) capabilities, and 
significantly increased its proficiency in executing hybrid operations. 
Operations in Ukraine and Syria serve to demonstrate these new 
capabilities and increase their proficiency.
    In the Cyber domain, Russia is a peer competitor of the United 
States and has demonstrated a willingness to exploit cyber to achieve 
its objectives. We suspect Russia has conducted a range of cyber 
operations against Government, academic, and private networks. Russian 
cyber capability could potentially cause considerable damage to 
critical network equipment and national infrastructure throughout the 
United States and Europe. In the near to medium term, Russia is also 
modernizing its counter-space capabilities to defeat a wide range of U 
.S. spacebased capabilities while seeking to secure Russian freedom of 
action.
    In summary, Russia is improving its high-end warfighting 
capabilities and closing the gap on our competitive military 
advantages. Since 2008, Russia has demonstrated increasingly 
sophisticated military capabilities and doctrine. In these operations, 
Russia has broadly operated across the spectrum of conflict to include 
information operations and cyber warfare. Russia is the only actor that 
can project strategic power in multiple regions to threaten U.S. 
national interests and coerce U .S. and allied decision-makers.
    PB17 addresses Russia's aggressive policies and military 
modernization through investment in a number of high-end capabilities. 
The budget request also quadruples funding for the European Reassurance 
Initiative (ERI) to $3.4B in fiscal year 2017 to reassure our NATO 
allies and deter Russian aggression.
    China--China's rapid military modernization and expanding presence 
in Asia and beyond increase the probability for misunderstanding and 
miscalculation.
    China is engaged in a sustained military modernization effort that 
is reducing our competitive military advantage against it. This effort 
is coupled with an ambitious foreign military-tomilitary engagement 
program that aims to acquire advanced tactics, training, and procedures 
from other developed militaries. China is also seeking to improve the 
joint capability of its armed forces to project power-enhancing its 
ability to fight and win a high-intensity regional conflict. Critical 
to Chinese efforts is the development of capabilities that specifically 
counter U.S. operational strength.
    Over the course of the last year, China's military operations have 
expanded in size, complexity, duration, and geographic location. 
Additionally, China continues to make large-scale investments in 
advanced A2/AD capabilities, including short-, medium-, and 
intermediate-range ballistic and cruise missiles employing 
countermeasures to deny U.S. missile defense systems. China is also 
investing in land attack and anti-ship cru i se missiles, counter-space 
weapons, cyber, improved capabilities in nuclear deterrence and long-
range conventional strike, advanced fighter aircraft, integrated air 
defenses, undersea warfare, and command and control capabilities. 
China's nuclear-capable missile forces pose a military risk to the U 
.S. Homeland. China's landbased missile forces continue to expand, 
increasing the number of nuclear warheads capable of striking the 
United States as well as bases in the Pacific theater.
    The aggregate of China's expanding, well-resourced, and well-
trained cyberspace forces represent a threat to the United States. 
China's use of computer network attacks in a conflict with the United 
States or our allies and partners could seriously limit access to 
cyberspace and further degrade deployment and sustainment of forces. In 
the Space domain, China continues to enhance its ability to support 
terrestrial operations. By pursuing a diverse and capable range of 
offensive space control and counter-space capabilities, China is also 
working to diminish U.S. space dominance.
    In summary, China's rapid military modernization is quickly closing 
the gap with U.S. military capabilities and is eroding the Joint 
Force's competitive military advantages. China's military forces can 
constrain U.S. military operations in the Western Pacific and hold key 
U.S. infrastructure and facilities at risk. Its strategic capabilities 
are improving and present an increasing risk to the U.S. Homeland and 
our allies.
    PB17 is supportive of our commitment to the Asia-Pacific rebalance. 
It invests in high-end capabilities, particularly those needed to 
maintain undersea dominance and to counter A2/AD capabilities. The 
budget request also funds the buildup of Guam as a strategic hub, 
initiation of P-8 maritime patrol aircraft rotations in Singapore, 
implementation of rotational initiatives in Northern Australia, and 
positioning F-35 fighters in Japan in 2017.
    North Korea--North Korea's nuclear weapons and ballistic missile 
programs, increasing asymmetric capabilities, and willingness to use 
malicious cyber tools threaten the security of the Homeland. These 
capabilities, alongside conventional forces, also threaten our allies 
in the region.
    North Korea has an opaque and confrontational national leadership, 
the fourth largest army in the world, and increasing nuclear and 
ballistic missile capabilities. The regime represents an immediate 
threat to U.S. allies in the region and an increasing threat to U.S. 
territories and the Homeland.
    The United States maintains a competitive military advantage 
against the relatively low technology North Korean military. However, 
in the event of a conflict on the peninsula, North Korea may be able to 
seize the initiative and rapidly escalate hostilities utilizing special 
operations forces, mass, and long-range fires. Risk of large numbers of 
civilian and military casualties remains high.
    North Korea continues to develop its offensive and intelligence-
collection capabilities aimed at exploiting U.S. and allies' cyber 
domains. North Korea's current cyber capabilities remain modest and 
pose the greatest threat to poorly defended networks. We expect North 
Korea to continue investing in more capable cyber tools to develop 
asymmetric options which can be effective against more sophisticated 
networks.
    In summary, North Korea's ballistic missile and nuclear 
developments, willingness to conduct malicious cyber activities, and 
potential to seize the initiative in a conflict on the peninsula pose 
risks to the security of the United States and our allies.
    As previously noted, PB17 is supportive of our commitment to the 
Asia-Pacific rebalance and accounts for the challenges posed by North 
Korea. The budget provides additional funds for conventional munitions 
and continues investment in missile defense.
    Iran--Continued expansion of Iranian malign influence in the Middle 
East threatens the stability and security of key regional partners. 
Iran is increasingly capable of restricting U.S. military freedom of 
action in the region.
    Iran is improving the quality and quantity of select conventional 
military capabilities. Specifically, Iran continues to leverage its 
position on the Strait of Hormuz to pursue an area denial strategy with 
increasing capability and capacity of ISR, anti-ship cruise missiles, 
fast attack craft, fast inshore attack craft, submarines, and mines. 
Iran augments its maritime patrol capacity with unmanned aerial 
reconnaissance systems and is developing an armed unmanned aerial 
system capability. Improvements in the quality, quantity, and lethality 
of Iran's military capabilities threaten both U.S. interests and 
freedom of action within the region.
    To date, Iran has not demonstrated the capability to strike the 
continental United States with a ballistic missile. However, Iran has 
made significant strides in its missile development programs since 
2009, when it successfully launched its first satellite. In 2010, Iran 
unveiled a new space launch vehicle that--if configured as a ballistic 
missile--would be capable of reaching the United States. In the Cyber 
domain, Iran's capabilities present a limited but increasing threat to 
the United States. Iran has demonstrated some degree of success in 
targeting vulnerable critical infrastructure networks.
    In summary, Iran and its malign activities present the greatest 
threats to U.S. interests in the Middle East and North Africa. Tehran 
has demonstrated the ability to project influence across the region and 
presents an asymmetric threat to the United States and its regional 
partners. Iran's conventional military modernization is not likely to 
compete with U.S. capability, but its ballistic missile force can hold 
key regional U.S. infrastructure at risk.
    PB17 addresses Iran's malign activities though investments in 
capabilities that improve our posture, enhance regional partnerships, 
and provide options in the event of a contingency. Specifically, the 
budget funds additional capabilities for power projection, sea control, 
and regional missile defense.
    Violent Extremist Organizations--VEOs threaten the stability and 
security of key regional partners and many of our closest allies. Their 
ability to inspire attacks threatens the security of U.S. citizens and 
interests at home and abroad.
    VEOs are distinct from the other four threats, representing both an 
immediate and long-term risk. Counter-VEO operations will require 
continued focus and resources even if the Joint Force is called on to 
respond to a contingency involving Russia, China, Iran, or North Korea. 
While VEOs do not pose an existential threat to the United States, they 
continue to increase their abilities to inflict harm upon our vital 
interests. Several of our partner nations -from South Asia to the 
Middle East and Africa--are battling VEOs that have established 
territorial control and are directly challenging existing Governments. 
U.S. values and the rules-based international order are also threatened 
by VEOs. Additionally, VEO-driven conflicts have generated mass 
migration and significant flows of foreign fighters to and from 
conflict zones, which poses risk to the United States and our allies 
and partners in the Middle East, North Africa, and Europe.
    The PB17 submission funds our ongoing counter-VEO operations. PB17 
OCO funding will help establish counterterrorism platforms in South 
Asia (Afghanistan), the Middle East (Levant), East Africa (Djibouti), 
and an enhanced presence in North/West Africa. These platforms will 
provide sustainable, flexible, and scalable nodes from which to conduct 
planning and synchronize operations within the U.S. Government and with 
allies and partners.
                v. crosscutting sources of military risk
    The Joint Force faces a variety of crosscutting sources of military 
risk: gaps and shortfall s that impact our ability to accomplish our 
missions and objectives, both in today's operations and in tomorrow's 
potential conflicts.
Multiple, overlapping contingencies
    In accordance with the 2014 Quadrennial Defense Review, the U.S. 
Armed Forces must be capable of simultaneously defending the Homeland 
while waging a global counterterrorism campaign, deterring potential 
aggressors, and assuring allies. If deterrence fails, U.S. Forces must 
also be capable of defeating an adversary and denying the objectives 
of--or imposing unacceptable costs on--a second aggressor in another 
region. The Joint Force will be stressed to execute a major contingency 
operation on desired plan timelines with available assets, while 
simultaneously defending the Homeland and continuing the counterterror 
fight against VEOs. Response to aggression by another adversary at the 
same time would be further limited due to capacity shortfalls, force 
movement timelines, and the dedication of enabling forces and 
capabilities elsewhere.
Intelligence, Surveillance, and Reconnaissance
    A lack of theater ISR surge capacity diminishes the Joint Force's 
responsiveness and flexibility to support emergent crisis or 
contingency. Current theater ISR assets and associated analytic support 
capacity remains short of combatant commanders' increasing 
requirements.
High Demand--Low Density Capabilities
    HD/LD capability and capacity shortfalls affect our ability to 
achieve assigned missions. We continue to operate systems in several 
critical mission areas and deploy personnel with specific specialty 
skills at high rates, resulting in minimal to no surge capacity in 
those areas. Similar to ISR, this negatively impacts the Joint Force's 
responsiveness and flexibility to support emergent requirements. HD/LD 
capability shortfalls that pose significant military risk include: 
missile defense systems, naval expeditionary forces, personnel recovery 
assets, airborne command and control systems, explosive ordnance 
disposal assets, air superiority and global precision strike units, and 
cyber mission forces.
Munitions
    Key precision guided munitions shortfalls are exacerbated by 
ongoing operations and may impact potential contingency response. 
Additionally, our current global inventories are insufficient for 
theater missile defense (TMD), standoff, and air-to-air munitions 
needs.
Logistics
    We are seeing increasing risk associated with the Joint Logistics 
Enterprise's ready and available capacity. Critical logistics enablers 
lack capacity and responsiveness: 79 percent of such units report 
reduced readiness levels which affects mission accomplishment 
flexibility and increases vulnerability. A majority of these elements 
are motor transportation, engineer, and cargo handling units necessary 
to support the deployment and sustainment of combat elements. Of these 
units, the vast majority reside in the Reserve Component (RC). As such, 
any contingency that requires responses on a timeline faster than that 
designated for RC mobilization will face risk from the lengthened 
timelines for combat forces and their sustainers to arrive in theater.
                            vi. pb17 summary
    PB17 addresses the Department's five strategic challenges--a 
resurgent Russia, a rising China, North Korea, Iran, and VEOs--by 
balancing the demands of readiness, capacity, and capability within the 
resources provided by the 2015 Bipartisan Budget Agreement. The total 
fiscal year 2017 topline, which is approximately $17 billion below what 
we planned in PB16, required us to defer modernization in favor of 
near-term readiness and force structure. These reductions and delays in 
modernization will exacerbate the procurement bow wave we confront at 
the end of the Future Year Defense Program (FYDP) and compound risk to 
the overall balance of the Joint Force.
    PB17 also contains fiscal risk. The budget assumes higher toplines 
in fiscal year 2018-2021, continued favorable economic factors, and 
future efficiencies. We also continue to depend on OCO funding for 
ongoing contingency operations and Joint Force readiness recovery.
Key Capability Investments
    Given a constrained topline, PB17 prioritizes investments to 
modernize the future Joint Force while balancing capacity and 
readiness.
TACAIR
    The Air Force accepts risk in the ``air'' domain in order to invest 
in nuclear enterprise, space, and cyber priorities. Cuts in fifth 
generation fighter aircraft procurement create risk in the mid-2020s, 
which will be mitigated by 4th generation fighter aircraft 
enhancements. PB17 funds 54 Air Force combat-coded fighter squadrons in 
the base budget and one squadron supporting the European Reassurance 
Initiative in the OCO budget (a total of six more squadrons than the 
PB16 plan for fiscal year 2017). The Department of the Navy will 
procure additional F-35C (+10), F-35B (+3), and F/A-18E/F (+14) over 
PB16 levels. The Department of the Navy will also complete its planned 
buy of 109 P-8A by fiscal year 2019.
Cyber
    State actors will remain the most capable threats to computer 
network operations. Non-state actors--VEOs, ideological hackers, and 
cybercriminals-have demonstrated high-level network intrusion skills 
against the U.S. Government and private entities and will continue to 
develop sophisticated tools to achieve their objectives. Developing and 
growing the Cyber mission force will require a long-term concerted 
effort. PB17 invests in both quantity and quality of cyber 
capabilities. It funds $6.78 in fiscal year 2017 (a 13 percent 
increase) and approximately $34 billion across the FYDP in cyber 
posture and capabilities--including investments in strategic cyber 
deterrence, cyber security, and offensive cyber.
Space Acquisition
    PB17 makes significant investment in space posture and capability. 
We are funding $7 billion in fiscal year 2017 and approximately $38 
billion across the FYDP, including space situational awareness, space 
launch capabilities, and command & control of critical space 
architecture. Other budget items will harden follow-on communications 
and warning satellites, accelerate GPS replacement to assure targeting 
accuracy and ability to resist jamming, and add security features to 
prevent exploitation and increase overall system resilience, safety, 
and stability.
Airborne ISR
    There is an ever-increasing demand for ISR assets to inform and 
enable our current and future warfighting efforts; PB17 invests in 
aircraft procurement and ISR support infrastructure. This is an area 
where we must increase both capacity and capability in the coming 
years. Continued shortfalls will stress the force to meet current 
requirements and do not provide any surge capacity to address near-peer 
challengers or overlapping contingency operations.
    The Navy is reducing planned Unmanned Carrier Launched Airborne 
Surveillance and Strike program capabilities in order to deliver a low-
end, permissive-environment tanking and surveillance capability (saving 
approximately $680M across the FYDP). The Air Force projects no 
significant change from PB16, maintaining its plan for 60 M Q-9 Combat 
Air Patrols and JSTARs Recapitalization.
Power Projection
    PB17 addresses critical power projection capabilities and related 
assets required to operate in non-permissive environments stemming from 
adversary advances in A2/AD. PB17 leverages ongoing initiatives to 
improve survivability of critical assets and enhance offensive strike 
capability. It invests in hypersonic vehicle concepts, flight 
demonstrations, infrastructure, and advanced conventional warheads. It 
also funds improvement in critical base and missile defenses through 
expedient shelters and multispectral camouflage. Finally, it increases 
the survivability in the undersea domain by investing in Maritime 
Strike Tactical Tomahawk capability, Unmanned Undersea Vehicle 
capabilities, additional Virginia Payload Modules, and Acoustic 
Superiority Program upgrades on Ohio- and Virginia-class submarines.
Shipbuilding
    Joint Force shipbuilding investment is on track to meet fleet goals 
in PB17. The Navy continues to grow the size of the fleet toward the 
goal of 308 ships to meet warfighting and posture requirements. PB17 
continues procurement of 10 DDG-51 Flight III destroyers across the 
FYDP but reduces planned Littoral Combat Ship procurement from 52 to 
40. It also invests in undersea capabilities as described previously.
Munitions
    PB17 invests in rebuilding depleted stocks of precision guided 
munitions and in future critical munitions capabilities and 
enhancements. Specifically, the budget includes $1.8 billion for 
precision guided munition replenishment due to usage during ongoing 
operations. Looking toward the future, the Navy is maximizing 
production of SM-6 missiles while maintaining required levels of other 
advanced munitions. It is also beginning development of follow-on 
torpedoes and modernizing Tactical Tomahawk to enhance maritime strike 
capability. The Air Force will continue with last year's plan to 
convert unguided bombs into all-weather smart weapons. The Marine Corps 
and the Army are funding RDT&E to support fiscal year 2020 development 
of area effects munitions compliant with the Departmental cluster 
munitions policy. Finally, the Army plan procures an additional 80 Army 
Tactical Missile System (ATACMS) Service Life Extension Program 
missiles, which bridges the capacity gap until the Army can develop and 
procure improved capability ATACMS.
Nuclear Enterprise Sustainment and Recapitalization
    Because nuclear deterrence is the highest priority of the 
Department of Defense, PB17 enhances investment in all three legs of 
our aging nuclear triad. Within the nuclear enterprise, the budget 
funds $19 billion in fiscal year 2017 and approximately $108 billion 
across the FYDP, adding $9.8 billion (an increase of 10 percent) to 
sustain and recapitalize the nuclear triad and strategic command, 
control, and communication systems. It invests in legacy strategic 
bomber modernization, ground-based strategic deterrence, incremental 
funding of the first ship of the Ohio-class replacement program, long-
range strike bomber, long-range standoff cruise missile, and the 
security helicopter replacement.
Counterterrorism
    The fiscal year 2017 budget request includes approximately $13. 
billion to support counterterrorism efforts in South Asia 
(Afghanistan), the Middle East (the Levant), East Africa (Djibouti), 
and an enhanced presence in North/West Africa. These capabilities are 
essential to implementing a new framework to counter terrorism, 
particularly against ISIL, that more effectively synchronizes counter-
VEO efforts within the Department and across the Government.
                        people and institutions
Talent and Leadership
    Beyond budgets and technology, the All-Volunteer Force remains our 
greatest asset and true warfighting competitive advantage. The future 
operating environment will place new demands on leaders at all levels. 
Our leaders must have the training, education, and experience to meet 
those demands. We are undertaking a series of significant changes to 
the personnel systems which have previously underpinned the Joint 
Force: military pay and compensation modifications, retirement reforms, 
talent management initiatives, and diversity integration efforts. These 
changes aim to make the Joint Force an inclusive, more agile, and 
stronger force by leveraging the talents of all qualified citizens to 
meet the challenges of the future. The Services are responsible to 
assess and execute these changes; not all will be easy. However, we are 
committed to preserving standards, unit readiness, and cohesion, and we 
will steadfastly adhere to our principles of dignity and respect for 
all servicemembers over the continuum of their service and beyond.
End strength
    Our end strength is driven by strategy but is also constrained by 
current fiscal realities. PB17 projects the force end strength 
consistent with the 2014 QDR forecasts. However, the emergence of ISIL 
and Russian revanchism has changed the strategic environment since the 
QDR was published. Force availability shortfalls hamper our ability to 
rapidly respond to multiple, overlapping contingencies. End strength 
reductions below the current plan must be carefully weighed against the 
end states sought by the Department.
    Active Duty Service end strengths in the proposed PB17 remain 
relatively constant across the FYDP (less than 0.7 percent overall 
reduction by fiscal year 2021). The Active Component will be reduced by 
9,800 personnel across the Services by fiscal year 2021, with most of 
that reduction coming in the Army by fiscal year 2018. Reserve 
Component end strength will see negligible decreases. Specifically, the 
Army will maintain end strength and capacity to meet operational 
requirements, and build a rotationally focused and surge-ready 980,000 
Total Army (450,000 Active Component), consistent with the 2014 QDR. 
Both the Navy and Marine Corps will maintain Active Component end 
strength numbers at 323,000 and l 82,000, respectively. The Air Force 
will maintain Active Component end strength at 317,000.
                            vii. conclusion
    PB17 reflects difficult choices made in the context of today's 
security challenges and fiscal constraints. Our budget submission 
balances investment in the high-end capabilities needed to counter 
major power competitors, the capacity to meet current operational 
demands and potential contingencies, and the need to rebuild read ness 
after an extended period of war. However, to accommodate a constrained 
topline, PB17 defers near-term modernization which will only exacerbate 
a coming bow wave of strategic recapitalization and other procurement 
requirements. More broadly, the cumulative effect of topline reductions 
over the past several years has limited the flexibility and resiliency 
of the Joint Force, and looking ahead I am concerned that the demand 
for future capabilities and capacity will outpace the resources 
available, forcing even more difficult decisions to match strategy and 
resources. I am grateful to Congress for your continued support, and I 
look forward to working with you to ensure the United States maintains 
the most capable fighting force in the world--and to ensure we never 
have to send American men and women into a fair fight.

    Chairman McCain. Secretary McCord, do you have any 
statement?
    Mr. McCord. I do not, Mr. Chairman.
    Chairman McCain. Well, thank you. I thank the witnesses.
    Mr. Secretary, I appreciate your comments about the Iranian 
behavior and their subsequent behavior exploiting this 
humiliation of American servicemembers. What action have you 
recommended that we take in response to this?
    Secretary Carter. Well, we're--everything we're doing in 
the Gulf, Chairman, including all of the actions that are 
funded in this budget, which include tens of thousands of 
Americans in the region--we want that--our ballistic missile 
defenses in the region--we want that----
    Chairman McCain. I see, but all of these things are planned 
and in the budget. I wonder if you had planned on any specific 
action that the Iranians would know is a result of our--
humiliation of our servicemembers.
    Secretary Carter. Well, I've made it quite clear that----
    Chairman McCain. You've made it quite clear that you're 
outraged and all that, but what specifically have you 
recommended to do in response to that?
    Secretary Carter. We're continuing to take all of the 
actions that we need to----
    Chairman McCain. What--obviously, the--the specific action 
in response to the Iranian outrage.
    Secretary Carter. At the time of the incident, we prepared 
to protect our people. It turns out they were released in time. 
We later had the opportunity to see them being filmed in the 
way they were. It made very clear that that's the kind of 
behavior we wouldn't want to engage in.
    Chairman, you want to add anything?
    Chairman McCain. Is stability in Afghanistan and the region 
in our national interest, particularly in light of the 
testimony of General Campbell and General Nicholson that the 
situation in Afghanistan is deteriorating?
    Secretary Carter. I'll start there and then ask the 
Chairman to chime in.
    Chairman McCain. I'll ask--fine.
    Secretary Carter. The--well, the situation in Afghanistan 
is very important to us. We have--the Afghans had a tough fight 
this last fighting season. They're going to have a tough season 
this time. It's important that we--not just we, but the rest of 
our coalition, stay with them, not just this year, in 2016, but 
in 2017 and so forth. We're continually assessing and adjusting 
how we give support to the Afghan Security Forces----
    Chairman McCain. Do you--but, you don't disagree with 
General Nicholson and General Campbell--I guess I'll ask 
General Dunford--that the situation is deteriorating in 
Afghanistan? Do you agree with that?
    General Dunford. Chairman, I listened to their testimony. I 
think they provided an accurate assessment of the situation in 
Afghanistan.
    Chairman McCain. Do you consider the Taliban to be a threat 
to Afghanistan's stability?
    General Dunford. I do, Chairman.
    Chairman McCain. Then, why do U.S. Forces not have the 
authority, other than self-defense, to target Taliban fighters 
in support of our Afghan partners?
    General Dunford. Chairman, right now----
    Chairman McCain. The threat to our stability and the 
situation is deteriorating, and yet we were--still don't give 
the authority of American forces to--other than self-defense--
to target Taliban fighters.
    General Dunford. Right now, Chairman, our authorities are 
focused on supporting the Afghan forces in their fight against 
the Taliban.
    Chairman McCain. So, even though the situation is 
deteriorating, even though they continue their attacks, even 
though--then we still do not give the U.S. Forces the authority 
to target Taliban fighters unless they are directly attacking 
the United States.
    General Dunford. At this time, that's correct, Chairman.
    Chairman McCain. Does that make sense to you?
    General Dunford. Chairman, we're in the process of 
reviewing the lessons learned from 2015. We have some 
recommendations made by General Campbell. We----
    Chairman McCain. We're well into 2016, and right now the 
plan is to cut the force from 9,800, drop down to 5,500 by the 
end of this year. Here we are, in March.
    General Dunford. Chairman, where I was going was, we have 
recommendations from General Campbell for changes made by--
made--to make in 2016 as a result of lessons learned in 2015. 
This week, we conducted a video teleconference, Secretary 
Carter and I with General Nicholson, who's on the ground in 
Afghanistan right now, to get his thoughts. We're in the 
process of making recommendations to the President for changes 
that might be made to make us more effective in supporting 
Afghan forces in 2016 and making them more successful.
    Chairman McCain. Including the force levels?
    General Dunford. A full range, to include capabilities, 
that's correct, Chairman.
    Chairman McCain. Last year, in the 2016 Future Years 
Defense Program, where you indicated that you needed an 
additional $37 billion above the BCA caps in 2016, the then-
Chairman of the Joint Chiefs of Staff said we're at the lower 
ragged edge of manageable risk. Now you're saying that it seems 
to be okay, even though the Army had to cut 24 UH-60 Black Hawk 
helicopters, the Air Force had to cut 5 F-35s and 45 over the 
next 4 years, the Air Force--the Navy plans to lay up an 
additional 5 cruisers, the Marine Corps plans to cut 77 joint 
light tactical vehicles and $1.3 billion in military 
construction, et cetera, et cetera. All of those cuts are being 
made, as opposed to what you asked for last year.
    So, now you're saying that we can--and, by the way, we've 
seen this bow-waves movie before. When you cut F-35s, when you 
cut the Black Hawks, when you cut them, you increase the costs, 
because the original plans are at optimum cost. So, now you're 
satisfied with the level, which is $17 billion less than last 
year, even though your predecessor said we were on the lower 
ragged edge of manageable risk with the amount we had last 
year, which was $17 billion more. It's hard for us to 
understand, General.
    General Dunford. Chairman, to be clear, what I've said is 
that the budget this year is sufficient to execute the 
strategy. There is associated risk in that, and I've provided a 
classified risk assessment to the Secretary. You'll see that 
some of the investments that we made this year are designed to 
address that risk.
    My most significant concern, frankly, is the bow wave of 
modernization that has been deferred that we're going to start 
to see in fiscal year 2019, 2020, 2021, and 2022. So, by no 
means have I said that the resource level for the Department as 
we look out over the next few years is adequate. What I simply 
said was that this year's fiscal year 2017 budget is sufficient 
to meet the strategy.
    Chairman McCain. So, it's okay with you to cut 24 Black 
Hawks, 5 F-35s, 45 over the next 4 years, Marine Corps cut 77 
joint light tactical vehicles, $1.3 billion in military 
construction, which last year was told to this committee that 
you needed.
    General Dunford. Chairman, that's not what I said. I didn't 
say it was okay to do those things. What I said was, with 
regard to this budget, we have made the best decisions that we 
can within the top-line that we were given from Congress. So, 
what I'm comfortable with is that we have made the right 
priorities. I'm not comfortable that we have addressed all the 
requirements.
    Chairman McCain. Senator Reed.
    Senator Reed. Well, thank you very much, Mr. Chairman.
    Thank you, gentlemen, for your testimony.
    One of the key issues that the committee is focused on and 
you're focused on is readiness. General Dunford, readiness is a 
function of not only resources, but time. Can you explain, or 
at least--I think the question is, Within the constraints you 
face, which are significant, you have tried to maintain and 
improve readiness, but that won't happen just with more money. 
That'll take time.
    General Dunford. Senator, thank you.
    That's right. From my perspective, there's three 
components. There's the money, there's the time, and then 
there's operational tempo. The operational tempo has maintained 
at a very high level, even as the force has drawn down from its 
peak, 3 or 4 years ago. As a result of sequestration, and 
particularly in 2013, we laid off a lot of engineers, we laid 
off a lot of artisans. We had a backlog of maintenance. That's 
going to take time to recover from that backlog of maintenance. 
In some cases, we deferred modernization issues, equipment, and 
so forth, that'll have an impact on readiness. Then, being able 
to recover, from a training perspective, requires an 
operational tempo that's much more sustainable than the one we 
have right now. So, from my perspective, that's why it's going 
to take--and I think you've heard from the Service Chiefs--in 
probably the near term, one of the services will be ready in 
about 3 or 4 years; and the Air Force, at the outside, I think 
has identified 2024 before it fully recovers. In a--and much of 
that is a function of aircraft maintenance and readiness.
    Senator Reed. But, in the context of this budget, the 
resources that you have available, the dollars, for readiness 
is sufficient at least to continue the improvement in readiness 
that you must achieve. Is that your estimate?
    General Dunford. Senator, the Secretary prioritized the 
readiness, particularly the readiness of those forces that will 
deploy. We have bought as much readiness as we can in fiscal 
year 2017. Many of the issues that we have with regard to 
readiness can't be addressed with additional resources this 
year. Again, they'll take time.
    Senator Reed. Thank you.
    Mr. Secretary or Mr. McCord, with respect to procurement, 
my understanding, but please correct me, is that you've done 
all you can to maintain multiyear contracting for systems, 
which essentially keeps us in the ball game, if you will, but 
that if we do not fix the sequestration problem next year, this 
fragile structure will sort of fall apart. But, we are still 
maintaining the cost-efficient multiyear contracting----
    Secretary Carter. We are.
    Senator Reed.--and we're not cutting back on those deals.
    Secretary Carter. No, we are. This gets to the point the 
Chairman raised about, How are we--how did we accommodate the 
difference between what we planned last year and what we got in 
the Bipartisan Budget Agreement. That--what I described as a 
net of 11 billion of our almost 600 billion. How did we 
accommodate that? As the Chairman said--and I was very 
insistent upon this, as was the Chairman--we protected 
readiness. So, the principal impact came in a number of 
modernization programs, to include aircraft, shipbuilding, a 
number of minor modernization programs. That's what we did. 
It's all out there, and I'm sure you'll be reviewing it.
    What we didn't do was not fund the service readiness 
recovery plans, where--as they try to move back to full-
spectrum readiness from where they've been after the Iraq and 
Afghanistan wars. That's what we need in all of the services, 
is full-spectrum. Making up some of the maintenance backlog, 
that particularly affects Marine Corps aviation. We did not 
change any of our end-strength goals. We did not change 
military compensation to make this difference. We didn't 
terminate, to your point, any major programs, any multiyear 
contracts. We didn't RIF [reduction-in-force] any employees. We 
didn't have to do any of that, but we did have to make 
adjustments. They're there for you to see.
    Are we happy making those adjustments? No, but that's what 
we needed to do to accommodate the Bipartisan Budget Agreement. 
Now, if the Bipartisan Budget Agreement were to fall apart, as 
everyone has said, that is our biggest strategic danger, 
because that will affect, in the future years, our ability to 
recover full-spectrum readiness, it will affect all those 
things that we did not have to affect this year. But, that's 
how we adjusted to the Bipartisan Budget Agreement.
    Senator Reed. Just a final point. Is--the concurrence or 
the opinion that has been expressed by, I think, everyone here 
about other need to end sequestration before 2018 is critical, 
paramount, has to be done.
    Secretary Carter. That is the greatest strategic risk to 
the Department of Defense, is the reversion to sequestration. I 
very much hope we can avoid that.
    Senator Reed. Thank you, Mr. Chairman.
    Chairman McCain. Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    I'm not going to ask a question about Gitmo. This is a 
budget hearing, but it's one that you should both be aware that 
the--there are two groups of people at this table up here. One 
is the hardliners, who feel it's just absurd to even think 
about giving up the resources that we have there, and 
particularly in light of the fact that we have a recidivism 
rate of, what, 30 percent or so. Others are going to be talking 
about--asking questions about that, so I'll let them take the 
time to do that. But, that'll be one of the considerations you 
have.
    You know, it's easy to kind of get--I'm not saying that 
we're hearing glowing reports right now, but we do hear all the 
time, as you said, Secretary Carter, we have the best-equipped, 
the best-trained, and all of that. That sounds good. That's the 
good side. But, there's a bad side, too. We're not where we 
normally should be and have been in the past. Have you--we've 
had probably more hearings, in the years that I've been on both 
the House and the Senate Armed Services Committee, this year 
than we've ever had before. I think I--I think that's the right 
thing to do. People are going to have to wake up and know the 
problems that we have.
    Now, when we--before this committee, Lieutenant General 
Nicholson said the security situation in Afghanistan is 
deteriorating. I think we probably agree with that. Last week, 
General Austin, before this committee, the--he's the CENTCOM 
[U.S. Central Command] Commander--in response to Senator 
McCain's question, he testified to this committee, just last 
week, that it may be time to reconsider the plan to reduce 
America's military forces in Afghanistan.
    General Dunford, is he right?
    General Dunford. Senator, thank you.
    As a matter of fact, we're in the process right now of 
reviewing----
    Senator Inhofe. Of reconsidering.
    General Dunford. Absolutely. It's a constant process, 
Senator. The Secretary and I have spent a fair amount of time 
on it, just this week, with General Nicholson, and we spent 
some time with General Campbell before he left. We're in the 
process of bundling together some recommendations to bring 
forth to the President.
    Senator Inhofe. You know, we hear dates all the time about 
when something's going to be decided. Now, let--isn't it better 
idea to let conditions on the ground determine what and when 
we're going to--changes we're going to make?
    General Dunford. Senator, I think that's exactly what we 
did in the fall when a decision was made to keep 9,800 through 
2016. So, I agree with that.
    Senator Inhofe. Okay. The two quotes that I gave from 
General Austin and General Nicholson, have you discussed with 
them specifically about the force-structure requirements?
    General Dunford. We have, Senator.
    Senator Inhofe. Okay. Have you presented any of the 
recommendations to the President?
    General Dunford. We have not yet, Senator.
    Senator Inhofe. All right. Are----
    General Dunford. We're still in the process of deliberating 
that, between the Secretary and I. We had a video 
teleconference with General Nicholson this week to make sure 
that we get the latest from him. He's now had a chance to--in 
both his predeployment site survey as well as being on the 
ground now since taking command, he's had a chance to make a 
personal assessment. It was important to both the Secretary and 
I that we heard from General Nicholson before we went--move 
forward.
    Senator Inhofe. Okay. Let me include one more thing that I 
want to get in this committee. Because we've had a lot of 
people testifying, the very best that we have. I have a great 
deal of respect for all of them, and they are very blunt about 
the problems that we have. Admiral Gortney, NORTHCOM [U.S. 
Northern Command] commander, he testified to this committee, 
just last week, that North Korea's recent nuclear test and 
satellite launch demonstrate that Kim Jung Un, which we know is 
mentally deranged, his commitment to developing strategic 
capabilities as well as his disregard for the U.N. Security 
resolutions, we all, I think, agree with that. Admiral Harris 
said--the PACOM [U.S. Pacific Command] Commander--he testified 
to this committee that Chinese coercion, artificial island 
construction, militarization in the South China Sea threaten 
the most fundamental aspect of global prosperity, freedom of 
navigation, and their forces are opening at a higher tempo, in 
more places, with greater sophistication than ever before. Do 
you--the two of you agree with that?
    Secretary Carter. I certainly do, Senator. This is, by the 
way, why we need to remain vigilant with respect to North Korea 
and its ballistic missile activities and other activities. I 
mentioned ``fight tonight.'' This is why we need the budget 
that we're asking for, and why we've got to avoid sequestration 
in the future. These are all serious matters.
    Senator Inhofe. Well, all serious matters. I contend that 
we're in the most threatened position that we've ever been in 
as a Nation. I look back wistfully at the days of the Cold War. 
I mean, right now, we have people like--mentally deranged 
people might have a capability of wiping out an American city. 
So, that's a serious thing.
    I would only leave you with a quote that both of you heard 
last week from Congressman Frelinghuysen, when he read you a 
quote made by Winston Churchill 70 years ago. This is the 
quote. He said, ``What--from what I have in''--particularly 
keeping in mind of what Putin has been doing in the Ukraine and 
other places, disregarding the threat that we would pose to 
him--he said, 70 years ago, ``From what I have seen of our 
Russian friends and allies during the war, I am convinced that 
there is nothing they admire so much as strength, and there's 
nothing for which they have less respect for than weakness, 
especially military weakness.'' I want you guys to keep that in 
mind as you're developing this budget.
    Secretary Carter. Will do.
    Senator Inhofe. Thank you, Mr. Chairman.
    Chairman McCain. Senator Gillibrand.
    Senator Gillibrand. Thank you, Mr. Chairman.
    Thanks, to all of you, for your service and for this 
hearing.
    I want to talk briefly about cyber. Cyberattacks against 
the Homeland are already a menacing threat to U.S. 
infrastructure, businesses, and defense. In the case of a 
severe domestic attack, DOD's unified commands will be 
responsible for coordinating a response in support of the 
Department of Homeland Security. However, CYBERCOM [U.S. Cyber 
Command] has reported a projected shortfall in its manning 
goals for fiscal year 2018, and there are concerns that DOD 
cyberoperators, both Active and Reserve, may not be able to 
seamlessly operate under the current patchwork of relevant 
authorities. How would you assess current coordination and 
interoperability between NORTHCOM, STRATCOM [U.S. Strategic 
Command], and Homeland Security? What could be done 
legislatively to complement those relationships? Can you 
describe the level of involvement the National Guard cyber 
operators might play in the event of a major domestic 
cyberattack? Do you believe they are adequately trained, 
equipped, and funded to meet that expectation? Finally, do you 
believe each responsible agency with cyber mandate, defense or 
otherwise, currently has the authorities it needs to coordinate 
an effective response domestically?
    Secretary Carter. Thank you, Senator.
    Let me take the part about the Guard first, if I may. It--I 
was out in Washington State a couple of weeks ago, where there 
is a terrific National Guard unit working on exactly what 
you're talking about; that is, defending the Nation and also 
defending our DOD networks, upon which we're so dependent, from 
cyberattack. These are people who--whose day job is to be the 
cyber defenders for some of our most important IT companies and 
tech companies. So, they're at the highest skill level that the 
private sector has. They're making their skills available to 
their country through the National Guard. So, this is a 
tremendous strength, among many, of the National Guard, the 
ability to bring us--to us a talent that we would otherwise 
have difficulty attracting and retaining.
    To get to your first part of your question, nevertheless, 
we do try to attract and retain, and we have some success in 
that regard. That's what we're doing as we build out the 133 
cyber mission teams for CYBERCOM. CYBERCOM does work, not only 
with our combatant commanders on wartime needs, including, by 
the way, joining the fight against ISIL and disrupting ISIL, 
blacking out ISIL, but also defending the country. Now, we do 
do that, as you suggest, in connection with Homeland Security, 
in connection with law enforcement. All that's perfectly 
appropriate. I--there are some legislative acts that have 
enabled us better in that regard. It's possible that we could 
do still better in that regard.
    With respect to CYBERCOM's own authorities, I will tell you 
that we adjust them continuously. Just this week, actually, I'm 
talking to Admiral Rogers about some of his authorities and 
what we can do to expand those authorities. So, it's a very 
actively moving----
    Senator Gillibrand. So, could you submit a letter to me or 
this committee if there's additional authorities you feel you 
need----
    Secretary Carter. Will do.
    Senator Gillibrand.--so we can work on that?
    With regard to military sexual assault, you're aware that, 
every year, I've been asking for files from the four major 
bases, and this year I added the four major trading bases, so I 
could just get a snapshot in time of, How do these cases go? 
What do they actually look like once they're filed and once 
they're taken to court? What we find is that more than half of 
the victims are civilians, which isn't entirely captured by our 
survey--spouses and civilians, not fully captured. The second 
thing I learned was that there's a 50 percent dropoff rate; 
once someone actually files a complaint, about 50 percent do 
not continue with their complaint during the course of the 
year, which is a huge problem. One of the things that this 
committee's done is, we are going to put in place a defense 
advisory committee on investigations, prosecution, and defense 
of sexual assaults. That's supposed to be an independent 
civilian review board that looks at this, designated by the 
President. It's very important to me that the executive 
director of this committee is independent, so that they can 
actually give us advice. I would like your commitment that you 
will look at the staffing of that individual. I'm hoping that 
you will chose a civilian to be the executive director, and one 
with prosecutorial experience; specifically, experience in 
sexual violence prosecutions, which are among the hardest to 
ever end in a conviction.
    Secretary Carter. Well, I--first of all, I thank you for 
your leadership in this issue. It's a really important issue. 
Of course we'll work with the committee on this--in this, and I 
promise you that, as in other matters. I'll just say very 
clearly to you how much I appreciate your leadership on this 
issue, because this is unacceptable in our military, because 
our military is about honor and it's about trust. Sexual 
assault violates honor and trust. So, we can't have any of it. 
The more we learn, the more we--as you say, there are other 
dimensions to it. Civilians, retaliation, which is another 
thing that you have rightly stressed, we need to pay attention 
to. So, this is something that we cannot stop learning about 
and doing better about. In this respect, I promise to continue 
to work with you.
    Senator Gillibrand. Thank you.
    General Dunford, because I'm out of time, I'm going to 
submit for the record a specific question about combat 
integration that I would love your response on.
    General Dunford. Thank you, Senator.
    Senator Gillibrand. Thank you so much.
    Senator Gillibrand. Thank you, Mr. Chairman.
    Chairman McCain. Senator Fischer.
    Senator Fischer. Thank you, Mr. Chairman.
    Secretary Carter, I'd like you to talk more about the third 
offset initiative. Specifically, what is new about it? Is it 
new money? Is it a new way of using that money? As you know, we 
spend tens of billions of dollars every single year researching 
and developing technologies. That is well in excess of our 
adversaries. This committee's heard a lot about how our 
technological edge is eroding. So, I'm wondering, if that level 
of investment, and specifically the way we are using it, wasn't 
sustaining our technological advantage, what about the offset 
initiative is going to ensure that that avoids a similar fate?
    Secretary Carter. Well, thank you, Senator.
    Our efforts are about both new money and new ways of using 
that money. The new money, we are asking for in this budget, 
notwithstanding the $11 billion that we absorbed. We didn't 
take that in our RDT&E [research, development, test, and 
evaluation]. We are increasing research, development, test, and 
engineering, relative to last year. Science and technology, 
which is part of that, also. But, we are doing it in new ways. 
I'll give you a couple of examples of that--two very important 
examples.
    One is reaching out to the high-tech industry that does not 
have a tradition of working with the Department of Defense. 
When I started out in this business, long ago, it was--all the 
major technologically intensive companies in America worked 
with the Defense Department. It was part of the legacy of World 
War II and the Cold War. I'm trying to, and we are trying, in 
the third offset, to rekindle those relationships with the 
high-tech industry. We find them willing, patriotic, eager to 
help serve. We have to do it in a way that's compatible with 
their business and technology models. We're doing that.
    Secondly, we have some innovative new parts of our 
Department. One I've called attention to is the Strategic 
Capabilities Office, which is specifically looking at, and has 
already made major progress in, highly innovative things, like 
electronic warfare drones. They're--that's the place where the 
idea of giving the SM-6 missile anti-ship capability came from, 
taking an old system, giving it a brand new capability. So, 
we're trying to back the innovators in our Department as well 
as connect with the best parts of innovative American society. 
Because, next to our people, our technology is what makes us 
great, and we get our technology because we're part of the most 
innovative country in the world.
    Senator Fischer. So, you would say that the process for 
developing these technologies--would you say that it has not 
been working in the past, and that's one of the main focuses, 
then, of the offset, is to not only work within the Department, 
but also to reach outside the Department, and not necessarily 
looking at specific programs, but having a more open, 
innovative mind----
    Secretary Carter. It is----
    Senator Fischer.--on this, then?
    Secretary Carter. Certainly, that's what it comes down to. 
Both our traditional programs, we need to make them move along 
faster, make them more agile, do a better job of incorporating 
technology in them, and reaching out to the innovative part of 
our society and trying to get--getting them interested in these 
vitally important national security problems, and working with 
us, as has been the tradition in America for decades and 
decades.
    Senator Fischer. Right. You know innovation is very risky. 
So, when we're looking at putting more money into the programs, 
I think all of us realize that losses are going to occur. We're 
not going to see a success rate with every program that you're 
trying for. There will be no results in some areas.
    Secretary Carter. That's correct. If you----
    Senator Fischer. We're not----
    Secretary Carter.--don't take risks----
    Senator Fischer. But, we're not in a risk-tolerant 
environment. How do you address that?
    Secretary Carter. Well, it's--that's a problem. We want our 
innovators to take risk. Taking risk, by definition, means that 
sometimes things won't go the way you'd hoped when you're 
exploring a technological frontier, when you're testing a 
weapon system. We have to be tolerant of risk as--provided that 
risk was taken advisedly, in the interests of making a leap 
ahead in technology. We have to do that. If we're too risk-
averse, then we're always going to be behind the technological 
curve, and not up with or above the technological curve. Our 
enemies take risks. No question--our potential enemies take--
they take those risks. We need to take those risks also.
    Senator Fischer. Thank you, sir.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Kaine.
    Senator Kaine. Thank you, Mr. Chair.
    Thanks, to all of you, for your testimony.
    General Dunford, you, in an interchange with the Chair 
about, you know, how you look at PB17 [President's Budget 
request for fiscal year 2017] and whether it does all you might 
want to do, I think you said, quote, ``Our budget is based on 
the top-line that Congress gave us.'' As I look at your written 
testimony--I'll just read it--``To accommodate a constrained 
top-line, PB17 defers near-term modernization, which will only 
exacerbate a coming bow wave of strategic recapitalization and 
other procurement requirements. More broadly, the cumulative 
effect of top-line reductions over the past several years has 
limited the flexibility and resiliency of the joint force, and, 
looking ahead, I'm concerned that the demand for future 
capabilities and capacity will outpace the resources available, 
forcing even more difficult decisions to match strategy and 
resources.''
    The constraint that we're talking about with respect to 
these top-lines is the 2011 sequester BCA caps, correct?
    General Dunford. That's correct, Senator. In--and I think, 
particularly, as I recall, fiscal year 2013 was particularly 
devastating----
    Senator Kaine. Right.
    General Dunford.--to our ability to plan and execute.
    Senator Kaine. We had an opportunity to turn off sequester 
before it went into effect on March 1, 2013, and we chose not 
to turn it off, and then that has created downstream 
challenging consequences.
    So, the real issue, I think, for us, if we put national 
security first, has got to be, What do we do about that 
constraint? Now, what we've done is, we've done two 2-year 
budget deals in a row that have averted some of the sequester 
cuts and provided some relief from the BCA caps. But, in each 
instance, when we did that, we also pushed the budget caps out 
an additional 2 years. So, you are facing the reality of--it's 
like an automatic snap-back sanction in these budget caps. If 
Congress were to not agree on a budget--and we've got a history 
of not agreeing on stuff over time--we will snap back to a 
punishing sanction against our own Nation's ability to defend 
ourselves. We've now pushed that out significantly into the 
future, into the late 2020s. That's the risk that you're 
talking about. The risk of falling back into sequester and 
punishing our national security is the significant concern that 
we're grappling with.
    General Dunford. Senator, that's exactly right. But, even 
if we avert sequester, we have now accumulated bills that will 
all come----
    Senator Kaine. Yeah.
    General Dunford.--due simultaneous. As I alluded to in my 
opening statement, the modernization of the nuclear enterprise 
will come now at the very same time that we'll start to recover 
from some of the deferred modernization over the last several 
years. So, even at the originally projected level of funding 
that the Department asked for, I would assess that probably in 
the late teens and early 2020s, again, we'll hit this bow wave 
of modernization that'll make it very difficult to balance 
readiness, force structure, infrastructure, and modernization. 
That's the balance that we try to have. The more out of balance 
we have become over the last few years, the more difficult it 
will be to achieve balance in the out years.
    Senator Kaine. There are some who, I think, have--I've 
heard argue that we don't--you know, we don't need to worry 
that much about sequester and the BCA caps, because what we can 
do is, we can just plus-up the OCO [overseas contingency 
operations] accounts as we kind of approach the budgetary 
challenges each year to try to deal with these issues.
    Now, from my way of thinking, that can be some short-term, 
temporary relief. But, OCO, which should have a particular role 
in a defense budget, obviously--but, OCO is not money that you 
can really count on. You can't count on it for following years. 
You could get OCO money in a year, but you would still face the 
sequester coming back, you're not sure whether you can count on 
OCO money the following year. Wouldn't you agree with me that 
sort of relying upon successive annual battles about OCO 
funding is not near the same as providing you with the kind of 
certainty that you need to have?
    General Dunford. Senator, we need three things. We need 
predictability. We need the right level of resources. We need 
those resources to be in the right areas. We need all three of 
those. I couldn't agree with you more.
    Senator Kaine. Well, my hope is, as we are talking about 
the NDAA [National Defense Authorization Act] this year, is 
that we will really grapple with this sort of snap-back 
sanction that we're imposing on ourself, which, if it ever--if 
we ever fell into it--I mean, again, I hope we're always going 
to be able to reach agreements, but we've now pushed this 
sequester and the BCA caps out for quite some time, and if 
somebody decides to hold up the process or we just can't reach 
an agreement for a good-faith reason, we are just--built this 
self-punishment into our mechanism. I hope part of what we 
might try to do in the NDAA this year is just agree, look, we 
are not required to continue a sequester that was put in place 
with budget caps in the summer of 2011, pre-ISIL, pre-Russia 
into the Ukraine, pre-North Korea cyberattacks, you know, pre-
Ebola, pre-Zika. We don't have to live by a 2011 reality in 
2016. I--and if anyone will see this and the importance of it 
in Congress, it's going to be the Armed Services Committees in 
both houses. We should be at the forefront of this. I know the 
Chairman has made this an important priority, and will continue 
to do that.
    Thank you very much.
    Chairman McCain. Senator Wicker.
    Senator Wicker. Thank you.
    I'm glad Senator Kaine brought this up, because it's 
exactly what I wanted to start with. The Chair has made this a 
priority.
    Let me just ask you, Secretary Carter and General Dunford, 
looking back several years ago, when sequester was headed our 
way but we really didn't think it was a reality,--I would ask 
people in your chair, other people, Are you planning for 
sequester? Their answer was, ``No, we're not planning for it. 
It was never intended. We were sure you ladies and gentlemen 
will fix it. It's unthinkable that we would do this.'' Of 
course, the unthinkable happened, and we had to deal with it.
    Now, you--we've dealt with it once, and that was bad 
enough. But, tell us about how going there a second time would 
be a whole new problem. General Dunford, did I--and I'll let 
you go first--did I hear you say, if we avoid sequester this 
time, we still don't have enough money to take care of the 
national defense needs that you have to take care of? Is that 
what you're saying?
    General Dunford. Senator, it is. What I'm saying is, even 
at a level of funding that avoids sequestration, we have a bow 
wave of modernization that's, in part, a result of the last 3 
or 4 years of the budget, and also a result of that bow wave 
for the nuclear enterprise that I alluded to. So, when you look 
at deferred modernization, the modernization that we would do 
in a normal course of events, plus the nuclear enterprise all 
coming due at or about the same time, my assessment is that we 
would be--we will be challenged even if we are at above 
sequestration level of funding. With regard to the other 100 
billion, I would just simply say--and Senator Kaine has listed 
the things that have all changed since the defense strategic 
guidance was written in 2012--my assessment is that if we are 
confronted with----
    Senator Wicker. So, let's reiterate those. Because I've----
    General Dunford. Well, I--it's very simple.
    Senator Wicker.--interrupted your train of thought. But, 
we're talking Russia, we're talking ISIL----
    General Dunford. I'm talking Russia, I'm talking ISIL, I'm 
talking the behavior of North Korea, I'm talking increased 
malign influence by Iran, and I'm talking about the activity in 
China, which concerns us, in terms of maintaining a competitive 
advantage. Their investment over time in their defense 
capabilities and some of their behavior in the Pacific also 
concern me from a competitive-advantage perspective. So, I 
would say there have been profound changes in each of the 5 
challenge areas identified by the Secretary that should inform 
future budgets.
    Senator Wicker. Okay.
    Secretary Carter, are--is there some room in your shop 
where we are planning for this disastrous eventuality if we're 
not able to reach an agreement and if the law of the land, 
which is sequestration, again, kicks in?
    Secretary Carter. Well, let--first of all, let me associate 
myself with everything that Chairman Dunford said. It's exactly 
right.
    With respect to your question, Senator, sadly, the 
Department did learn what it was like to feel sequester. I'll--
I can say what some of the effects are, and you'll immediately 
see why we're so concerned about it kicking back in the future. 
Uncertainty and turbulence cause us to do things inefficiently 
managerially. So, like issuing short-term contracts, turning 
things on and off. The strategy that the Chairman was just 
referring to, and the 5 major threats we face, those aren't 1-
year things. We can't budget and program 1 year at a time, 
herky-jerky fashion and meet those. It's unfair to our people 
for them to have budgetary uncertainty. They look here, they 
look to Washington, and they wonder what's going on and what is 
their future. I'm concerned about the picture it paints in the 
world when we do this to ourselves, to our friends and also our 
potential foes. So, we do know what the consequences are. We 
did go through it in recent years. It has very deleterious 
effects on how we manage ourselves and how we protect 
ourselves.
    The last thing I'd like to say is also to associate myself 
with something the Chairman said particularly with respect to 
the nuclear enterprise. We see bills out there for the--to keep 
safe, secure, and reliable nuclear arsenal, just to pick one 
very big item, which will include the Ohio replacement-class 
submarine, ICBM modernization--we go down that road--and other 
things. That money is going to have to be provided for us to 
have that. That's a bedrock capability. So, averting 
sequestration, absolutely necessary, but, on top of that, we're 
going to need the funding that the country needs in future 
years to defend ourselves and protect our people.
    Senator Wicker. Well, thank you. We rely on you to tell us 
what you need. Let's speak it out loudly and clearly from both 
sides of this table, and make it clear that what is at stake is 
nothing less than the national security of Americans.
    Thank you, all three.
    Chairman McCain. Senator Blumenthal.
    Senator Blumenthal. Thanks, Mr. Chairman.
    We often remark, in this committee, to thank the witnesses 
for their service to our Nation. Truly, we have three 
individuals this morning who have served our country over many 
years with extraordinary and unique distinction. So, we thank--
I thank you for all of your service to our Nation.
    Secretary Carter, you noted, in your testimony, that we do 
not have the luxury of choosing between strategic challenges 
that our Nation faces. Certainly one of those challenges is 
undersea warfare. As you know, our attack submarine force is 
projected to fall below the minimum desirable, 48 boats, by 
2025. It may go as low as 41 by 2029. Our submarines are among 
our most versatile, stealthy, and strong forces available to 
defend and also to conduct offensive operations. Considering 
the gap that we are approaching in submarine capabilities, 
wouldn't it be wise to consider building three submarines a 
year, two Virginia-class along with the Ohio replacement 
program? Would you support such a move?
    Secretary Carter. Senator, thanks.
    First of all, with respect to your general point about the 
critical importance of undersea dominance, that's an area where 
our military excels over all others. It's a critical area that 
we are targeting in this critical budget to keep and extend 
that advantage. It involves submarine construction. It 
involves, as I mentioned, the Virginia payload module, some 
other things, like undersea--unmanned undersea vehicles that--
some of which I can talk about, some of which I can't--and a 
host of other undersea capabilities. So, that's a major thrust 
of this budget.
    With respect to submarine-building numbers, we have laid 
into the budget this year, as we planned, and we've--we 
sustained that, we stuck with that--our two submarines per year 
through the FYDP [Future Years Defense Program]. Your question 
is, Will we, as we get to the point of the Ohio-class 
replacement in the future, want to add submarine shipbuilding 
capability and ships per year? Yes. That gets back to the point 
about having the money, when we begin the Ohio replacement, to 
keep a safe, secure, and reliable deterrent. We can't have that 
at the expense of our general-purpose Navy. That's a point 
we've all been making. That's going to require additional 
funding.
    Senator Blumenthal. So, if the shipbuilding capacity is 
there to do it, you would favor going that route, of three 
submarines a year, if necessary, to meet that gap.
    Secretary Carter. We're--yes, we're going to need to build 
the Ohio-class replacement submarine without shorting the rest 
of our undersea dominance.
    Senator Blumenthal. Secretary Carter, thank you.
    Earlier in the week, I think you met with Israeli's Defense 
Minister and others in the military establishment there. Can 
you commit to us that you will ensure that Israel maintains its 
qualitative military edge? Can you update us as to when the 
negotiations on the Memorandum of Understanding will be done?
    Secretary Carter. I obviously have that commitment. That's 
something that my good friend and colleague Israeli Defense 
Minister Yaalon and I discussed. We will do that.
    With respect to the MOU [memorandum of understanding], 
that's something that the President and the Prime Minister 
discussed, so it's not something that the two Defense Ministers 
decide. However, in our conversations, which are frequent, 
the--Minister Yaalon and I do discuss what the Israelis need, 
now and going forward. I--we use that to inform those 
discussions about--over the MOU and the amount of help that we 
give to the Israelis to defend themselves in what is a very 
dangerous region.
    Senator Blumenthal. Finally, I have long been concerned, as 
many of my colleagues have been, about the Iran ballistic 
missile program, its continuing testing. I led a letter to 
President Obama, with a number of my colleagues, calling for 
immediate enforcement of sanctions against Iran. The Department 
of Treasury, following the letter, did indeed enforce sanctions 
against 11 entities and individuals supporting Iran's missile 
program. Clearly, more must be done to deter Iran from 
continued aggressive pursuit of this program. General Votel and 
General Austin, literally within the past week or so, testified 
to this committee about the need for increased sanctions. Do 
you agree?
    Secretary Carter. I do. That's not a responsibility of the 
Department. But, a responsibility of the Department that we 
very much fulfill, and I know you discussed with them, is our 
defensive commitments with respect to Iranian ballistic 
missiles, both for our forces in the region and our friends and 
allies, who include Israel, but there are others, as well. 
That's why we have the missile defense and other capabilities 
in the Gulf, and why we need to keep them strong. I did discuss 
those also with Defense Minister Yaalon, including the help we 
give to the Israelis with respect to Iron Dome and David's 
Sling and Arrow, which are their three tiers of their own 
territorial defense against ballistic missiles.
    Senator Blumenthal. Thank you very much.
    Thanks, Mr. Chairman.
    Senator Reed [presiding]. On behalf of Chairman McCain, 
Senator Sessions, please.
    Senator Sessions. Thank you very much--I won't say would-be 
Chairman, but actual Chairman, I suppose, for a second. The man 
who would be Chairman.
    [Laughter.]
    Senator Sessions. Well, it's a political world we're living 
in.
    General Dunford, when you have a--when we look at the 
Middle East--we've had a number of witnesses testify here over 
recent months about it. I have come to the conclusion that 
there's just going to be a lot of violence for a long time. 
There won't be one victory that would make us safe. I've talked 
with our Democrat colleagues, and, from their comments in the 
committee meetings, it seems to me that we do need, and can 
maybe even agree upon, a strategy that could be bipartisan, 
that could extend beyond elections, that maybe the whole world 
would be able to support on how we confront this rising tide of 
violence and extremism. Do you think that's possible? How close 
are we to achieving something like that?
    General Dunford. Senator, I do think it's possible. I think 
we've done a lot of work, certainly internal to the Department, 
to take a long-term view of the Middle East and how to deal 
with the challenges inside of the Middle East. I couldn't agree 
more. You know, we can't--no more than we can develop a budget 
year-to-year and expect to be successful can we develop a 
strategy year-to-year and make lurching changes and expect to 
be successful. So, I think that a basic thesis, Can we get a 
bipartisan strategy and an approach to the Middle East that 
will carry out what we have assessed to be a generational 
conflict?--I fully concur with that.
    Senator Sessions. So, you assess it as a generational 
conflict, meaning more than--20 years or more.
    General Dunford. Senator, I think if you look at the 
underlying conditions that have led to violent extremism, I 
can't imagine addressing those in anything less than that 
period of time. When you look at the economic issues, the 
social issues, the political issues, the educational issues, 
those are all things that will take a long period of time. My 
assessment is that violent extremism, in some form, will exist 
until those conditions across the Middle East are addressed.
    Senator Sessions. Secretary Carter, do you agree with that?
    Secretary Carter. I do. I'd go even further than that. I 
mean, if--first, what can't be tolerated in a generational way 
is ISIL. That's why we're so intent upon accelerating the 
defeat of ISIL and--but, to the Chairman's point and to your 
point, Senator, that isn't going to automatically create a 
Middle East that is free of extremism. It's not going to create 
a world that's free of terrorism, because the trends in 
technology put more and more destructive power in the hands of 
smaller and smaller groups. So, we recognize--and it's part of 
our approach to our future defense--that both nonstate and 
state actors need to figure in the investment portfolio of the 
defense of this country, going forward. Both of those are 
featured in our long-term budget. Even though we expect and 
need to defeat ISIL in the short term, we're making investments 
to protect ourselves against nonstate actors for the more 
distant future. I think we have to.
    Senator Sessions. Well, I tend to agree with that. We need 
to focus on who needs to be confronted, militarily, and 
defeated as soon as possible. Certainly, ISIL is number one on 
that list. Would you agree?
    Secretary Carter. Absolutely.
    Senator Sessions. At the same time, we have allies in the 
region, we have allies who oppose some of these forces we 
oppose. We have some people in the region that would support 
people that we oppose. So, it's a very complex region, is it 
not? We have to be--and we need as many allies as we can have. 
Some of this fighting needs to be done by other people than us 
over the decade or generation to come. Would you agree with 
that?
    Secretary Carter. I completely agree. I'll just add to 
that. I was in Brussels a few weeks ago. I brought together all 
the Defense Ministers of all the countries that are part of the 
counter-ISIL coalition. Essentially, my message was, exactly as 
you say, we're willing to lead this, we're willing to do a lot, 
because we're powerful, but we need others to get in the game. 
Particularly, we need those in the region to play their part. 
Additionally, we need, and we're finding, more partners on the 
ground, because, both in Syria and Iraq, it's not only 
necessary to defeat ISIL, but it's necessary to sustain the 
defeat. Only those who live in the region can sustain that 
defeat. So, we can help them, we can lead them, but they need 
to do their part. I emphasized to them that we are going to 
defeat ISIL, and we'll remember who played their role, and who 
didn't.
    Senator Sessions. Well, thank you.
    I guess my time's up. I would just thank my colleagues that 
I--that have expressed concerns about this overall policy of 
the United States. I believe we could get there. I believe we 
can achieve a policy that defends the legitimate interests of 
the United States in bipartisan way, and that can be sustained, 
no matter who gets elected President in the years to come. I 
think that's important, because a great nation can't be flip-
flopping around on commitments around the globe.
    Thank you all.
    Senator Reed. On behalf of Chairman McCain, Senator 
Donnelly, please.
    Senator Donnelly. Thank you, Mr. Chairman.
    Thank the witnesses for being here.
    Secretary Carter, we're still losing over 400 
servicemembers each year to suicide. We were able to get in the 
fiscal year 2015 NDAA a requirement for--under the Jacob Sexton 
Act, that every servicemember receive a person-to-person mental 
health assessment every year. Can you provide me with an update 
on the status of the Sexton Act's implementation and when the 
Department will roll out those annual mental health 
examinations?
    Secretary Carter. Thanks, Senator. Thanks for your interest 
in this issue, which is an important part of the welfare of our 
folks. It is something that we've become increasingly attentive 
to. I'll get back to you on the specifics of the 
implementation, that program.
    [The information referred to can be found with the printed 
Questions for the Record at the end of this printing.]
    Secretary Carter. The thing I do know and want to say is 
that this is being reflected in our healthcare investments. As 
you know, we spend about $50 billion a year, out of the 600-or-
so----
    Senator Donnelly. Right.
    Secretary Carter.--billion we're requesting for you, on 
healthcare. Over the last few years, we have increased greatly 
the amount directed at mental health, to provide our folks with 
resilience, which is what--the program you're talking about, so 
that they are not as----
    Senator Donnelly. Right.
    Secretary Carter.--vulnerable and susceptible to the kinds 
of things that might drive them to such an extreme act, and 
also that we're treating people who already have reached the 
point where they have that kind of impulse. I'll get back to 
you with the specifics, but----
    Senator Donnelly. Great.
    Secretary Carter.--but it's very important.
    Senator Donnelly. To continue to remove the stigma from----
    Secretary Carter. That, too.
    Senator Donnelly.--trying to get help.
    Secretary Carter. Mental--we want people to seek mental 
health treatment when they need it, and we want everyone who's 
not seeking it to look sympathetically upon that, like getting 
any other kind of medical----
    Senator Donnelly. Great.
    Secretary Carter.--treatment.
    Senator Donnelly. Thank you.
    Mr. Secretary, I know how busy you are and the challenges 
we face around the globe. One part of trying to solve those 
problems are our National Labs. As you know, in Indiana, we 
have Crane Naval Warfare Center. We had talked about you 
possibly coming to visit, just a morning, or a late afternoon, 
or a late evening, or a midmorning at 3:00-in-the-morning 
visit, so you can get an understanding of the strengths and 
challenges. When do you think we can make that happen?
    Secretary Carter. I look--are you--will you come with me?
    Senator Donnelly. Yes.
    Secretary Carter. Okay.
    Senator Donnelly. Even at 3:00 in the morning.
    Secretary Carter. It's a deal. I love visiting all of our 
folks. There's nothing better than going out and getting among 
the people who serve this Department. In this case, it'll be 
laboratory scientists, but, whether they're troops or 
scientists or folks in industry, they're all part of what makes 
our military great. We'll have a wonderful time, I promise.
    Senator Donnelly. Thank you, sir. I appreciate it.
    General Dunford, when you see what has just happened with 
Vladimir Putin, how do you judge that? What do you think he is 
doing? How will that affect things in Syria?
    General Dunford. Senator, it--honestly, it's too early to 
tell what he's doing. I think those who have tried to predict 
Vladimir Putin's behavior have been universally proven wrong. 
What I would say that--is this, though, that, when Putin went 
into Syria, he said his express purpose was to go down and 
address ISIL. ISIL is not addressed. What I think it does do 
is, it makes it clear that his original intent was not what he 
said it was, which was to go after ISIL, but it was obviously 
to support the regime. I think what it also does is, for those 
who question whether the United States is the most reliable 
partner in the region, or not, I would just say, for the 
record, we're still there.
    Senator Donnelly. Right.
    Let me ask you and then the Secretary. How do we get to 
Raqqa? The next question, obviously, is when? There's no exact 
date on that. But, if you could give us an idea of how we get 
this done and how we eliminate ISIS presence on the ground, 
because it creates a danger to us.
    General Dunford. Senator, we're--you know, one thing I 
would say is, we're already isolating Raqqa right now, and made 
significant progress over the last couple of months in limiting 
the freedom of movement between Raqqa and Mosul, cut that line 
of communication between Iraq and Syria. We've isolated Raqqa 
to the north with Syrian Democratic Forces who seized an area 
called Shaddadi, which, again, further cut the lines of 
communication. We have grown the capability and capacity of the 
indigenous forces that were supporting in Syria quite a bit. In 
fact, had I testified a month ago, I would have told you that 
we had about 2,500 Arabs inside of the Syrian Democratic 
Forces. Today I can tell you we have 5,000 that are currently 
planning another operation that will further isolate Raqqa.
    Senator Donnelly. Do you see--just as an aside, not to 
interrupt you--that number continuing to grow significantly?
    General Dunford. Senator, I do. I think that's--my 
projection in the future is based on what's now recently 
happened. The more success we have--and we've always said 
that--the more success we have, we'll have what the Secretary 
described as a snowball effect, where people now are more 
willing to join us because they see the level of support that 
we're providing, and, more importantly, the level of success 
that these forces are having.
    Secretary Carter. That's exactly right, Senator. We're--
what we described in December is transpiring; namely, the SDF 
is growing in size, the Arab component of that. They're on the 
move. They've taken Shaddadi. You're right, Raqqa is a key 
target, because that's what ISIL calls its capital. We need to 
take that away from them and make it clear that a state based 
upon the ideology of ISIL is not tolerable. We are, in addition 
to backing those forces, pressuring Raqqa in lots of other 
ways--from the air, but other ways, as well.
    I want to raise something while we're on this, which is, we 
have--which is very important--in order for us to win, we need 
to constantly revise and adjust and take advantage of 
opportunities. We're trying to take advantage of opportunity 
right now, the Syrian Arab Coalition. In that connection, if I 
may, I need to plead for your help in releasing some of the 
funds that are allocated to precisely that purpose. It's not 
just about this committee, but we have--we made a request for 
those funds, and we got four different answers from four 
different committees. I know that's how the system works, but 
it's really tough to wage a campaign under those circumstances.
    Senator Donnelly. It's----
    Secretary Carter. So, if I can plead for--as we try to be 
agile, if we--I can plead for some agility in responding to our 
funding requests----
    Senator Donnelly. It's----
    Secretary Carter.--I'm very grateful to----
    Senator Donnelly.--it's timely urgent right now.
    Secretary Carter. It is time urgent.
    Senator Donnelly. Okay. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain [presiding]. Senator Ayotte.
    Senator Ayotte. Thank you, Chairman.
    I want to thank all of you for being here and for your 
leadership, service to our country.
    I wanted to ask--New Hampshire is facing a terrible 
epidemic of heroin and Fentanyl that is coming over the 
southern border, and it's killing people in our States. 
Recently the Senate passed what's called the Comprehensive 
Addiction and Recovery Act to deal with the prevention and 
treatment side and some support for our first responders. But, 
we know from prior testimony, both from our NORTHCOM and 
Southern Com commanders, that the networks that are being used 
to traffic the drugs into our country also are networks that 
can be used to, essentially, traffic anything.
    I wanted to ask both you, Secretary Carter and General 
Dunford, What can we do to get SOUTHCOM and NORTHCOM the 
resources they need to tamp down on these networks that not 
only are killing people in our country, but also can be used 
networks to traffic other dangerous things into our country, 
including used by terrorist networks?
    Secretary Carter. Well, I'll start, and then I particularly 
want the Chairman to comment, because he was just in the 
region, so he's--fresh insight there. But, the basic story is, 
as you say, in--while we do everything here back home to try to 
protect ourselves from this scourge, we've got to try to 
interdict the chains of supply. Our forces, in SOUTHCOM 
especially, but also NORTHCOM, are a part of that. One of the 
reasons why I'm so committed to working with you up here on the 
Goldwater-Nichols revisit effort that the Chairman and this 
committee have spearheaded and I am doing also in the 
Department and want to do with you, is because that is an area 
where--your point, which is allocating resources among COCOMs 
in an agile, effective, and optimal way. That's where, from my 
point of view, I would like to strengthen the role of the Joint 
Chiefs of Staff and the Chairman. Because different COCOMs see 
different things in their regions. They're all deeply expert in 
their own regions. But, somebody needs to put it all together 
and give me advice about that, how to synchronize all those 
forces. I look to the Chairman and the Joint Staff for that. 
I'd like to get to--for them to have more capability and 
authority to do so. I hope that's part of our effort.
    With that, let me turn it over to the Chairman, who just 
happened to be in the region last week.
    General Dunford. Senator, I did--as the Secretary said, I 
spent last week on this issue. I visited Southern Command, 
visited our Joint Interagency Task Force, and then I went down 
to Colombia. On the bright side, what I was encouraged by is, 
the amount of information that we have, the amount of 
intelligence we have today far exceeds what we used to have. If 
you look at the Joint Interagency Task Force alone, 15 
different countries, now, sharing information intelligence.
    But, what I found is that what we know far exceeds our 
ability to act on it, from an interdiction perspective. So, I 
saw exactly what you're alluding to, which was a shortfall of 
the resources necessary to interdict. I came back with a much 
better appreciation of that. Frankly, what I've asked our team 
to do is to try to look--given all the challenges that we have, 
and given all the competition for resources, I'm still not 
convinced that we can't find some innovative ways to address 
the interdiction. At least, if we took action on just the 
intelligence and the information that's----
    Senator Ayotte. Right.
    General Dunford.--currently available----
    Senator Ayotte. Right.
    General Dunford.--through the Joint Interagency Task 
Force--and the other thing, Senator, even in the--we have Joint 
Task Force Bravo. I think you're familiar with them. So, while 
we've always had, really, a pretty good understanding of what's 
going on in the air and the sea, and increasingly better today, 
again, because of both the Interagency and the international 
cooperation, what I also found was, our ability to see what's 
going on over land is also much greater than it was.
    What you're alluding to is--I do think--and I came back 
with this--you know, frankly, as something as a priority for me 
and the staff last week, coincidentally, was to come back and 
say, okay, we have all this information intelligence. I 
understand the competition for resources, but we have an 
imperative to actually do something about this. Frankly--I 
think you know it, because you've looked at the issue--we--what 
I've seen the studies say is that about 40 percent of 
interdiction is kind of where you need to be. In other words, 
there's other things you have to do, from prevention to 
treatment and so forth----
    Senator Ayotte. Right.
    General Dunford.--to deal with the issue. But, if you get 
the 40 percent interdiction, that's kind of the contribution 
you can make at the interdiction level. We're probably half of 
that, or below.
    Senator Ayotte. Or less.
    General Dunford. My priority--and I'll come to the 
Secretary with some recommendations--is to try to get us as 
close to that 40 percent as we can. Again, if nothing else, to 
try to get us to the point where we're acting in interdicting 
based on the intelligence and information that we have today.
    So, again, not a solution to the problem, but encouraged by 
what we know. Now we've got to do something about it. Of 
course, it's not just a DOD issue. The Coast Guard plays a huge 
role in that.
    Senator Ayotte. Right.
    General Dunford. Department of Homeland Security and so 
forth.
    Senator Ayotte. Well, I appreciate hearing you say, General 
Dunford, you think it should be a priority, based on your 
visit, because I remember also, when General Kelly was 
Commander of SOUTHCOM, he had talked to me at length about 
this, about--that we had the information, and we could see this 
stuff coming over. We just needed the additional resources to 
interdict it.
    I really appreciate your putting a focus on this, because 
we are--you know, we need to do the work on the prevention and 
treatment. We're focusing on that. But, the interdiction would 
be very significant, because it's so cheap on our streets right 
now, and that will help drive up the cost. We know that these 
networks are used to traffic--used by terrorists and others, 
too. So, it's important for our Homeland security, as well.
    General Dunford. Mr. Chairman, if I could, one follow-up. 
The other thing that I came back with is, you know, kind of an 
imperative to keep our partnership capacity-building efforts in 
the region going, and funding those adequately, as well, 
because, you know, clearly, we can't do it all ourselves. We 
don't want to do it all ourselves. The investment that we make 
in the ability of others to support the interdiction effort, I 
think is also an important part of this.
    Senator Ayotte. Great. Thank you.
    Chairman McCain. Senator King.
    Senator King. Thank you, Mr. Chairman.
    First, I'd like to associate myself with the questions and 
comments of Senator Sessions. I think the idea of developing a 
long-range strategy for dealing with the Middle East and 
violent jihadism is a--is an important project. We can't just 
ad hoc it all the time. This should be comprehensive, it should 
involve the Muslim world, the Arab countries, and other 
countries. So, I commend the Senator for bringing that up.
    I'd like to go back to the budget and pull back a bit. 
We're facing a series of challenges. One is a huge debt, now 
approaching $19 trillion, that we're passing on to our 
children, that I think is utterly irresponsible. The second is 
what I call the ``interest timebomb.'' Right now, we're in a 
Never Never Land of low interest rates that's very unusual. If 
interest rates return to 5 percent, kind of average over many 
years, just interest on that national debt will be almost equal 
to the entire discretionary budget today, $950 billion, way 
more than the entire defense budget. Just the increase from 2 
percent to 5 percent would almost equal the defense budget. 
That's money that's got to be paid, and that's an impending 
disaster out there.
    The third fact is that all of our discussions here today 
and in the other committees about the nondefense discretionary 
budget, the total of what we're talking about is a little over 
20 percent of the total Federal budget. Fifty percent is 
mandatory expenditures, which is being driven largely by 
demographics--we're all getting older--and healthcare expenses. 
Then another 25 to almost 30 percent is tax expenditures, which 
are rarely discussed, but which now exceed the entire revenues 
of the discretionary budget, over a trillion dollars a year. 
So, we're trying to solve a huge problem, looking at only one 
piece of it. It's as if you had a big problem in your family 
budget, and you said, ``We're going to solve this whole problem 
just by focusing on our electric bill.'' That's where we are. 
If you trim the lines out, we're already at the lowest point in 
70 years in defense spending as a percentage of GDP. We're at 
the lowest point in 70 years as nondefense discretion. We're 
struggling within this box that was created in 2011 to try to 
solve a problem that we can't solve within that--within that--
the space of that 21 percent of the overall Federal budget.
    So, it seems to me that you're doing a mighty job of 
working within the constraints, but if we don't go back and 
revisit the decisions of 2011, particularly in light of the 
reality of the world that we face today, we're facing a long-
term catastrophe. I mean, you're a student of long-term Federal 
budget. Is this an accurate assessment, Mr. Secretary?
    Secretary Carter. It is. I--it's--the--if I say it again 
this year, I said it at--when I presented the budget last year, 
when I became Secretary of Defense--that's not something we can 
solve in Defense, but we observe it.
    Senator King. But, we're trying--we're being forced to try 
to. That's what bothers----
    Secretary Carter. You're exactly right. You--we're trying 
to solve an entire problem on the back of discretionary 
spending. It's not enough. It's not sustainable. Now, there 
are--all those other parts of the budget have to be in the 
picture. I understand that. I think that is what is necessary, 
to have everybody come together behind a budget future. What--
one of the things that we're asking for here is stability and 
relief from those sequestration caps. I recognize----
    Senator King. Well, we've gotten to the point, around here, 
where 2 years sounds like stability. I mean, we're feeling 
great when we have a 2-year budget deal.
    Let me change the subject slightly. We've talked a lot 
about the bow wave and the modernization. We're talking about 
Ohio-class submarines, long-range strike bombers, missile 
upgrades. All of those are what I would call capital 
expenditures, in the sense that they are 30-, 40-year assets, 
and yet, in this strange world of Federal budgeting, they're 
treated as current expenditures. There's no way we're going to 
be able to handle those expenditures and do all the other 
things. Shouldn't we be thinking about them in a separate 
category? I believe there should be a capital Federal budget, 
assuming for a moment we could figure out what it is we own. 
But, we should have a capital budget for long-range 
investments, like a 40-year Ohio-class submarine, as opposed to 
trying to fund them out of current operating expenses. Is that 
something you'd consider?
    Secretary Carter. Well, certainly we try to think that way. 
As we put together budgets 1 year at a time, we prepare budgets 
5 years at a time, as you know, even though you only consider 
budgets 1 year at a time. So, we try to have that long-term 
perspective. I opened my testimony by saying we did, in this 
budget, take the long view. That's an important new thrust in 
this budget, is to look ahead 10, 20, 30 years from now.
    Now, in order to do that, you have to be confident that the 
reasonable resources will be available then. To the specific 
point about the Ohio-class replacement and the strategic forces 
recapitalization, for example, I've already made the point 
that, even with sequester relief, there's going to have to be 
additional----
    Senator King. Right. It just----
    Secretary Carter.--funds----
    Senator King. It just doesn't----
    Secretary Carter.--for that purpose, because it's so large 
a bill----
    Senator King. Right.
    Secretary Carter.--that we can't afford to have it squeeze 
out of our other submarine construction or other shipbuilding. 
We have to take that long-term perspective, I agree with you.
    Senator King. Good.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Cotton.
    Senator Cotton. Thank you.
    I want to continue along the same vein of questioning here.
    General Dunford, anytime your friends in the Navy come to 
testify about their top priorities, we get a little stoplight 
chart based on different budget scenarios. No matter the budget 
scenario, the sea-based nuclear deterrent is always green. Most 
other things might be yellow or red. Can you tell us why that 
is?
    General Dunford. That reflects the priority of the 
Department to provide an effective and safe nuclear deterrent, 
survivable nuclear deterrent, which is why that's green. It 
really does address the most important requirement that we have 
in the Department, which is to prevent a nuclear war against 
the United States.
    Senator Cotton. Do you know what percentage of the 
Department's overall budget is spent on our nuclear deterrent--
not just sea-based, but all legs of the triad, as well as the 
infrastructure?
    General Dunford. Senator, I don't know the percentage that 
we spend on that.
    Senator Cotton. Secretary Carter, you look like you know.
    Secretary Carter. It is, it's about $20 billion a year. It 
depends on what you include in that, but it's a couple of tens 
of billions of dollars. It's not an enormous part of our 
budget, but it is a critical part of our budget.
    Senator Cotton. That's a relatively small--4 or 5 percent.
    Secretary Carter. It is. Now, that doesn't count the things 
that Senator King is talking about, the bills that will come in 
the future to keep it that way. But, you're--just the--what 
we're paying in this year for our nuclear deterrent is that.
    Senator Cotton. I ask because of the sizable bills coming 
due to modernize all legs of the triad, as well as the 
infrastructure. I sometimes hear people say, you know, why do 
we spend so much money on weapons we never use? My response 
would be, first, we don't spend that much money on them, in the 
context of the defense budget. Second, we use our nuclear 
weapons every single day.
    There is a sea-based deterrence fund that was created last 
year, I believe, in anticipation of the large expense of the 
Ohio-class replacement submarine. Obviously, we also need to 
upgrade our bomber. That's why we have the B-21 program. There 
are also land-based and infrastructure modernization that is 
needed. Rather than having merely a sea-based fund, should we 
perhaps have a nuclear deterrence fund?
    Secretary Carter. I think that may make sense, certainly 
for whatever we decide to do with respect to the ICBM force, 
both as--regard missiles and their land basing. The B-21 
bomber, also one could put in that category. I just want to 
emphasize, we want the B-21 bomber for the nuclear mission and 
non-nuclear mission. It'll be capable of both. Like our current 
bomber force, we'll use it for both.
    Senator Cotton. Why would you have a sea-based deterrence 
fund alone, and not a broader nuclear deterrence fund?
    Secretary Carter. I'm agreeing with you that----
    Senator Cotton. Okay.
    Secretary Carter.--I think a broader nuclear deterrent fund 
may be appropriate.
    Senator Cotton. I mean, recognize that the B-21, like the 
B-2 and other aircraft, have dual capabilities, but the 
foundational capability across all of these systems is the 
nuclear deterrent. I'm not sure we should have any of these 
deterrent funds, but, if we do decide that we want to treat our 
nuclear triad in a special kind of way, then I think we should 
probably do all three legs of the triad.
    Secretary Carter, I want to turn to the South China Sea. 
You said, 2 weeks ago, that, ``China must not pursue 
militarization in the South China Sea. Specific actions will 
have specific consequences.'' What specific actions are you 
referring to?
    Secretary Carter. The specific actions of China are actions 
to press territorial claims, not through international legal 
mechanisms and peaceful mechanisms, but through militarization. 
That's what the Chinese have been doing in the South China Sea. 
They're not the only ones, but they're, by far and away, the 
largest militarizers of features in that region. The kinds of 
actions we are taking are--and I'll give you some examples of--
--
    Senator Cotton. My next question would be, What are the 
specific consequences?
    Secretary Carter.--we can go through them more in another 
setting, but, just to give you some examples. In addition to 
our own force posture in the region, which, as you know, we've 
been strengthening for--as part of the rebalance for several 
years--we're doing some extra strengthening of that this year. 
It's detailed in our budget statement. Particularly has to do 
with increasing the lethality of our platforms out there and 
their technological capability. But, in addition, one of the 
other effects that China's behavior is having is, it is driving 
many of our partners and allies to want to do more with us, 
give us more access. We will have that in the Philippines. 
We're doing more with Vietnam, much more with Japan, Australia, 
India. Not only are we reacting, but the countries in the 
region are reacting, too. Our relationships with them, 
accordingly, are blossoming. We're doing much, much more.
    Senator Cotton. Yes. Obviously, our relationships are 
getting much stronger in northeast and southeast Asia because 
of China's actions. But, in the end, I think some kind of 
genuine action on our part is going to be necessary; otherwise, 
they will present us with a fait accompli in the South China 
Sea.
    My time expired. Thank you all. Happy Saint Patrick's Day.
    Secretary Carter. Same to you.
    Senator Shaheen. Mr. Chairman, I'm going to defer to 
Senator Manchin, because he has to leave. So, I will give my 
slot. If you will come back to me after the next turn, I 
appreciate that.
    Chairman McCain. Senator Manchin.
    Senator Manchin. Senator Shaheen, thank you so much.
    Thank you all for your service, and thanks for being here.
    Let me just say, either to Secretary Carter, General 
Dunford, or whatever, I'm concerned about the--Russia's 
recently announced withdrawal from--the military forces from 
Syria, saying that they've fulfilled their mission. Putin 
communicating with President Obama on the Russian military 
force withdrawal and the next steps required to fully implement 
a cease-fire, with a goal of advancing political negotiations 
on a resolution of the conflict in Syria. Then I just have, 
on--today, I see where the Syrian Kurds plan to declare a 
federal region in northern Syria territory. I guess I would--
asking, Do you anticipate a change in the U.S. military-force 
role in Syria, based on Russia's military withdrawal? Is Russia 
claiming success? Has it strengthened their--basically, their 
swagger, if you will, the political clout in that area?
    Secretary Carter. Well, as I said before, Russia came in 
wrongheadedly, because they said they were going to fight ISIL, 
and they didn't. Instead----
    Senator Manchin. Correct.
    Secretary Carter.--they supported Assad, which prolonged 
the civil war, fueled the civil war.
    Senator Manchin. Correct.
    Secretary Carter. So, their effect has been the opposite of 
what they stated, and certainly the opposite of what is needed. 
It hasn't had an effect on our prosecution, to get to your--
what we're doing in Syria, of our counter-ISIL campaign. It has 
had the effect, in my judgment, of prolonging the Syrian civil 
war.
    Now, maybe Russia can do what it should do, which is use 
its influence over the Assad regime to promote the transition. 
That's what Geneva's about. To get to the question about the 
Kurds, that's exactly the kind of thing that's being discussed 
in Geneva. But, the Russian contribution has not been positive. 
We're watching its withdrawal. I don't know to--how far that 
will go. But, the Russian effect was not what they said it was 
going to be, and it was, as I've said, wrongheaded.
    Senator Manchin. But, I'm saying that, still, they're--the 
Kurds, the Syrian Kurds establishing an area, or claiming an 
area, is not met with--it's being met with resistance from 
Assad and his regime, correct?
    Secretary Carter. That is correct.
    Senator Manchin. You're thinking Russia can negotiate that?
    Secretary Carter. No, I don't know that Russia--I--we and 
others in the region, including the Turks, will have a major 
role in Geneva about deciding the manner of participation of 
the Kurds. I'd--so, Russia will play a role in those talks, but 
we have an important role to play, as well.
    I will say, with respect to the Syrian Kurds, that they 
have proven to be excellent partners of ours on the ground in 
fighting ISIL. So, we're grateful for that. We intend to 
continue to do that, recognizing the complexities of their role 
in the region overall.
    Senator Manchin. General Dunford, your posture--the 
statements--describes five strategic challenges: Russia, China, 
North Korea, Iran, and the violent extremists, of course, of 
ISIS. I guess I would ask, in your assessment, the greatest 
threat we're facing from that lineup.
    General Dunford. Senator, first, I guess I'd say we don't 
have the luxury of racking and stacking. We have to address 
each of them in----
    Senator Manchin. Right.
    General Dunford.--their own way. What I've said in the past 
in testimony, and I guess I would restate today, is, the one 
that has the greatest capability and poses the greatest threat 
to the United States is Russia, because of its capabilities--
its nuclear capability, its cyber capability, and clearly 
because of some of the things we've seen in its leadership's 
behavior over the last couple of years.
    Senator Manchin. What do you make of the kidnapping of the 
young student in North Korea?
    General Dunford. You know, I've watched that over the last 
couple of days, and, you know, you can't help but feel for both 
him and the family, but I think it's just a reflection of the 
absolutely irresponsible leadership in North Korea, and it 
exposes the regime. To those who may not have appreciated what 
the regime is--that behavior was certainly not a surprise to 
me, in terms of North Korean regime behavior, and I think that 
probably many other people who maybe weren't as attentive to it 
have now seen what North Korea is all about.
    Senator Manchin. Why do we have Americans still traveling 
in that area? I mean, why would they even be in the country?
    General Dunford. I--you know, I--Senator, that's----
    Senator Manchin. That was a religious, I believe, was it 
not? A religious----
    General Dunford. It was a religious group. What I heard 
this morning is that we probably had some 15,000 people go over 
to North Korea as tourists over the last several years, and 13 
of them have been apprehended. That was a statistic from the 
news. But, this is clearly not something that the Department of 
Defense is involved with, and I can assure you that we don't 
have members of the Department of Defense visiting North Korea.
    Senator Manchin. Secretary Carter.
    Secretary Carter. The only thing I want to add, if I could, 
because it's timely, in view of North Korea's threats about 
provocations, including missile launches, that we stand alert 
with our missile defense forces, with our allies, the Japanese 
and the South Koreans. That's a daily task, all sorts of 
missile defenses as well as our deterrent forces on the DMZ 
[demilitarized zone] and in South Korea.
    I used the phrase ``fight tonight,'' and that's their 
slogan. Of course, nobody wants that to occur, but the way to 
make sure it doesn't occur is for us to be ready each and every 
night. They're some of our most highly ready and capable 
forces.
    Senator Manchin. Thank you all. My time is up.
    Senator Reed [presiding]. On behalf of Chairman McCain, 
Senator Ernst, please.
    Senator Ernst. Thank you, Senator Reed.
    Thank you, gentlemen, for being here today.
    Yesterday, I joined a bipartisan group of lawmakers to 
advocate for some incredible women who really do deserve to be 
honored. They are the Women Airforce Service Pilots, otherwise 
known as WASPs. Secretary, you know where I'm going with this. 
It is a travesty that these women, who are pioneers in military 
aviation, had the honor of having their ashes inurned at 
Arlington National Cemetery revoked last year during the same 
year that, historically, you opened up positions that had been 
previously closed in combat to women. So, I would like to see 
that addressed. The Pentagon should do the right thing and 
honor these women by restoring their rights to have their ashes 
inurned at the National Cemetery. It's my understanding that a 
waiver can be done for these women to do so. So, I would 
encourage you to do that. I'd like to see that action taken. 
They are part of America's Greatest Generation, as well.
    So, Secretary Carter and General Dunford, I will submit a 
record--or a question for the record, and would love to have a 
forthcoming response from you on this issue. It is something 
that we are very passionate about in making sure that women are 
honored, as well.
    Senator Ernst. So, first, Secretary Carter, I do continue 
to remain concerned about the lack of capacity and capability 
provided to EUCOM [U.S. European Command] in order for it to 
perform its critical mission of defending our Nation and our 
allies. Especially as we look at Russian aggression. We've 
heard a number of members speak on that today.
    General Breedlove has come before our committee multiple 
times stressing the need to enhance our capacity and capability 
for EUCOM to match the threat of both Russian aggression and 
transnational terrorism. So, specifically, one area which he 
raised--this is a top concern of his, and I do share it--it's 
the lack of support for force protection of our servicemembers, 
of DOD civilians, and their family members. Considering 
terrorists have displayed the capability to plan, stage, and 
execute attacks in western Europe and in recent bombings in 
Turkey, I would just urge you to take immediate action to 
increase our force protection capabilities in the EUCOM AOR 
[area of responsibility].
    So, with that, there is a request to quadruple funding for 
the European Reassurance Initiative [ERI] in fiscal year 2017. 
Specifically, Secretary and General Dunford, how will you build 
capacity and capability to enhance our force protection in that 
area and EUCOM's warfighting functions to better counter 
Russia's aggressions as well as transnational terrorism?
    Secretary Carter. Thank you, Senator.
    First, I look forward to answering the question on the very 
first----
    Senator Ernst. Thank you. I appreciate it.
    Secretary Carter.--issue. Thank you for that.
    Secondly, both the issues you raise with respect to Europe 
are serious ones that we're adjusting to, and I'll say how.
    With respect to Russia and the potential for Russian 
aggression, outright aggression or the kind of Little Green Men 
hybrid warfare phenomenon that we saw, that's what--why we're 
quadrupling the European Reassurance Initiative. To what it 
pays for, it pays for the rotational presence of forces in 
Europe, including in border states--states, that is, that 
border Russia. It provides for increased pre-positioning of 
heavy equipment there and also in Germany and elsewhere. It 
provides for doing more exercising and so forth with the Baltic 
states, with Poland, with Romania, and so forth, and for 
equipment sets there that our troops fall in on. So, the 
European Reassurance Initiative, which this year, you're right, 
we're asking $3.4 billion--it's in our budget--it's extremely 
important. Basically, we're adjusting to a fact that we haven't 
had to face for a quarter century, as I said in my statement, 
namely that we have a Russia that is threatening to--western 
Europe, and we need a new playbook that goes with that. I 
regret to say that, but there it is. That's what the European 
Reassurance Initiative is about.
    Now, separately, you're right, in that this is something 
that General Breedlove and I and General Dunford watch very 
closely, is the protection of our people. That's a paramount 
concern to us everywhere, is force protection. Everywhere 
overseas, but Europe, also. We watch that very carefully, and 
we're making--taking steps to work with our host countries to 
increase the protection. We're taking steps, ourselves, with 
our own people, procedural and technical steps. We can go into 
them with you in another setting. But, it's extremely 
important. Our people are protecting us. We owe them 
protection, as well.
    Let me ask the Chairman if he wants to add anything on 
either of those.
    General Dunford. The only thing--the exercises, Senator--I 
mean, it's not only the capabilities we bring, and, of course, 
it's posturing the forces. We pre-position forces for 
responsiveness. It's the exercises to assure our allies and 
partners on a day-to-day basis. But, a number of those 
exercises are also designed to build the capacity of our 
European partners, too, so that, collectively----
    Senator Ernst. Military to military.
    General Dunford.--the 28 nations of NATO can be prepared to 
deal with the Russian threat. I would say that, if we fully 
leveraged the political, the economic, and the military 
capabilities of the 28 nations in NATO, it wouldn't be a fair 
fight, which is exactly what we wouldn't want it to be.
    Senator Ernst. Exactly.
    Thank you, gentlemen, very much.
    Thank you, Mr. Chair.
    Senator Reed. Thank you.
    On behalf of the Chairman, let me recognize Senator 
Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you all for your testimony today, and for your 
service.
    I want to follow up on Senator's questions about the 
European Reassurance Initiative, because, as I'm sure you're 
both aware, Europe is probably facing more challenges today 
than it has at any time since the end of World War II. The 
European Reassurance Initiative is very important in letting 
them know how committed we are to the peace and security of 
Europe. I was pleased to see that the President's Budget 
increased funding for the ERI. Can you talk a little bit more 
about what the risks are if we don't support additional funding 
for the Reassurance Initiative? Tell me if you share General 
Breedlove's view that--I don't think I'm misquoting him, but, 
when he was before this committee, he talked about the need to 
put more of our troops in Europe.
    Secretary Carter. Well, the effect of not funding the 
European Reassurance Initiative would be, physically, that we 
wouldn't have the funds to put equipment--position equipment 
there. That's equipment that then forces could fall into in a 
crisis to reinforce the forces that--it's always been our 
strategy in Europe, and it would be now, that the--we would 
have forces there already, but we would fall in with a much 
greater force--in fact, the full weight, the full might of the 
U.S. military behind NATO, in the event of a crisis. But, we 
need the equipment there, and we need our forces to be familiar 
with the terrain, which is why rotational training is so 
important. We need them to know how to work with their allies. 
We need--how to--them to be able to do all the logistics that 
allow a force to flow quickly. That's the kind of thing that 
General Breedlove needs to be able to exercise and prepare for. 
That's our approach, and we need the money in the ERI. That's 
physically what it does. Politically----
    Senator Shaheen. Let me----
    Secretary Carter.--it's also important, because----
    Senator Shaheen. Yes.
    Secretary Carter.--the reassurance is important. The allies 
want to know that we're there with them and that we see what 
they see in the behavior of Russia. We do. We want to match our 
behavior to theirs. Their concern is growing, as well. We're 
asking them to do more at the same time we're doing more.
    Senator Shaheen. I had a chance to visit some of the NATO 
exercises last summer in Latvia, and it was very impressive. 
You could see that--the synergy that existed because there were 
a number of countries coming together to work together and to 
work out the bugs of any future challenges we might face.
    Let me switch topics, here, to the issue of energy. I had 
the opportunity, at the readiness hearing this week, to talk to 
the--to ask all of the Vice Chiefs of each of the branches 
about the move towards more energy efficiency and alternative 
sources of energy within our military, and the perception that 
some people have that this is being done because people are 
being forced to do it, as opposed to because there's--part of 
our military imperative to improve our strategic readiness, 
that we have other energy sources that we can count on so that 
we're not so dependent on fossil fuels, as we have been in the 
past. Can I ask you all if you can speak to that, why you think 
this is an important strategic move as we look at our national 
security?
    Secretary Carter. Well, it is important to our overall 
national security. Energy security is. We play a part in that. 
But, everything we do needs to make sense for defense as well 
as play a part in the overall national energy strategy. But--
so, things we do to increase the energy efficiency of engines, 
develop new engines, very important for our air forces, but 
also will have a consequence for the--a good consequence for 
the economy, generally. We--for--spend money in order to save 
money on facilities, making them more energy efficient. We have 
a large existing base of buildings, installations, and so 
forth. We work on making them more energy efficient. We do that 
for the very reason that it frees up more money in the future 
that we can invest in real military capability. See, everything 
we do in the energy sphere has to make sense as a military 
investment. At the same time, these things are beneficial for 
the Nation's overall energy strategy. We do try to align them 
with the Department of Energy and the overall strategy so that 
we're not doing something that somebody else is already doing, 
and that we're benefiting from what other people are doing, and 
they're benefiting from what we're doing. But, it has to make 
military sense for us.
    Senator Shaheen. General Dunford, could you speak to the 
readiness benefit of our being able to take advantage of some 
of these new technologies?
    General Dunford. Senator, I could. You know, from my 
perspective, there's a couple of things about this. One is, if 
you save money in base operating expenses, that money is 
available for something else--read readiness. Then there's also 
an operational flexibility aspect of this, as well. The less 
reliant you are on fuel, the more operationally flexible you 
are. That is not only at the level of aircraft and ships and 
some of the bigger programs that we talk about a lot, but it's 
also--if you just look at the load of an individual infantryman 
in batteries, as an example. So, some of the initiatives, we've 
had to lighten the load. If you look at the weight that our 
young men and women are carrying right now, it prohibits--it's 
prohibitive. We've spent a lot of time trying to reduce the 
load of the individual soldier, sailor, airman, and marine. One 
of the ways we've been able to do that is simply by renewable 
energy sources that reduces the weight that they carry in 
batteries, alone, which is one of the biggest things that an 
infantryman has to carry.
    So, you know, again, I think, from a readiness perspective, 
you save money with fuel, you're able to reinvest that money. 
Then, from an operational flexibility perspective, again, both 
at the platform level and the individual servicemember level, 
there's a lot of utility to that. But, as the Secretary says, 
it's got to make sense.
    Senator Shaheen. Sure.
    Thank you all.
    Thank you, Mr. Chairman.
    Senator Reed. On behalf of Chairman McCain, Senator Graham, 
please.
    Senator Graham. Thank you.
    Thank you all very much.
    The Freedom Caucus, I think, in the House----
    Do you want to go?
    The Freedom Caucus in the House, I think, has taken a 
position that the House budget should go back to sequestration 
levels for this year. General Dunford, what would your response 
to that position be?
    General Dunford. My immediate response, Senator, would be, 
we will have to revise the defense strategy if we go back to 
sequestration. We will not be able to do what we need to do 
right now. When I say to revise the strategy, it's important to 
emphasize, we'll have to revise the ends of our strategy, 
because we will not be able to protect our interests in the 
same way that's articulated right now in our national security 
strategy and our defense strategy.
    Senator Graham. What effect would that have on our national 
security?
    General Dunford. It would cause us to expose the Nation to 
risk from those five challenges that the Secretary and I have 
spoken about today.
    Senator Graham. Would you say significant risk?
    General Dunford. I would say significant risk.
    Senator Graham. It would actually put our freedom at risk.
    General Dunford. It would absolutely affect it.
    Senator Graham. Okay. I sent you a letter, and you've given 
me a very timely response, and I appreciate it, General 
Dunford, about--some have suggested that we intentionally 
target civilians in the war on terror, and that we go back to 
using waterboarding or maybe even more aggressive interrogation 
techniques. You've given me a good response, which I'll share 
with the public later. But, I forgot to ask one question. What 
effect, if any, would this have on the warfighter if we started 
telling our men and women in uniform to intentionally target 
civilian noncombatants and engage in techniques such as 
waterboarding or more extreme forms of interrogation?
    General Dunford. Well, Senator, what I've said publicly 
before is that, you know, our men and women--and we ought to be 
proud of it--when they go to war, they go to war with the 
values of our Nation. Those kind of activities that you've 
described, they're inconsistent with the values of our Nation. 
Quite frankly, I think it would have an adverse effect--as many 
adverse effects it would have, one of them would be on the 
morale of the force.
    Senator Graham. Yeah.
    General Dunford. Frankly, they would--you would--what 
you're suggesting are things that actually aren't legal for 
them to do anyway.
    Senator Graham. Well, I don't think I've ever met a tougher 
guy than you, and I think it would hurt your morale if you were 
ordered to kill innocents, noncombatants.
    So, Raqqa. Do you see Raqqa falling this year, taken away 
from ISIL?
    General Dunford. Senator, we're focused right now on 
isolating Raqqa, limiting the enemy's freedom of movement. I 
can't put a timeline on when Raqqa will fall. I can tell you 
that we're working very closely with indigenous forces on the 
ground to isolate and then subsequently----
    Senator Graham. Do you agree with me the likelihood of 
Raqqa falling between now and the election is pretty remote?
    General Dunford. Senator, again, I haven't put a timeline 
on it.
    Senator Graham. Okay. When it came to liberating Fallujah, 
how many U.S. soldiers or military personnel were involved?
    General Dunford. Senator, we had 14,000 U.S. personnel that 
were involved immediately in the operations around Fallujah, 
but obviously many more in the surrounds that had a isolation 
effect.
    Senator Graham. If they haven't been there, would the 
outcome have been different?
    General Dunford. If the----
    Senator Graham. If we were not using military--American 
military personnel to deal with Fallujah.
    General Dunford. Well, at that time, Senator, we did not 
have capable indigenous forces. There was not an alternative to 
United States Forces in Fallujah.
    Senator Graham. Compare the indigenous forces in Syria 
today with indigenous forces that existed at the battle of 
Fallujah. Are they more capable in Syria than they were in 
Iraq?
    General Dunford. Today, the Syrian--I would assess the 
Syrian Democratic Forces, based on their performance at 
Shaddadi and other recent operations, are more capable, 
relative to the threat that exists in Syria, than what we had 
in Iraq back in 2004----
    Senator Graham. Are they----
    General Dunford.--and 2005.
    Senator Graham.--more capable of taking Raqqa than the 
Iraqis were at taking Fallujah?
    General Dunford. In 2004 and 2005, I would assess yes.
    Senator Graham. Okay. How many Arabs are in the Syrian 
Democratic Forces?
    General Dunford. Right now, we have about 10 to 15,000 
Syrian Democratic Forces, of which 5,000 are Arabs, and there's 
an estimated 20 to 30,000 additional reserve Syrian Democratic 
Forces.
    Senator Graham. Is it your testimony that the people we're 
training inside of Syria are capable of taking Raqqa back from 
ISIL and holding it?
    General Dunford. At this time, Senator, no, but that we 
intend on growing their capabilities over time. I would qualify 
that by saying that they're also going to require some support 
from the coalition.
    Senator Graham. Okay.
    Iran. Post-agreement, is Iran becoming a better actor in 
the region, or their behavior gotten worse, post-nuclear 
agreement?
    General Dunford. Senator, Iran was a malign influence in 
the region prior to the agreement. Iran remains a malign 
influence today.
    Senator Graham. Do you think Mosul will be in the hands of 
ISIL by the end of this year?
    General Dunford. Senator, I don't--similar to Raqqa, I 
wouldn't put a timeline on when we would secure Mosul. But, 
again, I would emphasize that operations against Mosul are 
ongoing----
    Senator Graham. Is taking going to be more difficult than 
what we had to do in Fallujah in 2004 and '05?
    General Dunford. Significantly more difficult, based on the 
population and the size of the enemy.
    Senator Graham. So, if you take Mosul without 14,000 
American military members, does that make it even more 
significantly different?
    General Dunford. Senator, it really is a correlation-of-
forces issue. Right now, we've identified over 12 brigades of 
Iraqi Security Forces, additional Peshmerga forces, and we're 
in the process of generating effective Sunni forces. So, the 
idea is that we'll isolate Mosul until the conditions are set 
for those forces to be successful in securing Mosul.
    Senator Graham. Finally, between 2016 and 2021, the next 5-
year window, we've talked about what's happened since 2011 to 
now. Generally speaking, do our national security threats--do 
they maintain at this level, go up, or go down? What can 
America expect in the next 5 years, in terms of threats? What 
kind of budget should we have?
    General Dunford. I think--I would assess, based on the 
trajectory we see today, I don't see our security challenges 
decreasing over the next 5 years, Senator, for sure.
    Senator Graham. Agree with that, Mr. Secretary?
    Secretary Carter. I do.
    Senator Graham. Thank you.
    Senator Reed. On behalf of Chairman McCain, Senator Nelson.
    Senator Nelson. Mr. Secretary, would you give us your 
advice for that period of time, 2018 to 2022, of being able to 
put our payloads into space? I'm mainly talking about DOD and 
intel payloads, in addition to NASA [National Aeronautics Space 
Administration] payloads and commercial payloads. Would you 
give us your advice on the question of whether or not we should 
continue to be able to have access to the RD-180 engine, which 
is the engine in the first stage of the Atlas V rocket?
    Secretary Carter. I----
    Senator Nelson. Until we develop the new one.
    Secretary Carter. I can, Senator. It is reflected in our 
budget. I know that there are different points of view on how 
to approach this problem. I think everybody agrees we have to 
have assured access to space, so we have to have a way to 
launch our national security payloads into space. Our country's 
security depends on that.
    One way to do that, which is reflected in our budget, is to 
continue to use the Atlas booster, including a limited but 
continuing number of RD-180 engines, not withstanding the fact 
that we don't like the fact that they're made in Russia and we 
buy them from Russia. That's the approach we recommend, because 
it is less expensive.
    The alternative, which I understand, but we don't recommend 
in this budget because it costs more, would be, essentially, to 
use the Delta as a replacement, which is more expensive than is 
required. If we're forced to do that, it ends up giving us a 
bill of a billion dollars, maybe more, which is not a bill we 
would like to pay. So, it's that simple. We'll get to space. We 
have to, because our security depends upon it. We are 
recommending to you a less expensive way but which does, 
however, cause us to have to hold our nose insofar as the 
procurement of the RD-180 engine is concerned. I recognize that 
there's a difference of opinion there, but that's my advice.
    Senator Nelson. Can--in your opinion and what you've been 
advised, can they ramp up the production of enough of the Delta 
IVs to get all of your payloads into space, even though it's 
going to cost more?
    Secretary Carter. My understanding is that, yes, that 
alternative is available--technically available. Obviously, 
it's much more expensive, which is the reason for the--not 
recommending it.
    Senator Nelson. It's more expensive also because the RD-180 
has to be used on the Atlas V for a number of the NASA 
payloads, including the Americans on the new Boeing Starliner, 
which is the spacecraft that will take us to and from the 
International Space Station, along with what we expect the 
Falcon 9 and its spacecraft, Dragon, but also all of the 
commercial payloads. So, if you shut down part of that 
production until we get the new replacement engine and new 
replacement rocket--because you just can't take a new engine 
and plug it into the Atlas V--it's going to cost everybody 
more, including the commercial sector.
    Secretary Carter. I can't speak for NASA or for them, but 
you're right, the Delta route is more expensive than the Atlas 
route. It is available. The--and we've made our recommendation. 
Where we'd like to go in the future, and where we're headed in 
the future, is a competitive provision of launchers--that's 
really important, for both cost and quality reasons--and to 
have two or more competitors from whom we buy launch services. 
I don't buy their--the pieces of the rocket, or develop them. 
They do that, and they provide us launch services. That's an 
efficient and competitive way. That's the route we're going to. 
But, I realize that there is a difference of opinion about how 
we get to that destination. We've made our recommendation in 
our budget submission.
    Senator Nelson. Fortunately, that competition has started, 
because the Falcon 9, SpaceX, has been a very viable 
competitor. In fact, that competition has brought the cost of 
the Atlas V down. There's a good example of competition that, 
in fact, is working.
    Let me just conclude by--any comment on our aging nuclear 
triad and the need for the long-range strike capability.
    Secretary Carter. Yes, just to reinforce that the nuclear 
deterrent of this country is--it's not in the headlines every 
day, thank goodness, but it's not in the headlines because it's 
there, it's the bedrock of our--it's a bedrock capability for 
our--of our security. We need it for the indefinite future. We 
intend to have it for the indefinite future. We're going to 
need to spend the money required to have that.
    Of particular concern, I would single out the Ohio-class 
replacement submarine, just to take one example, but a big 
example, because the Trident submarines are going to age out. 
They're effective but old submarines. They'll be replaced by 
the Ohio-class replacement. That's a key survivable part of our 
nuclear deterrent. We have to have it.
    You mentioned the bombers. That's one of the reasons why 
we're seeking to start, and have started, the long-range 
striker bomber, or B-21 bomber, program. Making sure that we 
have a safe, secure, and reliable nuclear deterrent for the 
future is a bedrock responsibility of the Department. We'll 
need the funding to do that. We have plans to do that.
    Senator Reed. On behalf of the Chairman, Senator Sullivan, 
please.
    Senator Sullivan. Thank you, Mr. Chairman.
    Thank you, gentlemen, for your service and your testimony 
here today.
    I particularly appreciate both of you outlining the five 
strategic threats. I think that's very clear. I think the 
American people need to hear that. I think Senator Graham's 
comments about--or his question about how you think those are 
going to continue is also very important testimony.
    You know, those threats in the--and how to counter them, 
include the aggression of Russia, which, as you know, Mr. 
Secretary, General Dunford, is not only Europe, but in the 
Arctic; the ability to ``fight tonight'' with regard to North 
Korea, as you mentioned; the ability to continually rebalance 
our Asia-Pacific force posture in light of our challenges there 
with China. In light of those serious threats, you may have 
seen that General Milley recently decided to reverse the Army's 
earlier decision, made last year, to disband the 425, which, as 
you know, Mr. Secretary, is the only airborne BCT [brigade 
combat team] in the Asia-Pacific, the strategic reserve that's 
very--that would be very involved in any kind of conflict in 
Korea, the only Arctic BCT that's trained to fight in mountains 
and extreme cold weather. I've raised this issue a number of 
times in the committee over the last year. Recently, several 
combatant commanders mentioned that they were supportive 
specifically of what General Milley is trying to do, just given 
how critical these forces are.
    So, Mr. Secretary, do you support the Army's recommendation 
to more effectively posture its forces to best meet the 
national security threats that you outlined in your testimony, 
particularly as it relates to the 425 and what General Milley 
mentioned, I think, a couple of weeks ago?
    Secretary Carter. Well, Senator, for--thank you very much 
for your interest in this. I--and I had the opportunity, which 
I appreciate, the other day to discuss this with you.
    Senator Sullivan. Yes, sir.
    Secretary Carter. Thank you for your leadership with 
respect to the overall rebalance and also for your State's 
hosting of forces that are so critical to so many scenarios of 
possible risk to the United States, as you already said.
    With respect to 425, I looked into that after our 
conversation. I've spoken to General Milley. If he makes that 
recommendation to me, I want you to know I'm going to approve 
that.
    Senator Sullivan. Thank you.
    Secretary Carter. I think that that is an important part of 
our force posture in the Pacific. I appreciate your calling my 
attention to it.
    Senator Sullivan. Thank you. I appreciate that, as well.
    Let me get back to the rebalance issue that you mentioned. 
You know, a lot of us met with you last year in Shangri-la. I 
think was a--as we--you and I have talked about, at the Defense 
Ministers meeting out there, an important demonstration of U.S. 
legislative, executive bipartisan support for that important 
strategy. I think a number of us are planning on going again, 
so I think doing that again would be important to show a strong 
across-the-board American resolve.
    Secretary Carter. Thank you.
    Senator Sullivan. With regard to the implementation of the 
strategy that you laid out in your speech last year, which I 
thought was a very strong speech, you know, we've been asking--
a number of us have written the President, have been 
encouraging--make sure we do--we implement this policy on a 
routine basis--now I'm talking about the South China Sea and 
our FONOPS [freedom of navigation operations] there--not only 
on a routine basis with--but also with allies. But, I'd like 
you to comment on--and both you and General Dunford--on the 
opportunities that what's going on out there presents to the 
United States, from a strategic perspective. More specifically, 
as you know, Mr. Secretary--and you see it every time you go 
out to the region--many, many countries, because of what China 
is actually doing in the South China Sea--many countries are 
very much being more interested in working with us and drawing 
closer to the United States. Are there strategic opportunities 
that we should be looking at, in terms of possible new basing, 
new training opportunities with the Marines in the Asia-
Pacific, clarifying strategic relationships--I think there's a 
number of questions of what our strategic obligations are with 
regard to, say, a country like the Philippines, looking at the 
next challenges--I know that there's some concern on this 
committee about the Scarborough Shoal--but, what are the 
opportunities that we have? Because they seem to me--yeah, we 
have challenges there, but there's also, I think, enormous 
strategic opportunities. Could you and General Dunford talk to 
those? Particularly, you know, the idea of new basing 
arrangements, the idea of new training arrangements. I think 
that there's a lot we could be doing, and I'd like to hear both 
of your views on that.
    Secretary Carter. Well, you're absolutely right. I'll 
start, and then I'll ask the Chairman to chime in, as well.
    There are opportunities. They are presenting themselves 
because countries in the region recognize that their region has 
had peace and stability for 70 years, and that is what has 
given them all the opportunity to rise. All the Asian miracles, 
beginning with Japan, South Korea, Taiwan, Southeast Asia, 
today India and, yes, China--all of that has occurred in an 
atmosphere of peace and stability, which they know we have 
played a pivotal part in. There is a greater demand for 
partnership with us. Whether you talk about basing--we are 
discussing with Philippines right now. You may know that their 
court passed an important milestone recently, which allows--
will allow us to do much more with the Philippines. We're doing 
more--and General Dunford had a key role in this--with 
Australia, particularly our marine rotations in Australia. 
Vietnam--who'd have thought, decades ago, Vietnam--we're doing 
more with Vietnam. We thank you, because the--we have the 
Maritime Security Initiative funding, which originated in 
discussions with you, Senator, and other members of the 
committee. We're grateful for that. We're using that funding. 
So--and the Japanese, as you probably know, are--have adjusted 
and amended their practices. They're looking to do more with 
us--joint patrolling, exercising, and so forth. India--I'll be 
in India in a short while, continuing to strengthen our 
relationship with that--an incredibly important country of a 
billion people and essential geography and a very capable 
military that wants to partner with us, as well.
    So, we do all this in order to keep going the system that 
has brought prosperity to Asia. We're not seeking to have 
conflict with China. It's not against anybody. It's part of 
keeping that system of security intact. We intend to do it. 
That's what the rebalance is about. But, the good news, as you 
say, is that it--we're popular there. People----
    Senator Sullivan. Yeah
    Secretary Carter.--want to work with us.
    Let me turn it over to the Chairman.
    General Dunford. Senator, I guess I'd emphasize what you 
and the Secretary have alluded to. I've made two trips to the 
region since I've been in my current assignment. I would tell 
you that the desire for people to develop stronger bilateral 
relationships with the United States has probably never been 
greater. Frankly, with our partners, particularly those with 
whom we have a treaty obligation, our relationship has probably 
haven't--never been deeper.
    But, when you talk about opportunities, the one thing that 
we haven't necessarily had in the past, a--multilateral 
relationships and interoperability associated with conducting 
everything from humanitarian assistance operations to other 
operations that may be required in the region, or that 
multilateralism, in and of itself, serving as a deterrent to 
those who might want to be destabilizing in the region. So, 
there is an opportunity. From those relationships then comes 
the one issue we haven't talked about in great detail, is 
opportunities for training. Because----
    Senator Sullivan. Right.
    General Dunford.--in the Pacific, you know, joint training 
is required to maintain readiness. We're always looking for 
opportunities to identify training areas where we can maintain 
readiness even as we conduct the exercises and engagements with 
our partners. I think the willingness of our partners to afford 
us the opportunity to train in their countries, continue to 
maintain proficiency with live fire, aviation capabilities, 
those kinds of things, I think will only increase in the 
future. There's a number of places where we're in contact--
Secretary's staff is in contact with a number of countries to 
enhance our training opportunities and, as the Secretary spoke 
about, our actual basing opportunities in the region.
    So, I would agree with you. I think a view of the common 
challenges in the Pacific has brought us together in a very 
positive way and has created all the opportunities you've 
alluded to.
    Senator Sullivan. Great. Thank you.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you very much.
    On behalf of Chairman McCain, Senator Lee, please.
    Senator Lee. Thank you, Mr. Chairman.
    Thanks, to all of you, for being here.
    Secretary Carter, on December 3rd, just a few months ago, 
you announced that the military branches would be opening all 
military occupational specialties, or MOSs, to servicemembers, 
regardless of gender, on the basis of various provisions in 
several iterations of the National Defense Authorization Act, 
on the basis of committee hearings and formal briefings with 
members and staff. At the time of your decision, you were 
certainly aware of Congress's interest in being closely 
consulted on the matter. Nevertheless, in your announcement and 
in subsequent briefings with Members of Congress, you failed to 
discuss the legal and practical implications this decision 
could have on the Selective Service in America. Would--so, my 
concern is that it seems the Department may have made a policy 
decision and left up to Congress and the courts to deal with 
the difficult legal ramifications.
    So, I'd like to know, what assessments, Mr. Secretary, has 
the Department of Defense made to examine how opening all MOSs 
to female servicemembers will affect the Selective Service Act. 
What assessments have you made to examine how requiring 
American women to register for the draft or, alternatively, 
ending the Selective Service altogether, would affect military 
readiness, recruitment, retention, and morale?
    Secretary Carter. Well, thank you, Senator. Thank you for 
that question.
    Let me just begin at the beginning. Why did we do this in 
the first place? The reason to open up all MOSs to females is 
to make sure that we're able to access what is, after all, 50 
percent of the population----
    Senator Lee. Right. Understand, I'm----
    Secretary Carter.--for force effectiveness----
    Senator Lee.--I'm not expressing concern about that----
    Secretary Carter. Understand.
    Senator Lee.--on the merits of that when I'm talking about 
its implications for the Selective Service.
    Secretary Carter. I do understand. So, that is the action 
we took. As far as informing the Congress is concerned, we have 
the implementation plans for that, including everything that is 
required by law in order for us to do what we need to do.
    Separately is the Selective Service system, which is not 
administered by us and is governed by statute. So, you will 
have a voice in any implications for that. My own belief about 
that is twofold. First, it stands to reason that you'll 
reconsider the Selective Service system and its treatment of 
females, in view of the Department of Defense's policies and 
practices with respect to women as well as men.
    But, the second thing I'd like to say about--and--about the 
Selective Service system and the draft, generally, is this. We 
want to pick our people. We don't want people forced to serve 
us, and we don't want all the people that are--young people 
that are in our country. We pick very carefully. In fact, only 
about--a little bit more than two-thirds of young Americans 
even meet our basic qualifications. Many of them are, I'm sad 
to say, obese or have other health issues. A third of them 
haven't graduated from high school, and we want high school 
graduates. About 10 percent of them have criminal records that 
make it impossible for us to want them. So, we don't want a 
draft. We don't want people chosen for us. We want to pick 
people. That's what the All-Volunteer Force is about. That's 
why the All-Volunteer Force is so excellent. That's why we're 
constantly trying to make sure we keep up with labor markets 
and generational trends and so forth, so that we continue to 
pick and have access to the very best people.
    Look at the magnificent people we have now in uniform. I 
need to make sure that tomorrow and 10 years from now and 20 
years from now, we're also able to attract the very best. But, 
now, and then, we want to pick. We don't have--want to have 
people picked for us; we want to pick, ourselves.
    Senator Lee. Right. Thank you. I appreciate that. I 
appreciate the sentiment that I think I understand you 
expressing, which is that any change to the universe of persons 
subject to the Selective Service registration requirement needs 
to be made by Congress, with input from the American people, 
rather than administratively or by the courts.
    Secretary Carter. It's set in law.
    Senator Lee. In the--in a long-ranging interview published 
with The Atlantic, President Obama has expressed his disdain 
for security freeriders when it comes to allies in Europe and 
parts of the Middle East. However, your fiscal year 2017 budget 
calls for a quadrupling of the European Reassurance Initiative, 
and robust OCO funding for activities in the Middle East. So, 
how do you, and how does the administration, how does President 
Obama, reconcile the concerns that President Obama has 
expressed about some of our allies who are not taking steps to 
increase their defense spending or who are potentially abusing 
their relationship with us, their alliance with us, for their 
own benefit without making corresponding increases to their 
investment in defense spending?
    Secretary Carter. Well, I'll just say, as Secretary of 
Defense, I think America needs to lead. I'm happy to have us 
lead. We have, by far and away, more capability than anybody 
else. But, we need others to join us and get in the game. You 
mentioned Europe. We have been urging, very insistently, 
Europeans to spend more on their own defense. Some are doing 
what they're supposed to do. I'd, for example, commend the 
United Kingdom, which has recently increased its percentage of 
GDP [gross domestic product] and has agreed to stay at what all 
the NATO countries agreed, which is a minimum of 2 percent. 
They're not all there yet. Then, as you go around the world 
with respect to others, allies in the Gulf and so forth, we are 
looking for people to join us. There, the counter-ISIL 
coalition, the effort to deter Iranian aggression, that's 
something we need our security partners to do with us. So, 
we're prepared to lead. We're willing to lead. But, I think 
it's fair to turn to our partners and say, ``We need you to 
join us.''
    Now, my role in that is very specifically--and the 
Chairman's, as well--to describe for our--let's take the 
counter-ISIL coalition--what it is we need. So, ``Here's what 
we need. We need some more ISR [intelligence, surveillance, and 
reconnaissance] help from you. We need some Special Forces from 
you. We need''--and this is important--``reconstruction funding 
for places like Ramadi. So, if you don't have any forces, or 
you don't want to put your forces there, you can open your 
wallet. That's needed.'' We try to give them choices for how 
they can make a contribution, and lead them in that direction. 
But, we need people to follow.
    I--it's an important part of my job--and I know the 
Chairman does this well--to talk to our counterparts and say, 
``We need everybody in the game if we're going to have a 
peaceful world. We share this world together. We share this 
future together. You've got to get in the game.''
    Let me ask the Chairman if he wants to----
    General Dunford. No, I'd just emphasize what the Secretary 
said. I think a key part of our responsibility is on a day-to-
day basis. I recently went to the region and met with 30 of the 
chiefs of defense from our coalition partners to encourage 
their participation. But, one of the things we do very hard is 
work on where they can make a contribution, and then encourage 
them to actually do that. I mean, I'd--that's an ongoing 
process. We're--are we satisfied with where we are? Never.
    Senator Lee. Thank you, General Dunford. Thank you, 
Secretary Carter.
    Senator Reed. Thank you.
    Gentlemen, thank you for your testimony. Thank you for your 
service.
    On behalf of Chairman McCain, let me declare the hearing 
adjourned.
    [Whereupon, at 12:20 p.m., the hearing was adjourned.]

    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator John McCain
    1. Senator McCain. Secretary Carter, you state that the funding 
shortfall from the fiscal year 2017 budget request and the fiscal year 
2017 topline submitted in the fiscal year 2016 Future Years Defense 
Program, a difference amounting to approximately $17 billion for 
national defense, was mitigated by favorable economic assumptions, such 
as the price of fuel. Where these favorable economic assumptions also 
applied to the fiscal year 2017 Future Years Defense Program, thus 
fiscal year 2018 through fiscal year 2021?
    Secretary Carter. Yes, we used the rate of change for inflation and 
fuel published by the Administration for the fiscal year 2017 through 
fiscal year 2021 program.

    2. Senator McCain. Secretary Carter, if favorable economic 
assumptions, relative to last year's budget request, was used for the 
fiscal year 2017 budget and Future Years Defense Program (FYDP), than 
the fiscal year 2017 FYDP figures should be lower than the fiscal year 
2016 FYDP budget levels. However, per page 5 of Chapter 1 of the fiscal 
year 2017 Defense Budget Overview, with the exception to fiscal year 
2021, the FYDP figures are practically identical. What specific items 
were you able to fund in the fiscal year 2017 FYDP that were not 
included in last year's FYDP? Why were these items not included in last 
year's FYDP? How do these items impact the Department's ability to 
execute the defense strategy, relative to last year's budget request?
    Secretary Carter. The Future Years Defense Program (FYDP) economic 
assumptions savings have contributed to the Department's ability to 
provide funding for several emergent programs:

      The fiscal year 2017 budget invests $18 billion over the 
FYDP to help spur research, develop, test, evaluate, and procure 3rd 
Offset Strategy capabilities our military will need to deter and if 
necessary fight and win high-end conflicts in the future. The 3rd 
Offset Strategy is based on the premise that advances in artificial 
intelligence and autonomy will allow the Joint Force to develop and 
operate advanced joint, collaborative human-machine battle networks 
that synchronize simultaneous operations in space, air, sea, undersea, 
ground, and cyber domains.
      To ensure enough fighter squadrons are ready to deploy to 
meet high overseas demand, the Air Force will transition the A-10 fleet 
two years later than previously planned, enabling a larger near-term 
force and investment in legacy capabilities.
      The fiscal year 2017 budget supports the Army's Aviation 
Restructure Initiative by providing $1.1 billion for 52 Apache 
helicopters, and $1.0 billion for 36 Black Hawk helicopters in fiscal 
year 2017.
      For the nuclear enterprise, while many systems remain 
effective, we are entering a period when multiple weapon systems 
require significant modernization. This drives an increase in the 
funding required over the FYDP and beyond.
      The Ohio Replacement Program is allocated $13.2 billion 
for development and initial construction over the FYDP.
      The budget allocates $108 million over the FYDP to 
implement the Joint Interagency Combined Space Operations Center, which 
will better align joint operations in space across the U.S. Government.
      The Department has assumed responsibility for 
development, design, security and operation of the background 
investigations information technology systems for the National 
Background Investigations Bureau. This will ensure cybersecurity is 
embedded throughout the process, thereby strengthening protection of 
federal employees' and contractors' personal information.
      The Department also utilized the economic assumption 
savings to restore previously planned savings for proposed force 
structure changes, health care reform, and other efficiency initiatives 
that Congress has denied.

    The fiscal year 2017 funding is constrained by the Bipartisan 
Budget Act of 2015, but this budget reshapes the Department in order to 
address current and future operational challenges. The Department's 
fiscal year 2017 budget and FYDP retains major elements of planned 
force structure; invests in the future; emphasizes lethality and 
capability over size; pursues innovative ``offset'' capabilities and 
processes; and enables the Joint Force to operate across all domains 
including cyber. However, increased and predictable funding is needed 
over the FYDP to sustain this investment in the future and maintain 
U.S. superiority.

    3. Senator McCain. Secretary Carter, in your statement you state 
``last fall's budget deal set the size of our budget, and with this 
degree of certainty we focused on changing its shape in fundamental 
ways--making choices and tradeoffs to adjust to a new strategic era, 
and seize opportunities for the future.'' However, this year's budget 
request seems to promote a very similar force structure and program 
requirements as previous budgets. In fact, this year's budget still 
seeks to meet the requirements and strategy as laid out in the Defense 
Strategic Guidance and the 2014 Quadrennial Defense Review. The target 
endstrength of the Total Army and Marine Corps has not changed. The 
total ship requirement has also not changed. The size and shape of the 
major Air Force procurement programs have also not changed. Thus, in 
what ways did the Department change the shape of the budget from 
previous years?
    Secretary Carter. The fiscal year (FY) 2017 budget request strikes 
a prudent balance among the modernization of the Joint Force, its size, 
and its readiness, and continues to keep faith with servicemembers and 
their families. The President's Budget (PB) 2017 reflects a defense 
program that effectively balances the need to meet today's persistent 
operational demand and to build our readiness and capabilities for 
full-spectrum warfare. The PB 2017 funding levels will allow the joint 
force to respond to steady state demand requirements, fulfill strategic 
obligations, and support the Services' readiness recovery plans. To 
continue to provide a strong package of pay and benefits for both 
military and civilians and ensure the Department remains competitive 
for the best talent, the budget proposes a 1.6 percent basic pay 
increase for 2017.
    Today's security environment is dramatically different from the one 
the Department has been engaged with for the last 25 years, and it 
requires new ways of thinking and new ways of acting. The following 
major changes to the PB 2017 reflect today's security environment:

      The PB 2017 funds intelligence, surveillance and 
reconnaissance (ISR) support for counterterrorism (CT) that will build 
to 90 total combat air patrols for combatant commands.
      The budget quadruples last year's request for the 
European Reassurance Initiative (ERI) to $3.4 billion in fiscal year 
2017 to reassure our NATO allies and deter Russian aggression. This 
funding supports prepositioning additional combat equipment, conducting 
additional training exercises, and enabling a continuous brigade-size 
rotation which will ensure we have three Army brigade combat teams in 
Europe at all times.
      In response to increased threats, the Department is 
strengthening cyber defenses and increasing options available in case 
of a cyber-attack. The PB funds $6.7 billion in fiscal year 2017 for 
defensive and offensive cyberspace operations, capabilities, and cyber 
strategy.
      The Department is focusing efforts to reduce management 
headquarters from the fiscal year 2014 level by 25 percent by fiscal 
year 2020.
      The Department is modernizing the TRICARE health plan to 
balance the needs of beneficiaries with requirements to maintain 
military medical readiness by incentivizing care at the military 
treatment facilities through lower fees and copays, as well as 
improving access to military care (e.g., timely medical appointments).
      The Department is assuming responsibility ?for 
development, design, security and operation of the background 
investigations information technology systems for the National 
Background Investigations Bureau. This will ensure cybersecurity is 
embedded throughout the process, thereby strengthening protection of 
federal employees' and contractors' personal information.
      The PB 2017 will help provide our Army, Marine Corps, and 
special operations forces with greater lethality to ensure ground 
forces can deter and, if necessary, fight and win a full-spectrum 
conflict.
      The fiscal year 2017 budget builds upon investments in 
last year's budget to help secure U.S. access to space and address 
space as an operational domain.
      The fiscal year 2017 budget invests $18 billion over the 
FYDP to help spur research, develop, test, evaluate, and procure 3rd 
Offset Strategy capabilities our military will need to deter and if 
necessary fight and win high-end conflicts in the future. The 3rd 
Offset Strategy is based on the premise that advances in artificial 
intelligence and autonomy will allow the Joint Force to develop and 
operate advanced joint, collaborative human-machine battle networks 
that synchronize simultaneous operations in space, air, sea, undersea, 
ground, and cyber domains.
      To ensure enough fighter squadrons are ready to deploy to 
meet high overseas demand, the Air Force will transition the A-10 fleet 
two years later than previously planned, enabling a larger near-term 
force and investment in legacy capabilities.
      For the nuclear enterprise, while many of our systems 
remain effective, we are entering a period when multiple weapon systems 
require significant modernization. This drives an increase in the 
funding required over the FYDP and beyond.

    The fiscal year 2017 funding is constrained by the Bipartisan 
Budget Act of 2015, but this budget reshapes the Department in order to 
address current and future operational challenges. The Department's 
fiscal year 2017 budget retains major elements of our planned force 
structure; invests in the future; emphasizes lethality and capability 
over size; pursues innovative ``offset'' capabilities and processes; 
and enables the Joint Force to operate across all domains including 
cyber. However, increased and predictable funding is needed over the 
FYDP to sustain this investment in the future and maintain U.S. 
superiority.
                               __________
              Questions Submitted by Senator James Inhofe
                          threats vs resources
    4. Senator Inhofe. Secretary Carter and General Dunford, how would 
you assess the future operations tempo of each of our services based on 
the assessment that former SecDef Gates made about aggressors, 
terrorists, revanchists, and expansionists half a world away are always 
interested in us?
    Secretary Carter. For the foreseeable future, the United States 
will continue to face the priority challenges from China, Russia, Iran, 
North Korea, and an enduring counter-terrorism campaign. Operations 
tempo to address these challenges will likely remain high, whether 
through continued operations such as the counter-Islamic State in Iraq 
and the Levant (ISIL) effort, or due to rotations and deployments to 
reassure allies and partners in key regions.
    The fiscal year (FY) 2017 budget reflects the strategic shift in 
resourcing the Department is undertaking--in the direction of, and in 
preparation for, the threats we see on the horizon from a reemergence 
of great power competition. In particular, in this budget the 
Department emphasizes investments to respond to the concerning coercive 
actions and military modernization agendas of China and Russia.
    The fiscal year 2017 budget submission focuses on a balanced set of 
investments in capabilities, capacity, readiness, and overall surge 
ability of the force to deter and, if necessary, prevail in future 
conflicts. The Department believes that in order to deter such 
conflict, U.S. Forces must have, and be seen to have, the ability to 
dominate and prevail against potential adversaries. The Department's 
modernization priorities for conventional forces, as well as for 
upgrading the U.S. nuclear deterrent, are the foundation for this 
deterrent ability.
    The Department also will not neglect the forces and skills required 
to continue our counter-terrorism efforts worldwide. The emergence of 
ISIL, recent terror attacks, and our continuing efforts in Afghanistan 
and Iraq are strong reminders that the United States and our global 
partners will need to continue to wage an enduring counter-terrorism 
campaign for the foreseeable future.
    General Dunford. The United States is now confronted with 
simultaneous challenges. The Department has identified five strategic 
challenges--Russia, China, North Korea, Iran, and Violent Extremist 
Organizations--all of whom that present transregional, multi-domain, 
and multi-functional threats. To meet these challenges the Joint Force 
will sustain a high level of operations tempo well into the future--
particularly regarding our high demand, low density capabilities (e.g. 
ISR, Integrated Air and Missile Defense). Sustaining this operational 
tempo over time will degrade our full spectrum readiness and undermine 
our long-term force modernization efforts.

    5. Senator Inhofe. General Dunford, would you agree with the 
statement regarding our current state of operations `we have more 
mission than money, manpower and time'?
    General Dunford. The Joint Force is facing simultaneous challenges 
from Russia, China, Iran, North Korea, and violent extremism. Meeting 
these challenges is straining the force, especially low density, high 
value assets, and degrading both our readiness and capacity for 
unexpected contingencies. Although the fiscal year 2017 budget is 
sufficient to meet the strategy, I am concerned that current resource 
levels for the Department, even absent sequestration, are insufficient 
to meet the impending bow-wave of deferred modernization starting in 
2019.

    6. Senator Inhofe. General Dunford, would you agree that budget 
constraints have forced each service to prioritize near-term readiness 
at expense of capacity, capability, modernization, and infrastructure?
    General Dunford. To the extent possible within the resources 
provided by the 2015
Bipartisan Budget Act, we have balanced three major areas: investment 
in high-end capabilities, the capability and capacity to meet current 
operational demands, and the need to rebuild readiness after an 
extended period of war. Although the fiscal year 2017 budget is 
sufficient to meet the strategy, I am concerned that current resource 
levels for the Department, even absent sequestration, are insufficient 
to meet the impending bow-wave of deferred modernization starting in 
2019.

    7. Senator Inhofe. General Dunford, is the current defense budget 
sufficient to simultaneously rebuild the readiness of each of the 
services and modernize the force for the future while continuing 
current operations around the globe?
    General Dunford. Our budget invests in the capabilities needed to 
maintain an advantage over adversaries and to transition the Joint 
Force to full-spectrum readiness. However, this process remains slow 
and fragile due to current operational demands. We are closely managing 
how the force is employed to meet current demands. The fiscal year 2017 
budget balances investment in high-end capabilities, the capability and 
capacity to meet current operational demands, and the need to rebuild 
readiness and is sufficient to meet the strategy. However, I am 
concerned that current resource levels for the Department, even absent 
sequestration, are insufficient to meet the impending bow-wave of 
deferred modernization starting in 2019.
                     force structure and readiness
    8. Senator Inhofe. All, what is our capacity today to provide 
additional ``surge'' forces to respond to a major contingency?
    Secretary Carter and Secretary McCord. Recognizing the limits of 
the current resource-constrained environment, the Department maintains 
the capacity to surge forces by managing four levers: planning, force 
management, readiness, and global posture.
    In the planning realm, the Department reviews the combatant 
command's campaign plans to achieve prioritized near-term objectives 
while balancing risks globally with service readiness recovery. These 
steady-state plans create the conditions that protect our interests, 
deter our adversaries, and enhance partner capacity. The Department 
also reviews and maintains resource-informed contingency plans that 
enable the combatant commands to respond to a wide-array of 
contingencies. These plans leverage postured forces and force 
employment options that provide the President and Secretary with a 
range of response options that secure U.S. interests and achieve 
strategic end-states.
    Through force management, the Department adjudicates and 
prioritizes global resource demands and distributes forces accordingly. 
To meet these demands, the Services have developed and are constantly 
assessing their force-generation models and sustainment processes.
    Finally, the Department's broader push for posture over presence 
preserves the means through which commands and services can surge into 
a given theater while managing risk globally and preserving non-
deployed readiness.
    Together, these four complementary lines of effort are rebalancing 
the Department's ability to surge to a contingency, manage readiness, 
and maintain the imperative to remain globally engaged.
    General Dunford. We have the total capacity to execute the strategy 
outlined in the 2014 QDR. However, our sustained high operational tempo 
is eroding readiness and extending the timeline by which forces can be 
made available to address unexpected contingencies or fulfill combatant 
commanders' requests.

    9. Senator Inhofe. All, given the current and projected threat 
environment and the increased demands being placed on our force 
structure, do you believe each of our services sized to meet increased 
operational requirements? If not, what is the right force structure 
size for each of your services?
    Secretary Carter. and Secretary McCord. Yes, the flexibility 
provided by last fall's budget deal allowed us to maintain the 
Department's desired targets across the Future Years Defense Program 
(FYDP) for end-strength and active-reserve mix for our ground forces. 
Without the budget deal, sequestration likely would have forced further 
reductions. Our current force structure allows us to execute our 
defense strategy with manageable risk, even as it does require us to 
accept elevated risk in some areas.
    The current force is sized to today's threat environment. The 
Department plans to stabilize the total ground force end-strength by 
the end of fiscal year 2018 with an Army of 450,000 active-duty 
soldiers, 335,000 soldiers in the Army National Guard, and 195,000 
soldiers in the Army Reserve--comprising 56 total Army brigade combat 
teams and associated enablers--and a Marine Corps of 182,000 active-
duty Marines and 38,500 Marine reservists. The fiscal year 2017 budget 
request will grow the size, and importantly the capability, of the 
Navy's battle fleet--providing for 380,900 active-duty and reserve 
sailors in fiscal year 2017, and an increase from 280 ships at the end 
of fiscal year 2016 to 308 ships at the end of the FYDP. The budget 
also supports an Air Force of 491,700 active-duty, reserve, and 
National Guard airmen--maintaining 55 tactical fighter squadrons over 
the next five years, and providing sufficient manpower to address high 
operating tempo and shortfalls in maintenance specialists for both 
tactical fighters and remotely-piloted aircraft.
    Future Joint Force requirements derive from the Department's five 
ongoing strategic challenges: Russia, China, North Korea, Iran, and 
terrorism. These challenges are the pacing threats that will inform, 
over the FYDP and beyond, the Department's force-sizing planning and 
programming processes.
    General Dunford. The Services are currently able to provide forces 
to support the strategy outlined in the 2014 QDR. However, resource 
constraints and increased day-to-day requirements are eroding readiness 
and extending the timeline by which forces can be made available to 
fulfill combatant commanders' requests and respond to emerging 
requirements. We will continue to closely monitor the security 
environment to ensure force retains the capacity, capability, and 
readiness to defend the nation against future challenges.

    10. Senator Inhofe. All, what is the impact of delaying 
modernization on our ability to conduct full spectrum operations?
    Secretary Carter. and Secretary McCord. The fiscal year 2017 budget 
reflects the strategic shift in resourcing the Department is 
undertaking--in the direction of, and in preparation for, the threats 
we see on the horizon from a reemergence of great power competition. In 
particular, in this budget the Department emphasizes the concerning 
coercive actions and military modernization agendas of China and 
Russia, who continue to advance military systems that seek to undermine 
the advantages that U.S. Forces have enjoyed for decades in gaining 
access to key regions. They are developing and fielding a range of 
anti-access/area denial capabilities, including long-range air-, sea-, 
and land-based missiles, advanced submarines, torpedoes, mines, and 
cyber and space capabilities.
    Major delays in the Department's efforts to modernize U.S. Forces 
for full-spectrum operations--including to contend with these more 
high-end threats in contested environments--could jeopardize the Joint 
Force's future ability to deter conflicts with Russia and China. The 
fiscal year 2017 budget submission focuses on a balanced set of 
investments in capabilities, capacity, readiness, and overall surge 
ability of the force to deter, and if necessary, prevail in conflicts 
adversaries may choose to initiate through future, aggressive behavior 
to achieve political ends. The Department believes that in order to 
deter such conflict, U.S. Forces must have, and be seen to have, the 
ability to dominate a conflict, should one arise. The Department's 
modernization priorities for conventional forces, as well as for 
upgrading the U.S. nuclear deterrent, are the foundation for this 
deterrent ability.
    To maintain and expand current U.S. military advantages and remain 
competitive into the future, particularly after a 15-year period in 
which the Joint Force was principally focused on protracted 
counterinsurgency and stability operations and took risk in capability 
investments, the Department has to pursue modernization efforts now. 
The fiscal year 2017 budget emphasizes the development and fielding of 
a wide range of U.S. capabilities to modernize the force, particularly 
against counter anti-access/area denial threats, including investments 
in: our posture in Europe; modernized fighter and attack aircraft; 
lethality in our undersea force; aggressive research and development 
efforts; and a range of cross-domain capabilities which strengthen 
power projection, including cyber, space, precision-guided munitions, 
stealth, and electronic warfare.
    General Dunford. Over the last fifteen years we have focused on 
providing our warfighters the support needed to win in the field. This 
resulted in deliberate decisions to delay investments in some force 
modernization. Continuing this delay will adversely affect readiness, 
degrading our competitive advantage, and impacting our capacity. Taken 
together, over time these impacts will undermine our capability to 
conduct full spectrum operations. Although the fiscal year 2017 budget 
is sufficient to meet the strategy, I am concerned that current 
resource levels for the Department, even absent sequestration, are 
insufficient to meet the impending bow-wave of deferred modernization 
starting in 2019.

    11. Senator Inhofe. All, have we created a procurement `bow wave'--
pushing out and flattening procurement of critical modernization 
programs, all with growing budget demand, because they will not fit 
into the current budget topline?
    Secretary Carter and Secretary McCord. The fiscal year 2017 budget 
request strikes a prudent balance among the modernization of the Joint 
Force, its size, and its readiness, and continues to keep faith with 
servicemembers and their families. The fiscal year 2017 funding is 
constrained by the Bipartisan Budget Act (BBA) of 2015, but this budget 
reshapes the Department in order to address current and future 
operational challenges. The Department's fiscal year 2017 budget 
retains major elements of planned force structure; invests in the 
future; emphasizes lethality and capability over size; pursues 
innovative ``offset'' capabilities and processes; and enables the Joint 
Force to operate across all domains including cyber.
    To underwrite this ability in the Joint Force, the Department's 
budget must prioritize capability investments and recovery of the 
force's readiness while controlling internal cost growth that threatens 
to erode combat power. It must also develop and maintain a posture of 
Continental U.S.-based and forward forces that prioritizes deterrence, 
surge for responsiveness to crises, and the ability to prevail in 
conflict. Finally, the Department must prioritize investments in and 
preparation for emerging 21st century threats, including those related 
to the space and cyberspace, the nuclear enterprise, and power 
projection in highly contested environments. This focus means 
sustaining robust investments in science, technology, research, and 
development in areas most critical to future conflict, including where 
there is the greatest potential for game-changing advances. It also 
requires reforms to headquarters, force structure, health care, and 
infrastructure so that the needed investment in priorities is possible. 
Lastly, increased and predictable funding is needed over the Future 
Years Defense Program to sustain this investment in the future and 
maintain U.S. superiority.
    General Dunford. Yes, due to lower than planned toplines, we have 
deferred modernization in favor of near-term readiness and force 
structure. Although the fiscal year 2017 budget is sufficient to meet 
the strategy, I am concerned that current resource levels for the 
Department, even absent sequestration, are insufficient to meet the 
impending bow-wave of deferred modernization starting in 2019.
                               deterrence
    12. Senator Inhofe. Secretary Carter, do you believe the United 
States is effectively deterring potential adversaries given the 
statements above?
    Secretary Carter. Yes, I believe the United States is effectively 
deterring potential adversaries from directly threatening the United 
States and our allies. However, we must remain vigilant against the 
risk that some states may turn to increasingly ambiguous and 
unconventional threats to our interests. Such approaches necessitate a 
whole-of-government response when the military instrument is not the 
appropriate solution.

    13. Senator Inhofe. Secretary Carter, what do you think the 
perception of Russia, China, North Korea and Iran on the United States' 
capability and willingness to deter their aggressive actions is?
    Secretary Carter. [Deleted.]

    14. Senator Inhofe. Secretary Carter, what is the impact our 
ability to deter by drawing red lines or making statements about taking 
action but failing to follow through?
    Secretary Carter. The Department of Defense is committed to the 
defense of the United States and of our allies. All instruments of 
national power underwrite this commitment and contribute to deterrence 
and extended deterrence. These instruments include our military forces 
generally, our forward presence in key areas around the world, and our 
deep defense cooperation with U.S. allies and partners. It would be a 
grave miscalculation for any nation to doubt our resolve and threaten 
U.S. and allied vital interests.
                               __________
              Questions Submitted by Senator Roger Wicker
                           russian aggression
    Senator Wicker. Russia's aggression in recent years has led many to 
believe that the Kremlin is trying to rebuild the Soviet empire. 
Domestically, President Vladimir Putin has overseen an increasingly 
repressive and undemocratic regime, where opposition groups are 
punished and human rights are ignored.
    On the world stage, Putin has twice defied the sovereignty of 
neighboring states, invading Georgia in 2008 and Ukraine two years ago. 
He has spared no opportunity to rebuke America--either by defending 
Bashar al-Assad's regime in Syria or harboring U.S. fugitive Edward 
Snowden.
    I believe President Obama's misguided concessions and promises have 
helped enable Putin's ambitions. In 2009, he and then-Secretary of 
State Hillary Clinton pursued a fruitless ``reset'' in bilateral 
relations despite warnings from experts--and members of this 
committee--that Russia could not be trusted.
    Two years ago, the Department of Defense and Department of State 
confirmed that Russia had violated the Intermediate-Range Nuclear 
Forces or ``INF'' Treaty, a pivotal Cold War pact signed by President 
Reagan and Soviet leader Mikhail Gorbachev to limit both countries' 
arsenals. DOD officials have told the press that these violations 
occurred as late as 2008.
    It's abundantly clear to me that Putin will continue to test 
American and NATO resolve during the remaining year of the Obama 
Administration. I urge the two of you to offer bold and blunt counsel 
to the White House on the threats posed by the Russian Bear.

    15. Can you highlight to this committee the steps DOD is taking 
with its NATO Reassurance Initiative to send a clear message about our 
red-lines in Eastern Europe?
    Secretary Carter. Aggressive Russian actions against U.S. partners 
and interests continue on multiple fronts. Russia continues to occupy 
Crimea illegally and to support armed conflict in eastern Ukraine, and 
has routinely violated its international agreements, notably the 
Intermediate-Range Nuclear Forces (INF) and Conventional Armed Forces 
in Europe (CFE) Treaties, as well as the Budapest Memorandum. Russia 
has also intervened in Syria seemingly to prop up the failed Assad 
regime, leading to greater civilian suffering and diverting forces on 
the ground from fighting the Islamic State of Iraq and the Levant 
(ISIL). The United States has responded to these aggressive acts by 
reinvigorating cooperation with Allies and partners, supporting Ukraine 
in the face of such aggressive Russian actions, and investing in 
prudent defensive capabilities while adjusting the U.S. Force posture 
in Europe.
    The recent submission of the fiscal year 2017 budget significantly 
increases funding for the European Reassurance Initiative (ERI) to 
approximately $3.42 billion. This year's request deepens the United 
States' investment in Europe by funding more rotational U.S. Forces, 
increased training with our Allies and partners, enhanced the quantity 
of pre-positioned warfighting gear in countries bordering Russia, and 
improvements to the requisite supporting infrastructure. ERI is helping 
to enhance our military readiness and sharpen our focus on the 
expanding strategic challenges our European Allies and partners 
continue to face. It is a visible demonstration of the United States' 
resolve to support North Atlantic Treaty Organization (NATO) assurance 
measures, bolster the security and capacity of our regional partners, 
deter and respond to aggressive actions by regional actors, and respond 
to crises in the region. With Russia's continued aggressive actions in 
eastern Ukraine and elsewhere, this increased ERI request represents 
the U.S. firm commitment to the security and territorial integrity of 
our NATO Allies.
    General Dunford. U.S. is supporting Ukraine in the face of Russian 
aggression, and increasing investment in sensible defensive 
capabilities while adjusting our force posture in Europe. The fiscal 
year 2017 budget submission significantly increases funding for the 
European Reassurance Initiative (ERI) to approximately $3.42 billion. 
With this request, the United States' expands investment in Europe by 
funding additional rotational U.S. Forces which will enable increased 
training with our Allies and Partners, increase pre-positioned combat 
gear in theater, and improve necessary support infrastructure. It is a 
visible demonstration of the United States' determination to support 
NATO assurance measures, bolster the security and capacity of our 
regional partners, deter and respond to aggressive actions from 
regional actors, and respond to crises in the region. In response to 
Russia's continual aggression in Ukraine and elsewhere, this increased 
ERI request signifies our steadfast assurance to our NATO Allies 
security and territorial integrity.
                               __________
              Questions Submitted by Senator Kelly Ayotte
                  performance of the a-10 against isil
    16. Senator Ayotte. This week, the Air Force Vice Chief of Staff 
said that A-10s are performing ``superbly'' against ISIL. Secretary 
Carter, you recently said that the A-10 has been ``devastating ISIL 
from the air.'' Secretary Carter, what is making the A-10 so effective 
against ISIL?
    Secretary Carter. Since 26 November 2014, A-10s have executed 
approximately 12 percent of all C-ISIL air strikes, utilizing precision 
guided munitions, and occasionally, its onboard 30mm cannon. The A-10 
also provides capability to support personnel recovery and combat 
search and rescue missions for U.S. Central Command. The proximity of 
A-10 basing at Incirlik Air Base, Turkey enables extended on-station 
time while lessening the requirement for in-flight refueling.
                               __________
               Questions Submitted by Senator Joni Ernst
                        honoring women veterans
    17. Senator Ernst. Do you support reinstating Women Airforce 
Service Pilots (WASP) eligibility to have their remains inurned at 
Arlington National Cemetery?
    Secretary Carter. Yes, I honor the service and sacrifice of the 
women who served as WASPs during World War II. Today, these brave and 
patriotic women are recognized as ``active-duty designees'' and 
afforded veteran status. Although not presently eligible for interment 
or inurnment at Arlington National Cemetery, I support Congress 
amending the 1977 law expanding their benefits to include above-ground 
inurnment at Arlington National Cemetery.

    18. Senator Ernst. Do you have the authority to immediately 
reinstate WASPs eligibility to have their remains inurned at Arlington 
National Cemetery?
    Secretary Carter. No. As a general matter, I do not have the 
authority to immediately amend the codified rules on eligibility for 
interment and inurnment at Arlington National Cemetery, whether for the 
WASPs or any of the active-duty designees. Amending codified rules 
requires notice and public comment rulemaking--a process which takes 
considerable time. As such, I believe the most direct and expedient 
path to expanding the funeral benefits currently afforded active-duty 
designees is to amend the 1977 law as contemplated in the bill 
sponsored by Representative McSally and recently passed by the House. I 
would add that the Secretary of the Army already has the statutory 
authorization to consider an individual case-by-case exception to 
policy based on an individual's record of accomplishments and service.

    19. Senator Ernst. If you do not have the authority to immediately 
reinstate WASPs eligibility to have their remains inurned at Arlington 
National Cemetery, do you request legislative action which would 
immediately reinstate this eligibility?
    Secretary Carter. Yes. Expanding the benefits that Congress has 
already afforded active-duty designees is best accomplished by amending 
the 1977 law. I fully support such Congressional action provided the 
bill is drafted narrowly to reduce impacts on the finite capacity of 
Arlington National Cemetery to perform above-ground inurnments. Any 
bill passed by Congress and signed into law by the President would be 
immediately implemented.
                               __________
                Questions Submitted by Senator Mike Lee
                           selective service
    20. Senator Lee. Secretary Carter, what assessments has the 
Department of Defense conducted to examine how opening all MOS's to 
female service-members will affect the Selective Service Act, and what 
assessments have you made to examine how requiring American women to 
register for the draft, or ending Selective Service, would affect 
military readiness, recruitment, retention, and morale?
    Secretary Carter. The Department included its analysis of the legal 
implications of my decision to open all remaining closed occupations 
and positions with respect to the Military Selective Service Act as 
part of the December 3, 2015, notification package.
    Currently, the Selective Service System process provides a unique 
source on new, quality leads for each branch of Service to assist in 
its recruiting efforts. With over 2 million registrants per year, the 
Department realizes approximately 75,000-80,000 joint leads annually. 
With the current requirement to register with the Selective Service 
System, young males are compelled to think about the possibility of 
military service. No money, no legislation, and no marketing technique 
can replace this opportunity. Mandatory registration of females may 
provide similar benefits currently experienced through mandatory 
registration of males with the Selective Service System.
    There is merit in a thorough assessment of the issue of requiring 
American women to register for the draft, or ending Selective Service, 
to include a review of the statutes and policies surrounding the 
current registration process, though this should be part of a much 
broader national discussion, in which the Department stands ready to 
participate.
                         counter-isis campaign
    21. Senator Lee. Last week in the CENTCOM posture hearing, General 
Austin stated that, following the failure of its first attempt last 
year, the Department of Defense is seeking to recalibrate its efforts 
to train and equip a Syrian rebel force by focusing on training 
``smaller numbers of people that we can train on specific skills.'' 
Some of us were skeptical about this initiative from the outset, as we 
believed that the opposition forces in Syria were much more fragmented 
than was being assessed.
    General Dunford, while I have no doubt that the servicemembers 
involved in this initiative are the best qualified in the world to lead 
it and are giving the mission their best effort, the underlying causes 
that led to the failure of the first program are unlikely to disappear 
simply because we try to ``recalibrate'' our approach. If the 
Department of Defense insists that there has to be some sort of 
friendly force on the ground in Syria--a premise that is open to 
debate--why do we not see a push to have regional Sunni powers, such as 
Turkey and Saudi Arabia, assume the leading role in this initiative?
    General Dunford. We have explored the possibility of using Turkish 
and/or Saudi Arabian ground forces, however this option is unlikely to 
materialize in the foreseeable future. While both partners have proven 
to be significant contributors to the C-ISIL coalition, their efforts 
will likely remain focused on other areas. Moreover, tensions with both 
Russia and the Kurds leave little likelihood that Turkish ground forces 
in Syria are a viable option.

    22. Senator Lee. British Foreign Secretary Phillip Hammond in 
February stated [QUOTE] ``What we have seen over the last weeks is very 
disturbing evidence of coordination between Syrian Kurdish forces, the 
Syrian regime and the Russian Air Force which [is] making us distinctly 
uneasy about the Kurds' role in all of this.''
    Secretary Carter, can you confirm whether any of the Kurdish groups 
who have been receiving assistance or support from the United States 
are also working with the Russian Government and the Assad regime? Is 
there any evidence that the United States-backed Kurdish forces and 
United States-backed Sunni groups in Syria have ever engaged in 
hostilities against each other?
    Secretary Carter. [Deleted.]

    23. Senator Lee. On Monday, Russian President Putin announced that 
a significant portion of the Russian military will be withdrawing from 
Syria and that they had accomplished their strategic goals in the 
country. General Dunford, how much more difficult has Russia's 
involvement in the region made achieving the U.S. Government's stated 
goal of an inclusive government in Damascus? Do the Russians consider a 
partitioned Syria with President Assad left in power in the western 
part of the country a successful outcome for their strategic interests, 
and is that the direction toward which events on the ground are 
leading?
    General Dunford. I will defer to the State Department to 
characterize Russia's diplomatic objectives vis-a-vis Assad and whether 
they are conducive to a lasting peace. Russia's military actions 
suggest a desire to support Regime advances across Syria, including but 
not limited to the Alawi heartland, in a way which preserves and 
protects its strategic basing and military position.

    24. Senator Lee. Secretary Carter, how do you assess the 
effectiveness of other lines of effort being executed by U.S. agencies 
in the counter-ISIS effort, especially to disrupt the finances and 
weapons supplies of the terrorist group, and their efforts to bring 
fighters into and out of the warzone?
    Secretary Carter. The lines of effort in the counter-Islamic State 
of Iraq and the Levant (ISIL) campaign are all interconnected and work 
across the departments and agencies of the U.S. Government. Recent 
strikes against ISIL's finance-related leadership and infrastructure 
deprived the group of bureaucratic expertise and the raw materials 
needed to generate revenue and support its terrorist operations. The 
U.S. Government's combined efforts to weaken ISIL's war-making capacity 
and to retake significant swaths of ISIL-held territory in Iraq and 
Syria directly translate into fewer resources available for ISIL to 
conduct and sustain its operations. In addition, recent U.S. Government 
efforts have made it increasingly difficult for prospective foreign 
terrorist fighters to reach ISIL-controlled territory in Iraq and 
Syria. In many cases, particularly in regard to efforts focused outside 
Iraq and Syria, law enforcement partners of other countries have the 
lead. Examples of U.S. interagency-led initiatives include: 
watchlisting, border security initiatives, Treasury designations, and 
criminal prosecution. The Department of Defense contributes to U.S. and 
foreign partner efforts to disrupt the movement of personnel and 
material to, and within, ISIL-controlled territory through intelligence 
collection and information sharing, strikes within Iraq and Syria, and 
extensive collaboration with multiple partners to facilitate disruption 
operations.

    25. Senator Lee. Secretary Carter, what is the overall intention of 
the Counterterrorism Partnerships Fund (CPF) in the War on Terrorism, 
and in your assessment, since we are seeing more destabilization in the 
Middle East than ever before, is the Fund meeting the objectives that 
you have set out for it?
    Secretary Carter. Yes. The intent of the Counterterrorism 
Partnerships Fund (CTPF) is to build a network of capable partners to 
degrade and defeat terrorist threats to the United States, our Allies, 
and our partners across the U.S. Central Command and U.S. Africa 
Command areas of responsibility. The CTPF is used to support education, 
training, equipping, advisory efforts, exercises, intelligence 
cooperation, and military-to-military engagement in a comprehensive 
approach to building partner counterterrorism capacity. As a result of 
CTPF investments, our partners have conducted operations that have 
contained, disrupted, and degraded groups such as Boko Haram (in the 
Lake Chad Basin), al Shabaab (in East Africa), and al Qaeda in the 
Islamic Maghreb. In the Middle East, the CTPF has enabled Jordan and 
Lebanon to increase the security at their borders with Syria, thus 
limiting the Islamic State in Iraq and the Levant's destabilizing 
impact.
                          force of the future
    26. Senator Lee. Secretary Carter, the fiscal year 2017 budget 
request outlines several initiatives that are deemed to be part of 
building the ``force of the future.'' Is there a cumulative cost 
estimate of the financial impact of all these changes on the 
Department? I understand there is the longstanding argument of 
readiness versus retention, but what readiness sacrifices has the 
Department decided to make and for exactly what gains in retention? 
What evidence does the Department have to support this vigorous effort?
    Secretary Carter. The reforms captured in Force of the Future 
(FOTF) represent an investment in maintaining the strongest and most 
agile fighting force the world has ever known. Our people represent our 
best competitive advantage in warfare and FOTF examines how we can 
better attract and retain top talent in the Department of Defense 
(DOD). It is estimated that reforms approved to date will cost DOD 
approximately $834 million across the Future Years Defense Program 
(FYDP). All costs are being taken from existing DOD resources and 
additional unidentified savings may be garnered as the Department 
becomes more efficient as a result of better talent management. These 
are not zero-sum propositions. We can increase the investment we are 
making in our people and preserve vital readiness funding at the same 
time. The Military Departments were not asked to reduce readiness 
dollars in order to fund any of the FOTF initiatives, and most of the 
funding for fiscal year 2017 will come from funding lines within the 
Office of the Secretary of Defense.
    The FOTF initiatives with the most direct impact on readiness are 
enhanced maternity and parental leave. New mothers will receive 12 
weeks of maternity leave (down from 18 weeks for the Department of the 
Navy, up from 6 weeks for the other Services), and a legislative 
proposal has been offered to Congress to extend parental leave for 
spouses from 10 days to 14 days.
    Current productivity needs to be carefully weighed against the 
long-term readiness of the force, measured in human capital. Currently, 
women in the military have a 33 percent lower retention rate than men 
over the first 10 years of Service, constituting an unacceptable loss 
of talent and undermining our long-term readiness. Using the most 
conservative private sector return on investment figures, retention 
rates within the DOD would only have to improve between 2 percent and 3 
percent for the DOD to hit a ``break-even'' point for the new policy. 
Given the gross discrepancy in retention rates between men and women, 
there is ample reason to believe we can do better.
    The annual impact of the new maternity leave policy across the 
Department will be comparable to the loss of 630 full time equivalents, 
or a 0.05 percent increase in non-availability. Once parental and 
adoptive leave are added, the Joint Force expects a loss of 1,608 full 
time equivalents, or a 0.12 percent increase in non-availability.
    It's important to recognize that these impacts on unit readiness 
will be quite modest for three reasons. First, the extended leave will 
be spread across an active component force of 1.3 million people. The 
projected total increase in non-availability across the force is about 
0.12 percent. Second, the extended leave period is months shorter than 
the Services' non-deployability policies for mothers following 
pregnancy. In the event of a contingency, these units will have to 
deploy without these women regardless of changes to maternity leave 
policy. Third, the Services have personnel management flexibilities 
that enable them to mitigate unit-level impacts. The Navy's policy of 
reassigning pregnant women to shore duty, rather than deployable ships, 
is a Service-level example of flexibilities that are often exercised at 
much lower unit levels.

    27. Senator Lee. Secretary Carter, as has been brought up in this 
committee already this year, we are seeing significant disruption in 
the civilian workforce in highly skilled positions at military depots 
and maintenance facilities because of the time it takes to hire new 
employees. What is the Department doing, both short term and long term, 
to address this issue, and why is this not a higher priority in the 
Force of the Future plans as a pressing readiness concern?
    Secretary Carter. Recruiting and retaining the best talent in our 
civilian workforce is a key element of the Department's ability to 
build a strong future force and to maintain our superiority well into 
the 21st century. The Department has numerous human resources 
flexibilities at our disposal to attract, recruit, and retain a highly 
skilled and diverse workforce, and we continuously review our 
authorities to ensure the right workforce planning and development 
strategies and flexibilities are in place. We have developed tools and 
guidance for use by hiring managers, in consultation with Human 
Resource professionals, to ensure the effective use of these 
authorities to fill positions with the right candidates as quickly as 
possible. Force of the Future initiatives seek to leverage these 
processes, including steps to improve the hiring and on-boarding 
process, to recruit the best and brightest, and match talent and skill 
with mission requirements across the entire Department. To that end, 
modernizing personnel practices is a Force of the Future priority, and 
the Department will continue to study and pursue opportunities to 
streamline processes and reduce recruitment times.
                          range modernization
    28. Senator Lee. General Dunford, do you believe that it should be 
a priority for the services to be enhancing and protecting their test 
and training ranges from encroachment and environmental concerns in 
order for them to be ready for testing and training 5th generation 
weapons against emerging 21st Century threats? What readiness problems 
will be incurred by the services if our test and training ranges are 
not adequately prepared?
    General Dunford. Our test and training ranges are important 
national assets supporting weapon system development and readiness of 
the joint force. We will continue to preserve them to the best of our 
ability and modernize as fiscally prudent to ensure our systems are 
tested and our soldiers, sailors, marines and airmen are trained 
against emerging and realistic 21st century threats.
    However, our chief readiness problem is driven by several years of 
an unstable fiscal environment combined with an extraordinarily high 
operational tempo.
                        chinese naval aggression
    29. Senator Lee. Secretary Carter, our naval forces, under your 
orders, have conducted several freedom of navigation patrols through 
the South China Sea in international waters that are contested by the 
Chinese Government. As the Chinese Government has recently placed HQ-9 
Surface-to-Air Missiles on an island in the South China Sea, do you 
assess that our freedom of navigation exercises have been successful, 
or are the Chinese using them to justify further build-up?
    Secretary Carter. Since 1979, the U.S. Freedom of Navigation 
program has demonstrated non-acquiescence in excessive maritime claims 
by coastal states all around the world. The program includes both 
consultations and representation by U.S. diplomats and operational 
activities by U.S. military forces. Our operations in the South China 
Sea are routine, lawful, and consistent with the way we operate 
globally. The objectives of our recent Freedom of Navigation Operations 
in the South China Sea were to protect the rights, freedoms, and lawful 
uses of the sea and airspace guaranteed to all countries. These 
operations were successful in meeting those objectives and directly 
contributed to supporting and sustaining the principled, rules-based 
order in the Asia-Pacific region.
    China's recent military deployments to disputed features in the 
South China Sea, including the placement of surface-to-air missiles on 
Woody Island, are not connected to the conduct of U.S. Freedom of 
Navigation Operations. China continues to take unilateral actions in an 
attempt to advance its claims over disputed areas, thus increasing 
tensions in the region. We have discouraged China and all claimants 
from taking unilateral actions, and we continue to encourage China to 
clarify its claims in accordance with international law and to commit 
to resolving its disputes through the use of peaceful dispute 
settlement mechanisms, such as arbitration. China's actions are out of 
step with the aspirations of the region for peace and stability, as 
expressed in the U.S.-ASEAN Sunnylands Declaration of February 16, 
2016. We will continue to take a strong position in coordination with 
our allies and partners in the region to uphold the principles of 
international law, and to support unimpeded lawful commerce, freedom of 
navigation and overflight, and the peaceful resolution of disputes. We 
believe this rules-based order has been conducive to the peace and 
prosperity of the Asia-Pacific region.

    30. Senator Lee. Secretary Carter, what is the ultimate objective 
of China's naval activity in the South China Sea and the East China 
Sea? Are they looking to control or inhibit commercial access and 
activity in this region, or are they primarily focused on claiming 
natural resources from the sea and seabed?
    Secretary Carter. [Deleted.]
                                 yemen
    31. Senator Lee. General Dunford, when General Austin testified 
before this committee last week, he used the phrase ``tactical 
stalemate'' to describe the situation in Yemen. While we have been 
supporting Saudi forces through intelligence and other tactical means, 
we have yet to see any success in this tribal-war-turned-failed-state 
situation. General Austin also noted the United States would support 
re-establishing the legitimate government in Yemen. What kinds of 
resources would this require of the already-heavily engaged forces in 
this region?
    General Dunford. Presently, it is hard to accurately speculate what 
resources would be required to support a new Yemeni Government. 
However, military force alone cannot reestablish a legitimate 
government in Yemen. Long term peace will require a political 
resolution between the various competing actors inside Yemen.
                              afghanistan
    32. Senator Lee. General Dunford, The funding request for 
operations in Afghanistan is based upon projected troop draw-down 
levels. As you know, there has been discussion of a residual U.S. Force 
remaining longer than anticipated. If additional regional security 
concerns were to emerge in the future that demand more forces, or if 
the next president of the United States were to decide to leave more 
forces in Afghanistan longer, what would this do to the budget request 
and what the DOD had planned for? Would we be prepared for this? Would 
we need emergency funding?
    General Dunford. Our fiscal year 2017 budget request includes 
adequate funding to support our commitment to the mission in 
Afghanistan. Specifically, the request supports an average deployed 
troop strength of 6,217 based on the projected drawdown of forces from 
9,800 to 5,500 at the end of the first quarter. If additional regional 
security concerns emerge in the future that could be addressed with 
higher troop levels, we will be prepared to recommend appropriate 
military options and their associated incremental costs.
                              healthcare:
    33. Senator Lee. Secretary Carter, with regard to the reform 
proposal included for TRICARE, it is my understanding that the 
Department intends to switch to a two-path healthcare option, with an 
HMO and PPO option. What is the impetus for deciding to shift to a two-
path option at this time?
    Secretary Carter. While our proposal is not dramatically different 
from our current TRICARE offering that includes two main plans, TRICARE 
PRIME and TRICARE STANDARD/EXTRA, there are some important 
distinctions. The following are attributes and enhancements:

      Our proposal economically incentivizes use of the 
Military Treatment Facilities to a greater extent to make maximum use 
of existing capacity, reduce taxpayer costs, and provide the workload 
necessary to maintain the clinical skills of our medical providers.
      One of our two proposed plans, TRICARE Select, is the HMO 
option, and is very similar to TRICARE Prime with the exception of 
different co-pays for primary vs. specialty care.
      The second of our two proposed plans, TRICARE Choice, 
will transform TRICARE STANDARD/EXTRA into a modern PPO. Under Choice, 
the in-network care has fixed copays with no deductible. This is an 
important enhancement that means beneficiaries will know up front what 
their out of pocket costs will be. Beneficiaries will not be required 
to wait for the claim to be processed to find out how much they owe the 
provider.

    34. Senator Lee. Secretary Carter, I know the Military Compensation 
and Retirement Modernization Commission (MCRMC) has recommended 
establishing a new DOD health program that offers a selection of 
commercial insurance plans through OPM, similar to the Federal Employee 
Health Benefit Program. Considering that there are issues surrounding 
OPM and the DOD working effectively on joint activities, such as 
civilian hiring and securing personnel information, why would the DOD 
want to share this new healthcare system with OPM instead of 
establishing a system over which DOD has control?
    Secretary Carter. As you know, the Department of Defense non-
concurred with the Military Compensation and Retirement Modernization 
Commission's (MCRMC) recommendation to commercialize the military 
health benefit. The reasons for our non-concurrence included a concern 
that we would drive care away from our Military Treatment Facilities 
which are important readiness training platforms for our providers. 
Based on our analysis, the MCRMC recommendation would have 
substantially increased costs for both the beneficiary and the 
Department. Given these substantial impediments to implementing the 
MCRMC's recommendations, we did not further analyze the viability of a 
relationship with Office of Personnel Managment.
                              excess icbms
    35. Senator Lee. Secretary Carter, I have been in discussions with 
the Air Force about the potential of allowing the service under certain 
conditions to sell spare ICBM motors to private sector companies to be 
refurbished and used for commercial space launch. This would both save 
the Air Force funding in storing these ICBMs and allow them to make 
money in selling them off. Would the Department of Defense be 
supportive of this policy change?
    Secretary Carter. The Department believes it is appropriate to 
consider leveraging the considerable investment that the American 
taxpayer has made in developing, manufacturing, and maintaining these 
motors. However, in doing so, we must not put the small launch market 
at risk. We should study the issue carefully to determine if the 
engines could be sold to commercial industry at a reasonable price and 
in reasonable numbers that do not provide an unfair competitive 
advantage to the recipient. Selling excess motors would recoup some of 
the investment that the taxpayers have made, rather than waiting until 
the motors become unusable and have to be destroyed.
    The Department absolutely understands and values the health of our 
launch industrial base, and we are encouraged by the industry's 
innovation and investment. We want to encourage this vibrant market, 
and any policy proposal to make the intercontinental ballistic missile 
engines available should take the long-term health of the small launch 
segment into account.
                   counter-terrorism weapons systems
    36. Senator Lee. Secretary Carter, the United States is engaged in 
equipping and financing the sale of highly-technological, fourth and 
fifth generation fixed and rotary winged aircraft to Middle Eastern 
partners for counter-terrorism efforts. While they are able to execute 
the missions assigned to them, such missions could also be accomplished 
by low-cost, low-maintenance aircraft, especially against adversaries 
that do not have advanced surface-to-air capabilities. For example, the 
UAE has a contract for modified Air-Tractor 802 airplanes outfitted for 
low-intensity conflict usage. How is the Department of Defense and our 
partner nations working to find lower-cost equipment solutions for low-
intensity conflicts and special forces use where higher-end weaponry 
may not be necessary?
    Secretary Carter. Title 10 train-and-equip authorities, such as 
section 2282, allow the Department to tailor programs uniquely designed 
for counter-terrorism purposes. The Department works with interagency 
counterparts to develop programs to equip partners with the proper 
systems tailored for the level of threat and the capacity of the 
partner to absorb, employ, and sustain new capabilities. Through this 
process, and with Secretary of State concurrence, the Department has 
funded numerous low-cost, low-tech solutions in the U.S. Central 
Command and U.S. Africa Command regions, such equipping partners with 
Air-Tractor 802, Cessna C208, and UH-1 Huey II aircraft and the Raven 
and Scan Eagle unmanned aerial systems.
                               __________
            Questions Submitted by Senator Claire McCaskill
                          headquarters reform
    Senator McCaskill. There is ongoing discussion on reducing 
headquarters size and right shaping it for the future. The Armed 
Services Committee has received testimony that the current construct of 
staff for the Office of the Secretary of Defense and a parallel Joint 
Staff creates, in some instances, unnecessary duplication of work.

    37. Secretary Carter, have you identified overlap in the duties and 
responsibilities of the OSD and the Joint staff?
    Secretary Carter. We have identified a number of areas of potential 
overlap. For example, both the Office of the Secretary of Defense (OSD) 
and the Joint Staff have intelligence offices. Both OSD and the Joint 
Staff have logistics offices. Both OSD and the Joint Staff have offices 
working on military personnel issues. Both OSD and the Joint Staff have 
regionally-focused offices to address policy and plans in critical 
areas of the world.
    These areas of potential overlap are not necessarily inappropriate: 
we need capability on both the civilian and the military side to ensure 
that we can preserve both civilian control over the military and the 
ability of our senior offices to provide objective military advice. If 
our OSD and Joint Staff offices work together as they should, this 
binocular vision can produce better advice for senior leaders.
    What concerns me is that in some cases our civilian and military 
offices may not appropriately coordinate their efforts, so that we 
could have two staffs performing the same work and creating redundant 
work products. In that case, the work of the two offices would be not 
only potentially overlapping, but actually redundant. In an era of 
tight budgets, we can't afford that.

    38. Senator McCaskill. Secretary Carter, if you have identified 
overlap, do you assess that it is creating unnecessary duplication of 
effort?
    Secretary Carter. The Department is currently reviewing areas of 
potential overlap to determine whether they are creating unnecessary 
duplication of effort.

    39. Senator McCaskill. General Dunford, have you identified overlap 
in the duties and responsibilities of the OSD and the Joint staff?
    General Dunford. Currently, work is underway to determine which 
overlaps add value to Department processes and which overlaps are 
redundant.

    40. Senator McCaskill. General Dunford, if you have identified 
overlap, do you assess that it is creating unnecessary duplication of 
effort?
    General Dunford. The short answer is yes, both within the Joint 
Staff and between the Joint Staff and OSD. However, determining the 
added value is challenging. The ideal way forward is to rationalize and 
reduce staffing through a multi-year, sustained and methodical review 
of processes, organization, and functions within each community of 
interest.
                         syria train and equip
    41. Senator McCaskill. General Dunford, during General Austin's 
testimony on March 8th he discussed a new effort to train and equip 
Syrian forces. The method he described was a ``train-the-trainer'' 
model designed to train volunteers and get them back into the fight 
more quickly. What safeguards will be in place to ensure that we will 
be training and equipping individuals whose interests align with ours?
    General Dunford. We identify groups of individuals who share a 
common goal of combating ISIL and focus on selecting groups whose 
regions are threatened by ISIL. In selecting personnel to receive 
training, we utilize vetting procedures that include background checks, 
social media checks, and physical searches. Coupled with this vetting, 
U.S., Coalition, and host nation partners monitor the equipment we 
provide to prevent its misuse or diversion from its intended purpose.
                               __________
             Questions Submitted by Senator Jeanne Shaheen
                         regenerative medicine
    42. Senator Shaheen. I noted with interest the recent Manufacturing 
Innovation Institute request for information (RFI) from the Air Force 
Research Laboratory (AFRL). I have been a strong supporter of 
strengthening advanced manufacturing in New Hampshire and around the 
country and applaud this step in support of the President's 
manufacturing initiatives. While there are several possible focus areas 
noted in the RFI, Bioengineering for Regenerative Medicine looks 
especially promising. It's an area where there is significant 
discussion among research universities and R&D companies in my state 
and I would encourage you to explore this topic fully. Secretary 
Carter, what are your thoughts this topic and what is the selection 
process for these Manufacturing Institutes?
    Secretary Carter. Bioengineering for Regenerative Medicine is also 
an area of interest for the Department. The Department is currently 
reviewing information collected from the request for information (RFI) 
and recent workshops held on the areas of interest listed in the RFI. 
This information will be used to select the technology areas for future 
DOD-led Manufacturing Innovation Institutes.
                          nanotube technology
    43. Senator Shaheen. Secretary Carter, you have been a strong 
supporter of utilizing advanced technology to ensure our military 
maintains its superiority over our adversaries. For example, in 2010, 
you signed a presidential memorandum citing carbon nanotubes as a 
national security priority. Do you still believe the development of 
carbon nanotubes is priority?
    Secretary Carter. Yes, the development of carbon nanotubes is still 
a priority for the Department. The Department has invested $25 million 
in Defense Production Act Title III funding over the last six years to 
develop an economically viable, technologically competitive capability 
in this area.

    44. Senator Shaheen. Secretary Carter, how is DOD leveraging DPA 
Title III funds and the Manufacturing Technology Program to develop 
carbon nanotube technology and support the industrial base?
    Secretary Carter. A recent Defense Production Act Title III (DPA 
Title III) project established the infrastructure for the world's first 
industrial scale manufacturing facility producing carbon nanotube (CNT) 
yarn, sheet, tape, and slurry materials. This facility is also 
producing CNT Electro-Static Discharge/Electro-Magnetic Interference 
shielding, which has achieved a Technology Readiness Level (TRL) of 8/9 
for spacecraft, while CNT heaters, data cables, and enhanced soft and 
hard ceramic armor have all achieved TRL 6.
    DPA Title III funding of $24.76 million for this project was 
augmented by $9.21 million of contractor's cost share. The contract was 
completed in February 2016. Based on the performance of current CNT 
materials developed through this DPA Title III investment, the Air 
Force Manufacturing Technology Program has decided to invest $4.1 
million in a project to enhance the performance of commercial quantity 
CNT for next-generation wiring applications in Space and Naval 
applications.
                          intermission program
    45. Senator Shaheen. Secretary Carter, the career intermission 
program gives more flexibility for servicemembers to take a sabbatical-
type leave of absence. Do you think programs like this help retain more 
servicemembers?
    Secretary Carter. Yes. The Career Intermission Pilot Program has 
been a useful tool for retention, as it affords our servicemembers more 
flexibility to pursue personal or professional growth outside their 
military service while providing a mechanism for their seamless return 
to Active Duty. Allowing our servicemembers the opportunity to take a 
sabbatical-type leave of absence for personal reasons assists the 
Department in retaining personnel with valuable experience and training 
that might otherwise be lost by permanent separation. Since the pilot 
program was authorized in 2009, there have been several common reasons 
for servicemembers requesting to participate. These have included: 
completing their education, starting a family, aligning tours with a 
military spouse, and caring for family members.

    46. Senator Shaheen. Secretary Carter, do you support making the 
career intermission program permanent?
    Secretary Carter. Yes, I do support making the Career Intermission 
Pilot Program a permanent program. By allowing our servicemembers the 
opportunity to take an intermission from service during their careers, 
with a guaranteed return to Active Duty, both the Services and the 
members benefit. The servicemembers are able to tend to personal needs 
or desires and our Services have another tool that may be used to 
retain servicemembers in whom we have invested valuable training and 
who have tremendous experience.
                               __________
           Questions Submitted by Senator Kirsten Gillibrand
                           combat integration
    47. Senator Gillibrand. Secretary Carter, I strongly support your 
decision to open all military positions, including combat arms, to any 
individual capable of meeting the occupational standard. Regardless of 
gender, we want the right people in the right positions, and to ensure 
they are successful once in these positions. You recently approved the 
services' and SOCOM's implementation plans. Are you confident the 
implementation plans the services submitted to you are adequate to the 
task?
    Secretary Carter. Yes, the Services' and Special Operations 
Command's implementation plans clearly demonstrate a commitment to the 
monitoring, assessment, and in-stride adjustments that will enable 
sustainable success.

    48. Senator Gillibrand. Secretary Carter, what kind of oversight do 
you plan to do to ensure that the plans are successful?
    Secretary Carter. The Deputy Secretary of Defense and Vice Chairman 
of the Joint Chiefs of Staff are co-chairing an Implementation Work 
Group to oversee implementation and ensure the Services and Special 
Operations Command continue to communicate and share best practices, as 
they have over the past three years since rescission of the 1994 Direct 
Ground Combat Definition and Assignment Rule. Additionally, the 
Services and Special Operations Command will submit annual 
implementation assessments through the Chairman of the Joint Chiefs of 
Staff and the Under Secretary of Defense for Personnel and Readiness 
detailing how each is addressing my implementation tenets.

    49. Senator Gillibrand. Secretary Carter, how will you work toward 
maximizing success of their plans, and have you set milestones?
    Secretary Carter. On March 9, 2016, I approved the implementation 
plans submitted by the Services and Special Operations Command in 
January 2016, following a thorough review by the Implementation Work 
Group, co-chaired by the Deputy Secretary of Defense and Vice Chairman 
of the Joint Chiefs of Staff. Each of the Services and Special 
Operations Command established internal milestones to monitor and 
measure implementation, and each will provide an annual assessment to 
me addressing my seven implementation tenets.

    50. Senator Gillibrand. General Dunford, are you encountering 
negative perceptions of full integration at the tactical levels of 
command, and if so, what forms of education and training are you 
implementing to address them?
    General Dunford. Training and educating the forces are a Service 
responsibility and I am confident the Services are moving forward with 
full integration.

    51. Senator Gillibrand. Secretary Carter, are the services 
developing tests at the recruit stage to better predict outcomes for 
entry level applicants seeking accession into ground combat arms?
    Secretary Carter. Yes, the Services are working to improve the 
match between entry-level applicants for enlistment and job 
requirements. Currently, the Services use the Armed Services Vocational 
Aptitude Battery (ASVAB) to identify those individuals with the 
cognitive skills and aptitudes to be successful in entry-level military 
training on the job. The ASVAB has been proven to be a robust predictor 
of training and job performance, but not as good for predicting non-
cognitive aspects of performance (e.g., motivation, attrition), which 
are better predicted by temperament or personality measures. The 
Services are now developing instruments to measure personality traits 
that predict attrition, such as the Army's Tailored Adaptive 
Personality Assessment System. The Navy is also developing a non-
cognitive instrument to improve the match between a sailor's 
personality traits and interests with job requirements. Additionally, 
the Services are developing physical predictor and screening tests for 
physically demanding military occupational specialties. For example, 
the Army's Occupational Physical Assessment Test and the Marine Corps' 
Ground Combat Arms Initial Strength Test will allow the Army and Marine 
Corps to select servicemembers who are capable of performing tasks 
associated with physically demanding military occupational specialties.

    52. Senator Gillibrand. General Dunford, the special operations 
community broke ground years ago with creatively-designed, pre-
selection orientation courses that better predict and ensure candidate 
success and reduce rates of injury, all prior to accession into the 
field; is there a lesson the services can draw from these courses in 
identifying and preparing the most-qualified servicewomen for combat 
arms?
    General Dunford. The benefits of these practices are not gender 
specific, and Services will leverage appropriate resources, to include 
those lessons from the SOF community, to successfully integrate 
servicewomen into combat arms.
    Supporting Information: The focus of SOF pre-selection orientation 
courses is to improve the success rate of candidates in specialized 
training programs. SOF Service Components have identified specific 
courses of study and physical training regimens that better prepare 
candidates for their specific training requirements. During the 
recruiting process, the Services also administer screening tests to 
assess the potential of recruits to meet the physical requirements of 
basic and technical training. Both SOF and Service screening reduces 
the rate of injury and increases the probability that a recruit will 
complete training.

    53. Senator Gillibrand. Secretary Carter, how can we ensure long-
term job satisfaction and retention of servicewomen in these roles?
    Secretary Carter. The Department agrees that long-term job 
satisfaction and retention are key components of the All-Volunteer 
Force; however, we do not make a distinction with respect to men or 
women. Our aim is retain the highest quality servicemembers regardless 
of their gender.
    The Department does not prescribe specific policies for the 
Services to follow in promoting job satisfaction and retaining their 
personnel. Each Service has its own retention policies and each offers 
many challenging, yet rewarding assignments for its members.
    The Services all seek to provide a positive climate for their 
members and use a variety of tools to encourage retention. Common 
retention options include selective retention bonuses, duty station 
preferences, assignment preferences, and additional education 
opportunities. These tools vary, whether they are used often depends on 
what motivates the individual servicemember's decision to remain in 
uniform.

    54. Senator Gillibrand. General Dunford, before he retired, then 
SOUTHCOM Commander General John Kelly raised concerns that lowering 
standards was the only way to ensure that women became infantry, SEALs 
or Rangers in ``real numbers.'' That position has been vehemently 
contested by the Service Chiefs of the Army, Navy, and Air Force, as 
well as the commander of SOCOM, yet General Kelly's comments represent 
prevalent views in combat units, particularly in the Marine Corps. How 
do you as Chairman plan to ensure that integration is successful?
    General Dunford. All standards have been validated as gender-
neutral and operationally relevant. There are no plans to lower any 
standards. The Services and Special Operations Command will submit 
annual assessments regarding full implementation of their progress 
through my office to the Secretary of Defense.

    55. Senator Gillibrand. General Dunford, how do you plan to deal 
with these views?
    General Dunford. We must ensure our Armed Forces are trained and 
ready to meet mission requirements. As Chairman of the Joint Chiefs of 
Staff, I will continue to consult with the Joint Chiefs and provide my 
best military advice to the Secretary.

    56. Senator Gillibrand. General Dunford, do you plan to allow the 
lowering of standards?
    General Dunford. The Service Chiefs have repeatedly stated that 
they have no plans to lower standards.

    57. Senator Gillibrand. General Dunford, a 2015 RAND study titled 
Implications of Integrating Women into the Marine Corps Infantry, 
commissioned by the Marine Corps itself, identified integrated training 
as an important step to integrating women into combat positions. 
Despite this study, I understand the Marine Corps will continue to 
train men and women separately at the Recruit Depots at Parris Island 
and San Diego, and Officer Candidate classes at Quantico. I also 
understand the Marine Corps integration plan includes assigning women 
to combat units in cohorts rather than as individually-assigned 
personnel. Are there any plans to fully integrate all levels of 
training? Why or why not?
    General Dunford. Training and educating the forces is a Service 
responsibility. They've submitted their plans to the Secretary of 
Defense, and his 9 March 2016 memo approved their plans and gave them 
the go-ahead to begin integration. I know it is the Secretary's intent 
that the Services will continuously learn from their experiences and 
adjust the plans when appropriate to ensure we have the most combat-
ready forces to defend our nation.

    58. Senator Gillibrand. General Dunford, what size would those 
cohorts be, and what will you do if only one woman passes an MOS 
school?
    General Dunford. This is a Service issue, and I have forwarded your 
question for Service response.

    59. Senator Gillibrand. General Dunford, the positions opened to 
female airmen and sailors represented only a minority of the Air 
Force's and Navy's occupational specialties, and for the most part were 
concentrated within those services' special operations components. 
Therefore, this will be a less substantial change for the majority of 
sailors and airmen compared to other servicemembers. How do you think 
those services' experiences might differ during the execution phases of 
their respective implementation plans from the Army and Marine Corps, 
which have much higher proportions of ground combat arms?
    General Dunford. It is the Secretary's intent that the Services 
continuously learn from their experiences and adjust the plans when 
appropriate to ensure we have the most combat-ready forces to defend 
our nation.

    60. Senator Gillibrand. General Dunford, what lessons, if any, can 
the Marine Corps and Army learn from the experiences of the Navy and 
Air Force?
    General Dunford. It is too early in the integration process to draw 
conclusions. The Services will continue to share information and best 
practices as they execute their plans.
                            military museums
    61. Senator Gillibrand. Secretary Carter, in April 2014, the 
Department of Defense released its fiscal year 2013 Report to Congress 
on Operation and Financial Support for Military Museums. This report 
stated that DOD spent $91.1 million in fiscal year 2013 on 87 museums. 
The report was then discontinued. How much did DOD spend on museums in 
fiscal year 2014, fiscal year 2015, and fiscal year 2016?
    Secretary Carter. In fiscal years 2014 and 2015, the Department of 
Defense (DOD) invested approximately $103.5 million and approximately 
$119.0 million respectively, in appropriated funds for 83 military 
museums. For fiscal year 2016, the Department plans to expend 
approximately $92 million in appropriated funds for 82 military 
museums.
    The variances in appropriated funding allocated to support the 
museums from fiscal year 2013 to fiscal year 2016 are due to 
construction cost, divesting museums, an improved management approach, 
or through the consolidation of museums across the military Services.

 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  FY 2013 # of      FY 2014 # of      FY 2015 # of      FY 2016 # of
                                                                    Museums /         Museums /         Museums /         Museums /       Funding Delta
                      Military Component                         Funding Totals    Funding Totals    Funding Totals    Funding Totals     (FY 2013 & FY
                                                                       (M)               (M)               (M)               (M)            2016) (M)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Army..........................................................       56 / $36.6        57 / $47.1        57 / $64.1        56 / $34.1             -$2.5
Navy..........................................................       11 / $16.3         9 / $18.4         9 / $12.8         9 / $14.1             -$2.2
Marine Corps..................................................        5 / $14.6         5 / $17.9         5 / $20.0         5 / $22.4              $7.8
Air Force.....................................................       13 / $17.2        12 / $20.1        12 / $22.1        12 / $21.4              $4.2
Total # of Museums............................................               85                83                83                82
Appropriated Funding..........................................            $84.7            $103.5            $119.0             $92.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    While DOD no longer routinely reports these figures, these 
estimates are based on appropriated funds that the Military Services 
and Agencies invest in military museums.

    62. Senator Gillibrand. Secretary Carter, to what extent do these 
museums supported by DOD focus on women servicemembers and issues 
related to women in service?
    Secretary Carter. The Department of Defense (DOD) is committed to 
focusing on women in service by telling the story of and accurately 
reflecting the significant contributions of women servicemembers 
through our military museums. Some of the military museums fully 
integrate the impact and reach of women servicemembers into their 
exhibits on campaigns and military history, while other military 
museums have focused exhibits, tours, and educational outreach efforts 
dedicated to women in service.
    Notably, military museums have proactively created large and 
extensive collections of artifacts, exhibits, and programs that 
document and teach our servicemembers and the American public about the 
critical contribution women and women servicemembers have made to our 
military and the nation. Whether it is the dedicated Women's Museum at 
Fort Lee, traveling exhibits each March that celebrate women's history 
month, or special lectures, galleries, symposia, artifacts, and exhibit 
narrations by and for women servicemembers across the military museum 
portfolio, the DOD depends on and is extremely proud of our women 
servicemembers. Highlighting women servicemembers and issues central to 
their success and challenges is at the very core of our military 
museum's missions.
    Army: The Army has 56 museums and all of them contain historical 
content relating to women in service or women who have supported the 
Army throughout its 241 year history. The U.S. Army Women's Museum, 
located at Fort Lee, Virginia, is the only museum of its kind in the 
world dedicated to telling the story of women's contributions to the 
Army. Of all the military Services, the Army is the only one to have 
such a museum. Nevertheless, because the history of women in all 
branches of the Armed Forces overlaps, the museum has supported the 
Navy, Coast Guard, Air Force and other nations' efforts to share the 
story of military women.
    Navy: The Navy has 9 museums and all of them provide exhibits 
showcasing the roles and contributions of women in naval services. Of 
the Navy's 9 museums, 6 have dedicated exhibits showcasing women in 
service. All of the Navy's museums display a six-panel ``Women in the 
Navy'' exhibit each March in conjunction with Women's History Month. 
Additionally, all Navy museums regularly host military ceremonies for 
female servicemembers, including promotions, retirements and changes-
of-command.
    Marine Corps: There is no single exhibition that highlights gender 
differences within the Marine Corps; instead, the topic is included 
throughout the galleries. The National Museum of the Marine Corps and 
the command museums integrate the story of female Marines throughout 
its galleries, starting with WWI.
    Air Force: The National Museum of the United States Air Force and 
11 field museums hold historically significant items for preservation 
and study to tell the Air Force story. These museums discuss women as 
part of the diversity of the Air Force, its operation, culture, and 
overall experience.
                               __________
              Questions Submitted by Senator Joe Donnelly
                             mental health
    63. Senator Donnelly. Secretary Carter, please provide an update on 
implementation of section 701 of the Carl Levin and Howard P. ``Buck'' 
McKeon National Defense Authorization Act for Fiscal Year 2015 (P.L. 
113-291).
    Secretary Carter. The Department of Defense (DOD) provides person-
to-person Mental Health Assessments (MHA) for each servicemember 
deployed in connection with a contingency operation, as required in 
section 1074(m) of title 10, United States Code and in accordance with 
DOD Instruction (DODI) 6490.12, ``Mental Health Assessments for Service 
Members Deployed in Connection with a Contingency Operation.'' DODI 
6490.12 is being amended to incorporate the requirement to conduct a 
MHA once during each 180-day period during which a member is deployed 
(in-theater MHA) until January 1, 2019. This policy is expected to be 
published by July 2016.
    The Department is integrating the annual MHA requirement into the 
Periodic Health Assessment (PHA) process in an effort to standardize 
these assessments across the military components. This requirement has 
been integrated into the DODI for PHAs. The policy is estimated to be 
published by July 2016.
                         nuclear modernization
    64. Senator Donnelly. Secretary McCord, many have raised concerns 
about the ``bow wave'' of cost we are facing in nuclear modernization 
efforts. As you look at the FYDP and years beyond, do you believe that 
these plans are manageable?
    Secretary McCord. With proper financial management planning, the 
DOD should be able to handle the modernization of strategic platform, 
while at the same time safeguard the requirement for non-nuclear 
related modernization costs. This is not to imply that it will not be a 
fiscal challenge. The collective annual costs of acquiring the 
replacement for the entire nuclear triad, the Ohio-class ballistic 
missile submarine, the Minuteman III Intercontinental Ballistic Missile 
and a new strategic bomber for the Air Force will be in the billions of 
dollars, and will present the Department with a unique task. Previous 
modernization of America's strategic nuclear deterrence enterprise were 
accomplished by topline increases to avoid having to make drastic 
reductions to our conventional forces, and such increases would be 
prudent again.
    For the time period covered in the current fiscal year 2017 
President's Budget Future Year Defense Program, we believe that the 
costs of all nuclear enterprise modernization costs have been 
accommodated, without adversely impacting the funding for non-nuclear 
defense programs. As for follow-on fiscal years (beyond fiscal year 
fiscal year 2021), the DOD is fully aware of the funding challenges, 
and is already exploring options to mitigate production costs, by 
investing in innovative strategies to lower future costs for these 
programs.

    65. Senator Donnelly. Secretary McCord, the heaviest cost burden 
for our nuclear modernization efforts will fall on future 
administrations. What are you doing now to set the Department up for 
success in the future?
    Secretary McCord. Both the Navy and the Air Force are actively 
looking at developmental and production efficiencies that would lead to 
lower costs. We expect the total cost of nuclear modernization to be in 
the range of $350 to $450 billion. Although this still presents an 
enormous affordability challenge for DOD, we believe it must be funded. 
Previous modernizations of America's strategic deterrent and nuclear 
security enterprise were accomplished by topline increases to avoid 
having to make drastic reductions to conventional forces, and it would 
be prudent to do so again. I hope DOD can work with Congress to 
minimize the risk to our national defense.

    66. Senator Donnelly. Secretary McCord, where do you see the 
biggest risks in nuclear modernization from a budget perspective?
    Secretary McCord. From a DOD perspective, the most significant 
challenge will be coping with the synergy of developing and procuring 
several separate strategic platform and weapon systems concurrently in 
the coming decade. The prospect of acquiring a replacement for the 
Ohio-class ballistic missile submarine, a replacement for the Minuteman 
III Intercontinental Ballistic Missile, the Air Force new strategic 
bomber, and a new nuclear armed Air Launch Cruise Missile, while at the 
same instance supporting the operational deployment of legacy strategic 
systems will be demanding and difficult if not properly managed, which 
could adversely affect the funding for other national security 
activities.
    Also, while the budget demand for the Ohio Replacement Program 
(ORP); Long Range Standoff (LRSO) cruise missile; B-21 long range 
strike bomber; and the Ground Based Strategic Deterrent (GBSD) program 
are well known, there are several other systems in development, all in 
the same mission area that also mature in the next 10 years. Those 
include the B61 nuclear gravity bomb Tail Kit Assembly (B61 TKA); 
modifications and modernization of the Navy's Trident II (D5) 
Submarine-Launched Ballistic Missile and Air Force Minuteman III 
modernization projects.
    Collectively, these critical nuclear enterprise requirements could 
overwhelm the budget for other non-nuclear modernization programs. 
Especially in the time period between fiscal year 2023 and fiscal year 
2028, when several of the strategic platforms will reach rate 
production.
                   conventional prompt global strike
    67. Senator Donnelly. Secretary Carter, hypersonics are addressed 
as a high priority in your fiscal year 2017 budget request. Why?
    Secretary Carter. Hypersonics have potential to add a new dimension 
to U.S. military capabilities that are vital to maintaining military 
superiority in the future. Hypersonic vehicles and weapons could answer 
warfighter needs with technology innovation that offers promising 
capabilities to rapidly engage time-sensitive, high-value targets in 
anti-access/area denial environments.
    The Department is also aware of international investments in 
hypersonic technologies. It is important for the United States to 
understand the challenges with and advantages of this transformational 
technology.

    68. Senator Donnelly. Secretary Carter, do you view conventional 
prompt global strike as an important element of our hypersonic research 
and development efforts?
    Secretary Carter. Yes, the technology developed and tested as part 
of the Department's Conventional Prompt Strike (CPS) program has 
resulted in a much greater understanding of the extreme flight regimes 
and capabilities we may eventually deploy. The CPS National team has 
achieved numerous technological advances. A successful flight 
experiment in 2011 demonstrated the ability to fly a hypersonic glide 
body at hypersonic speeds over long distances, arriving at the intended 
destination. Future planned flight experiments will continue this 
technology maturation.
    Hypersonic weapons could provide new strategic approaches to 
preventing and winning conflicts against advanced threats, specifically 
time-critical, high-value targets in anti-access/area denial 
environments. The CPS effort is poised to achieve an acquisition 
milestone decision by the end of 2020, consistent with the fiscal year 
2016 National Defense Authorization Act.

    69. Senator Donnelly. Secretary Carter, what is your perspective on 
conventional prompt global strike transitioning to a program of record 
and the ideal timing for that transition?
    Secretary Carter. The Department is encouraged by efforts to date, 
in particular the successful hypersonic glide flight test in 2011. 
Continued Conventional Prompt Strike (CPS) research and development is 
promising and may enable a transition to a program of record by the end 
of 2020, consistent with the fiscal year 2016 National Defense 
Authorization Act.
    A decision to transition to a program of record will be based on a 
number of factors, including technology maturation, adversary 
capabilities, and a careful assessment of how CPS fits with other U.S. 
kinetic and non-kinetic capabilities. The current development program, 
with its upcoming flight tests, will further reduce technical risk, 
help determine deployment options, and position the Department well for 
a milestone decision and transition to a program of record no later 
than 2020.
                               nswc crane
    70. Senator Donnelly. Secretary Carter, following up on your 
commitment to visit Naval Surface Warfare Center Crane, please provide 
preferred dates for the visit. I look forward to hosting you in 
Indiana.
    Secretary Carter. It is my understanding our staffs are working to 
coordinate a date for such a visit and I look forward to making it to 
Indiana and NSWC Crane in the future.
                               __________
              Questions Submitted by Senator Mazie Hirono
                         asia pacific-rebalance
    71. Senator Hirono. Secretary Carter, as the department continues 
to rebalance our military forces in the Asia-Pacific and Middle East, 
there are clearly new challenges in terms of available resources. How 
does the fiscal year 2017 budget proposal affect the rebalance and our 
military readiness in the Pacific region?
    Secretary Carter. The fiscal year 2017 President's Budget 
submission further operationalizes the rebalance to the Asia-Pacific. 
The United States seeks to preserve peace and stability, and maintain 
our strategic advantage in an area that is critically important to 
America's political, economic, and security interests. The rebalance 
will continue the Department's efforts to advance a geographically 
distributed, operationally resilient, and politically sustainable 
posture in the region. We continue to resource the forward presence of 
some of our most advanced capabilities in and around the region, 
including F-22 stealth fighter jets, P-8A Poseidon maritime 
surveillance aircraft, and our newest surface warfare ships. The 
Department also continues to resource the implementation of key posture 
initiatives in places like Guam, the Northern Marianas, and Australia; 
modernize our existing footprint in Korea and Japan; and strengthen 
existing partnerships and develop new ones, from India to Vietnam. Key 
contributions from partners like Singapore augment our investments and 
enable us to further realize our initiatives in the region.
    The Department is pursuing these initiatives in the context of 
broader efforts to support and strengthen a regional security 
architecture that benefits everyone--from modernizing alliances and 
building the capabilities of friends and allies who want to do more in 
the region, to bolstering our ties with the Association of Southeast 
Asian Nations. The budget fully supports the five-year, $425 million 
Southeast Asia Maritime Security Initiative.
    More long-term, the budget also invests heavily in the Joint 
Force's ability to deter and, if necessary, win a high-end conventional 
conflict in a contested environment that a potential adversary may 
choose to start, across all warfighting domains (air, land, sea, space, 
and cyberspace). China is among our most stressing competitors, as it 
continues to advance anti-access and other systems that seek to 
threaten U.S. military advantages in specific areas. In this context, 
the budget funds the development and fielding of a range of U.S. 
capabilities and new technologies to counter the growing military 
capabilities of competitors like China. These include investments in: 
procurement and modernization of strike fighter and attack aircraft; 
lethality in the platforms and payloads of our undersea force; new 
passive and active defenses to support a resilient posture; aggressive 
research and development efforts; and a range of cross-domain 
capabilities which strengthen Joint Force power projection, including 
in precision-guided munitions, stealth, electronic warfare, and assured 
operations in the cyber and space domains.
                            missile defense
    72. Senator Hirono. Secretary Carter, North Korea has recently 
fired test missiles into the Sea of Japan and was purported to have 
tested a nuclear weapon. While sanctions are important, we must remain 
vigilant and prepared as the country continues these provocative 
actions. Secretary Carter, given these actions and the likely 
improvement of the North Korean missile capability what is the 
Department doing in terms of protecting allies close to the situation 
such as Japan and Korea? As for protecting the United States, what is 
the department doing in terms of protecting against missile threats to 
Hawaii?
    Secretary Carter. The United States maintains an array of forward-
deployed missile defense capabilities in both the Republic of Korea and 
Japan in addition to indigenous capabilities currently fielded by each 
of these nations for their own self-defense. Additionally, the United 
States continues to work with both nations to grow and adapt each 
alliance's defensive capabilities through continued Foreign Military 
Sales; bilateral and multilateral exercises; and a trilateral 
information-sharing arrangement between the United States, Japan, and 
the Republic of Korea. Further, the ground-based interceptors, deployed 
in Alaska and California, provide defensive coverage of Hawaii against 
the limited North Korean long-range missile threat. The total number of 
operational interceptors deployed in the United States is being 
increased from 30 to 44 to ensure that the United States remains 
protected against intercontinental ballistic missile threats. The 
United States and our allies are postured to defend against the limited 
North Korean ballistic missile threat.
                                 cyber
    73. Senator Hirono. General Dunford, you mentioned that Russia and 
China are actively challenging us in our cyber capabilities. North 
Korea and Iran, while not as big of a threat, also have cyber 
capabilities that are potentially harmful to us. Furthermore, in past 
hearings, the message has been that our adversaries are closing the 
technology gap and now have access to many of the capabilities that 
gave us the edge in the past. I realize that the current fiscal 
environment spurs the Department of Defense to focus on our immediate 
need for readiness, but it is also important that we do not lose our 
edge. The fiscal year 2017 budget funds $6.78 billion in fiscal year 
2017, which you stated is a 13 percent increase from last year. Do you 
feel that this funding will be adequate in enabling us to continue to 
maintain our edge? Can you please discuss the importance of maintaining 
our cyber capabilities and how this budget supports this need?
    General Dunford. [Deleted.]
                                 energy
    74. Senator Hirono. Secretary Carter, the national security of our 
country is greatly dependent on the implantation of energy security 
efforts. By decreasing our energy footprint, we enable our forces to 
more efficient and lessen our dependence on fuel. Can you please 
provide an update on how the fiscal year 2017 budget reflects the 
efforts of our country to reduce consumption, use alternative clean 
sources and increase U.S. energy security?
    Secretary Carter. The fiscal year 2017 President's Budget includes 
a $2.5 billion investment to increase our warfighters' capability 
through more energy efficient weapons systems, a reduction in energy 
consumption on our installations and in theater, and the use of 
alternative sources of energy to reduce operational burden--this 
increases U.S. military operational effectiveness and readiness.
    For instance, the Improved Turbine Engine Program will reduce fuel 
use in our UH-60 and AH-64 helicopters by 13 to 25 percent, and enable 
increased range, endurance, and performance in high altitude/high 
temperature conditions. At sea, the installation of Hybrid Electric 
Drive propulsion on board our DDG-51 class destroyers may extend time-
on-station by up to 2.5 days. The Air Force's pursuit of adaptive 
engine technology will increase range and endurance of fighter aircraft 
and decrease the supporting requirement for tanker aircraft by 
achieving 25 percent greater fuel efficiency. Likewise, the Army's 
pursuit of tactical micro-grids and more efficient power generation 
will reduce the burden of resupplying contingency bases distributed 
across contested operating environments.
    The Department also is developing and fielding alternative, non-
fossil fuel sources of energy that support increased warfighting 
capabilities. For example, the Marine Corps is fielding portable 
tactical solar systems, which, in conjunction with thermally improved 
shelters and more efficient environmental control systems, can reduce 
the frequency and risks of resupplying small contingency bases.
    The Department has made great progress towards improving the energy 
efficiency of its installations. With an annual energy cost of 
approximately $4 billion, installation energy is the single largest 
operating cost of our installations. To reduce this cost, the 
Department is pursuing energy efficiencies through building 
improvements, new construction, and third party investments. Since 
fiscal year 2009, we have reduced the energy consumed on our military 
bases by about 10 percent, avoiding over $1.2 billion in new energy 
costs. In addition to using appropriated funding for energy 
conservation and efficiency initiatives, the Department is continuing 
to take advantage of third-party financing tools through energy 
performance-based contracts to implement renewable technology and 
energy efficiency improvements in our existing buildings.
    The Department has also made great progress in deploying Renewable 
Energy (RE) and is using it for everything from powering remote special 
operations to air conditioning and lighting at our installations. We 
are on track to meet our RE facility energy goal of 3 gigawatts and 25 
percent by fiscal year 2025--approximately 262 new RE projects came 
online during fiscal year 2015, collectively representing 58 megawatts 
of new renewable capacity, that are cost-effective utility scale 
projects and, when feasible, include energy resilience capability 
(i.e., are micro-grid ready).
                          balancing resources
    75. Senator Hirono. Secretary Carter, in this fiscal environment 
you have to make hard choices between force structure, modernization, 
and readiness. Do you believe that this budget reflects the best 
balance between these three components? Which area suffered the most? 
What can we do in the future to ensure that we are adequately 
fulfilling the needs of each component?
    Secretary Carter. Yes, given the current funding constraints the 
Department has assumed some risk in fiscal year 2017 modernization; 
however, increased and predictable funding is needed over the Future 
Years Defense Program (FYDP) to sustain our investments in the future 
and maintain U.S. superiority. The fiscal year 2017 budget request 
strikes a prudent balance among the modernization of the Joint Force, 
its size, and its readiness, and continues to keep faith with 
servicemembers and their families. The fiscal year 2017 funding is 
constrained by the Bipartisan Budget Act (BBA) of 2015, but this budget 
reshapes the Department in order to address current and future 
operational challenges. The Department's fiscal year 2017 budget 
retains major elements of our planned force structure; invests in the 
future; emphasizes lethality and capability over size; pursues 
innovative ``offset'' capabilities and processes; and enables the Joint 
Force to operate across all domains including cyber. The Congress needs 
to eliminate the funding caps in order to ensure we are adequately 
fulfilling the needs of each Component.
                             modernization
    76. Senator Hirono. Secretary Carter, the current fiscal 
environment forces the services to balance readiness and modernization. 
When modernization efforts slip to the right, equipment is forced to 
perform beyond the service life expectation and we risk the 
repercussions of an aging fleet. Do you believe that the budget 
adequately focuses on the need for modernization? What areas are you 
most concerned about?
    Secretary Carter. The Department has assumed some risk in fiscal 
year 2017 modernization due to fiscal constraints; however, increased 
and predictable funding is needed over the Future Years Defense Program 
(FYDP) to sustain our investments in the future and to maintain U.S. 
superiority. The fiscal year 2017 budget request strikes a prudent 
balance among the modernization of the Joint Force, its size, and its 
readiness, and continues to keep faith with servicemembers and their 
families. The fiscal year 2017 funding is constrained by the Bipartisan 
Budget Act (BBA) of 2015, but this budget reshapes the Department in 
order to address current and future operational challenges. The 
Department's fiscal year 2017 budget retains major elements of our 
planned force structure; invests in the future; emphasizes lethality 
and capability over size; pursues innovative ``offset'' capabilities 
and processes; and enables the Joint Force to operate across all 
domains including cyber.
    The Department's greatest responsibility is to win the nation's 
wars. The Department will continue to invest in the most capable, 
ready, and efficient force that can project power globally for full-
spectrum operations against a range of threats. The fiscal year 2017 
budget request supports the following major modernization efforts:

      Provides the Army, Marine Corps, and special operations 
forces with greater lethality to ensure ground forces can deter and, if 
necessary, fight and win a full-spectrum conflict.
      Provides stability in Navy shipbuilding while buttressing 
aviation and weapons to address emerging challenges. The fiscal year 
2017 budget request supports the construction funding for 38 ships 
across the FYDP and supports steady production of destroyers and 
submarines; 10 destroyers and 9 submarines are constructed through 
fiscal year 2021 to support a fleet size of 308 ships.
      Includes funding in the FYDP shipbuilding construction 
program for the Ohio Replacement Program Advanced Procurement beginning 
in fiscal year 2017; 1 LHA amphibious assault ship replacement; 4 T-
AO(X) fleet oilers, and continued funding for the refueling and 
overhaul of the USS George Washington (CVN 73).
      Funds 2 littoral combat ships and continues to finance 
the detailed design and construction of the second Ford-class carrier 
and provides for the procurement of carrier-based aircraft to address a 
looming strike-fighter shortage in the 2020s, and it bolsters funding 
for some of the Navy's most capable weapons to provide a powerful 
deterrent to potential aggressors.
      Supports the Marine Corps efforts to actively modernize 
and prepare for future challenges, as demonstrated by its Joint Strike 
Fighter program achieving initial operating capability last year, and 
increase this momentum with new technologies to enable its mission set.
      Maintain an Air Force with global power projection 
capabilities and modernizing next generation Air Force combat 
equipment--to include fighters, bombers, and munitions--particularly 
against increasingly sophisticated air defense systems, while 
sustaining the health of the combat fleet.

    I am most concerned with ensuring that U.S. Forces be the best 
trained warfighters with the most technologically advanced equipment 
available to ensure the security of the United States and its allies.
                      veterans' transition program
    77. Senator Hirono. Secretary Carter, the need for improvement in 
enhancing veterans' transition programs continues to be an important 
issue. I'm sure you agree that supporting our servicemembers during 
their transition into civilian life should remain a top priority for 
the Department. Please comment on how the fiscal year 2017 budget 
supports this area and could you provide any updates on the joint 
collaboration efforts between DOD and VA?
    Secretary Carter. Supporting servicemembers during their transition 
into civilian life remains a top priority for the Department.
    The proposed fiscal year 2017 budget supports the Department's 
current efforts to improve servicemember transition. It sustains 
programs that educate and credential servicemembers as well as those 
that improve transition preparedness of servicemembers throughout their 
military careers.
    The proposed fiscal year 2017 budget also funds efforts that 
inspire future generations to serve. These efforts include funding: to 
enact a modern military retirement system; sustain programs dedicated 
to supporting financial readiness and ending veteran homelessness; and 
improve job skills training, credentialing and license portability, 
particularly for dislocated workers, transitioning servicemembers, 
veterans, and military spouses.
    Collaboration between the Department of Defense (DOD) and the 
Department of Veterans Affairs (VA) regarding transition is strong. DOD 
relies heavily on the VA to provide resources and services to 
transitioning servicemembers who either do not meet the Career 
Readiness Standards or are determined to need further transition 
support. The Department partners closely with the VA through the 
Transition Assistance Program (TAP) Executive Council and Senior 
Steering Group to monitor the execution, assessment, and modification 
of TAP. Additionally, the Department continues to collaborate with VA 
through many programs to ensure the flow of medical and health-related 
information to allow for a continuum of care. Furthermore, the 
Department, working with the VA and the Department of Labor, continues 
to directly engage states regarding the elimination of barriers for 
servicemembers and veterans to receive civilian licenses.
    The Department appreciates Congress's efforts to support 
servicemembers in their transition into civilian life, particularly 
through the encouragement of constituent businesses and organizations 
to educate, certify, and employ our transitioning servicemembers.
             dod-va electronic health record collaboration
    78. Senator Hirono. Secretary Carter, in the 2008 National Defense 
Authorization Act, the Department of Defense and the Department of 
Veterans Affairs were directed to implement ``fully interoperable'' 
electronic health records. Seven years later, the Government 
Accountability Program placed VA Electronic Health Records on its high 
risk list for mismanagement, waste, cost overruns and in most need of 
transformation. One of the problems cited by GAO was the continued lack 
of interoperability between DOD and VA Health Records, which inhibit 
VA's ability to provide timely, quality health care to our nation's 
veterans. This is a problem that GAO has reported on for more than a 
decade, and a problem that is necessary to address in order to ensure a 
continuum of care for veterans. Recently, DOD and VA have both 
announced plans to upgrade their existing software system. DOD has 
announced that it will spend 4.3 billion to upgrade the Armed Forces 
Longitudinal Application, while VA is continuing to update VistA. Can 
you please provide an update and comment on this issue?
    Secretary Carter. Our servicemembers, veterans, retirees, and their 
families deserve nothing less than the best possible health care and 
services that the Department of Defense (DOD) and Department of 
Veterans Affairs (VA) can provide. Our mission is to fundamentally and 
positively impact the health outcomes of active duty military, 
veterans, and eligible beneficiaries. To this end, DOD is committed to 
two equally important objectives: improving data interoperability with 
both VA and our private sector healthcare partners, and successfully 
transitioning to a state-of-the-market electronic health record that is 
interoperable with VA and the commercial healthcare systems used by our 
TRICARE network providers. Ultimately, this means that up-to-date and 
comprehensive health care information is available whenever and 
wherever it is needed to facilitate decisions.
    We have made significant progress in achieving both of these 
objectives. Today, DOD and VA share a significant amount of health 
data--more than any other two major health systems. DOD and VA 
clinicians are currently able to use their existing software 
applications to view records of more than 7.4 million shared patients 
who have received care from both Departments. This data is available 
today in near real time, and the number of records viewable by both 
Departments continues to increase. Both Departments' health care 
providers and VA claims adjudicators successfully access data through 
our current systems nearly a quarter of a million times per week.
    This process involves two of the world's largest health care 
providers, with hundreds of thousands of users, and millions of data 
elements. This requires strong communication, collaboration, and 
technical leadership. A tangible product of this work can be seen in 
the Joint Legacy Viewer (JLV), which provides an integrated display of 
DOD, VA, and TRICARE network provider data for clinicians and other 
users. For DOD clinicians, JLV is embedded directly into the Armed 
Forces Health Longitudinal Technology Application (AHLTA), allowing any 
registered user to easily view a comprehensive picture of a 
beneficiary's health record, regardless of whether the data resides in 
AHLTA, Veterans Health Information Systems and Technology Architecture 
(VistA), or a TRICARE network provider's EHR. JLV has received 
considerable praise from both DOD and VA users, with many commenting on 
its ability to save time in clinical interactions and to allow benefits 
adjudicators to cross-reference retiree records with the more 
comprehensive medical record in JLV. Because of this positive feedback, 
DOD and VA have sought to rapidly expand access to JLV. Originally 
developed as a pilot program with 275 users at nine sites in 2014, JLV 
has now been fielded to nearly every DOD medical facility, all VA 
medical centers, and every Veterans Benefits Administration regional 
site, supporting over 100,000 registered users.
    In November 2015, DOD formally issued a letter to Congress 
certifying that we had met the requirement of interoperability in the 
fiscal year 2014 National Defense Authorization Act (NDAA) by mapping 
all data in DOD's AHLTA outpatient electronic health records (EHR) 
system to existing national standards. Based on the recommendations of 
DOD and VA functional representatives, DOD also integrated data from 
other DOD health IT systems, including inpatient, theater, and 
pharmacy. Once VA finalized its efforts, we delivered to Congress a 
joint certification letter on April 8, 2016 (see enclosed).
    On a parallel path, DOD's modernization effort is well underway. In 
July 2015, the competitive contract for a new EHR was awarded to a team 
led by Leidos that includes 34 other partners. At the core of this 
modernization will be Cerner's EHR, one of the most widely used and 
trusted EHR systems on the market today, used in nearly 18,000 
facilities worldwide. Henry Schein, an industry-leading capability, 
will support the dental component of the new EHR. In addition to 
utilizing the Cerner and Henry Schein suite of solutions, this new EHR 
system will continue to provide industry leading interoperability with 
the VA, other federal agencies, and the private sector by using 
federally recognized Office of the National Coordinator standards. In 
accordance with the fiscal year 2014 NDAA, deployment is scheduled to 
start later this year at the initial operational capability sites in 
Washington State representing all three services.
    DOD and VA remain in mutual agreement that interoperability with 
each other and our private sector care partners remains a priority. 
This broader interoperability is not dependent on a single system. This 
strategy makes sense for both Departments and provides the most 
effective approach moving forward to care for servicemembers, veterans, 
retirees, and their families. The effort continues to have direct 
senior-level oversight from both Departments as well as rigorous 
oversight from the Congress.
                               __________
             Questions Submitted by Senator Martin Heinrich
                              third offset
    79. Senator Heinrich. Congress authorized the ``Third Offset'' 
initiative last year to accelerate the fielding of systems that would 
help counter the technological gains of our adversaries. There was a 
significant amount of bipartisan support in congress when it voted in 
favor of the NDAA and later wrote a $100 million check for the effort. 
As part of our legislative responsibility to appropriate dollars and 
direct how they are spent, the defense committees instructed that up to 
half of the funds be spent on the promising area of Directed Energy. 
Yet, we are hearing reports that none of these funds is being spent on 
Directed Energy. Is this specific funding being spent, and will be 
spent, on Directed Energy as intended by Congress and is so, how much?
    Secretary Carter. The Department appreciates the congressional 
appropriation of $100 million from the fiscal year 2016 Omnibus 
Appropriations Act to support the Third Offset Strategy to accelerate 
systems that would help counter the technological gains of our 
adversaries. The Department is currently vetting internal proposals 
that are responsive to the Third Offset initiative, which include 
directed energy program proposals.

    80. Senator Heinrich. Can you please look further into this, make 
appropriate changes where necessary, and keep this committee informed 
of those decisions?
    Secretary Carter. Yes, I will ensure the committee is apprised of 
the Department's plans to execute the funds within the Technology 
Offset congressional add.
                               encryption
    81. Senator Heinrich. I read with interest the remarks you recently 
made during your visit to California, when you said that, ``data 
security is an absolute necessity for [the military],'' and that, ``I'm 
not a believer in back doors or a single technical approach to what is 
a complex problem.'' I strongly agree with you. Robust encryption is 
central to securing the financial transactions, health data, and 
personal safety of all U.S. citizens. I'd like to get your view on our 
adversaries' cyber capabilities, and the threat they pose to our 
national interests. Do state-sponsored cyber actors in other countries 
have offensive tools and capabilities that rival that of the United 
States in cyberspace?
    Secretary Carter. [Deleted.]

    82. Senator Heinrich. To what extent do these foreign cyber actors 
pose a significant threat not just to the personal data and safety of 
U.S. citizens, but also to the security and reliability of U.S. 
critical infrastructure?
    Secretary Carter. [Deleted.]

    83. Senator Heinrich. If you knew your adversary required all 
internet service providers and app developers to build decryption tools 
for their software and hardware, would U.S. Cybercommand consider that 
a key vulnerability to target in preparing the battlefield and in war-
planning?
    Secretary Carter. Any effort to weaken or bypass encryption 
represents a vulnerability that could be used to exploit a target. 
Strong encryption is good for U.S. national security, which is the 
reason I have been opposed to a single technical approach to commercial 
encryption that would give the Government unfettered access to data.
    General Dunford. Adversary use of decryption tools could be a 
vulnerability depending on the cyber actor and the software being 
employed. The vulnerability's magnitude depends on the nature of 
software being employed and complexity of the cyber domain.
                                ukraine
    84. Russia has said it is removing the main part of its forces from 
Syria, after having largely taken the winter off from fighting in 
Ukraine. What are your thoughts on Russia's next moves in Eastern 
Europe?
    Secretary Carter. [Deleted.]
    General Dunford. The conflict in Ukraine will continue to simmer as 
Russia attempts to pressure and leverage Ukraine's current political 
crisis. We expect Russia to exploit opportunities to sustain 
instability in Ukraine.

    85. What are we doing to better monitor the situation in Ukraine 
and provide strategic warning should Russia decide to reengage its 
forces there?
    Secretary Carter. [Deleted.]
    General Dunford. [Deleted.]
                      european security initiative
    86. Senator Heinrich. I was pleased to see the budget request year 
quadruples the European Security Initiative to $3.4 billion. I was also 
glad to see we will be deploying several thousand additional troops to 
Europe, and providing for the first time a more permanent presence in 
the Baltics. However, this troop deployment won't actually happen until 
2017. What kind of force presence do we have in place today, and is it 
enough to reassure our allies that the United States will defend them 
against Russian aggression?
    Secretary Carter. There are approximately 62,000 active duty U.S. 
military personnel stationed in 12 countries across Europe. This 
presence is comprised of components from all of America's military 
services who organize, train, and equip ready forces to provide timely 
regional security. Their missions range from joint and combined multi-
national operations to engagement activities with Allied and partner 
nations, while also supporting missions of U.S. Africa Command, U.S. 
Transportation Command, the North Atlantic Treaty Organization (NATO), 
and others.
    Additionally, there is an existing rotational presence of U.S. 
Forces and armored equipment in Eastern Europe to include the Baltics. 
The proposed activities in the fiscal year 2017 European Reassurance 
Initiative (ERI) request will increase and enhance that rotation to a 
persistent presence of armored forces in Eastern Europe that will 
deploy with modernized equipment. U.S. presence activities have been 
effective in assuring NATO members of U.S. commitment to their security 
and territorial integrity, with the activities in the fiscal year 2017 
ERI request continuing those assurance efforts while also funding 
deterrence measures to enable a rapid response to threats made by 
aggressive regional actors.
    General Dunford. Currently, a US-based Armored Brigade Combat Team 
rotates to Europe for approximately six months per year. During the 
time it is in Europe, the Brigade supports Operation Atlantic Resolve 
(OAR), including forward deployments in the Baltics, Poland, Romania, 
Bulgaria, as well as other training events and exercises across Europe. 
During periods when the US-based armored unit is not in Europe, one of 
the two Europe-based brigade combat teams deploys a battalion to the 
Baltics and Poland, and the 12th Combat Aviation Brigade maintains a 
forward deployed helicopter detachment in the Baltics. Although we 
believe the current measures have reassured our Allies, our enhanced 
posture will bolster deterrence and improve operational effectiveness. 
We are in near-constant contact with our allies, and they repeatedly 
emphasize that they deeply appreciate the persistent rotational 
presence of U.S. Forces to Eastern Europe for the last two years, and 
they are confident of U.S. commitment to their security.

    87. Senator Heinrich. Is this presence sufficient to deter Russia 
from further efforts to annex its neighbors?
    Secretary Carter. The European Reassurance Initiative (ERI) is part 
of a comprehensive approach to address U.S. security priorities in 
Europe. ERI funds have been used to supplement U.S. Force presence in 
Europe through funding the rotational presence of U.S. Forces and 
armored equipment in Eastern Europe. The fiscal year 2017 ERI request 
will increase and enhance that rotation to a persistent presence of 
armored forces in Eastern Europe that will deploy with modernized 
equipment. In addition to funding these force rotations to assure 
allies, the fiscal year 2017 ERI request will also fund deterrence 
measures that will increase responsiveness and readiness by pre-
positioning ammunition, fuel, and equipment and by improving 
infrastructure to enhance our ability to provide a rapid response 
against threats made by aggressive regional actors.
    When taken in sum, these activities are a visible demonstration of 
the United States' resolve to support North Atlantic Treaty 
Organization assurance measures, bolster the security and capacity of 
our regional partners, deter and respond to aggressive actions from 
regional actors, and respond to crises in the region.
    General Dunford. Our growing forward presence and unambiguous 
commitment to Article 5 of the North Atlantic Treat is deterring Russia 
from further aggression in Europe. We also continue work with NATO 
Allies to increase their presence in front line states, while enhancing 
NATO defense plans and non-military components.
    The fiscal year 2017 ERI budget request includes two flagship 
initiatives that, if funded by Congress, will improve the U.S. 
deterrence posture. Those initiatives will allow continuous, rotational 
presence of a U.S.-based Armored Brigade Combat Team (ABCT) in Central 
and Eastern Europe, and the Army Pre-positioned Stock consisting of the 
equipment for a Division Headquarters, an Armored Brigade Combat Team, 
and a Fires Brigade. These activities reaffirm the U.S. commitment to 
NATO's collective defense under Article 5 of the North Atlantic Treaty, 
and to deter Russian aggression.
                         isil global coalition
    88. Senator Heinrich. You recently met in Brussels with 27 other 
countries' defense ministries involved in the military coalition to 
defeat ISIL. This coalition included partners like Saudi Arabia and the 
UAE. What kind of new commitments from these countries are you getting, 
and how do you plan to keep these countries engaged and participating 
in the coalition?
    Secretary Carter. The countries that attended the Defense 
Ministerial in Brussels pledged new commitments to the military 
campaign in various forms. These include: providing additional trainers 
and advisors, increasing airstrikes and expanding air operations into 
Syria, providing additional equipment and weapons, supporting mobility 
and logistics, providing intelligence, surveillance, and reconnaissance 
(ISR) and airborne command and control (C2), supporting police 
training, and providing medical support, among others. The granularity 
of numbers of the country of origin for a large number of commitments 
are classified, however, some of the contributions publicly announced 
include:

      Canada: increasing train, advise, and assist personnel, 
and adding medical personnel
      Denmark: seeking parliamentary approval of air strikes 
into Syria
      Italy: increasing personnel recovery assets and 
leadership and providing security forces for Mosul Dam repairs
      The Netherlands: extending its air operations into Syria 
and intensifying training of Iraqi Security Forces (ISF) including 
Peshmerga
      Saudi Arabia: recommitted to the air campaign and began 
strikes
      UAE: recommitting to the air campaign
      UK: Increasing strike aircraft, authorizing Syria 
operations, and providing additional personnel

    The Department of Defense (DOD) continues to engage partners 
through a series of upcoming meetings and through detailed tracking and 
coordinating efforts. DOD tailors its bilateral and multilateral 
engagements closely to encourage partners to contribute more, and it 
tracks the status of partner nation contributions very closely. In 
addition to my regularly scheduled bilateral engagements, I will 
participate in three multilateral conferences with my counterparts 
through June 2016, including the U.S.-Gulf Cooperation Council (GCC) 
Defense Ministerial that I am hosting on April 20-21, 2016, where I 
will engage our Gulf Partners on a myriad of topics, including the 
counter-ISIL fight.
               funding shortfalls impacting troop morale
    89. Senator Heinrich. General Dunford, every fiscal decision has 
the potential to impact servicemembers. Sequestration's negative impact 
on troop morale has repeatedly been raised, not only in relation to the 
quality of life and needs of servicemembers and families, but also in 
regards to the unpredictability of resources and training. Could you 
discuss the impact on troop morale if the DOD is funded below the 
requested levels? Could you also discuss its impact on servicemembers 
and their families?
    General Dunford. We have an amazingly resilient and committed All-
Volunteer Force. However, the uncertainty created by sequestration 
added significant stress to that Force. Continued reductions in funding 
constrain our resources and create additional uncertainty. This will 
lead to insufficient training and equipment, possible further end 
strength reductions, and uncertainty in future pay and benefits. The 
culminating adverse impacts on job certainty, readiness, and retention 
weigh heavily on our All-Volunteer Force and their families.
                        impact of increased risk
    90. Senator Heinrich. General Dunford, budget reductions inevitably 
reduce the military's margin of error in dealing with risk and a 
smaller force strains our ability to simultaneously respond to more 
than one contingency operation. You stated that our country's top five 
challenges are China, Russia, North Korea, Iran, and the Islamic State. 
The United States is being forced to respond to these challenges in two 
different parts of the world. Do you believe this fiscal year 2017 
budget supports adequate operations needed in both the Asia-Pacific and 
in the Middle East? In what areas will the DOD have to accept increased 
risk? How will the various combatant commanders adjust for these risks?
    General Dunford. Our budget invests in the capabilities needed to 
maintain an advantage over adversaries and to transition the Joint 
Force to full-spectrum readiness. However, this process remains slow 
and fragile due to current operational demands. We are closely managing 
how the force is employed in all operations to meet current demands. 
The fiscal year 2017 budget balances investment in high-end 
capabilities, the capability and capacity to meet current operational 
demands, and the need to rebuild readiness and is sufficient to meet 
the strategy. However, I am concerned that current resource levels for 
the Department, even absent sequestration, are insufficient to meet the 
impending bow-wave of deferred modernization starting in 2019. To 
adjust for the risks, the Department has a process to allow combatant 
commanders the ability to identify Capability Gaps that inform 
priorities for future resourcing decisions.
                              auditability
    91. Senator Heinrich. Mr. McCord, what is the current status on the 
DOD's ability to reach full auditability? Is the Department still on 
track for meeting the goal of having financial statements audit-ready 
department-wide by 30 September 2017?
    Secretary McCord. Significant progress has been made in the last 
five years in preparing the Military Departments, the defense agencies, 
and other defense organizations to be ready for annual financial 
audits. Last year, each Military Department began an independent audit 
of its
    fiscal year 2015 current-year appropriations, and most of the 
larger defense organizations completed a mock audit. Current audits 
cover 90 percent of the Department's $673 billion in current-year 
budgetary resources and 78 percent of total budgetary resources. Work 
to prepare the remaining statements is intensifying. This is a great 
achievement given the magnitude and complexity of the Department.
    The culture, business processes, and systems that have been in use 
for many years ably support the DOD mission, but are not so well suited 
for a financial audit. Accordingly, we remain fully committed to making 
the necessary improvements in our business processes and systems, as 
well as the reliability of our data, so that we can begin an audit of 
DOD's financial statements by September 30, 2017. We have a credible 
plan addressing these critical capabilities that is being monitored by 
the Assistant Deputy Chief Management Officer and me. In line with 
these plans, each component reports its progress every 60 days in 
fixing known problems, such as balancing our checkbook with Treasury, 
and in preparing other areas, such as completing inventories and 
valuation of assets.
    Further, the Services have reported to the Deputy Secretary of 
Defense (DSD) that they would be ready for an audit by September 30, 
2017. The DSD has reiterated to senior leaders across the Department 
that audit is a top priority.

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              

                         TUESDAY, APRIL 5, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.

                           U.S. CYBER COMMAND

    The committee met, pursuant to notice, at 9:33 a.m. in Room 
SH-216, Hart Senate Office Building, Senator John McCain 
(chairman) presiding.
    Committee members present: Senators McCain, Inhofe, 
Sessions, Ayotte, Fischer, Cotton, Rounds, Ernst, Tillis, 
Graham, Reed, Nelson, McCaskill, Manchin, Shaheen, Gillibrand, 
Blumenthal, Donnelly, Hirono, Kaine, King, and Heinrich.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. Good morning. Committee meets today to 
receive testimony from Admiral Michael Rogers, USN, the 
Commander of U.S. Cyber Command, Director of the National 
Security Agency, and Chief of the Central Security Service.
    A lot of titles, Admiral. That's good. Thank you for your 
many years of distinguished service and for appearing before 
this committee today.
    Threats to our national security in cyberspace continue to 
grow in speed and severity. New attacks appear in the headlines 
on an increasingly frequent basis as nation-states, criminal 
organizations, and terrorists seek to leverage technology to 
steal, coerce, and deter. When you appeared before this 
committee in September, Admiral Rogers, you noted that we, 
quote, ``have peer competitors in cyberspace'' and that some of 
them have, quote, ``already hinted that they hold the power to 
cripple our infrastructure and set back our standard of living 
if they choose.''
    Since that hearing, Russia has demonstrated the ability to 
cut power to hundreds of thousands of people in central and 
western Ukraine. This attack, the first confirmed successful 
cyberattack on a large-scale power grid, is terribly 
significant, as it demonstrates a sophisticated use of 
cyberweapons as a destabilizing capability and an effective 
deterrence tool. With Russia, China, and other potential 
adversaries developing capabilities intended to deter us along 
with our friends and allies, we must develop not only an 
effective deterrence policy, but also the capabilities 
necessary to deter any nation seeking to exploit or coerce the 
United States through cyberspace.
    After significant urging by this committee, I believe the 
Defense Department is--recognized this need, and important 
progress has been made at Cyber Command. But, there's still a 
lot of work to do. For the most part, the services appear to be 
on track to meet the goal for the development of a 6,200-person 
cyberforce, but unless we see dramatic changes in future 
budgets, I'm concerned that these well-trained forces will lack 
the tools required to protect, deter, and respond to malicious 
cyberbehavior. In short, unless the services begin to 
prioritize and deliver the cyberweapon systems necessary to 
fight in cyberspace, we're headed down the path to a hollow 
cyberforce. Just as it would be unacceptable to send a soldier 
to battle without a rifle, it's unacceptable to deprive our 
cyberforces the basic tools they need to execute their 
missions. Some service budgets omitted funding for even the 
most basic tools, like those necessary for cyberprotection 
teams to assess and triage compromised networks. This is 
unacceptable, and I look forward to hearing your assessment, 
Admiral Rogers, of the Military Service's commitment to 
equipping the cyberforce. I also look forward to hearing 
whether the new acquisition authorities we provided Cyber 
Command in the fiscal year 2016 NDAA will help address some of 
these service-induced shortfalls.
    While I'm encouraged by some of the progress of the 
Department of Defense in Cyber Command, I remain concerned that 
the administration's cyberpolicy, as a whole, remains detached 
from reality. For years, our enemies have been setting the 
norms of behavior in cyberspace while the White House sat idly 
by, hoping the problem will fix itself. In December, the 
administration provided its response, nearly a year and a half 
late, to this committee's requirement for a cyberdeterrence 
policy. The response reflected a troubling lack of seriousness 
and focus, as it simply reiterated many of the same 
pronouncements from years past that have failed to provide any 
deterrent value or decrease the vulnerability of our Nation in 
cyberspace. I applaud the recent efforts of the Justice 
Department to name and shame Iran for its cyberattacks against 
our critical infrastructure and financial sector. But, again, I 
remain puzzled as why it took nearly 5 years after Iran began 
attacking U.S. banks for the administration to begin doing so. 
That kind of indecisiveness is antithetical to deterrence, and 
our Nation simply cannot afford it.
    Let me close by thanking you, Admiral Rogers, for your 
leadership at Cyber Command. You've always been very candid and 
forthcoming before this committee, and we appreciate that very 
much. We're finally beginning to field the cybercapabilities we 
need for the future. As we confront the challenges ahead, this 
committee remains committed to doing everything we can to 
provide you and the men and women you lead with the tools 
necessary to defend our Nation in cyberspace. I look forward to 
your testimony.
    Senator Reed.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Thank you very much, Mr. Chairman.
    I, too, would like to welcome Admiral Rogers back to the 
committee--thank you, sir--and to express my gratitude to you 
and--but also to the men and women that you lead, the military 
and civilians who work to secure the department of networks, 
support the combatant commands in cyberspace, and defend the 
Nation against major cyberattacks.
    Cyber Command is at another set of crossroads. The 
committee received testimony last fall from multiple witnesses 
recommending elevation of Cyber Command to a full unified 
command. I understand that elevation has been discussed by the 
Joint Chiefs, and that the Secretary is considering this 
recommendation as part of the Goldwater-Nichols reform effort. 
I would like to hear, Admiral, in your testimony and your 
comments, your views on the readiness of the Command for 
elevation and on the related issue of sustaining the dual-hat 
arrangement under which the commander of Cyber Command also 
serves as the Director of the National Security Agency.
    Six years after Cyber Command was established, the Military 
Services are just now presenting trained military cyberunits to 
command. A little more than half of the planned units have 
reached initial operational capability. This is a major 
milestone, but trained individuals are only one part of 
military readiness. The other pieces are unit-level training 
and proficiency and equipping the forces. The Defense 
Department is only at the beginning phase of building a unit-
level training environment. There are shortages and capability 
shortfalls in the toolkits available for the Cyber Protection 
Teams, and the Department has not yet developed a plan for or 
selected a service executive agent to acquire foundational 
situational awareness and command-and-control systems for our 
cyberforces. I look forward to a status report from you, sir, 
about the pace of progress in these areas.
    There are other foundational challenges. The Department has 
deployed, and is in the process of acquiring, additional 
capable cybersecurity centers at all layers of its networks, 
from the large perimeter gateways to the millions of individual 
computers spread across the globe. Cyber Command has dozens of 
Cyber Protection Teams assigned to defend key segments of our 
networks, while the Military Services and the Defense 
Information Systems Agency have their own computer network 
defense organizations. A major task now is to integrate these 
centers and organizations under joint operational concepts to 
enable real teamwork. Admiral, again, I will be interested in 
your thoughts on this very difficult issue.
    I am pleased that Cyber Command is joining the initiative 
to leverage the innovation of the commercial informational 
technology industry for both cybersecurity and its other 
missions. To keep pace with a rapidly changing threat, it makes 
sense to partner with an industry that innovates at the same 
pace. Admiral, I'm interested in hearing how you plan to apply 
the acquisition authorities the committee granted to Cyber 
Command in last year's Defense Authorization Act to working 
with the information technology sector, in particular.
    Finally, Mr. Chairman, I would note that Admiral Rogers, in 
his prepared statement for the hearing today, quoted the 
Director of National Intelligence to the effect that China is 
still engaged in economic theft in cyberspace and that, quote, 
``Whether China's commitment of last September moderates its 
economic espionage remains to be seen.'' It is obviously a very 
serious matter if China does not live up to President Xi's 
pledge to President Obama. Again, I would be interested in your 
comments, sir, on this issue.
    Thank you for your service. I look forward to your 
testimony.
    Chairman McCain. Admiral Rogers, welcome back.

 STATEMENT OF ADMIRAL MICHAEL S. ROGERS, USN, COMMANDER, U.S. 
   CYBER COMMAND; DIRECTOR, NATIONAL SECURITY AGENCY; CHIEF, 
                   CENTRAL SECURITY SERVICES

    Admiral Rogers. Thank you, sir. Good to be back.
    Chairman McCain, Ranking Member Reed, and distinguished 
members of the committee, I am pleased to appear before you 
today to discuss the opportunities and challenges facing U.S. 
Cyber Command. I'd like to thank you for convening this forum.
    It's an honor to represent the individuals of this fine 
organization, and I'm grateful for, and humbled by, the 
opportunity to lead this impressive team. I'm confident you'd 
be extremely proud of the men and women of U.S. Cyber Command 
if you saw their commitment to mission and hard-earned 
successes on a daily basis, as I am fortunate to do.
    While my written statement goes into greater detail, I'd 
like to briefly highlight the challenges we face in today's 
environment and also some of the initiatives that the Command 
is pursuing to meet those challenges.
    Over the last year, we've seen an increase of cyberspace 
operations by state and nonstate actors. We've seen a wide 
range of malicious cyberactivities aimed against both 
government and private-sector targets. At U.S. Cyber Command, 
we focus on actors that pose a threat to our national interests 
through cyberspace. Nations still represent the gravest threats 
to our Nation's cybersecurity, but we continue to watch closely 
for signs of nonstate actors making significant improvements in 
their cybercapabilities.
    Malicious actors use cyberspace to steal intellectual 
property and citizens' personal information; and criminals' 
increasing use of ransomware to extort companies is a worrisome 
trend. Malicious actors have also intruded into networks, 
ranking from the Joint Staff's unclassified network to networks 
controlling our Nation's critical infrastructure. These threat 
actors are using cyberspace, I believe, to shape potential 
future operations, with a view to limiting our options in the 
event of a crisis. Despite this challenging environment, U.S. 
Cyber Command continues to make progress as it emphasizes 
shifts to operationally--operationalizing the Command and 
sustaining its capabilities.
    Over the past year, we've continued building the capability 
and capacity of Cyber Command while operating at an increased 
tempo. We continue to make progress in building the cyber 
mission force of the 133 teams that will be built and fully 
operational by 30 September 2018. Today, we have 27 teams that 
are fully operational and 68 that have attained initial 
operational capability. It's important to note that even teams 
that are not fully operational are contributing to our 
cyberspace efforts, with nearly 100 teams conducting cyberspace 
operations today. For example, the Command continues to support 
U.S. Central Command's ongoing efforts to degrade, dismantle, 
and ultimately defeat ISIL [Islamic State of Iraq and Syria]. 
Last year, we noted we had just established the Joint Force 
Headquarters DOD [Department of Defense] Information Networks. 
Today, I can probably report the JFHQ DODIN, as we call it, has 
made great strides towards its goal of leading the day-to-day 
security and defense of the Department's data and networks. 
Also, as the DOD expands the joint information environment, we 
will have significantly more confidence in the overall security 
and resilience of our systems. Our operations to defend DOD 
networks and the Nation's critical infrastructure proceed in 
conjunction with a host of Federal, industry, and international 
partners.
    Recognizing that DOD is just one component of the whole-of-
nation's cyber team, U.S. Cyber Command's own annual exercises, 
CYBERFLAG and CYBERGUARD, offer unmatched realism as we train 
with Federal, State, industry, and international partners. 
Additionally, Cyber Mission Teams and Joint Cyber Headquarters 
are regular participants in the annual exercises of all the 
combatant commands. While our training is improving, we need a 
persistent training environment, which the Department is 
continuing to develop, to gain necessary operational skills and 
to sustain readiness across our force.
    I'm excited by the innovation, cultural shift, and focus on 
long-term strategy that is emerging in the Command and the DOD. 
In the last year, we've established a Point of Partnership 
Program in Silicon Valley to link Command personnel to some of 
the most innovative minds working in cyberspace. Our program is 
aligned and colocated with the Department's Defense Innovation 
Unit Experimental, or DIUX, and we are building on the synergy 
among all DOD elements under the DIUX umbrella.
    Last September, the Department identified the need to 
transform DOD's cybersecurity culture by improving individual 
performance and accountability. The Secretary and Chairman 
approved the DOD Cyber Security Culture and Compliance 
Initiative to address those concerns. Cyber Command was 
identified as the mission lead for this initiative, and is 
working closely with the Joint Staff and OSD to build the 
requisite capacity and structure. Cyber Command is also 
actively contributing to the implementation of the new DOD 
cyber strategy. The strategy, released in April of 2015, 
provides a detailed plan to guide the development of DOD's 
cyberforces and strengthen DOD's cyberdefense and 
cyberdeterrence posture. The pervasive nature of cyberspace 
throughout all facets of life and across geographic boundaries, 
coupled with a growing cyberthreat, makes deterrence in 
cyberspace a challenge, but evermore important. A proactive 
strategy is required that offers deterrent options to the 
President and Secretary of Defense, to include integrated 
cyberspace operations to deter adversaries from action and to 
control escalation.
    To help with all of this, we requested and received 
enhanced acquisition and manpower authorities. I thank Congress 
and the President for the authorizations granted to Cyber 
Command in the fiscal year 2016 NDAA. This represents a 
significant augmentation of our ability to provide capabilities 
to our Cyber Mission Teams as well as our ability to attract 
and retain a skilled cyber workforce. We are currently studying 
how to best implement those provisions, and laying the 
groundwork needed to put them into effect while, in parallel, 
evolving a formalized synchronization framework to optimize the 
employment of our Cyber Mission Force.
    With that, thank you again, Mr. Chairman and members of the 
committee, for convening this forum and inviting me to speak.
    [The prepared statement of Admiral Rogers follows:]

            Prepared Statement by Admiral Michael S. Rogers
    Thank you, Chairman McCain, Ranking Member Reed, and Members of the 
Committee. I am pleased to appear before you today to talk about the 
opportunities and challenges facing U.S. Cyber Command (USCYBERCOM). I 
am honored to represent the men and women of this strong team in their 
work to secure Department of Defense networks and defend the interests 
and security of our nation, in cyberspace. I know you would be as proud 
of them as I am if you could see their commitment and successes on a 
daily basis as I do. We at USCYBERCOM welcome this opportunity to tell 
you how we are shifting from a focus on building the Command to an 
emphasis on operationalizing, sustaining, and expanding its 
capabilities.
    By way of context, USCYBERCOM is a sub-unified command of U.S. 
Strategic Command (USSTRATCOM). Though USSTRATCOM is headquartered in 
Nebraska, we are located nearby in Maryland, where we share a corner of 
Fort Meade with the National Security Agency (NSA), which I also 
direct. Our Congressionally appropriated budget for fiscal year 2016 
amounts to $466 million (that's $259 million for our Headquarters and 
$207 million for Cyber Mission Forces support). We have 963 billets for 
full-time employees, both military and civilian, working in 
USCYBERCOM's headquarters, plus another 409 contract employees. Our 
military contingents represent every one of the Armed Services, both 
Active and Reserve, and they include Coast Guardsmen as well. 
USCYBERCOM comprises a headquarters organization and seven components: 
the Cyber National Mission Force, the Joint Force Headquarters-DOD 
Information Networks, plus joint force headquarters and growing forces 
at Army Cyber Command/Second Army, Marine Forces Cyberspace Command, 
Fleet Cyber Command/Tenth Fleet, and Air Forces Cyber/24th Air Force. 
Our seventh partner, though not a component, is U.S. Coast Guard Cyber. 
USCYBERCOM manpower reflects a true total force effort encompassing a 
robust Active component along with both Guard and Reserve forces being 
fully integrated at all echelons from the highest levels of our 
USCYBERCOM headquarters to our Cyber Mission Forces. Our service 
components are leading our integration efforts and building surge 
capacity, and they are doing an outstanding job. While USCYBERCOM 
resides with NSA, the two organizations are distinct entities with 
separate missions, authorities, and resource streams. Neither is an arm 
of the other, and both perform vital tasks on behalf of our nation.
                 current threats and potential threats
    USCYBERCOM's mission goes well beyond defending DOD's networks and 
systems against cyber threats and cyber responses to those threats. 
Since I spoke to you last year USCYBERCOM has seen an intensification 
of cyberspace operations by a range of state and non-state actors. A 
year ago I mentioned North Korea's brazen cyber operations to impair 
and intimidate Sony Pictures Entertainment. We have seen no repetition 
of such destructive assaults against targets in the United States. On 
the other hand, we have seen a wide range of malicious cyber 
activities, aimed against American targets and victims elsewhere around 
the world, and thus we are by no means sanguine about the overall 
trends in cyberspace.
    In a public forum it can be difficult to explain the nuance and 
depth of the threats that we at USCYBERCOM see on a daily basis. We 
must, however, because Congress, the federal government, industry, 
allies, and the general public should understand the ability and 
determination of malicious cyber actors. Literally every American who 
has connected to a network has been affected, directly or indirectly, 
by cyber crime. By this point millions of us have had personal 
information stolen, or seen our accounts or credit compromised. Even if 
we have so far avoided such problems, however, we all pay higher prices 
for our computers and software, our Internet service, and the goods we 
buy as a result of cyber-enabled theft. That burden weighs on the 
entire economy, costing jobs and dampening growth. Just as all our 
citizens have benefitted from the increased productivity and speed that 
cyber commerce facilitates, all likewise pay the costs of cyber crime. 
This multi-faceted problem is the context for what follows.
    At USCYBERCOM, as in the Department of Defense writ large, we focus 
on foreign state and non-state actors who would harm our national 
interests in cyberspace. Criminal activity remains the largest segment 
of cyber activity of concern, but nations in many ways still represent 
the gravest threats, as they alone can bring to bear the skills, the 
resources, and the patience to sustain sophisticated campaigns to 
penetrate and compromise some of the world's best-guarded networks. If 
they can gain access to those networks, moreover, they can manipulate 
information or software, destroy data, harm the computers that host 
those data, and even impair the functioning of systems that those 
computers control. We remain vigilant in preparing for future threats, 
as cyber attacks could cause catastrophic damage to portions of our 
power grid, communications networks, and vital services. Damaging 
attacks have already occurred in Europe. Just before Christmas, 
malicious actors launched coordinated cyber-attacks on Ukraine's power 
grid, causing outages and damaging electricity control systems. If 
directed at the critical infrastructure that supports our nation's 
military, cyber attacks could hamper our forces, interfering with 
deployments, command and control, and supply functions, in addition to 
the broader impact such events could have across our society.
    The states that we watch most closely in cyberspace remain Russia, 
China, Iran, and North Korea. Russia has very capable cyber operators 
who can and do work with speed, precision, and stealth. Russia is also 
home to a substantial segment of the world's most sophisticated cyber 
criminals, who have found victims all over the world. We believe there 
is some overlap between the state-sponsored and criminal elements in 
cyberspace, which is of concern because Russian actions have posed 
challenges to the international order.
    China's leaders pledged in September 2015 to refrain from 
sponsoring cyber-enabled theft of trade secrets for commercial gain. 
Nonetheless, cyber operations from China are still targeting and 
exploiting U.S. government, defense industry, academic, and private 
computer networks. As Director of National Intelligence James Clapper 
testified last month, ``China continues cyber espionage against the 
United States. Whether China's commitment of last September moderates 
its economic espionage remains to be seen.''
    Iran and North Korea represent lesser but still serious challenges 
to U.S. interests. Although both states have been more restrained in 
this last year in terms of cyber activity directed against us, they 
remain quite active and are steadily improving their capabilities, 
which often hide in the overall worldwide noise of cybercrime. Both of 
these nations have encouraged malicious cyber activity against the 
United States and their neighbors, but they currently devote the bulk 
of their resources and effort to working against their neighbors.
    The so-called Islamic State in Iraq and the Levant (ISIL) is also a 
concern, though their organic capabilities to conduct malicious cyber 
activities so far remain limited and their main effort in cyberspace 
appears to be propaganda, recruiting, radicalization, and fundraising. 
ISIL has sought repeatedly to reach over our forces in the Middle East 
and carry the conflict into America itself. For instance, ISIL-
affiliated cyber operators last spring posted the personal information 
of more than one hundred American service personnel, many of whom were 
here in the continental United States. Not only did the hackers for 
ISIL publicize the personal details on these Americans, but ISIL also 
called for jihad against them, urging followers in the United States to 
assassinate them and their family members. While there is no direct 
link between this ISIL posting of personal information on 
servicemembers and the recent extremist attacks in the U.S. and Europe, 
ISIL wants its followers on the Internet to take inspiration from such 
attacks.
    In general all these various actors mount a range of cyber 
activities to support their interests in: a) fostering a nationalist 
vision of economic competition; b) intimidating emigre groups and 
neighbors whom they view as competitors; and c) deterring any perceived 
threats from other states, including ours. They steal from our 
corporations, and we learned last year that certain actors also stole 
the personal information of more than 21 million Americans that was 
stored in systems maintained by the Office of Personnel Management. 
Another group of hackers was responsible for an intrusion into an 
unclassified network maintained by our Joint Staff. Finally, we have 
seen cyber actors from more than one nation exploring the networks of 
our nation's critical infrastructure--and can potentially return at a 
time of their choosing. Collectively these actors make our government, 
our institutions, and our people spend far more on defense than the 
actors themselves spend on their efforts to penetrate our systems.
    Some of these threat actors are seeking to shape us, narrowing our 
options in international affairs to limit our choices in the event of a 
crisis. As a result of these developments, we at USCYBERCOM are 
thinking more strategically about shifting our response planning from 
fighting a war to also providing decision makers with options to deter 
and forestall a conflict before it begins. These new options would be 
in addition to capabilities that help our combatant commanders succeed 
in their missions if and when conflict erupts and the joint forces 
receive an ``execute order'' to commence kinetic as well as cyberspace 
operations. All of this work must be seen in the context of the 
Department's evolution of thinking toward what senior leaders call the 
``Third Offset'' and its promise for deterring conventional as well as 
nuclear war. USCYBERCOM stands ready to help develop and deploy the new 
cyber capabilities entailed in the Third Offset, particularly hardened 
command and control networks and autonomous countermeasures to cyber 
attacks. Finally, our efforts are also proceeding in tandem with a 
heightened collaboration across the federal departments, agencies, and 
industry aimed at increasing the costs (to adversaries) of malicious 
cyber activities.
                         progress and prospects
    Let me give you some details on how we are responding to the trends 
noted above. Over the last year we continued constructing USCYBERCOM 
while operating it at an ever-faster tempo. We have begun to transition 
from the ``building the force'' mode to a ``readiness'' mode. Our 
operations kept us busy defending the Department's networks and systems 
while supporting the missions of the combatant commands, especially 
U.S. Central Command (USCENTCOM), assisting other U.S. government 
entities (as authorized and upon the request of the relevant agency), 
and building capabilities to defend the nation against significant 
cyberspace attacks.
    Progress in Building the Cyber Mission Force. To understand where 
we are today it is necessary to glance back at how far we have come. 
The Department of Defense concluded several years ago that defending 
the nation in cyberspace requires a military capability, operating 
according to traditional military principles of organization for 
sustained expertise and accountability at a scale that lets us perform 
multiple missions simultaneously. When we started to build that 
capability in early 2013, we had no cyber mission force, no ability to 
generate or train such an entity, and scant ability to respond at scale 
to defensive requirements or requirements from combatant commanders. 
Now we have 123 teams of a target total of 133; those teams comprise 
4,990 people and will build to 6,187 when we finish. In terms of 
progress, we have 27 teams that are fully operational capable today, 
and 68 that have attained initial operating capability.
    The application of military capability at scale is what the Cyber 
Mission Force (CMF) gives us in USCYBERCOM and in the Department as a 
whole. Our Combat Mission Teams (CMTs) operate with the combatant 
commands to support their missions, while National Mission Teams (NMTs) 
help defend the nation's critical infrastructure from malicious cyber 
activity of significant consequence. We have Cyber Protection Teams 
(CPTs) to defend DOD Information Networks alongside local Computer 
Network Defense Service Providers (CNDSPs). Each of them complements 
the efforts of the others. I should emphasize that Cyber Mission Force 
teams can and do contribute to our nation's cyberspace efforts even 
before they reach full operational capability. Elements of teams that 
are still ``under construction'' are already assisting the combatant 
commands and our partner departments and agencies. Cyber Protection 
Teams, for instance, played important roles in defending the Joint 
Staff's unclassified systems after an intrusion last summer, and in 
remediating the vulnerabilities that the intruders had utilized.
    Those Cyber Mission Force teams give USCYBERCOM the capacity to 
operate on a full-time, global basis on behalf of the combatant 
commands. The Combat Mission Teams help combatant commanders accomplish 
their respective missions to guard U.S. interests and project our 
nation's power when authorized to deter those who would threaten our 
security--the teams help ensure that we have the ability to enable our 
combatant commanders to defeat emerging threats. Such assistance occurs 
daily, for instance, in the fight against ISIL, as Secretary Carter 
recently explained in his remarks in California. Although I cannot 
address the particulars in this setting, USCYBERCOM is executing orders 
to make it more difficult for ISIL to plan or conduct attacks against 
the U.S. or our allies from their bases in Iraq and Syria to keep our 
Service men and women safer as they conduct kinetic operations to 
degrade, dismantle, and ultimately destroy ISIL. The nation and every 
combatant commander can now call on CMF teams to bring cyberspace 
effects in support of their operations. Additional Combat Mission Teams 
under the functional commands (U.S. Strategic Command, U.S. 
Transportation Command, and U.S. Special Operations Command) bring 
still more resources to supplement those of the regional commands.
    At USCYBERCOM, moreover, we control additional teams under the 
Cyber National Mission Force (CNMF) that can help defend America's 
critical infrastructure against malicious cyber activity of significant 
consequence. The CNMF comprise National Mission Teams, National Support 
Teams, and National Cyber Protection Teams to conduct full-spectrum 
cyberspace operations to deter, disrupt, and defeat adversary cyber 
actors.
    DODIN Operations and Defense: At USCYBERCOM we have extended the 
same principles (unity of effort and command for sustained effort at 
scale) to the operation and defense of DOD information systems. Last 
year I noted that we had just established the Joint Force Headquarters 
(JFHQ-DODIN) and dual-hatted the Director of the Defense Information 
Systems Agency to command it. Today I can proudly report that JFHQ-
DODIN has made great strides toward its goal of leading the day-to-day 
defense of the Department's data and networks. As a functional 
component command of USCYBERCOM located at DISA, JFHQ-DODIN directs an 
aggressive and agile network defense. The Department of Defense as a 
whole is working to harden and defend its networks and systems, with 
USCYBERCOM providing the operational vision and directing the defense, 
and the DOD Chief Information Officer (CIO), working with NSA, DISA and 
the Military Services, providing the technical standards and 
implementation policy. DOD CIO is measuring the cyber security status 
of the whole department, and for particular missions through the new 
CIO cybersecurity scorecard, which is provided to the Secretary each 
month. The Secretary recently announced another initiative as well, 
linked to broader Administration efforts to strengthen the nation's 
cybersecurity under the Cyber National Action Plan--a ``bug bounty'' to 
encourage private-sector experts (i.e., trusted hackers) to probe our 
systems for vulnerabilities. The goal of all of these measures is to 
minimize the adversary's ability to attack our systems and networks, 
and to detect, diagnose, contain, and eject an adversary should an 
attack occur.
    Our operations to defend DOD networks and the nation's critical 
infrastructure proceed in conjunction with a host of federal, industry, 
and international partners (about whom I shall say more in a moment). 
Defending America in cyberspace is a whole-of-government, indeed a 
whole-of-nation, endeavor. No single agency or department has the 
authority, information, or wisdom to accomplish this mission alone, 
which is why USCYBERCOM and NSA recently updated our understandings 
with the Department of Homeland Security in a cyber action plan to 
chart our collaboration. The entire federal government, however, cannot 
do the job without the active participation and cooperation of the 
private sector. Here I compliment Congress for recently passing the 
Cybersecurity Information Sharing Act, which should enable industry to 
increase its sharing of threat information with the federal government 
(and vice versa) without fear of losing competitive advantage or 
risking additional legal liability. This is a key element in the 
government's efforts to improve the cybersecurity of critical 
infrastructure--and to frustrate adversary attempts to bend American 
foreign policy to their liking or even to harm Americans.
    We seek to build the Command's capabilities (especially the Cyber 
Mission Force) with deliberate speed, and progress continues to 
accelerate as we learn and improve at building our teams. We remain 
committed to achieving full operational capability for the entire CMF 
by the end of fiscal year 2018. Our ability to do this is shaped in no 
small part by consistent funding throughout the remainder of the CMF 
build. The key to the CMF's utility to the Department and the nation is 
the proficiency of its personnel. We do our best to give our people the 
infrastructure, tools, and support they require, but military cyber 
operations, despite their high degree of automation, place a premium on 
insight, intuition, and judgment.
    Training. Cyber operators are being trained to operate mission 
effectiveness (for the Department and for the nation), and they must 
operate in a manner that respects and protects the civil liberties and 
privacy of American citizens. Developing a training program for cyber 
operators resembles the challenge that DOD faces in training pilots and 
aircrew to operate some of the world's most advanced aircraft, 
maintaining their skills on the latest aircraft systems, and sustaining 
their numbers to ensure a constant sufficiency of motivated and 
technically excellent personnel. Creating such a ``pipeline'' in the 
U.S. military's (and other countries') air components took many years, 
so I am hardly surprised by the persistence and complexity of the 
challenges that we at USCYBERCOM confront in constructing the training 
and personnel pipeline for the Cyber Mission Force.
    Sustainment. Training the force does not automatically bring it to 
peak proficiency. Teams must learn to operate against live opposition, 
and our commanders and seniors must develop an understanding of how 
cyber operations unfold so they have a better idea of what to expect 
and what can be achieved. USCYBERCOM has been providing some insights 
by employing teams in the recent series of real-world operations, such 
as in dealing with intrusions in DOD systems and the networks of other 
federal entities. Cyber Mission Teams are now regular participants in 
the annual exercises of the geographic and functional combatant 
commands, even though the demand for CMF participation outstrips our 
capacity to provide teams to all the exercise organizers who request 
them. USCYBERCOM's own annual exercises, CYBER FLAG and CYBER GUARD, 
offer a certain degree of realism, assembling federal, state, industry, 
and international partners to practice cyber defense and offense 
against a wily opposition force. The realism they offer is limited, 
however, in part because they operate on simulated networks that do not 
come close to approximating the scale and complexity of the Internet. 
We can do better, which is why the Department is building for us an 
advanced Persistent Training Environment to exercise our teams, and 
though it is not yet complete it has already been used and found very 
helpful.
    Capabilities. Our teams require specialized tools, infrastructures, 
and capabilities to perform their missions. The work of improving our 
ability to operate in cyberspace begins in our own DOD systems; our 
networks are continually being probed and frequently attacked, so we 
are learning to combine the insights we gain from these events with our 
knowledge of cybersecurity to achieve situational awareness and an 
intuitive feel for what is coming next. In addition, USCYBERCOM has 
partners that possess very useful capabilities and skills, so we are 
constantly seeking to expand our knowledge of what is under development 
in the Services, national labs, agencies, as well as key foreign 
partners.
    Innovation. Secretary Carter spoke in California recently about the 
importance of innovation for DOD. We heartily agree, which is why our 
outreach to academia and to industry is expanding as well. In the last 
year we established a lean but motivated ``Point of Partnership'' in 
Silicon Valley to link Command personnel to some of the most innovative 
minds on earth. This new unit will help industry understand how to 
interact with USCYBERCOM--both how we work and where to plug in so we 
can work difficult, and mutual, problems together. It will also help 
USCYBERCOM scout technology trends, build trust, and develop mechanisms 
and pilot projects to facilitate the movement of the nation's cyber 
workforce across the public-private boundary. Our Point of Partnership 
is aligned and co-located with the Department's new Defense Innovation 
Unit-Experimental (DIUx), and we are hoping for synergy among all the 
DOD elements under the DIUx umbrella. Another of our efforts in this 
area is an ongoing set of initiatives and projects to bolster the 
security of hardware and software in DOD weapons systems. We are 
learning a great deal from this effort.
    Culture. Innovation, technical upgrades, and cyber organizational 
changes are ongoing and necessary but by themselves are insufficient to 
help us fully defend our networks, systems, and information. Last 
September, the Department identified the need to transform DOD 
cybersecurity culture by improving individual performance and 
accountability as called for in the DOD Cyber Strategy. The Secretary 
and Chairman approved the DOD Cybersecurity Culture and Compliance 
Initiative (DC3I) to initiate a shift in the Department's cybersecurity 
norms. This initiative seeks to instill principles of operational 
excellence, personal responsibility, and individual accountability into 
all who provide or use cyber capability to accomplish a mission. The 
Department already inculcates a culture of responsibility and 
accountability in every DOD affiliate, both uniformed and civilian, who 
is authorized to handle a firearm. Our reliance on networks and data 
systems to accomplish our missions demands all DOD personnel understand 
their individual responsibilities to protect the Department of Defense 
Information Networks and act with similar discipline and diligence 
everytime they use Department systems. Instituting meaningful and 
lasting cultural change DOD-wide will require a long-term commitment by 
the Department. USCYBERCOM was identified as the mission lead for this 
initiative and is working closely with Joint Staff and the Office of 
the Secretary of Defense to build the capacity and structure to 
increase cybersecurity and promote mission assurance through improved 
human performance in cyberspace.
    DOD Cyber Strategy. Another USCYBERCOM function is to help the 
Department's leadership to reflect and act on the full range of issues 
pertaining to the cyber field Many such issues fall outside our 
Command's mission set, strictly speaking, but still have relevance to 
how the United States can and should regard cybersecurity for the 
nation and cyberspace capabilities as an instrument of national power. 
We are called upon for contributions on matters such as the 
implementation of the new DOD Cyber Strategy, or the defense of 
personally identifying information of DOD personnel and affiliates in 
sensitive databases, because of our level of expertise on cyber 
matters. Senior leaders at the Command are leading teams or serving on 
all of the teams charged with implementing the DOD Cyber Strategy's 
many initiatives, particularly the ``lines of effort'' regarding the 
training and proficiency of cyber personnel as well as the integration 
of cyber effects in DOD and cross-agency planning efforts. We at 
USCYBERCOM, of course, consult constantly our network of partners 
across the U.S. government to learn more. Typically a combatant 
command, let alone a sub-unified command, is not staffed to play such a 
role for the Department, but cyberspace is a dynamic environment with a 
host of complicated and consequential issues, and DOD has not yet had 
time to build up the broad and deep reserve of institutional knowledge 
that it possesses on other matters.
    Authorities. I thank Congress and the President again for the 
acquisition authorities granted to USCYBERCOM in the National Defense 
Authorization Act for Fiscal Year 2016. Together with new manpower 
flexibility these presage a significant augmentation of our role of 
bringing capabilities to our cyber mission teams and network defenders, 
as well as our ability to keep our DOD cyber workforce proficient. We 
are studying how best to implement that Act's provisions--such as the 
role of a new Command Acquisition Executive and the scope of cyber 
operations-peculiar equipment and capabilities--and laying the 
groundwork needed to put its provisions into effect after the 
Department drafts its implementation plan.
    DOD has extensive sharing arrangements already with some of our 
closest allies and partners, who support our operational planning and 
capabilities development. These arrangements are not unlimited, but 
they have improved our situational awareness and helped us in the 
maturation of USCYBERCOM, and we have a process for managing the 
relationships and extending collaboration in new areas as needed. Other 
nations engaged in the fight against violent extremists and in planning 
for contingencies involving potential adversaries have also expressed 
their desire to partner with us. We are more limited in what we can do 
with them.
    Let me head toward a conclusion by reflecting on how we can take 
advantage of the new authorities and changes discussed above in 
building a cyber force that is even more capable in the future. As we 
learn how to conduct operations to defend our nation in cyberspace, our 
experiences are convincing me that we across the Department may need to 
think again about what a 21st century military organization is. When we 
created USCYBERCOM we did so with the understanding that our basic 
principles and values remain sound; our Command was constructed to 
apply time-honored lessons about the need for clear and unified 
authorities, for consistent performance at scale, for sustainability, 
and for a capacity to synchronize a wide range of activities under the 
rule of law. I marvel at this nation's ability to assemble such 
resources and operate them in such a powerful manner, and I also marvel 
at the commitment and skill of our people--Active Duty and civilians 
alike--who answered the call to service in this new domain. Terrorists 
can harm us but they have no chance of defeating such a force as long 
as we remain true to our national values. Nevertheless, terrorism is 
not the only threat we face. Other states will one day build cyber 
forces as capable as ours and they may attain comparable capabilities, 
just as the Soviets achieved rough nuclear parity with us in the Cold 
War. Military power in cyberspace is already something of a misnomer; 
cyber forces do not square off against each other and fight pitched 
battles like armies or fleets. Indeed, cyberspace is unlike the natural 
domains in many ways, and thus certain metaphors and analogies from the 
natural domains might just confuse matters and impair judgment. Our new 
cyber military force is virtually always a partner, as it rarely, if 
ever, acts alone. Instead, it can constitute the center of gravity for 
joint and combined, whole-of-government operations that defend the 
United States and serve the interests of the nation, and its people, 
and our allies. The President's International Strategy for Cyberspace 
clearly articulates our policy to exhaust other options short of 
military force if possible, but it also emphasizes our nation's 
inherent right of self-defense in cyberspace and all other domains. To 
exercise that right, our nation must understand how others might use 
force against us, and to do so we must know how force works in 
cyberspace, and why our nation must be able at times to depend on 
military capabilities that act as a nucleus of national power in this 
domain.
                               conclusion
    Thank you again, Mr. Chairman, Ranking Member Reed, and Members of 
the Committee, for inviting me to speak to you today. I greatly 
appreciate the support that you and this Committee have provided to 
USCYBERCOM, and I am also grateful for the stability that you and your 
colleagues in Congress have provided to our resource base over the next 
couple years as we complete the Cyber Mission Force build and shift our 
focus to sustained operations. We look to your counsel as we partner 
with the federal government, industry, allies, and the whole gamut of 
stakeholders who seek to preserve cyberspace as a free, reliable, and 
secure domain for exchange, commerce, culture, and progress. Our nation 
determined some years back that preserving freedom and security in 
cyberspace will inevitably mean an operational role for the U.S. 
military in this domain. We at USCYBERCOM strive every day to provide 
the sort of military capabilities and options that our leadership 
requires to secure and defend DOD information systems and to protect 
and further the nation's interests, not only in cyberspace but in all 
domains where our national security is challenged. I hope you will 
agree that our people at USCYBERCOM--while their work is not done--have 
already delivered handsomely on the early promise that you saw and 
supported. They take pride in their accomplishments, but they do not 
rest on them. With them, I look forward to tackling our current and 
future challenges together with you and our mission partners across the 
government. I am happy to take your questions.

    Chairman McCain. Well, thank you, Admiral Rogers.
    General Dempsey was asked about our ability to address 
challenges to this country, and he basically--he stated that we 
have significant advantages in every major challenge, except 
one, and that was cyber. Do you agree with General Dempsey's 
comment, about a year ago?
    Admiral Rogers. I do. The phrase I use internally with him 
is, ``Cyber is one area we have to acknowledge that we have 
peer competitors who have every bit as much capacity and 
capability as we do.''
    Chairman McCain. That, I would say to my fellow members of 
the committee, emphasizes our need to address this issue in a 
comprehensive fashion. So, after we finish the defense bill, I 
would--I will spend a great deal--this committee will spend a 
great deal of its time on this issue, since the threat is as 
Admiral Rogers just stated.
    You stated, last year in a House hearing, there's still 
uncertainty about how we would characterize what is offensive 
and what is authorized. Again, that boils down, ultimately, to 
a policy decision. To date, we have tended to do that on a 
case-by-case basis. In other words, do we preempt? Do--if we 
respond, how do we respond? All of those, it seems to me, are 
policy decisions that have not been made. Is that correct?
    Admiral Rogers. I guess, Chairman, the way I would describe 
it is, we clearly still are focused more on an event-by-event 
particular circumstance. I think, in the longrun, where clearly 
I think we all want to try to get to is something much more 
broadly defined and well understood.
    Chairman McCain. That you understand, when you detect a--an 
attack or as to exact--or detect a probable attack--I'm--so, 
right now, you are acting on a case-by-case basis.
    Admiral Rogers. Sir.
    Chairman McCain. Does Russia have the capability to inflict 
serious harm to our critical infrastructure?
    Admiral Rogers. Yes.
    Chairman McCain. Does China have the same capability?
    Admiral Rogers. Some measure of the same capability, yes.
    Chairman McCain. How has China's behavior evolved since the 
OPM breach?
    Admiral Rogers. We continue to see them engage in activity 
directed against U.S. companies. The questions I think that we 
still need to ask is, Is that activity then, in turn, shared 
with the Chinese private industry? We certainly acknowledge 
that states engage in the use of cyber as a tool to gain access 
and knowledge. The question or issue we've always had with the 
Chinese is, what--while we understand we do that for nations to 
generate insight, using that then to generate economic 
advantage is not something that's acceptable to the U.S.
    Chairman McCain. Do you agree that the lack of deterrence 
or repercussions for malicious cyberbehavior emboldens those 
seeking to exploit the U.S. through cyber?
    Admiral Rogers. Yes.
    Chairman McCain. Admiral, we are looking carefully at a 
consolidation of command, here, as far as your responsibilities 
are concerned. I believe that the Secretary of Defense will 
also support such a move, so I will be recommending to the 
committee that we include that consolidation in the defense 
authorization bill as we mark up. I think my friend Senator 
Reed also agrees with that.
    Would you agree that probably the issue of cyberwarfare is 
the least understood by all of our leadership, including in 
government, executive and legislative branch?
    Admiral Rogers. It's a--it's certainly among the least 
understood. I think that's a fair----
    Chairman McCain. Is part of this problem is that this 
challenge is rapidly evolving?
    Admiral Rogers. I think that's--that's clearly an aspect of 
it, the speed and the rate of change, as well as the 
complexity. It can be intimidating. I'd be the first to 
acknowledge that many people find this a very intimidating 
mission area.
    Chairman McCain. If you had a recommendation for this 
committee and Congress as to your significant two or three 
priorities, what would you recommend?
    Admiral Rogers. In terms of----
    Chairman McCain. Of action----
    Admiral Rogers.--cyber, overall?
    Chairman McCain.--action that you'd like to see the 
Congress and the executive branch take.
    Admiral Rogers. I think we clearly need a focus on 
ensuring, number one, that we've got our defensive house in 
order and that we're able to defend our systems as well as our 
networks. We need to think beyond just networks, into our 
individual----
    Chairman McCain. Which----
    Admiral Rogers.--combat and weapon----
    Chairman McCain.--which, to me, means a policy, but please 
go ahead.
    Admiral Rogers. Secondly, we need to continue to generate 
the complete spectrum of capabilities to provide options for 
our policymakers, as well as our operational commanders, so, 
when we have these issues, we've got a series of capabilities 
that we can say, ``Here are some capabilities that we can 
choose from.''
    Lastly, I think we've just got to--the other point I'd try 
to make is, we've got to figure out how to bridge across not 
just the DOD, but the entire U.S. Government, with the private 
sector about how we're going to look at this problem set in an 
integrated national way.
    Chairman McCain. Would you also agree that sequestration 
could threaten you with a hollow force after you have recruited 
and--some of the brightest minds in America to help you?
    Admiral Rogers. Oh, very much so. I would highlight, in 
fiscal year 2013, when we shut down the government, I can 
remember going--I was in a different job at the time, but still 
I was doing--leading the Navy's cyber effort. As much of my 
workforce said, ``So, explain to me, Admiral, why we should 
stay with you, if this is what we're going to have to deal with 
on an aperiodic basis, being told we're going to be furloughed, 
we're not going to get paid.'' I can remember telling them, in 
2013, ``Please stay with us. This--I hope this is a one-time 
thing.''
    Chairman McCain. But, sequestration means further hampering 
of----
    Admiral Rogers. It means further--because everything is--
our ability to meet the timelines that we've been given have 
been predicated on the sustaining of the budgets. If we go to 
sequestered levels, I will not be capable of generating that 
capability in a timely way that right now we're on the hook to 
do.
    Chairman McCain. Senator Reed.
    Senator Reed. Well, thank you, Mr. Chairman.
    One of the issues that has been discussed, and I mentioned 
in my opening statement, is raising Cyber Command to a full 
unified command. I also noted, and you acknowledged, that only 
half of Cyber Command's uniformed cyber mission forces are 
initially capable--IOP--IOC [initial operating capability], I 
should say. Some critical elements, such as persistent training 
environment, a uniform platform doesn't exist. Are you, in your 
mind, mature enough to be a full unified command now? Or----
    Admiral Rogers. Yes.
    Senator Reed. What would that advantage give you? Or what 
would that decision give you?
    Admiral Rogers. So, generally when we think about what 
tends to drive should something be elevated to a combatant 
command--broadly across the Department, we tend to focus on the 
imperatives of unity of command, unity of effort, and is it 
either--in this case, it would be a functional, not 
geographic----
    Senator Reed. Right.
    Admiral Rogers.--and, in this case, does the function rise 
to a global level, and is it of sufficient priority to merit 
coordination across the entire Department?
    The other issue, I would argue, is one of speed. All of 
those argue--and again, I'm--I just am one input. I realize 
this is a much broader decision than just Admiral Rogers, and 
there's many opinions that will be factored in. My input to the 
process has been, the combatant commander designation would 
allow us to be faster, which would generate better mission 
outcomes. I would also argue that the Department's processes of 
budget, prioritization, strategy, policy, are all generally 
structured to enable direct combatant commander input into 
those processes. That's what they're optimized for. I believe 
that cyber needs to be a part of that direct process.
    Senator Reed. The other aspect, obviously, is the 
relationship with NSA [National Security Agency]. There are 
several options. One is to have separate commanders, one is to 
have one commander with a dual hat. Or one option, or 
additional option, is to, at least at a future time, have the 
option to divide the dual-hat arrangement. Can you comment on 
that issue?
    Admiral Rogers. So, my recommendation has been, for right 
now, you need to leave them dual-hatted. Part of that is the 
very premise that we built Cyber Command, when we created it 
six years ago, where we said to ourselves, ``We are going to 
maximize the investments that the Nation had already made in 
NSA, in terms of infrastructure and capability.'' So, because 
of that, we didn't have a huge military construction program, 
for example, for Cyber Command, and put these cyber mission 
forces, the 6200, in different structures. We said we were 
going to take NSA's existing space as a vehicle to do that. So, 
my input has been, for right now, based on the very model we 
created Cyber Command, where we really, in many ways, very 
tightly aligned these two organizations, that, at the current 
time, it would be difficult--not impossible--first to 
acknowledge that--it would be difficult or less than optimal, 
in my opinion, to try to separate them now. But, what I have 
also argued is, but we need to continue to assess that decision 
over time. You need to make it a conditions-based assessment as 
to, At some point in the future, does it make more sense to do 
that?
    Senator Reed. Part of that is the fact that if you are a 
unified command, you will be developing alternatives to NSA 
capabilities----
    Admiral Rogers. Yes.
    Senator Reed.--exclusive to Cyber Command, so that, at some 
point, you could have an infrastructure that looks remarkably 
like NSA, and these synergies you're talking about now aren't 
operational----
    Admiral Rogers. As important, right. Yes, sir.
    Senator Reed. One of the issues is that, as a--you depend 
upon the services to provide you a great deal of resources. In 
fact, it is really, I think, interesting to note that only half 
of these identified units are, at least initially, capable, and 
that there's--doesn't seem to be an intense training effort 
that's standardized and in place right now. What can you do--
what can we do to accelerate these units, in terms of their 
maturity and their training environment?
    Admiral Rogers. So, if I could, Senator, I'm going to 
respectfully disagree.
    Senator Reed. That's quite all right. You don't even--well, 
you have to be respectful.
    [Laughter.]
    Admiral Rogers. Remember, we started this build process in 
fiscal year 2013. We said that we would finish it by the end of 
fiscal year 2018, full capability and ready to fight in a high-
----
    Senator Reed. Right.
    Admiral Rogers.---demand environment. We're pretty much on 
track, as I have said publicly. If you look right now--in fact, 
in the last two months, I've actually managed to increase 
timeliness since the last assessment I did in February, where I 
publicly had said, based on the data as of the 1st of February, 
I believe that we'll meet IOC for 91 percent of the teams on 
time, and that we will meet FOC [Full Operational Capability] 
for 93 percent of the teams on time. In the two months since 
then, we're up--I managed to work with the services, and, for 
IOC, we're up to about 95 percent of the force; and, for FOC, 
we're at about 93--we're still at 93 percent of the force. So, 
my only point is, I'm not critical of the services, in terms of 
their generating the force. I think they're making a very good 
effort, and it's on track. It's not perfect, but it's not--on 
track.
    They've also been very willing--when I've said, ``What we 
need to do is ensure that we have one integrated joint category 
to how we work cyber,'' so there's got to be one structure, one 
training standard--every service has agreed to adhere to that. 
So, in that regard, I'm also very comfortable what the services 
are doing.
    What I think the challenge for us as I look over the next 
few years is, we initially focused on those mission teams and 
the men and women and their training. What experience is 
teaching is--not unlike other domains, is--and as you both, the 
Chair and Ranking Member, said in your opening statements, 
that's not enough. What we're fighting now is, it's the other 
things that really help enable--we've got to focus more on.
    Senator Reed. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    Admiral Rogers, in December of last year, you published an 
article saying, ``A challenge for the military cyber 
workforce,'' and you discussed, as you did in your written 
statement today, that--the importance of growing and developing 
and maintaining this force. When you talked about--well, I 
guess it was the Chairman, in his statement--the 123 teams, 
where you are right now, and aiming to 133, what comprises a 
cyber team?
    Admiral Rogers. They come in several different types. There 
is what we call Combatant Command Mission Teams. Those are 
aligned with combatant commanders. They are generally designed 
to create offensive capability, if you were--will.
    Senator Inhofe. Yeah.
    Admiral Rogers. There are Cyber Protection--those are 
about--and that team, CCMTs, Combatant Commander Mission 
Teams----
    Senator Inhofe. Yeah.
    Admiral Rogers.--there are about 65 individuals on a team. 
If you look at Cyber Protection Teams, slightly different 
mission, so different structure, different focus--they're at 
about 39 individuals per team. Each of those two teams, the 
Combatant Commander Mission Team, the Cyber Protection Team----
    Senator Inhofe. Okay.
    Admiral Rogers.--has a small subset of about 23 
individuals, what we call Support Teams.
    Senator Inhofe. Well----
    Admiral Rogers. So, that just gives you a sense for the----
    Senator Inhofe. Sure.
    Admiral Rogers.--range; anywhere from----
    Senator Inhofe. Sure.
    Admiral Rogers.--20 to 60----
    Senator Inhofe. That's--when you add all that together, 
that's when you come up with the 6,187.
    Admiral Rogers. Yes, sir.
    Senator Inhofe. As was brought out in the Chairman's 
statement, you really have to know--well, first of all, you're 
drawing from institutions that are training these people. This 
is new. This is----
    Admiral Rogers. Right.
    Senator Inhofe. This is brand new to a lot of people, 
including a lot of people at this table. I know that, in my 
State of Oklahoma, the University of Tulsa has really made 
great progress. In fact, your predecessor was out there and 
working with them. I understand, from Senator Rounds, that a 
similar thing is happening in South Dakota. So, you've got 
these kids out there, they're learning this, they're choosing--
they're determining what they're going to do for a career.
    Now, I think it's a good question when you say--when we ask 
the question, ``Can we really depend on sustaining, in this 
environment that we're in right now, this--these teams--this 
number or this workforce, so that individuals out there will--
would be aiming their talents toward helping us in your''--
because there's going to be a lot of competition for these 
kids. How confident are you that we're going to be able to 
maintain the level necessary to attract good people?
    Admiral Rogers. So, experience to date says we're doing a 
good job in that regard, both for our ability to recruit and 
retain. What tends to drive that to date, our experience 
suggests, is the desire of men and women, whether they're 
civilian or in uniform, to be part of something bigger than 
themselves, to do something that matters, and to do something 
on a cutting edge. That, if you will, is really what powers the 
men and women of the teams.
    Senator Inhofe. Yeah.
    Admiral Rogers. I'm always talking to the--my fellow 
leaders about, ``So, what are the advance indicators that we 
should be looking at that would tell us if that trend is 
changing?'' There are a couple skillsets within the mission 
force, that I've mentioned separately previously, that I may, 
in fact, come back to the committee with to say, ``Look, there 
may be some additional measures here--flexibility to hire''----
    Senator Inhofe. That would be a good thing to do for the 
record, to come back, because I'm running out of time here, and 
I'd----
    Admiral Rogers. Sir.
    Senator Inhofe.--a couple of other things I wanted to get 
to. I agree with you, when you say that the states that we 
watch most closely in cyberspace remain Russia, China, Iran, 
and North Korea. At the same time, I notice that the--there is 
an effort--and this came when our FBI Director, James Comey, 
was in contact with these people--that they've--they were--
China is trying to develop a closer relationship with us, when, 
in fact, they're the ones that we're going to be watching. 
You're not entertaining any kind of a close relationship with 
them that might impair that----
    Admiral Rogers. No, sir.
    Senator Inhofe.--area. Okay, good.
    Yesterday, in the--an article came out on the GAO 
[Government Accountability Office] report that says the 
Pentagon doesn't know who's in charge for responding to a 
massive cyberattack. They go on to talk about the Northern 
Command. They talk about what we are doing. They're talking 
about Homeland Security. You're familiar with this report that 
came out yesterday?
    Admiral Rogers. No, I'm not.
    Senator Inhofe. Oh.
    Admiral Rogers. But, I'm familiar with the broad premise.
    Senator Inhofe. Well, okay. Well, the conclusion of the 
report--and I'll just read this, and--it says, ``We believe 
that, by issuing or updating guidance that clarifies roles and 
responsibilities of relevant DOD officials, DOD will be in a 
better position to plan for and support civil authorities in a 
cyberincident.'' This is a GAO report, so I--I'd suggest that 
you look at that and see if we have reached that--their 
conclusion so far.
    Admiral Rogers. Sir.
    Senator Inhofe. Thank you, Mr. Chairman.
    Chairman McCain. Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    Thank you, Admiral, for being here and for the work you do. 
I appreciate it very much.
    We face a wide range of cyberthreats from terrorist groups, 
like the ISIS criminal hackers and spies and all the 
underlying. In nearly every briefing about our national 
security, I've asked about the issues of cybersecurity and 
protecting our power grids. It's a very important issue to me 
and the amount of power that our little State produces for this 
country. In the short term, which cyberthreat is most dangerous 
to the United States? I guess it may--our grid, our food 
supply, our water supply? What is most vulnerable that we 
should be working on?
    Admiral Rogers. Power and basic infrastructure, something 
that always concerns me, because the potential impact on the 
Nation is very significant, should we have significant issues 
there. I'd also argue--one sector that I worry about a little 
bit is--you look at the amount of personally identifiable 
information that is resident out there in a lot of various--
healthcare is a good example, where the amount of data that we 
have all provided to the medical world that is available out 
there on all of us and our families--that worries me, about, 
you know--and that's reflected--and you look at OPM, you look 
at the Anthem health insurance, large data concentrations are 
now increasingly becoming an attractive target. Because of the 
power of big data analytics, massive amounts of data that, 10 
years ago, we would have said to ourselves, ``No one could ever 
really comb through that to generate insights or find anything. 
It's just too large.'' You sure don't have those conversations 
anymore.
    Senator Manchin. I mean, we talk about cyber, and we keep 
talking about, basically, our corporate--you know, corporate 
hacking, if you will, for proprietary reasons. Then you look at 
the military hacking that goes on for our defense reasons, but 
then you look at just the everyday life----
    Admiral Rogers. Right.
    Senator Manchin.--that we've come to expect that could be 
probably disrupted with quite an alarming----
    Admiral Rogers. Yes, sir.
    Senator Manchin.--alarming concerns.
    The other thing I'll--in your testimony, you mentioned that 
the Guard and Reserve forces are being assigned to all levels 
of U.S. Cyber Command and the cyber mission forces. Can you 
elaborate on what the Reserve component--specifically, the 
National Guard--bring to the table for the cyber mission?
    Admiral Rogers. Well, you're able--through our Guard and 
Reserve teammates, you're able to access a set of manpower that 
potentially is using these same skillsets in their day-to-day 
work in the private sector. You're able to also access, at 
times, a very different perspective, which works out very well, 
which is one reason why, as we were creating this cyber 
construct for the Department, we were adamant, from the 
beginning, it needed to be viewed as a total force, that if we 
were just going to make this an Active-only component, I was 
not going to optimize the full range of capabilities that are 
out there. You've seen, in the last six months in particular, 
the Guard and Reserve capability starting to come online and 
flesh out, as well.
    Senator Manchin. The thing I'm--that I'm saying is, I've--
the National Guard in West Virginia, we don't----
    Admiral Rogers. Right.
    Senator Manchin.--have a base, and our Guard is everything 
to us. Being a former Governor, I understand the importance of 
our Guard. But, we've been so active as, basically, in 
aggressive recruiting, and some of our best and brightest and 
youngest people are coming into the Guard for all the 
opportunities, especially educational.
    Admiral Rogers. Right.
    Senator Manchin. It's an area where they can designate and 
pinpoint for you to bring in some of these really sharp young 
talents that could help us in defending ourself, cyber. I 
didn't know if you all look at that.
    Admiral Rogers. Which is--the Guard is doing now.
    Senator Manchin. They're--and you all are in--okay.
    Admiral Rogers. Well, Senator Grassley and I spend a lot of 
time talking about, How do we do this in an integrated way?
    Senator Manchin. Again--well, the other thing--in your 
testimony, you state that ISIS main cyber effort is focused on 
propaganda, recruiting, and radicalization of others. Can you 
elaborate further on this disturbing statement and how have 
they been successful?
    Admiral Rogers. They've harnessed the power of the 
information arena to promulgate their ideology on a global 
basis, to recruit on a global basis, to generate revenue and to 
move money, as well as coordinate some level of activity on a 
large, dispersed basis. The challenge I look for, or that 
concerns me when I look at the future, is, What happens if the 
nonstate actor--ISIL being one example--starts to view cyber as 
a weapon system? That would really be a troubling development 
on----
    Senator Manchin. In a very simplistic way--people ask, Why 
can't we shut down that part of the Internet? Why can't we 
interrupt ISIS's ability to go on social media and attract? Why 
are we not able to infiltrate that more?
    Admiral Rogers. I mean, I would--the idea that you're just 
going to shut down the Internet, given its construction and 
complexity, is just not----
    Senator Manchin. I've had people ask me----
    Admiral Rogers.--right--going to be realistic.
    Senator Manchin.--``Can't you just stop it from that area 
of the world where all the problems are coming from, whether it 
be in the Syria or in parts of Iraq or Iran, things that we 
might have some input and control over?'' It's not possible?
    Admiral Rogers. It's just not that simple. I wish I could 
say that there's a part of the Internet that is only used by a 
specific set of users, but there are all sorts----
    Senator Manchin. I'm just trying to----
    Admiral Rogers.--users out there.
    Senator Manchin.--find an answer. But, I think----
    Admiral Rogers. Yes, sir.
    Senator Manchin.--that question is asked quite a bit----
    Admiral Rogers. Not like that.
    Senator Manchin.--``Just shut her down, like turning off 
your telephone.'' But, it doesn't work that way.
    Thank you for your service.
    Admiral Rogers. Sir.
    Senator Manchin. Any way this committee can help, I'm sure 
we'll be there for you.
    Admiral Rogers. Thanks, Senator.
    Chairman McCain. Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    Admiral Rogers----
    Admiral Rogers. Sir.
    Senator Sessions.--thank you for your service. You're, I 
believe, the right person at a very challenging time, here in 
the middle of some decisions that have to be made by the United 
States sooner rather than later.
    Our Congress passed--well, Carl Levin was Chairman then--we 
passed a requirement that the Defense Department evaluate the 
vulnerability of our systems and to issue a report to how to 
defend those. That time passed, but we've issued another 
legislation last year that said, ``The Secretary of Defense 
shall, in accordance with the plan, complete an evaluation of 
the cyber vulnerabilities of each major weapon system of the 
Department of Defense not later than December 31st, 2019.'' So, 
we've given an additional date there. But, ``Not later than 180 
days after the date of this enactment''--which I believe would 
be about May this year, ``the Department--the Secretary of 
Defense shall submit to the congressional defense committees 
the plan of the Secretary for the evaluation of major weapon 
systems, including an identification of each system to be 
evaluated, an estimate of the funding required, and priority 
among the evaluations.'' Are you familiar with that? Are we 
in--on track to--is the Defense Department on track to complete 
that initial report?
    Admiral Rogers. I am familiar with it. I'm sorry, I am not 
in the weapon acquisition business, so I'm not the best 
informed as to the current status. I know the effort is 
ongoing, because we, U.S. Cyber Command, are part of that 
broader effort, partnering with AT&L. I--if I could just take 
that one for the record, sir. I apologize----
    Senator Sessions. Well, if you would, because this has been 
going on some time. So, on a bipartisan basis, Congress 
recognized, several years ago, that our weapon systems--it 
started out for space, missiles, and antimissile systems being 
evaluated, and then we realized large segments of our defense 
capability are vulnerable, and we've had a broader report. I 
believe it is important for the Secretary to complete this on 
time, if not sooner. I would hope that you would look at that.
    Admiral Rogers. Sir.
    [The information referred to follows:]

    The Department of Defense, to include Service Components, 
USCYBERCOM and other organizations are working in conjunction to 
provide a complete response to the fiscal year 2016 NDAA (section 
1647), cyber vulnerabilities of each major weapons system report. Any 
particular details in reference to the report would need to be directed 
to the DOD CIO office.

    Senator Sessions. In light of Chairman McCain's questions 
and Senator Inhofe's questions, I would refer to this GAO 
report that just came out. The first line of this article is, 
quote, ``The Pentagon does not have a clear chain of command 
for responding to massive cyberattack on domestic targets in 
the United States, according to the Federal Government's 
principal watchdog, GAO.'' Does that concern you?
    Admiral Rogers. First of all, I haven't read the report, 
sir, so I'm not informed as to its specifics. I mean, I would 
argue, hey, I'm always concerned about a clear chain of command 
and a clear articulation of responsibilities.
    Senator Sessions. Well, it lists a number of things that do 
appear to be unclear in how we respond. The Chairman asked you, 
When do we--aren't we going to need to develop a policy for how 
to respond to attacks, and what we might do in response, and 
how to ratchet up responses relevant----
    Admiral Rogers. Right.
    Senator Sessions.--to the threats that we face? So, I hope 
that you would look at that.
    With regard to the worldwide situation, there's commercial 
and economic and private companies that are a big part of the 
entire network of cyber worldwide. Many of those impact our 
allies, our friends. Many of those could--many companies could 
be based in countries that are not friendly to us and would 
like to penetrate our systems. Are you concerned that all of 
our allies--Asia, Europe--need to be aware of this danger? Are 
we working to make sure that segments of those systems aren't 
purchased or impacted by entities that could be hostile to our 
joint interests?
    Admiral Rogers. So, I share your concern about supply-chain 
vulnerability, the phrase we use to----
    Senator Sessions. That's a good----
    Admiral Rogers.--describe the----
    Senator Sessions.--word.
    Admiral Rogers.--to describe that----
    Senator Sessions. Supply-chain vulnerability, okay.
    Admiral Rogers.--is--and it is growing in probability, if 
you will, given the nature of the economic world we're living 
in now. We have a process within the U.S. Government to address 
these issues from major purchases, companies, national security 
priorities. We have a specific process in place for some 
components of DOD infrastructure, like the nuclear world, for 
example. But, if you look at its proliferation of the issue 
generally across both our allies and ourselves, this is an 
issue that's only going to get tougher, not easier.
    Senator Sessions. Could be going on for decades, it seems 
to me. Do we need to meet with our allies to develop a unified 
policy to protect our joint systems?
    Admiral Rogers. It is a discussion we have with our allies, 
and it's much--as you said, this goes across the commercial 
sector, DOD, government, writ large. It's out there for all of 
us.
    Senator Sessions. Well, I thank you for your leadership. 
There will be a lot of challenges like that in the months----
    Admiral Rogers. Sir.
    Senator Sessions.--to come. You're at the focal point of a 
critical issue, and I hope you'll not hesitate to lead and tell 
us----
    Admiral Rogers. Sir.
    Senator Sessions.--what we need to do to help you.
    Admiral Rogers. Roger that.
    Chairman McCain. Senator King.
    Senator King. Thank you, Mr. Chairman.
    Admiral Rogers, I need some clarification of what your 
responsibilities are in Cyber Command. Are you responsible for 
protecting this country from cyberattacks on private networks 
and corporations, or is it simply government networks?
    Admiral Rogers. So, DOD has a responsibility to defend 
critical infrastructure against events of significant cyber 
consequence.
    Senator King. So, critical infrastructure, that--for 
example, in Maine, in May, we had three urgent-care centers 
that were hacked. We had Maine General Health, which is one of 
our major healthcare--they were hacked. Is that part of your--
what's the definition of ``critical infrastructure''?
    Admiral Rogers. No, there are 16 segments that the Federal 
Government has identified as having significant implications 
for the Nation's security. But, the second component, I would 
argue, of the definition I gave you of the mission is not just 
the sector that was attacked, so to speak, but also the 
magnitude of the event. In DOD, we use the phrase ``significant 
cyber consequence.'' The concern being that the Department of 
Defense is not resourced, nor is it currently tasked with, 
defending every single computer structure within the United 
States. We try to identify, Where can our finite resources be 
best applied? They're focused on those 16 segments that have 
been designated as critical to the Nation's infrastructure, and 
then tripped in those circumstances in which the actions 
against one of those 16 segments reaches ``significant cyber 
consequence.''
    Senator King. But, in terms of national defense, we're 
being--it's death by a thousand cuts. I mean, we're being 
hacked every day in----
    Admiral Rogers. Sir.
    Senator King.--insurance companies, businesses. Some of it 
is cyber espionage, as you point out, but some of it is just--
some of it's criminal----
    Admiral Rogers. Criminal.
    Senator King.--but it seems to me we need to be thinking 
about who is responsible. I mean, I understand you don't call 
out the Army if there's a criminal in one town. You have local 
police. But, there's a gap, here. Do you see what I'm saying?
    Admiral Rogers. Yes, sir.
    Senator King. There's a gap in our defenses, because we 
really don't have the infrastructure of the State police or the 
local police that would protect local interests when they're 
being attacked. You have the expertise. There--we have to work 
out something as between Cyber Command and local law 
enforcement, if you will, to protect us from these repeated and 
continuous and escalating attacks.
    Admiral Rogers. Although, if I could, I'd urge us to think 
more broadly than just Cyber Command. I think the challenge is, 
How do we harness the capacity and capability that is resident 
within our government structure, teamed with the capabilities 
that are resident in the private sector? It's much bigger than 
just----
    Senator King. Right.
    Admiral Rogers.--don't get me wrong, we're definitely a 
part of this, but I always urge people--we have got to think 
much more broadly than----
    Senator King. Well, I think----
    Admiral Rogers.--just the DOD.
    Senator King.--that's a good way to articulate it.
    Don't--we keep talking, in these hearings. When are we 
going to have a well-developed and articulated cyberdeterrence 
strategy? I emphasize--in my notes, I underlined the word 
``articulated.'' It's not deterrence if it's not articulated. 
But, we need definition of, What is an act of war? What is a 
proportional response? What is a mutually-assured-destruction 
situation? This--it seems to me that--is this in the works? If 
so, when?
    Admiral Rogers. I mean, sir, I don't have a date for you. 
That's well beyond the mission set of U.S. Cyber Command. I am 
part of those discussions. I'm the first to acknowledge that. I 
try to provide an input and just be one voice as to what I 
think is the direction, broadly, that we need to go. I 
apologize, Senator, I don't have a specific date or timeline 
for you.
    Senator King. But, it just seems to me that, as a matter of 
policy, that we really need--this needs to happen. We've been 
talking about this as long as I've been on this committee, and 
we aren't there yet. Something terrible is going to happen, and 
a lot of people are going to say, ``Well, why didn't we have a 
policy? Why don't we have a deterrent policy?''
    Admiral Rogers. Yes, sir.
    Senator King. So, I would urge you, with counsels of the 
administration, to push for a sense of urgency on this 
question, because if we--if all we do is defense, and there's 
no deterrence, ultimately we're going to lose that battle.
    Admiral Rogers. Yes, sir. It's a losing strategy.
    Senator King. A final point. I know that you talked about 
this earlier. I--I'm finding it harder and harder to justify 
your holding two jobs, given the complexity--I mean, this 
arrangement was created in 2009, which, in technological terms, 
is a century ago. I just can't--I mean, I understand the 
relationship between NSA and Cyber Command, but, particularly 
if we move in the direction, which I think we are, of setting 
up Cyber Command as its own independent combatant command, to 
have the same person trying to run those two agencies, I just 
think is impractical and almost impossible.
    Admiral Rogers. I've been doing it for two years, to date.
    Senator King. You've been doing it very well.
    Admiral Rogers. So, what I--as I said in my initial 
comment, I agree that it's something we need to continue to 
assess. I agree that, in the long run, the, probably, best 
course of action is to ultimately put both organizations in a 
position where they're capable of executing their mission in a 
complementary and aligned way, but in a more separate way. But, 
the reality is, we're just not ready to do that today, I 
believe. Now, don't get me wrong. If I am ordered or directed, 
I get paid to make things happen, and I will execute it to the 
best of my ability.
    Senator King. But, I take it you agree that we should 
move--Cyber Command should be its own combatant command.
    Admiral Rogers. I do, sir.
    Senator King. Yes, sir. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Subject to the will of the entire 
committee, that would be my intention. Senator Reed and I would 
propose that on the defense authorization bill. Right, Jack?
    Senator Reed. I think so, sir. I think that's something 
we're going to consider. But, I think it's valuable to have 
Admiral Rogers' comments today and to consider them as we go 
forward.
    Chairman McCain. Thank you.
    Senator Fischer.
    Senator Fischer. Thank you, Mr. Chairman. I look forward to 
the discussion on raising Cyber to its own combatant command, 
and I look forward to our discussions, as a committee, on the 
importance of cybersecurity for this country.
    Admiral Rogers, in your prepared statement, you mentioned 
the cyberattack on Ukraine's power grid, and you also note that 
you have seen cyberactors for more than one nation exploring 
the networks of our Nation's critical infrastructure. Do you 
believe that our national mission teams possess the necessary 
skills relating to industrial controls and SCADA [Supervisory 
Control and Data Acquisition] systems to be able to stop or to 
recover from an attack on our power grid?
    Admiral Rogers. We have the skills. The challenge for us, 
at the moment, is one of capacity. What I mean by that is, in 
the two years I've been in command, I have yet to run into a 
situation where we didn't have the skillset to apply against 
the problem. But, the challenge at the moment, because we're 
still in the midst of that build, is, sometimes that skillset 
is embodied in an incredibly small number of people. If we had 
multiple events simultaneously, for example, that gets to be--
under the--where we are right now, you snap the chalk today, so 
to speak, capacity really is the greater concern to me than 
capability, if you will, if that makes sense.
    Senator Fischer. Well, I understand your demands on the 
force to exceed that capacity, but, as you add those 
capabilities, how are you going to prioritize the duties and 
the responsibilities that you're going to have? How do you plan 
to prioritize placing that--building competency with our 
industrial control system? Is that going to be something you're 
going to focus on in the near term, or is it going to take a 
backseat to maybe some of the other areas that you're looking 
at for the cyber mission forces?
    Admiral Rogers. So, it's something we're doing right now. I 
would also highlight that the very construct of the force, by 
creating a separate section of the force that is focused purely 
on defending critical infrastructure--it was designed to 
account for that. How do you make sure you prioritize this 
capability and ensure that at least an element of the force 
that we are building is focused like a laser on the defend-the-
critical-infrastructure mission set? It's a carved-out, 
separate entity. It's the national mission force, we call it. 
General Nakasone is the--my component commander doing that.
    Senator Fischer. Do you have a plan to work with services, 
then, on building that----
    Admiral Rogers. Oh, yes, ma'am.
    Senator Fischer. Is it near completion? You heard Senator 
King ask about policy. We've been asking about policy for a 
long time. We don't have a policy, but--so, if we don't have a 
policy, how are we going to develop plans?
    Admiral Rogers. Well, my--remind people is--look, even as 
we're trying to get to the broader issues that you have all 
raised, much of which is outside the immediate mission set of 
Cyber Command, hey, look, our mission is: generate capacity and 
capability to ensure that we're ready to go as those broader 
issues are being addressed. So, we're trying to deal with the 
deterrence piece by generating the capabilities that we think 
would be part of that deterrence discussion, by generating the 
defensive capabilities that we think would be part of that 
deterrent discussion. I don't want to wait for everything to 
fall in place that--we just can't afford to do it that way, as 
perfect as it would be, in some ways. But----
    Senator Fischer. I agree with you, there--we don't have 
time to wait.
    Admiral Rogers. Yes, ma'am.
    Senator Fischer. When we look at the Department, what level 
of communication do you have with different communities within 
the Department--say, the--with regards to acquisition or 
installations--to ensure that the items we purchase or the 
facilities that we're building are able to take those threats 
that we're looking at from cyber into account?
    Admiral Rogers. I would tell you the acquisition piece is 
one of the areas that we still need a lot of work. It's not 
because people aren't working hard. But, I've always been 
struck by the analogy, we would never buy a ship, a tank, an 
aircraft with the--without the operational vision driving 
exactly how we designed it, built it, structured it. For much 
of our networks and infrastructure, that has not historically 
been our model. We just built those. We bought those--we 
focused on efficiency and price. We didn't really focus on 
operational impact, and we really didn't think, at the time, 
that we'd be dealing with a world in which intruders--foreign 
actors, nonstate actors--would be using those systems as access 
points to materially degrade our ability to execute our 
missions as a department. We just didn't anticipate that, 
decades ago. That's the world we're in now. We're trying to 
overcome----
    Senator Fischer. Well, it's----
    Admiral Rogers.--literally----
    Senator Fischer.--it's happened in private industry.
    Admiral Rogers. Right, decades of investment we're trying 
to overcome.
    Senator Fischer. Do you--last question--do you have any 
knowledge if our adversaries have targeted any infrastructure 
on our military bases?
    Admiral Rogers. Yes.
    Senator Fischer. Thank you very much.
    Admiral Rogers. Yes, ma'am.
    Chairman McCain. Senator Blumenthal.
    Senator Blumenthal. Thanks, Mr. Chairman.
    Thank you, Admiral Rogers, for your extraordinary and 
distinguished service in so many roles over so many years.
    I want to focus on the challenges of recruiting young 
people in an age where the best and the brightest who have 
knowledge in this area have so many opportunities, many of them 
highly paid and challenging in their professional issues. Young 
Americans are entering the workforce with computer technology 
that has been part of their entire lives, not so much for us of 
a certain age, but for them, yes. I wonder if you could tell us 
how successful you and the, obviously, incomparably important 
forces under your command have been in recruiting and 
maintaining talent in this time, and what we can do to help.
    Admiral Rogers. I'm very comfortable with where we are on 
the uniformed side. The same things that lead a young man or 
woman in our Nation to decide they want to pick up a rifle and 
take on that challenge leads men and women to decide they want 
to put on a uniform and pick up a keyboard. That has not been 
the biggest challenge. The area that I've told the team we 
probably need to take a greater look at is on the civilian side 
of this, because we have got--our vision is, you've got to 
create a workforce that is both Active and Reserve military as 
well as civilian component to it so we get that breadth of 
expertise that you've referenced.
    While we're meeting our targets right now on the civilian 
side, as I've said, there's a couple skillsets already where I 
think I'm going to have to come back to the committee to say, 
``Look, I could--probably need some help here with--can I come 
up with some different processes or options that would make 
things more attractive to, particularly, some very high-end, 
very small number of skillsets that I don't have huge numbers 
of, but they're incredibly valuable for us?'' That's one area 
where I'm thinking I'm probably going to have to come back. I 
have to work this with the Department first, but my experience 
is telling me, ``You know, Mike, we need to step back and take 
a look at this piece of it.''
    Senator Blumenthal. Is there sufficient--are there 
sufficient resources devoted to research, the personnel 
available to supervise that research, and, in effect, planning 
for the future?
    Admiral Rogers. Right. I mean, there's--I'm not going to 
pretend for 1 minute that you have all the people and all the 
money and--that you would like. It's--I would argue--
characterize it as reasonable right now. It's not a major 
issue, in the sense that, as a commander, I've said to myself, 
``Wow, we've got a significant deficiency here that will impact 
our ability to execute the missions.'' I haven't seen that.
    Senator Blumenthal. I know that you indicated earlier that 
you haven't read the GAO report.
    Admiral Rogers. Right. Right.
    Senator Blumenthal. But, I wonder, focusing on the local 
capability, and particularly on the private sector, the 
infrastructure segment that you mentioned earlier in some of 
your conversations with my colleagues--transportation, 
financial, electric--how well are they doing in protecting 
themselves?
    Admiral Rogers. I would--if you look across the 16 segments 
in the private sector that have been designated as critical 
infrastructure, in terms of impact on the Nation's security, I 
would argue some are a little--some are ahead of others. I'd 
probably put--financial, for example, not surprising, in the 
sense that--has access to more resources than some, has come to 
the conclusion that cyber potentially calls into question their 
very business model, since it's built on the idea of trust and 
the ability to move funds globally simultaneously through these 
transactions, if you will, that we all believe in and trust. On 
the other hand, there are some industries--I--and, in their 
defense, I look at them, and they're quick to remind me, ``Hey, 
remember, our business model is different. We're a regulated 
industry.'' For example, ``In order to generate resources to 
apply to increase our cyberdefense, our cybercapabilities, the 
only way for us to do that is raise rates. For example, most 
consumers, not really enthusiastic about that. Most regulatory 
bodies not necessarily overly enthusiastic about that at the 
moment.''
    Senator Blumenthal. Those regulated industries would be 
electricity----
    Admiral Rogers. Right. Power is an example.
    Senator Blumenthal. Yeah.
    Admiral Rogers. There's a couple of others that fall into 
that.
    Senator Blumenthal. Are there unregulated industries that 
are also in need of improvement that you would put at the 
bottom of that list of readiness?
    Admiral Rogers. There are some. I've--think I've publicly 
previously talked about--healthcare, for example, is one of the 
16 segments I look at, and I--that's an area probably that 
needs a broader top-to-bottom look, although I'm the first to 
acknowledge it's really outside my immediate mission area, and 
I don't bore into it every day. But, as I look at where I'm--
potentially we're going to be tasked to provide our 
capabilities to partner with, it's an area that I pay attention 
to.
    Senator Blumenthal. Thank you very much.
    Admiral Rogers. Sir.
    Senator Blumenthal. Thank you, Mr. Chairman.
    Chairman McCain. Senator Rounds.
    Senator Rounds. Thank you, Mr. Chairman.
    Admiral Rogers, first of all, thank you for your service.
    I find it interesting that, as you work your way through 
this, you're in a brand new area and you're trying to determine 
how to respond and how to protect. It seems that when you lay 
this out--and you say, like, you have 16 different segments 
within the realm that you're responding to. Fair to say that 
they break out into either information or data systems and 
operating systems, in terms of the way that we look at what the 
data is or the different systems that we're looking at as being 
vulnerable at----
    Admiral Rogers. Right.
    Senator Rounds.--at a data system being the collection of 
information on individuals and operating systems being those 
systems perhaps necessary for the infrastructure within our 
country? A fair way to break out?
    Admiral Rogers. I guess that's fair. To be honest, Senator, 
I've never really thought of it that way. Not that that's a bad 
way.
    Senator Rounds. The----
    Admiral Rogers. I just haven't----
    Senator Rounds. Well, the reason that I ask is, it would 
seem that, while information systems would contain material, 
information that would be of a private nature, perhaps, trade 
secrets that may very well be information on an individual, 
such as the information that we lost at the Federal level when 
our Federal systems were hacked. At the same time, we have an 
operating system out there for the utilities. We have operating 
systems out there for dams. We have operating systems for 
nuclear power plants. Clearly, in those areas, if someone with 
intent could get into an operating system, they could do 
significant amount of damage, perhaps bodily injury, as well.
    Admiral Rogers. Yes.
    Senator Rounds. Fair to----
    Admiral Rogers. Yes.
    Senator Rounds.--look at it?
    Based upon that, when you look at your role and the role of 
Cyber Command, do you see this as protecting--do you see them 
different, in terms of how you protect, or do you see your role 
different with operating systems versus data and information-
collection systems?
    Admiral Rogers. So, our protection scheme, if you will, is 
based on two different pieces of strategy. The first component 
of our strategy is--our intent is to go into foreign space to 
stop the attack before it ever reaches those systems. The 
second component of our strategy is to apply defensive 
capability working directly with each of the individual 
elements, if you will, to say, ``If that fails, we'd also like 
to work with you on how you might shore up your systems and 
your vulnerability.''
    The other point I want to make sure I articulate--and I 
probably should have done a better job this morning--is, as a 
reminder, U.S. Cyber Command and DOD, writ large, provide our 
cyber capabilities in the defense of critical infrastructure in 
the private sector in partnership and in support of DHS. DHS 
has overall responsibility in the Federal Government for the 
provision of government support to the private sector when it 
comes to cyber. I'd--I don't want people thinking, ``Well, it's 
just Cyber Command and just the private sector.'' There's a 
broader set of players out there that we integrate with and we 
support as we execute the mission.
    Senator Rounds. An attack in either case would be done in 
milliseconds, fair to say? So, unless we have the system in 
place and we know whether or not we are there to respond or to 
correct, to protect, in advance, we don't know whether or not 
we're going to be able to do it in time. At that point, then we 
simply respond afterwards. Would you say that, today, we have 
systems in place to appropriately protect--for lack of a better 
term, I'm going to call, the operating systems and the 
information systems that we have--do you feel that the 
protocols are there? I'm going back to what Senator King was--
--
    Admiral Rogers. Right.
    Senator Rounds.--alluding to earlier. I--I'm not sure that 
we have the definitions prepared yet to allow you to respond 
immediately, within milliseconds, unless we talk about it and 
we lay it out. Is it there today?
    Admiral Rogers. So, across the board, with every single 
component in the private sector, no, it's not.
    The other point I would make is, cyber is no different than 
other domains, in the sense that the importance of intelligence 
to provide us insight as to what is likely to be coming at us 
gives us the knowledge and insight, the warning, if you will, 
to anticipate and act in advance. It's every bit as true for 
the CENTCOM [Central Command] commander as it is for me in 
Cyber Command. Warning continues to be critical for both of us.
    Senator Rounds. Today, if our forces were aware of an 
attack on them, they have the ability to respond. But, if it 
was property or entities that are within the United States, do 
you have the ability to respond today if it is not a military 
but a civilian or a civil target?
    Admiral Rogers. So, is there a process? Yes. Is it 
something that I can do automatically, instantaneously? No.
    Senator Rounds. Then, it--in that case, then it would have 
to happen first, then, because, for all practical purposes, the 
attack will be instantaneous.
    Admiral Rogers. Or we have to get the warning in advance, 
that importance of intelligence. It----
    Senator Rounds. But, even if you get the warning in 
advance, in terms of--it would have to be enough time for you 
to get out and to have a political discussion, for all 
practical purposes, about whether or not you can respond----
    Admiral Rogers. Again, it would depend by the scenario, 
because there are some elements where we've got mechanisms in 
place for the application of capability, and it's just a 
process, if you will, as opposed to a broad----
    Senator Rounds. But, not one that----
    Admiral Rogers.--political decision.
    Senator Rounds.--could be done in milliseconds.
    Admiral Rogers. But--right, no. I'm not going to pretend 
for 1 minute that it's something you're going to do in 
milliseconds.
    Senator Rounds. Thank you. Thank you, sir.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator McCaskill.
    Senator McCaskill. Thank you, Mr. Chairman.
    Thank you, Admiral, for being here.
    Admiral Rogers. Senator.
    Senator McCaskill. Let me start with your acquisition 
personnel. Some of the saddest stories of waste have been in 
the acquisition of IT within the military--frankly, within 
government. A lot of that has had to do with, you know, knowing 
what you need to buy, when you need to buy it, and when legacy 
systems need to be scrapped, and how nimble can you be with 
off-the-shelf--I'm not sure the military has been a great 
example of that flexibility and the ability to move with the 
technology. So, I think these acquisition personnel are pretty 
important. Do you have the ten in place that are supposed--that 
we authorized in order for you to make the wisest acquisition 
decisions possible, in light of a history littered with serious 
mistakes and lots of--billions and billions of dollars wasted?
    Admiral Rogers. Well, first, just a reminder. Remember, 
Cyber Command, I operate and defend; I don't buy. You have been 
kind enough--the committee and the Congress has been kind 
enough to provide, if you will, an initial capability to do us. 
We're in the process of hiring those ten individuals that you 
have authorized. I am very mindful of--as I remind the team, 
``It is about generating outcomes, guys. That's why we're 
granted this authority, and that's what we need to be mindful 
of. I'm not interested in spending money for the sake of 
spending money. It's about generating capabilities that 
directly impact our mission in a material way.''
    Senator McCaskill. Well, I would be interested in how you 
are acquiring, with more detail, if you----
    Admiral Rogers. Yes, ma'am.
    Senator McCaskill.--would provide it--how you are finding 
the right acquisition personnel, and how competitive are we in 
finding the right acquisition personnel? Because, in many ways, 
I think that's the key to the kingdom. If we're going to have 
the capabilities in this space, it--a lot of it is, you know, 
people being trained, but a lot of it is also----
    Admiral Rogers. Oh, yes, ma'am.
    Senator McCaskill.--the underlying----
    Admiral Rogers. You have to buy the right----
    Senator McCaskill.--the capabilities.
    Admiral Rogers.--capabilities.
    Senator McCaskill. I just--I'm really worried about getting 
the right people----
    Admiral Rogers. Yes, ma'am.
    Senator McCaskill.--making those decisions. So, I would 
like to stay updated in that progress.
    Senator McCaskill. What kind of coordination is--your 
command have at this point with our NATO [North Atlantic Treaty 
Organization] allies, with Israel, with our Arab allies? I'm 
particularly interested in any coordination and cooperation you 
have with NGA [Naitonal Geospatial-Intelligence Agency].
    Admiral Rogers. So, I'm not going to publicly, in----
    Senator McCaskill. Obviously.
    Admiral Rogers.--unclassified forum, go into the specifics. 
I would only tell you, we partner with--we have a handful of 
nations right now we have a very direct, very real relationship 
with, with respect to capabilities, real-world operations. I 
won't go into the specifics of the who.
    One of the challenges I find is, cyber, like any other 
mission area, we have got to prioritize. So, when I look at 
foreign partnerships, I ask, Where is the greatest return for 
us, as a Department, as the DOD, and where is the greatest 
return for us, U.S. Cyber Command, in terms of the ability to 
execute our mission? We've got to--I spend almost as much time 
with a discussion with the team about what we're not going to 
do as what I discuss what we are going to do, because I always 
remind them, particularly since we're still in the midst of 
building this capability out, ``Prioritization, prioritization, 
prioritization, guys.'' We can't do everything. We've 
identified an initial set of foreign partners, if you will. 
Those partnerships today are generating capability that we're 
actually using today.
    Senator McCaskill. Great. Maybe in a classified setting, I 
could get more information.
    Admiral Rogers. Yes, ma'am.
    Senator McCaskill. What is the ratio of civilian versus 
military within the Command at this point?
    Admiral Rogers. It's about--we're trying to build to about 
80 percent military, 20 percent civilian. If you looked at it 
today as a snapshot, it's probably, off the top of my head, 70/
30--70 percent military, 30 percent civilian.
    Senator McCaskill. What about contractors? What is the 
ratio on contractors? What is your goal on contractors? Because 
this could be an area--and, of course----
    Admiral Rogers. Right.
    Senator McCaskill.--you know, underlying that is a concern 
about the actual screening of contractors. What is your ratio 
now of contractors to DOD, and what do you want it to be, going 
forward?
    Admiral Rogers. We probably, right now--apologize, I'm 
trying to do the math in my head--it's probably about 25 
percent--we have an--over and above the government, civilian, 
and military--we have an additional 25--off the top of my head, 
we have about an additional 25 percent in the contractor base.
    Senator McCaskill. It--and is that where you would like to 
be, going forward? Do you see more reliance on contractors, 
going forward?
    Admiral Rogers. I'm a little bit leery of over-becoming 
reliant on contractors. Why? Because I try to remind people, 
cyber is a domain in which we conduct a wide range of military 
operations. In accordance with the Law of Armed Conflict, those 
operations need to be conducted by military personnel. So, I'm 
not trying to minimize the role of contractors. I just try to 
remind the team, ``It's not one-size-fits-all, so we've got to 
step back and ask ourselves what's the right allocation.'' I'm 
pretty comfortable right now. I wouldn't argue that it's among 
my highest priorities, in terms of increasing the ratio of 
contractors. I'd argue, right now, probably priority number 
one, manpower-wise, as I've said, is the civilian piece. I'm 
very comfortable with--we're tracking and we're going the right 
way in the uniformed piece. The civilian area is where I know 
I'll be paying more attention to in the coming year.
    Senator McCaskill. Thank you, Admiral.
    Admiral Rogers. Yes, ma'am.
    Chairman McCain. Senator Graham.
    Senator Graham. Thank you for your fine work, Admiral. Can 
you hear me?
    Admiral Rogers. Yes, sir.
    Senator Graham. Okay. What are the threats, nation-state-
wise, in terms of who we're most threatened by?
    Admiral Rogers. I would argue Russia and, again, the--
probably, in terms--if you look at capability, the other four 
that we have publicly acknowledged we pay great attention to: 
China, Iran, North Korea--and then the nonstate actors, the 
other category where I look, that could be a game-changer, were 
the--some of the dynamics to change.
    Senator Graham. On the terrorism side, could you give us 
the top couple of terrorist organizations you're worried about?
    Admiral Rogers. It's not that I don't know it. In an 
unclassified forum, I----
    Senator Graham. Okay, we won't go down that road.
    Admiral Rogers. If I could. Thank you, sir.
    Senator Graham. On the criminal side, what areas of 
criminality do you worry the most about? What countries?
    Admiral Rogers. I would argue, right now, Russia probably 
has the most active criminal element, with the most--with the 
greatest capability.
    Senator Graham. Do you think the Russian government's doing 
anything constructive, in terms of regulating their criminal 
activity in cyber?
    Admiral Rogers. I would only say it doesn't appear to be 
getting much better.
    Senator Graham. What about Iran? Has Iran gotten better in 
the last year, in terms of their cyber activity?
    Admiral Rogers. Yes.
    Senator Graham. Are they less threatening?
    Admiral Rogers. I apologize, I'm not sure----
    Senator Graham. Are they less threatening or just more 
capable?
    Admiral Rogers. I'd argue they're increasing their 
investment, they're increasing their level of capability. We 
have not seen the same level of activity from them that we have 
seen historically in the past. I have seen some of that same 
activity directed at other nations and other groups around the 
world.
    Senator Graham. They're improving their capability?
    Admiral Rogers. Yes, sir.
    Senator Graham. Do we know if any of the money they're 
getting from the Iranian nuclear deal is going into their cyber 
upgrades?
    Admiral Rogers. I don't know for a fact.
    Senator Graham. Okay. Is it fair for the country to 
establish, as a policy, cyber dominance over enemies, that we 
want to be the--have a dominance in this area of warfare?
    Admiral Rogers. I mean, I want to think--I would argue we 
want to have the same level of capability in supremacy in cyber 
as we have articulated that we want in every other----
    Senator Graham. Okay. Well, that's----
    Admiral Rogers.--domain----
    Senator Graham. I think that's a good goal----
    Admiral Rogers.--for our Nation.
    Senator Graham.--so let's march down that path. I associate 
myself with Senator King about what we need to do as a Nation.
    Admiral Rogers. Sir.
    Senator Graham. The Navy. The difference between the 
Chinese navy, the Russian navy, and the American Navy is pretty 
wide?
    Admiral Rogers. Yes, sir.
    Senator Graham. In the cyber arena, how close is it?
    Admiral Rogers. I have publicly stated before, the 
Russians, I would consider in cyber, a peer competitor. China, 
not in the same place, but rapidly attempting to get there.
    Senator Graham. So, the gap between the dominance we have 
on the seas in cyber is not nearly----
    Admiral Rogers. Not nearly the same.
    Senator Graham. Okay. When it comes to Iran, when you 
compare their air force to our Air Force, what's the gap?
    Admiral Rogers. Oh, significant.
    Senator Graham. Okay. In the cyber arena, less significant?
    Admiral Rogers. Less significant, but it's still an area of 
significant advantage for us, right now.
    Senator Graham. Are the Iranians trying to close it?
    Admiral Rogers. Oh, they are.
    Senator Graham. Okay. So, from a NATO point of view, you're 
familiar with Article 5, an attack against----
    Admiral Rogers. Sir.
    Senator Graham.--one is an attack against all. Is there any 
such concept in the cyber arena?
    Admiral Rogers. You've heard NATO publicly talk about the 
fact that they believe Article 5 applies to all domains of 
warfare.
    Senator Graham. Do they have any rules of engagement that 
would identify what a cyberattack is?
    Admiral Rogers. They're probably in the same arena we are: 
still trying to work our way through that.
    Senator Graham. When do you think we'll arrive at a 
conclusion to Senator King's question?
    Admiral Rogers. Boy, I don't know. The----
    Senator Graham. What's the biggest impediment to us getting 
there? Is it the Congress? Is it the----
    Admiral Rogers. No.
    Senator Graham.--DOD?
    Admiral Rogers. It's as much, in some ways, as--and again, 
this is just Mike Rogers' opinion--it's as much, in some ways, 
from my perspective, as, ``Well, this is just an intellectual 
exercise. It--this is something we can afford to''----
    Senator Graham. The Department----
    Admiral Rogers.--``to push down''----
    Senator Graham.--of Homeland Security is responsible, 
basically, for protecting us in the financial/service/power 
arena, our civilian targets.
    Admiral Rogers. Sir.
    Senator Graham. You're responsible for protecting the 
military infrastructure.
    Admiral Rogers. We provide support to that commercial----
    Senator Graham. That's right.
    Admiral Rogers.--infrastructure, if requested.
    Senator Graham. But, you're also responsible for going on 
offense. The----
    Admiral Rogers. Yes, sir.
    Senator Graham.--DHS [Department of Homeland Security] is 
not going to attack a foreign nation. You would.
    Admiral Rogers. Yes, sir.
    Senator Graham. So, how could we, as a Nation, given the 
threats that we face in the cyber arena, not really have a good 
answer as to, What's the impediments to creating rules of 
engagement?
    Admiral Rogers. I apologize, sir. You really need to speak 
to the policy side.
    Senator Graham. Yeah, but you're an operator.
    Admiral Rogers. Yes, sir.
    Senator Graham. So, who do you talk to about, ``Hey, guys, 
let's see if we can get there''?
    Admiral Rogers. So, I'd--the Secretary of Defense or the 
Office of the Secretary of Defense.
    Senator Graham. How do they respond?
    Admiral Rogers. I think, intellectually, we all realize 
that that's what we need to do. It's generating that consensus, 
I think----
    Senator Graham. Is there anything Congress is not doing 
that you would like us to do to help resolve this issue?
    Admiral Rogers. No, I can't argue that it's something that 
Congress has failed to do. I don't see that.
    Senator Graham. Thank you.
    Admiral Rogers. Sir.
    Chairman McCain. Senator Hirono.
    Senator Hirono. Thank you, Mr. Chairman.
    Admiral, I know that you talked a little about cyber teams 
in response to our--to earlier questions. I think the idea to 
leverage our outstanding National Guard capabilities and 
capacity in establishing many of these cyber teams is a good 
idea. As you and your colleagues look to establish additional 
cyber units in the future--and while I'm sure you are looking 
at this region, meaning the Pacific region, I ask that you look 
closely at the needs of the Asia-Pacific region. In Hawaii, for 
example, as you well know, we have PACOM [Pacific Command], NSA 
Hawaii, various component commands, and other agency regional 
officers that are--offices that are likely targets for 
cybercriminals and--you know, as we focus on the rebalance to 
the Asia-Pacific, obvious. I wanted to get to a question.
    Last September, the U.S. and China did agree that neither 
government would support or conduct cyber-enabled theft of 
intellectual property. Now that we are six months down the 
road, would you say that China is living up to this agreement?
    Admiral Rogers. Well----
    Senator Hirono. I don't know how specific the agreement 
was, frankly, but, you know, it seemed like a good idea for the 
two countries to enter into that kind of a dialogue and 
discussion. But, really, what is happening with regard to that 
agreement?
    Admiral Rogers. So, if I could, what the agreement said 
would--was, neither nation would engage in that activity for 
the purpose of gaining economic advantage for their private 
sector. We continue to see Chinese activity in this regard. The 
million-dollar question is, Is that activity for governmental 
purposes or is it being then passed from the government to the 
private sector? It--from my mind, the jury is still out in that 
regard. Its activity level is somewhat lower than prior to 
September of 2015.
    Senator Hirono. But, is there any way that we can determine 
whether China is engaging in such activity? Really, are there 
any parameters? Is there anything that we measure to determine 
whether these--this agreement is being adhered to?
    Admiral Rogers. Yes, ma'am. In an unclassified forum, I'm 
not going to get into the specifics of how we go about doing 
that, but yes, ma'am.
    Senator Hirono. So, one of the areas of--thank you. Maybe 
in another context, we can get to some of those questions. With 
regard to our ability to support a--our cyber capabilities, 
training and retention, really important. In that regard, STEM 
[Science, Technology, Engineering and Mathematics] education is 
critical. Can you just talk a little bit more about what you 
are doing to--any collaborations, partnerships you are doing 
with universities or community colleges to train a workforce 
for us?
    Admiral Rogers. So, let's just take Hawaii as an example. 
Today, as a matter of fact, in Kunia, the adjutant general for 
the Guard in Hawaii is meeting in the Kunia complex with U.S. 
Cyber Command, NSA, and elements from across the island on Oahu 
to try to look at--to include the academic sector--How do we 
generate a more capable workforce both to meet Guard 
requirements as well as to meet Cyber Command, NSA, and other 
elements? How can we partner more effectively in aligning that 
capability to deal with issues of common interest to us; in 
this case, on Oahu, specifically, and the State of Hawaii, in--
more broadly? You see that same--Hawaii is an area where we 
probably are--have gone further than others, but you can see 
that same type of activity for U.S. Cyber Command right now 
with what we are doing with a handful of universities across 
the United States, from the West Coast--Carnegie Mellon--there 
are some West Coast universities, Tulsa, you heard, one--
there's, I want to say, something on the order of 60 to 100 
right now, between NSA and Cyber Command. This is one area 
where NSA and Cyber Command tend to partner together a lot.
    Senator Hirono. Obviously, that needs to continue, because 
our cyber capability is something that is going to be an 
ongoing----
    Admiral Rogers. Right.
    Senator Hirono.--effort.
    You mentioned the importance of the private sector in a 
whole-of-government plus, you know, outside-of-government 
approach to cybersecurity needs. So, how do you envision the 
private sector's role?
    Admiral Rogers. So, what we've tried to do at Cyber Command 
is--what I think the private sector brings is technical 
innovation, intellectual innovation, if you will--just broad 
knowledge of capabilities--and alternative ways to look at 
problems, if you will. Those are, at a macro level, the three 
things--when I look at the private sector, I say, ``Wow, you 
really could add value for us in that regard.''
    What we've done to date is, we've created what we call the 
Point of Partnership in Silicon Valley, where I've placed a 
very small element on the ground. The part that's interesting 
to me is, I did not want U.S. Cyber Command people out there. 
Instead what I wanted was one individual who's a U.S. Cyber 
Command individual, and then I wanted to harness the power of 
Reserve individuals who are currently in the ecosystem in the 
Valley, working in their day-to-day jobs. We've just started 
that since last summer. That's starting to work out very well 
for us. It gives us a chance to get a sense for what technical 
innovation is going on out there. We approach them with 
different problem sets and say, ``Hey, here's an issue we're 
still trying to work our way through. How are you handling 
this? Or would you give us some suggestions on how we might 
deal with it?'' I'm trying to see if we can replicate that 
model that we currently have in place in Silicon Valley in 
other areas. I'm looking at the East Coast next, kind of as an 
example of that, probably somewhere in the Greater Boston Metro 
area next.
    Senator Hirono. So, it sounds like more of an informal kind 
of arrangement right now, and maybe, going forward, you would 
want to maybe institutionalize----
    Admiral Rogers. Right.
    Senator Hirono.--this kind of collaboration with the 
private sector.
    Admiral Rogers. Yes, ma'am.
    Senator Hirono. Thank you, Mr. Chairman.
    Chairman McCain. Senator Tillis.
    Senator Tillis. Thank you, Mr. Chairman.
    Admiral Rogers, I don't envy you with the job that you 
have, the complexity and then the additional challenges that we 
have, as the Chairman has said, about sequestration, things 
that are on the horizon that you have to worry about.
    The--you know, and in listening to the discussion, I think 
one thing that's very important is, we're never going to have 
the perfect weapon. This is not--you know, absent the United 
States coming up with a game-changing offensive or defensive 
capability of the scale of the Manhattan Project, you can't 
possibly get inside the decision cycles of the state actors, 
organized crime, terrorists, and other people. If--and when you 
think about decision cycles in this realm, you think about--
every single day, you get new malware, viruses, other 
technology added to your PC to deal with new threats that 
didn't exist a day or two or a week before. So, I'm trying to 
get my head around how you really even segregate your scope of 
responsibility, which is largely, you know, the vulnerabilities 
of, say, the DOD or with--however you would----
    Admiral Rogers. Right.
    Senator Tillis.--like to define your scope, ability, and 
how you differentiate that from the broader private-sector 
threat. I mean, you've got 28 million small businesses. You 
have close to 19,000 businesses with 500 employers or more. You 
have distributed public-sector infrastructure, whether it's 
electric, water, gas. If--and the concern that I have is, what 
we have right now are the equivalent of guerrilla sniper fire 
or mortar attacks. We haven't seen--and I think that we will 
see someday--a nation-state or organized crime or terrorist 
organization literally be in a position to execute a multi-
pillar attack that, if they're smart--and they are--what they 
will do is something to disrupt you, and then disrupt your 
ability to react to it by attacking the private sector, which 
is also integral to your supply chain.
    So, you know, how are we looking at this on a global basis 
and understanding that, as they continue to increase their 
abilities, they're going to figure out a way, on a multi-pillar 
basis, to go after communications infrastructure, a supply-
chain infrastructure, healthcare, electric, whatever public 
infrastructure may be vulnerable--how do we actually get these 
things to coalesce, versus finding out we create--we get a good 
job--we do a good job in DOD, we create the Maginot Line, and 
they just go around it and disrupt you from a different 
direction?
    Admiral Rogers. So, you have very succinctly articulated 
much of the problem set and the challenges of how you operate 
in this environment, because the--these arbitrary boundaries 
that we traditionally consider, ``Well, this is a DOD function 
and this is a private function, this is an inherently 
government''--cyber just blurs these lines. So, even as I focus 
on the DOD mission, it's one reason why I've argued we have got 
to think so much more broadly about this problem set.
    Now, within the DOD arena, it's one of the reasons why, for 
example, if you look at our exercise in training regime that 
we've put in place, we try to do that, not just within the DOD, 
but across a breadth of the private sector. CYBERGUARD is our 
annual exercise. It'll be in June of this year. We pick a 
different segment, if you will, every year. We're going to do 
the power segment in this year's exercise. I think it's 
something like 20 different corporations will be exercising 
with us--the Guard, State, local----
    Senator Tillis. Well, that's--you know, that's what I'm 
getting to. It's almost as if your military exercises have to 
involve all of these players----
    Admiral Rogers. Sure.
    Senator Tillis.--so that they have a better understanding 
of their vulnerabilities and the nature of the attack that 
would occur in cyber.
    The other question that I had is, To what extent are we 
looking at State and local governments as a way to at least--in 
North Carolina, I served in the legislature, and we were 
talking about what we could do to work on cyberthreats. I saw 
it also as an economic advantage. If States became particularly 
good at grid-hardening or at securing the physical presences 
and cyberthreats within their State borders, they actually 
create an economic advantage for people to set up business in--
--
    Admiral Rogers. Right.
    Senator Tillis.--those States. So, to what extent are we 
trying to lead and help make this problem a little less 
difficult at the Federal level by making sure that the States 
and local governments are stepping up their game as a part of 
the effort?
    Admiral Rogers. So, it's one of the reasons why there's a 
big Guard component to this effort, to ensure we can also try 
to address the State and local aspects of this.
    Senator Tillis. Thank--I have a million different 
questions. I think----
    Admiral Rogers. Sure.
    Senator Tillis.--what I'll probably do is see if I can 
schedule some time----
    Admiral Rogers. Oh, yes, sir.
    Senator Tillis.--in my office to go over a number of other 
ones. We may have to do some in a secured setting.
    Thank you very much.
    Chairman McCain. Senator Reed.
    Senator Reed. Thank you, Mr. Chairman.
    One of the issues is, in fact, sort of the services being 
able, within their resources, to fully develop the units that 
they will detach to, essentially, or provide for your 
operational control, since you won't have your organic units. 
Can you give an assessment of sort of where we are--where they 
are, in terms of doing that, across the services?
    Admiral Rogers. So, that really goes to the heart of 
readiness, if you will. One of the--so, in September, when I 
was with you, one of the things I said then, during that 
session, was that I thought one of the reasons why 16 was going 
to be such a big game-changer was, I thought we'd get more 
involved in the total breadth of capability sets, which we are. 
Then, the other reason was because we needed to shift from a 
focus on IOC and FOC, the generation of capability, to actual 
readiness, ``Okay, guys, are we actually ready to employ 
this?'' So, we have spent the last six months working our way 
through, How do you define readiness in the cyber arena, down 
to the individual team level so that I, as a commander, have an 
awareness of what the true capabilities of the force is, and, 
using the same mechanisms that we use to assess readiness 
across the DOD, I can provide policymakers and decisionmakers a 
true picture of, ``This is just--here is what this force is 
really capable of doing.''
    We've just started doing that. I've gone through two 
strawmen so far with the team. We're going to do a third and 
final one this summer. Then, by the end of the summer, in 
September, I will start providing to the DOD, on a quarterly 
basis, by team, ``Here's where we are in terms of true 
readiness.''
    Chairman McCain. Is the nightmare scenario that one of 
these nations acquires the capability to shut down satellites?
    Admiral Rogers. I mean, that is a--there's two scenarios 
that really concern me. One is the physical shutdown and 
interdiction of capability. The other scenario that I----
    Chairman McCain. But, explain the first one.
    Admiral Rogers. If you were to shut down--look at it from--
first, from a narrow DOD perspective--because much of what we 
rely on for our enablers as a Department are commercial 
infrastructure--power, our ability to move force, for example. 
If you were able to try to take that away or materially impact 
the ability to manage an air traffic control system, to manage 
the overhead structure and the flow of communications or data, 
for example, that would materially impact DOD's ability to 
execute its mission, let alone the broader economic impact for 
us as a Nation.
    The other concern I have is, to date, most penetrations of 
systems that we've seen by actors have either been to steal 
data or to do reconnaissance. What happens if the purpose of 
the intrusion becomes to manipulate the data? You can no longer 
believe what you are seeing. Think about the implications of 
that, if you couldn't trust the military picture that you are 
looking--that you're using to base decisions on, and let alone 
the broader economic impacts for us as a Nation.
    Chairman McCain. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you----
    Admiral Rogers. Senator.
    Senator Shaheen.--Admiral, for being here and for the job 
that you're doing every day to protect the country.
    I wanted to, first, start with a statement you made 
earlier, I think, to a question from Senator McCain about, Does 
Russia have the capacity to inflict serious harm to our 
infrastructure? You said yes. Do we have capacity to inflict 
serious harm to Russia's infrastructure?
    Admiral Rogers. In an unclassified hearing, I'd rather not 
get into that, if I could, ma'am. I don't----
    Senator Shaheen. But, I--let me put it in the context of--I 
assume there is some mutual deterrence that goes on when we're 
talking about some state actors.
    Admiral Rogers. Again, it's a lot more complicated than 
just a yes or a no.
    Senator Shaheen. Okay. Well, I hope that we will be able to 
ask that question in a----
    Admiral Rogers. Yes, ma'am.
    Senator Shaheen.--classified setting.
    I had the opportunity, over the last 2 weeks, to visit 
Estonia, which is, as you know, one of the most wired 
countries----
    Admiral Rogers. Right.
    Senator Shaheen.--in the world, and also the--probably the 
first victim of a cyberattack by a nation-state, by Russia. I 
had the opportunity to visit the Cyber Center that's been 
accredited by NATO and to hear them talk about how they think 
about cyber issues. Can you talk a little bit about how 
CYBERCOM works with our NATO allies?
    Admiral Rogers. So, I've been in Tallinn, myself. I've been 
to the Center. I was just in Brussels, for example, in 
December, and I--as U.S. Cyber Command, I addressed the North 
Atlantic Council, you know, as one of the member nations. I was 
asked to talk to the leadership of the alliance about 
implications of cyber and how might the--just one voice, I'm 
the first to acknowledge that--how might the alliance work its 
way forward as we're trying to deal with the cyber arena. Cyber 
Command, I tried to partner both with the alliance as a whole 
as well as specific member nations on specific issues within 
the alliance. What I suggested to NATO is, I think the real key 
is, you've got to get the defensive house together, number one, 
and then, secondly----
    Senator Shaheen. Explain a little more what you mean when 
you say that.
    Admiral Rogers. Much like we've seen on the U.S. side, I've 
said, ``Look, I see NATO is spending a lot of time--and it's a 
good thing--focused on defense of NATO's fixed 
infrastructure,'' but I also remind them that I think there's 
value in spending time thinking about--for example, as NATO is 
creating additional capability of different, additional force 
constructs to be able to apply traditional capability in a much 
faster way. I've also been part of discussions where I remind 
them, ``Even as you're generating that additional force, that 
additional capability, you need to be thinking about, What are 
the cyber vulnerabilities and the cyber defense implications of 
that? Because we can spend a lot of money on generating new 
capability, but if it's got inherent vulnerabilities that 
quickly negate its ability to actually be used, that's not a 
good situation for the alliance or for us. We're dealing with 
the same challenges. I've had those discussions with the 
alliance, writ large.
    Senator Shaheen. How do we increase their participation in 
training exercises like CYBERFLAG?
    Admiral Rogers. So, for CYBERFLAG, for example, we have 
some NATO nations that participate in CYBERFLAG, which is U.S. 
Cyber Command's largest exercise. I won't say we have all 28 
member nations at CYBERFLAG. We--over time, you'll see more and 
more nations participating. One of the things I've talked to 
NATO about, although we haven't yet fleshed out the how, is, 
How might we go about taking a look at a cyber exercise or 
training regime? I'd be the first to admit, this is just a 
preliminary discussion. But, when I was there in December, I 
said, ``Hey, look, I think this is something we need to be 
thinking about.''
    Senator Shaheen. One of the things that I was really 
interested in, in Estonia, was hearing about their Estonian 
Defense League.
    Admiral Rogers. The Defense League.
    Senator Shaheen. You were talking about--earlier in your 
testimony, about the effort to take advantage of the expertise 
in the private sector to help us as we're looking at cyber 
issues. I was very interested. One of the things I heard was 
that the reality is, we can't completely prevent a cyberattack. 
What we've really got to do is be prepared to respond to that 
attack in the way that is most effective and most--and fastest. 
They were talking about their Defense League as one way that 
they are able to do that. Is that something that--recognizing 
that we're probably not talking about--is--but, is that what 
you're looking at when you're talking about the teams that are 
being set up to help respond?
    Admiral Rogers. It's a little different, in the sense that 
the idea behind the Cyber League for Estonia is, you have 
private citizens----
    Senator Shaheen. Right.
    Admiral Rogers.--who volunteer--on a voluntary basis----
    Senator Shaheen. Right.
    Admiral Rogers.--will apply themselves at specific problem 
sets as they emerge, kind of after hours, after work, on their 
own time. That's kind of the model for the Cyber League in 
Estonia. They use that to augment their government and----
    Senator Shaheen. Right.
    Admiral Rogers.--private-sector capabilities.
    On the U.S. side, for us in the DOD, that Cyber League, I 
would argue, is a cross, for us in our structures, between the 
digital service arena that DOD is creating as well as the kind 
of Guard construct, although the difference is, when the 
Estonians do it, you're doing it purely on your own time, 
purely as assistance, not as a uniformed member of the Guard 
and Reserve, so to speak. So, it--it's not exactly the same, 
but the thought process that----
    Senator Shaheen. Right.
    Admiral Rogers.--the idea of trying to tap that is similar.
    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Ayotte.
    Senator Ayotte. Thank you, Chairman.
    I want to thank you, Admiral Rogers, for your service----
    Admiral Rogers. Senator.
    Senator Ayotte.--to the country.
    I wanted to just ask you a basic question. You have 
substantial responsibility in your position. What keeps you up 
at night? What are the thing--what is--you're most worried 
about that we need to understand?
    Admiral Rogers. Well, let me be bit of a smartass and say, 
based on the workload, I have no problem sleeping.
    [Laughter.]
    Admiral Rogers. But, secondly, there's three things, 
generally, I highlight. Number one is actions taken against 
critical infrastructure in the United States, damage or 
manipulation. Number two, what happens when actors start to no 
longer just enter systems to do reconnaissance or to steal, but 
actually to manipulate or change data so that we no longer can 
believe what we're seeing? The third and final thing in the 
cyber arena is, What happens when nonstate actors start to use 
cyber as a weapon system and they want to use it as a vehicle 
to inflict pain and--against the United States and others?
    Senator Ayotte. To the third point you just made about 
nonstate actors using cyber as a weapon system, how grave of a 
threat is that to us, currently?
    Admiral Rogers. I would argue that it is not--you know, 
it's one of these, you say it and then tomorrow something will 
change. But, today what I would tell you is, I have not seen 
groups yet make huge investments in this, but I worry that it's 
a matter of time, because it wouldn't take long. One of the 
challenges of cyber--in addition, we've previously talked today 
about how it doesn't recognize boundaries. It doesn't take 
billions of dollars of investment. It doesn't take decades of 
time. It doesn't take a dedicated workforce of tens of 
thousands of people, like you see most nation-states deal with. 
The problem is that cyber is the great equalizer in some ways.
    Senator Ayotte. What are the greatest risks, to the extent 
you can describe them here, to our critical infrastructure, the 
first issue that you----
    Admiral Rogers. I just worry--in that regard, what I worry 
is--based on the accesses and the activity that I've seen of 
some nation-state actors out there, what happens if they decide 
that they want to, for some period of time, disrupt the things 
we take for granted, the ability to always have power, pumps--
--
    Senator Ayotte. Power system----
    Admiral Rogers. Power systems.
    Senator Ayotte.--financial system.
    Admiral Rogers. To move money. I mean, if you take a look 
at the scenario in the Ukraine on the 22nd of December, imagine 
had a scenario like that unfolded in the United States. I'm not 
going to argue that someone's capable of making the United 
States totally go dark, but I would argue there's capability 
there to cause significant impact and damage.
    Senator Ayotte. That's why you discussed, in your opening 
testimony, the need for the coordination between government, 
private----
    Admiral Rogers. Yes, ma'am.
    Senator Ayotte.--sector, and across the whole of 
government.
    Admiral Rogers. Right.
    Senator Ayotte. I wanted to ask you--the law that was 
changed by Congress, in terms of the NSA, the holding of 
information----
    Admiral Rogers. Oh, the----
    Senator Ayotte.--the USA Freedom Act----
    Admiral Rogers.--USA Freedom Act. Yes, ma'am.
    Senator Ayotte.--can you give us an update on what is 
happening with that, and whether that's working, and any 
concerns you have? I think it's an important question----
    Admiral Rogers. Right.
    Senator Ayotte.--for us to check back in with you on.
    Admiral Rogers. Yes, ma'am. So, if I could, in an unclass 
hearing, I'm not going to go into great detail. What I would 
say is, and what I've said to the intelligence oversight 
committees, we have been able to comply with the Act, and to do 
it on time. There has been some level of slowness, but that--in 
terms of difference from the old system and the new system--but 
that----
    Senator Ayotte. Terms of how quickly you can get 
information?
    Admiral Rogers.--that's--right, that's--that time duration 
is minutes or hours, it's not days or weeks. So, it hasn't yet 
gotten to the point where I've felt I've needed to come back to 
the Congress or the administration and say, ``Look, I'm seeing 
a significant material impact on our ability to generate timely 
insights.'' Because I made that commitment. I said if I saw 
that, then I believe I owe it to the Nation to make that point. 
I have not seen that yet.
    Senator Ayotte. But, there's no doubt that it's taking 
longer, in some ways.
    Admiral Rogers. In some ways, it takes longer.
    Senator Ayotte. Well, I think it is important for you to 
come to us with that, because, you know, given that minutes and 
hours can make a difference----
    Admiral Rogers. Yes, ma'am.
    Senator Ayotte.--when it comes to terrorist attacks, and 
preventing them, and taking action, I think this is really 
important for all of us to understand, given the world that we 
are living in.
    I wanted to ask you a final question about the JCPOA, or 
the Iran deal.
    Admiral Rogers. Yeah, the Iran----
    Senator Ayotte. In there, there's a provision that said 
that the U.S. must cooperate with Tehran through training and 
workshops to strengthen Iran's ability to protect against 
sabotage of its nuclear program. Admiral Rogers, from a cyber 
perspective, has the U.S. helped Tehran strengthen its ability 
to protect against sabotage of its nuclear program----
    Admiral Rogers. Ma'am, I can't speak----
    Senator Ayotte.--this agreement?
    Admiral Rogers.--I cannot speak for the U.S. Government as 
a whole. I can tell you U.S. Cyber Command has not participated 
in any such effort.
    Senator Ayotte. Okay. Thank you.
    Admiral Rogers. Yes, ma'am.
    Chairman McCain. Senator Kaine.
    Senator Kaine. Thank you, Mr. Chair.
    Thank you, Admiral Rogers.
    Admiral Rogers. Senator.
    Senator Kaine. I have missed some of the discussion. I 
don't want to be needlessly repetitive, but I met--I want to go 
back to an interchange that you had with the Chair in the 
opening questions that he asked--I met recently with a senior 
military leader, who kind of tried to, basically, summarize his 
sense of things, and he said, ``We have O-plans, but no 
strategy.'' I've been thinking about that. I think, in your 
back-and-forth with the Chair, you talked about--and I think 
others may have asked you about this a little bit--this notion 
that we are kind of reacting case-by-case to cyberattacks, and 
kind of deciding, in each instance, what we want to do. But, 
the development of a broader doctrine, whether it's, you know, 
what will a deterrence policy be that we might communicate, how 
do we view a cyberattack under Article 5 of NATO, in terms of 
triggering a collective self-defense--the collective defense 
obligation--that we're assessing those things, but we're kind 
of not at the endpoint of answering a lot of those questions. 
Could you talk to us about the kind of doctrinal development 
process and--in working on these questions, they're so 
important. What might we expect from the Pentagon, from Cyber 
Command, in our interaction--in our oversight--in terms of the 
development of doctrines that have greater clarity and that 
aren't just kind of pragmatically reacting?
    Admiral Rogers. Right. So, you'll see, in the DOD cyber 
strategy--for example, we've got a broad overarching framework 
for the Department about how we are going to both develop 
capability and then employ it. We're part--Cyber Command is 
part of the broader dialogue within the Department about, How 
do we align the capabilities of the force with the world that 
we're seeing today? One of the arguments that we've made over 
the course of the last six months is, we need to take an 
element of the cyber capability we're generating and focus it 
very much in the deterrence piece. How do we shape, potentially 
drive, opponent choices and behavior before we get to the 
crisis scenario? We're in the early stages of that, but I'm 
very heartened by the fact that we now have broad agreement 
that that's an important part of our strategy, and we need to 
be doing that. So, we're just starting the early stages of that 
journey.
    The Department participates in the broader dialogue within 
the U.S. Government as to about how--from a national policy 
perspective, how are we going to move forward in addressing 
some of the issues that you have all raised today? Meanwhile, 
for me, as U.S. Cyber Command, what I remind our team is, ``We 
know that capability is going to be part of that deterrence 
strategy, both offense and defense. Guys, that's what we get 
paid to do. We have got to focus on generating that capability 
today.'' So, we can't wait for this broader discussion to 
complete itself. That's just a losing strategy for us. So, 
that's kind of been, if you will, the focus for U.S. Cyber 
Command, at the operational level that I and the team really 
focus at.
    Senator Kaine. Let me ask you another question. I think 
Senator Shaheen may have asked this before I came into the 
room, with respect to NATO. But, another item that's very 
common in this committee as we talk--look at the postures of 
other commands, is joint training exercises. India does more 
joint training with the United States than any other nation. We 
have marines deployed throughout Africa in these Special 
Purpose MAGTFs, doing training of African militaries. What is 
our posture, vis-a-vis sort of partners, in the cyber area, in 
the training that we do together, in the development of----
    Admiral Rogers. Right.
    Senator Kaine.--you know, joint resiliency strategies?
    Admiral Rogers. So, we do some level of training with key 
allies. One of the challenges for us, quite frankly, is, How do 
you maximize capacity? So, it's all about prioritization. You 
cannot do everything you would like to do with every nation 
that you would like to do it. So, part of our strategy is, How 
do you focus the greatest return? What are the nations that you 
want to start with? So, we have done that.
    The other challenge I find is--and this is part of an 
ongoing internal discussion for us--based on where we are in 
the journey right now, I can't do so much with the external 
world that it negatively impacts our internal ability within 
the Department to generate. Because, unlike some mission sets, 
where we literally have decades of infrastructure, capability, 
capacity, and experience, we don't have that in the cyber 
arena. So, the same force and capability I'm using to help 
train and partner with foreign counterparts, I'm still building 
every day. So, that's part of the challenge for us right now. I 
don't think it'll be as much an issue in the future as that 
capacity fully comes online, but we're not there yet.
    Senator Kaine. We trained aviators out of other service 
branches, and then we created an Air Force Academy in 1954 and 
decided, okay, we're going to, you know, train aviators at--not 
that we don't train aviators in the other service branches. I 
think----
    Admiral Rogers. Right.
    Senator Kaine.--Senator McCain may have had some training 
somewhere in his past. But, we created an Air Force, you know, 
after World War II. I've wondered about whether the cyber 
domain would eventually become so significant that there may be 
the need to consider creating a dedicated Cyber Academy, much 
like the Air Force was created in the '50s. Now the question 
is, you can train cyber folks everywhere and have them 
percolate throughout the service branches, or you can focus on 
a particular cyber expertise, and then those folks could go 
into the different service branches. Have--has there been any 
discussion or thought about that?
    Admiral Rogers. I mean, it's been a discussion. My input to 
that discussion has been, I'm not, right now, based on my 
experience and what I see, a proponent of that approach. 
Because my concern is, to maximize effectiveness in cyber, you 
need to understand how it fits in a broader context. I watch, 
at times, when I deal with elements in our own workforce who 
are incredibly technically savvy, incredibly smart about other 
eaches of the mission, and yet, when I try to remind them, 
``Remember, we're applying this as part of a broader strategy 
and a broader context''--when you don't understand that broader 
context, you're just not--in my experience, you're not as 
effective. That's my concern about that approach. It'll start 
to really make us very, very----
    Senator Kaine. Siloed.
    Admiral Rogers.--narrow and siloed. I'm just concerned 
about the potential implications of that.
    Senator Kaine. Great. Thank you.
    Thanks, Mr. Chair.
    Chairman McCain. Senator Cotton.
    Senator Cotton. Admiral Rogers, thank you for appearing 
again before----
    Admiral Rogers. Sir.
    Senator Cotton.--the committee.
    If I heard you correctly, you testified to Senator Ayotte 
that your three main fears were threats to our critical 
infrastructure, the ability to manipulate systems such that we 
might not have faith in their operations, and, third, nonstate 
actors using cyber as a weapon against the United States. Is 
that an accurate----
    Admiral Rogers. Yes, sir.
    Senator Cotton. Yeah. Are----
    Admiral Rogers. Yes, sir.
    Senator Cotton. Are either the Islamic State or al Qaeda 
able to do any of those three things at this point?
    Admiral Rogers. I haven't seen them yet, but my concern is, 
that's now.
    Senator Cotton. So, the Islamic State has a reputation for 
being very effective online. Can--what we infer, then, is 
online recruiting and propaganda is a distinct skillset from 
the use of cyber as a weapon----
    Admiral Rogers. Yes, sir.
    Senator Cotton.--against things like electrical power grids 
and so forth.
    Admiral Rogers. Yes, sir.
    Senator Cotton. How hard would it be for a nonstate actor, 
like the Islamic State or al Qaeda, to develop that skillset? 
Is it nothing more than recruiting the right person?
    Admiral Rogers. It would not be difficult. It's about 
recruiting the right people with the right focus, but it would 
not--it's certainly not beyond their ability if they decide--I 
believe it's not beyond their ability if they made that 
decision.
    Senator Cotton. When we think about other potential 
nonstate actors, are those--do those groups that have that 
capability or are approaching the capability tend to be 
associated with state actors?
    Admiral Rogers. In some cases, yes, but not in all. Not in 
all.
    Senator Cotton. Okay.
    I want to turn now to the ongoing debate about encryption. 
I think data security and cybersecurity is obviously critical 
in the modern world. Most people in this room probably have a 
smartphone in their pocket. Even my 70-year-old father finally 
turned in his flip phone and got a smartphone recently. We keep 
emails, text messages, phone calls, financial information, 
health information, and many other sensitive data----
    Chairman McCain. He's ahead of Senator Graham.
    [Laughter.]
    Senator Cotton.--on our phones. So, I think data in 
cybersecurity is essential. I also think physical security is 
essential.
    Admiral Rogers. Right.
    Senator Cotton. I'd hate to see Americans get blown to 
pieces because we had an imbalanced priority of cybersecurity 
over physical security. How do we strike that balance as a 
society?
    Admiral Rogers. I--my first comment would be, I don't think 
it's either/or.
    Senator Cotton. I don't either. There has to be some kind 
of----
    Admiral Rogers.--my argument would be, we don't serve 
either viewpoint particularly well when we cast this as, 
``Well, it's all or nothing, it's either/or.'' My view is, over 
time, we have been able to integrate ground-changing technology 
in the course of our Nation, and to do it in a way that enables 
the Nation, under the right circumstances, with the right level 
of control, to be able to access that. For me, my starting 
position is, What is it that is different about this that would 
preclude that from applying here? I just don't personally see 
that, even as I acknowledge there's no one simple answer, 
there's probably no one silver bullet. It's not going to be a 
one-size-fits-all. But, I look at the innovation and the can-do 
approach that we have as a Nation to this, and I'm thinking we 
can't--we can solve this.
    Senator Cotton. Like, for instance, a decades-old law known 
as the Communications Assistance for Law Enforcement Act----
    Admiral Rogers. Act.
    Senator Cotton.--which tells telecom companies of any size 
that if they want to construct a telephone system in this 
country, it has to be susceptible to a wiretap, pursuant to a 
court order, if a court finds probable cause to order a wiretap 
against a terror suspect or a human trafficker or a drug dealer 
or so forth. Similarly, we all expect privacy in our bank 
accounts, but banks, obviously, must maintain systems in which 
they turn over bank account information, subject to a court 
order, against, say, a potential money launderer. Is there any 
reason our society should treat data and tech companies 
differently from how we treat telephone companies and banks?
    Admiral Rogers. I mean, that's clearly a much broader issue 
than Cyber Command. I won't get into the good or bad, so to 
speak, but I--like you, I'd just say, ``Look, we've got 
frameworks in other areas. Why can't we apply that here?''
    Senator Cotton. Okay.
    These questions have been about the larger debate about 
encryption, going forward, the way smartphones are designed, 
the way messaging systems are designed. There was a case 
recently, involving Apple and the FBI and the San Bernardino 
shooter, in which the FBI requested Apple's assistance to 
override a feature of an iPhone, Apple refused, the FBI 
apparently found a third party capable of doing so and has 
withdrawn that case. Should Americans be alarmed at this kind 
of vulnerability in a--such a widely used device?
    Admiral Rogers. The way I would phrase it is, vulnerability 
is an inherent nature of the technical world that we live in 
today. If your desire is to live in a world without 
vulnerability, I would say that is probably highly unlikely.
    Senator Cotton. Do you know if we have shared that 
vulnerability with Apple--the United States----
    Admiral Rogers. As U.S. Cyber Command, I--sir, I apologize, 
I don't know.
    Senator Cotton. Thank you.
    Chairman McCain. Admiral, one other point. We know for a 
fact that Baghdadi is sending young men into the refugee flow 
to commit acts of terror wherever they can locate. Is it true, 
or very likely, that they also know of a Web site to come up 
on, secure, so that they can communicate back with Baghdadi and 
his tech----
    Admiral Rogers. Yes.
    Chairman McCain. So, right now--there was a media report 
that 400 young men had been sent into the refugee flow. I would 
assume, then, that at least some of them have--are armed with a 
Web site to come up on once they get to a preferred destination 
so that they can coordinate acts of terrorism.
    Admiral Rogers. A Web site or an encrypted app. Yes, that's 
probably likely.
    Chairman McCain. That's a bit concerning, isn't it?
    Admiral Rogers. Yes, sir.
    Chairman McCain. So, what should we be doing to counter 
that?
    Admiral Rogers. So, I----
    Chairman McCain. Besides take out ISIS.
    Admiral Rogers. I think we need a broader national dialogue 
about, What are we comfortable with? It's not either/or. 
Because we have got to have security, and we've got to have 
safety and privacy. At the moment, we're in a dialogue that 
seems to paint it as, well, it's one or the other. I--as the 
dialogue we just had with Senator Cotton, I don't see it that 
way.
    Chairman McCain. We know of a direct threat of an attack in 
Europe or the United States and a technical capability to 
enhance their ability to commit this act of terrors.
    Admiral Rogers. Yes, sir.
    Chairman McCain. Isn't that a pretty tough--so, we need a 
national conversation? Do we need more hearings? Do we need to 
urge the administration to come up with a policy? What are our 
options, here?
    Admiral Rogers. Well, the worst-case scenario, to me, is, 
we don't have this dialogue and then we have a major event. In 
the aftermath of a major event, we decide to do something that 
perhaps, in the breadth of time, we step back and ask 
ourselves, How did we ever get here?
    Chairman McCain. I don't think there's any doubt that's a 
likely scenario.
    Admiral Rogers. That is what I hope it doesn't come to. 
But, to date, for a variety of reasons, we just have unable--
been unable to achieve that kind of consensus. But, we have got 
to figure out how we're going to do this. You don't want a law 
enforcement--I believe you don't want a law enforcement 
individual or an intelligence individual dictating this, just 
as I don't believe you want the private sector, a company, 
dictating this. This is too important, from my perspective.
    Chairman McCain. I don't--we--is awareness of this threat 
important to--for the American people to know how serious this 
threat is?
    Admiral Rogers. Yes.
    Chairman McCain. Senator King.
    Senator King. Mr. Chairman, it--hearing this dialogue and 
the discussion you have just been having, it strikes me it 
underlines the foolishness of continuing to be governed by 
budget decisions made six years ago, when this threat was 
nothing like the magnitude that it is today. Here we are, 
dealing with a major new threat and trying to fit it within--to 
shoehorn it within a budget structure that was--that clearly 
did not take account of the fact that we've got a major new 
threat, and a serious one, that we're facing that's going to 
take resources to confront. It just--I just can't help but make 
that point, that it underlines the fact that we're trying to--
we're governed by decisions made at a time when circumstances 
were very different than they are today.
    Chairman McCain. Well, I thank Senator King. But, Admiral 
Rogers has already made it clear, I think, in this testimony, 
that sequestration will prevent him from carrying out 
completely the missions that he's been tasked with.
    Is that correct, Admiral?
    Admiral Rogers. Yes, sir. My greatest concern, if you went 
to sequestration, would be the impact on the workforce, 
particularly the civilians, who would argue, ``So, is this what 
I want to be aligned with?'' That concern--I can replace 
equipment. It takes us years to replace people.
    Chairman McCain. There is a real likelihood that, if we 
continue the sequestration, that you will have to--you will not 
be able to continue to employ these outstanding and highly 
selected individuals.
    Admiral Rogers. Yes.
    Chairman McCain. You know, sometimes, Admiral, I do not 
want the American people to see what goes on at these hearings. 
The old line about laws and sausages. But, I certainly wish the 
American people could hear and see your statements that you're 
making today rather than, as you just indicated, an attack, and 
then we always overreact, that that's just what democracies are 
all about.
    I thank you for your good work, but I also want to thank 
you for your straightforward answers to questions that were 
posed by the members of this committee. We thank you.
    Hearing is adjourned.
    [Whereupon, at 11:32 a.m., the hearing was adjourned.]

    [Questions for the record with answers supplied follow:]
              Questions Submitted by Senator Jeff Sessions
                   u.s. cyber vulnerabilities report
    1. Senator Sessions. Admiral Rogers, what is the status of the 
Department of Defense report that was directed in the fiscal year 2016 
NDAA on the cyber vulnerabilities of each major weapons system?
    Admiral Rogers. The Department of Defense, to include Service 
Components, USCYBERCOM and other organizations are working in 
conjunction to provide a complete response to the fiscal year 2016 NDAA 
(section 1647), cyber vulnerabilities of each major weapons system 
report. Any particular details in reference to the report would need to 
be directed to the DOD CIO office.
                               __________
              Questions Submitted by Senator Kelly Ayotte
                             national guard
    2. Senator Ayotte. What is the role of the National Guard in the 
Cyber National Mission Force (CNMF)?
    Admiral Rogers. Guard and Reserve forces are an integral part of 
the Cyber Mission Force total force solution and are providing trained 
and ready personnel and teams in support of current operations as well 
as on-demand surge capacity. USCYBERCOM continues to work with the 
Services to ensure National Guard and Reserve personnel are fully 
integrated at all echelons from the highest levels of our USCYBERCOM 
headquarters to our Cyber Mission Forces. Of the 64 assigned team 
members for the 24 National Mission Team (24 NMT), 12 billets will be 
Air National Guard members.
    Additionally, USCYBERCOM, through the Services, looks to leverage 
the National Guard and Reserve and their unique authorities and 
civilian skills in achieving its Defend the Nation mission. The Reserve 
Components, being community based, have insight into local, state, and 
regional emergency operations, and can be enabled to provide an 
immediate local response to help shape the incident response during 
national level events.
          support to civil authorities during cyber incidents
    Senator Ayotte. The Government Accountability Office (GAO) 
published a new report this month regarding the roles and 
responsibilities for defense support of civil authorities during cyber 
incidents. GAO found that the Department of Defense (DOD) has developed 
overarching guidance, but has not clearly defined roles and 
responsibilities for cyber incidents.
    According to GAO, ``DOD officials stated that the department had 
not yet determined the approach it would take to support a civil 
authority in a cyber incident and, as of January 2016, DOD had not 
begun efforts to issue or update guidance and did not have an estimate 
on when the guidance will be finalized.''

    3. What is your response to this GAO report?
    Admiral Rogers. I agree with the GAO report findings that DOD has 
not clearly defined the roles and responsibilities or determined an 
approach for support to civil authority for cyber incidents. The DOD is 
well accustomed to providing Defense of Civil Authorities (DSCA) 
support to Federal, state, tribal and local authorities in a variety of 
missions during catastrophic natural or man-made events. However, our 
society's increasing dependence on information technology and the 
availability of cyberspace should also compel us to expand missions to 
include DSCA support within the cyber domain. The basic DSCA guidance 
detailed in DOD 3025.18 provides an overall framework for DSCA 
operations. Within this general guidance, we believe that the DOD will 
be able to respond to a wide variety of events, which could include 
appropriate DSCA activities in cyberspace. However, more specific 
guidance regarding DSCA in cyberspace would be beneficial.
    The growing pains associated with understanding how to provide 
domestic cyber support will subside as experience is gained in this new 
mission space. That is one of the objectives of the USCYBERCOM 
sponsored CYBER GUARD exercise series. These exercises bring Federal, 
DOD, State and Industry stakeholders together to better understand how 
DSCA will occur in cyberspace.

    4. Senator Ayotte. What must be done to clarify DOD roles and 
responsibilities when it comes to supporting civil authorities during 
cyber incidents?
    Admiral Rogers. Recently, USCYBERCOM, the Joint Staff, the Office 
of Secretary of Defense and U.S. Northern Command held staff talks to 
rationalize and/or harmonize the Cyber Incident Coordination Policy 
with the National Incident Response Framework. Incident response in 
cyberspace should not be materially different than that of any other 
domains. Additionally, the command will continue to explore roles and 
responsibilities for supporting civil authorities in response to cyber 
incidents during the annual CYBER GUARD exercise series. CYBER GUARD 
brings together DOD, federal, state, and industry stakeholders to 
better understand Defense Support of Civil Authorities in cyberspace to 
include how cyber incident response fits in with a broader DOD response 
effort.

    5. Senator Ayotte. What role do you see the National Guard playing 
in support for civil authorities during cyber incidents?
    Admiral Rogers. The National Guard is, and will always be, a key 
enabler in support for civil authorities during all domestic response 
actions. The National Guard has unique state-based structures and 
authorities that provide great flexibility and application at the state 
and local level to respond to varying types of incidents, cyber 
included. The National Guard Cyber Protection Teams implemented to 
date, provide the States with a joint trained capacity that could be 
utilized by their respective Governors, as first responders during a 
cyber-event. For example, these teams, given their State level 
affiliations, could work directly with the Joint Terrorism Task Force 
and cyber forces the FBI has, and with DHS to provide additional 
technical capacity for resilience and recovery at the Federal, State 
and Local levels.
                               __________
                Questions Submitted by Senator Jack Reed
                     cyber operations against isis
    6. Senator Reed. At the end of February, 2016, Secretary Carter 
announced that we would be using cyber capabilities offensively against 
ISIS. He said that our goal would be to, quote, ``Black these guys out. 
Make them doubt their communications, make it impossible for them to 
dominate and tyrannize the population in the territory they are and 
just whack away with this as we are whacking away with everything else. 
We have to put an end to this fast.''
    Please provide your assessment of the effectiveness and impact of 
each of the lines of effort that Cyber Command is pursuing, alone or in 
partnership with other commands, pursuant to the Secretary's direction.
    Admiral Rogers. [Deleted.]
                               __________
               Questions Submitted by Senator Bill Nelson
      u.s. cyber command reliance on the national security agency
    7. Senator Nelson. Admiral Rogers: There is a concern that U.S. 
Cyber Command's Cyber Mission Force (CMF) might still be too reliant on 
the National Security Agency (NSA) for tools, infrastructure, and 
training, and too reliant on signals intelligence (SIGINT) for military 
operations in cyberspace. Do you share that concern, and what steps 
have been taken over the last year to address it?
    Admiral Rogers. I do not share that concern. The CMF is still 
evolving and building and the partnership between U.S. Cyber Command 
and NSA is a positive one. At this stage of maturity in our force 
build, I see the relationship with NSA as enabling the operations of 
U.S. Cyber Command. The leadership, headquarters commands, and CMF 
across the entire CMF are identifying requirements as they conduct 
operations and take away lessons learned from exercises that inform the 
future cyber force. I have incorporated some of these issues into 
formal requirements, such as Unified Platform and Persistent Training 
Environment as described in the President's Budget Request for fiscal 
year 2017. Additionally, the Department recognized the need to provide 
an operating environment for the CMF separate from and in addition to 
use of NSA tools and infrastructure. The tools and infrastructure 
(i.e., access, payload, platforms) needed to conduct military 
operations are described in the fiscal year 2017 President's Budget 
Request. The support provided by NSA continues to be essential to the 
execution of cyber operations by the CMF and prudent given the still-
evolving nature of cyber requirements and the resource environment we 
are operating in.
                               __________
             Questions Submitted by Senator Martin Heinrich
                        ics at dod installations
    8. Senator Heinrich. Admiral Rogers--A couple months ago at an open 
hearing before the Senate Intelligence Committee, we discussed the 
vulnerabilities of electrical generation and water and wastewater 
systems across civilian infrastructure. I'd like to follow-up on that 
and ask about the security of our infrastructure at military bases. 
What steps has Cyber Command taken in the last couple of years to 
secure Industrial Control Systems (ICS) at military installations, and 
does this issue continue to be a top priority for you?
    Admiral Rogers. Yes, working toward securing Industrial Control 
Systems (ICS) at military installations is a new focus area and we are 
developing capabilities at U.S. Cyber Command. We have improved our 
ability to detect adversarial presence, increased resiliency within DOD 
control system networks, and aligned cyber mission forces with critical 
infrastructure and key resources. In June 2015 DOD CIO's Terry 
Halvorsen and AT&L's Frank Kendall and myself co-signed the ``DOD 
Cybersecurity Campaign Memo,'' outlining the requirement to establish a 
working group with the chief focus on cyber securing ICS in weapons, 
logistics, medical systems and installations. In December 2015 we 
completed the development, test, evaluation, and refinement of the 
Advanced Cyber Industrial Control System (ACI) Tactics Techniques and 
Procedures (TTP) for DOD ICS. It was specifically designed to enable 
managers of ICS networks Detect, Mitigate, and Recover from nation-
state-level cyber-attacks. Collaborating with the Services and CIO, we 
have enabled ICS owners and operators access to dozens of government 
and commercial best practices and standardized process via a DOD 
knowledge service portal. This summer DOD will publish cybersecurity 
criteria for planning, design, construction, and modernization of 
facility-related ICS (will apply to MILCON). Lastly, over the past year 
we have conducted several assessments at various locations and can 
share the results in a classified forum.

    9. Senator Heinrich. Two 4-star Navy admirals recently sent a 
letter to the Secretary of Defense asking that more attention be paid 
to ICS security across military infrastructure, and called for clear 
ownership policies and additional investments in detection tools and 
processes. Admiral, how is Cyber Command working with other DOD 
components to secure these systems, and do you believe sufficient 
resources have been made available to address the problem?
    Admiral Rogers. U.S. Cyber Command is working with the DOD Chief 
Information Officer and Service Components to increase ICS security at 
military installations, and partnering with the Department of Homeland 
Security to secure DOD Industrial Control Systems dependent on civilian 
infrastructure. Concerning resources, we are currently reviewing our 
policies, processes, and capabilities for securing DOD Industrial 
Control Systems in order to establish priorities, align resources, and 
identify additional resources as needed.

    10. Senator Heinrich. In your opinion, should there be a defense-
wide effort to secure these systems, or is it better to observe a 
distributed authority approach and leave efforts to each of the 
Services?
    Admiral Rogers. DOD Chief Information Officer, Office of Secretary 
of Defense, Acquisitions, Technology and Logistics (AT&L), Joint Staff, 
and USCYBERCOM are leading a DOD-wide approach to enforce compliance 
with cybersecurity requirements mandated by U.S. law, DOD policy, and 
USCYBERCOM orders. These defense-wide efforts are driven by plans and 
policies that help synchronize service and combatant commanders' 
understanding and compliance with current and future security 
requirements and support the Planning, Programming, Budgeting and 
Execution (PPBE) process to meet national, strategic, and operational 
requirements. This approach will monitor and assess the Services' 
implementation of cybersecurity plans and policies to verify the 
overall health of DOD ICS systems. Ultimately, these efforts seek to 
integrate ICS security into existing DOD cybersecurity processes for 
Information Technology (IT) systems.

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              

                        THURSDAY, APRIL 7, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.

                 POSTURE OF THE DEPARTMENT OF THE ARMY

    The committee met, pursuant to notice, at 9:30 a.m. in Room 
SD-G50, Dirksen Senate Office Building, Senator John McCain 
(chairman) presiding.
    Committee Members Present: Senators McCain, Inhofe, Wicker, 
Ayotte, Fischer, Cotton, Rounds, Ernst, Tillis, Sullivan, Lee, 
Graham, Reed, McCaskill, Manchin, Shaheen, Gillibrand, 
Blumenthal, Donnelly, Hirono, Kaine, King, and Heinrich.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. Well, good morning.
    The Senate Armed Services Committee meets this morning to 
receive testimony on the posture of the United States Army in 
review of the defense authorization request for fiscal year 
2017 and the future years defense program.
    I am pleased to welcome Acting Secretary, much too young, 
Patrick Murphy, and Army Chief of Staff, General Mark Milley. I 
thank you both for your years of distinguished service and your 
continued leadership of our Army.
    Fifteen years of war have tested our Army, but time and 
time again, our soldiers have met that test and proved their 
commitment, courage, and determination. It is the duty of this 
committee and this Congress to do our utmost to provide them 
the support they need and deserve. That starts by recognizing 
that our Army is still at war. At this moment, 186,000 soldiers 
are deployed in 140 locations around the globe. They are 
fighting terrorists and training our partners in Afghanistan 
and supporting the fight against ISIL, all the while defending 
South Korea and reassuring our allies in Eastern Europe. The 
demands on our soldiers only continue to increase as the 
threats to our Nation grow more diverse, more complex, and more 
severe.
    But despite the stark and urgent realities of the threats 
to our Nation and the risk they pose to our soldiers, the 
President continues to ask the Army to do more with less. He 
has done so once again with his defense budget request. The 
President should have requested a defense budget that reflects 
the scale and scope of the national security threats we face 
and the growing demands they impose on our soldiers. Instead, 
he chose to request the lowest level of defense spending 
authorized by last year's budget agreement and submit a defense 
budget that is actually less in real dollars than last year, a 
budget that will force our Army to confront growing threats and 
increasing operational demands with shrinking and less-ready 
forces and aging equipment.
    By the end of the next fiscal year, the Army will be cut 
down to 450,000 Active Duty soldiers, down from a wartime peak 
of 570,000. These budget-driven--I repeat budget-driven--force 
reductions were decided before the rise of ISIL or the 
Russians? invasions of Ukraine. Ignoring these strategic facts 
on the ground, the budget request continues down the path to an 
Army of 450,000 soldiers, an Army that General H.R. McMaster, 
an individual known to all of us as one of the wisest soldiers, 
testified earlier this week, quote, the risk of being too small 
risks being too small to secure the Nation.
    We should be very clear that when we minimize our Army, we 
maximize the risk to our soldiers, the risk that in a crisis 
they will be forced to enter a fight too few in number and 
without the training and equipment they need to win. That risk 
will only grow worse if mindless sequestration cuts are allowed 
to return and the Army shrinks further to 420,000 soldiers.
    As our Army shrinks, readiness suffers. Just over one-third 
of the Army's brigade combat teams are ready for deployment and 
decisive operations. Indeed, just two--just two--of the Army's 
60 brigade combat teams are at full combat readiness. The Army 
has no plan to return to full spectrum readiness until 2021 at 
the very earliest.
    As the National Commission on the Future of the United 
States Army made clear in its recently published report, both 
the mission and the force are at risk.
    Meanwhile, the Army is woefully behind on modernization, 
and as a result, America's capability advantage in ground and 
airborne combat weapon systems is not nearly as great as it 
once was. Decades of under-investment and acquisition 
malpractice have left us with an Army that is not in balance, 
an Army that lacks both the adequate capacity and the key 
capabilities to win decisively.
    As Vice Chief of Staff of the Army General Daniel Allyn 
recently testified, the Army can no longer afford the most 
modern equipment and we risk falling behind near peers in 
critical capabilities. Indeed, the Army currently has no major 
ground combat vehicle development program underway and will 
continue to rely on the increasingly obsolete Bradley fighting 
vehicle and Abrams tanks for most of the rest of this century.
    As General McMaster phrased it earlier this week, the Army 
is, quote, outranged and outgunned by many potential 
adversaries.
    Confronted with the most diverse and complex national array 
of national security threats since the end of World War II, the 
Army urgently needs to restore readiness, halt misguided end 
strength reductions, and invest in modernization. Instead, this 
budget request is another empty promise to buy readiness today 
by reducing end strength and modernization for tomorrow. 
Mortgaging the future of our Army places an unnecessary and 
dangerous burden on our soldiers, and I believe it is the 
urgent task of this committee to do all we can to chart a 
better course.
    I look forward to the testimony of our witnesses today and 
their recommendations as to how we build the Army the Nation 
needs and provide our soldiers with the support they deserve.
    I would like now to call on a former Army person for his 
remarks.

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Thank you very much, Mr. Chairman. Thank you 
for calling this important hearing.
    Let me welcome Secretary Murphy and General Milley. Thank 
you for your distinguished service to the Nation.
    As the chairman indicated, we are reviewing the Army's 
proposals for the fiscal year 2017 budget request, and they are 
absolutely critical. We are facing extraordinary challenges, 
and the chairman has outlined them very eloquently and very 
precisely. We have to rebuild readiness. We have to modernize 
the force. Also in this light, I think another message is, with 
all respect to Secretary Murphy, getting not an ``acting'' 
Secretary but a permanent Secretary. I hope we could move Mr. 
Fanning's nomination as quickly as possible.
    The President's fiscal year 2017 budget submission for the 
Department of the Army includes $148.1 billion in total 
funding, of which $125.1 billion is the base budget and $23 
billion for overseas operations in the OCO account.
    While the budget request complies with the funding levels 
included in the Bipartisan Budget Act of 2015, the Army's top 
line is essentially flat as compared to the fiscal year 2016 
enacted levels. As the committee considers the Army's funding 
request, we must always be mindful of the risks facing our 
country and our national security challenges. In fact, it is 
highly unlikely that demand for Army forces will diminish any 
time in the near future. Currently, as the chairman indicated, 
190,000 soldiers across the Active and Reserve components and 
Active forces are serving in 140 countries. While we continue 
to field the most capable fighting force in the world, 15 years 
of sustained military operations focused almost exclusively on 
counterterrorism and counterinsurgency has taken a toll on the 
readiness of our soldiers. Today less than one-quarter of our 
Nation's Army is ready to perform their core wartime missions 
and some critical combat enabling units are in far worse shape. 
In addition, the evolving threat facing our Nation impacts 
readiness as the Army needs to train and fight a near peer 
competitor in a full spectrum environment.
    Unfortunately, while additional funding is important, it is 
not the sole solution to restoring readiness levels. It will 
take both time to rebuild strategic depth and relief from high 
operational tempo.
    I applaud the Army for making readiness their number one 
priority in this year's budget request. General Milley, I look 
forward to your thoughts on the Army's progress in rebuilding 
readiness within the timelines the Army has set and what 
additional resources may be needed.
    While readiness is vital, we cannot neglect investments in 
the modernization of military platforms and equipment. Building 
and maintaining readiness levels requires that our forces have 
access to equipment that is properly sustained and upgraded. 
The Army's fiscal year 2017 budget request--$22.6 billion for 
modernization efforts that includes $15 billion for procurement 
and $7.5 billion for research, development, test and 
evaluation--is a start. I would like to know if our witnesses 
feel confident that this funding for modernization is adequate 
and will not adversely impact the future readiness of our 
aviation units particularly or add substantial cost.
    Related to the Army's acquisition processes, this committee 
made important changes in acquisition and procurement policies 
in the fiscal year 2016 National Defense Authorization Act, 
including giving the Service Chiefs significant 
responsibilities. I would appreciate the Chief's and the 
Secretary's comments on how these procedures are being worked 
into the system.
    The men and women in uniform in our military and also our 
civilian workforce remain a priority for our committee. We need 
to ensure the pay and benefits remain competitive in order to 
attract and retain the very best for military and government 
service. The committee also understands, however, that military 
and civilian personnel costs comprise nearly one-half of the 
Department's budget. Again, your insights as to how we can 
control those costs would be very much appreciated.
    Finally, as I have stated and as the chairman emphatically 
stated, the Budget Control Act is ineffective and shortsighted. 
I believe, in a bipartisan fashion, that we have to repeal the 
BCA, establish a more reasonable limit on discretionary 
spending in an equitable manner that meets our domestic and 
defense needs, and then move forward.
    Again, I would like to thank the witnesses and the 
chairman.
    Chairman McCain. Thank you.
    Secretary Murphy?

 STATEMENT OF HONORABLE PATRICK J. MURPHY, ACTING SECRETARY OF 
                            THE ARMY

    Mr. Murphy. Thank you, Mr. Chairman. Thank you, Senator 
Reed and members of this committee, for allowing me to be here 
to talk about your Army.
    It is my 12th week on the job as Acting Secretary of the 
Army. It is truly an honor to be back on the Army team. I have 
traveled to see our soldiers, our civilians and their families 
in Kentucky, Missouri, Texas, and Kansas and also to Iraq and 
Afghanistan. The selfless service and dedication of our team 
should inspire us all. We are tasked with the solemn 
responsibility to fight and win our Nation's wars and to keep 
our families safe here at home.
    Our Army must produce ready units today to deter and to 
defeat our Nation's enemies, defend the Homeland, project 
power, and win decisively. By ``ready,'' we mean units that are 
fully manned, trained for combat, fully equipped according to 
the designed structure, and led by competent leaders.
    We must also be ready for our future fights by investing in 
modernization and research and development. We do not want our 
soldiers to have a fair fight. They must have the technical and 
tactical advantage over our enemies.
    With our $125.1 billion base budget request, our Army will 
focus its efforts on rebuilding readiness for large-scale, 
high-end ground combat today. We do so because ignoring 
readiness shortfalls puts our Nation at greatest risk for the 
following reasons.
    First, readiness wins wars. Our Army has never been the 
largest in the world, and at times we have not been the best 
equipped. But since World War II, we have recognized that ready 
soldiers properly manned, trained, equipped, and led can beat 
larger or more determined forces. Whether confronting the 
barbaric acts of ISIS or the desperation of North Korea, our 
Army must be prepared to execute and to win. We train like we 
fight and our Army must be ready to fight tonight.
    Next, readiness deters our most dangerous threats and 
assures our allies. We are reminded with alarming frequency 
that great power conflicts are not dead. Today they manifest 
themselves on a regional basis. Both Russia and China are 
challenging America's willingness and ability to enforce 
international standards of conduct. A ready Army provides 
America the strength to deter such actions and reassure our 
partners throughout the world.
    Readiness also makes future training less costly. 
Continuous operations since 2001 have left our force proficient 
in stability and counterterrorism operations. But our future 
command sergeants major and brigade commanders have not had the 
critical combat training experiences as junior leaders trained 
for high-end ground combat. Investing in readiness today builds 
the foundation necessary for long-term readiness.
    Finally, readiness prepares our force for potential future 
conflicts. We cannot fight the last fight. Our Army must be 
prepared to face the high-end and advanced combat power of an 
aggressive Russia or, more likely, Russian aggression employed 
by surrogate actors.
    This budget dedicates resources to develop solutions for 
this, to allow our force to develop new concepts informed by 
the recommendations of the National Commission on the Future of 
the Army. Our formations must first be ready to execute against 
current and emerging threats.
    The choice, though, to invest in near-term readiness does 
come with risk. Smaller modernization investments risk our 
ability to fight and win in the future. We have no new 
modernization programs this decade. Smaller investments in end 
strength risk our ability to conduct multiple operations for 
sustained periods of time. In short, we are mortgaging our 
future readiness because we have to ensure in today's success 
against emerging threats. That is why initiatives like BRAC 
[Base Realignment and Closure] in 2019 are needed to be 
implemented now. Let us manage your investment, and this will 
result in $500 million a year in savings and a return on your 
investment within five years.
    Lastly, while we thank Congress for the Bipartisan Budget 
Act of 2015, which does provide short-term relief and 2 years 
of predictable funding, we request your support for the 
enactment of our budget as proposed. We request your support 
for continued funding at levels that are calibrated toward 
national threats and our interests. We request your continued 
support for our soldiers, civilians, and their families so that 
our military and our Army will continue to be the most capable 
fighting force in the world and will win in decisive battles 
and keep our families safe here at home.
    Thank you.
    [The joint prepared statement of Mr. Murphy and General 
Milley follows:]

Joint Prepared Statement by the Honorable Patrick J. Murphy and General 
                             Mark A. Milley
    We would like to thank the committee for their continued support of 
the United States Army and the American Soldier. Humbled to be 
entrusted with the care of our soldiers, civilians, and their families, 
we look forward to working with Congress to ensure our Army remains 
unmatched in the world.
                              introduction
    The United States Army is the most formidable ground combat force 
on earth. America's Army has convincingly demonstrated its competence 
and effectiveness in diverse missions overseas and in the Homeland. 
Today, these missions include: fighting terrorists around the world; 
training Afghan and Iraqi Army forces; peacekeeping in the Sinai 
Peninsula and Kosovo; missile defense in the Persian Gulf; security 
assistance in Africa and South America; deterrence in Europe, the 
Republic of Korea, and Kuwait; rapid deployment global contingency 
forces; and response forces for the Homeland. Additionally, we maintain 
12,000 miles of U.S. waterways; respond to hurricanes, floods, and 
severe snowstorms; patrol our Southwest border; and assist with the 
response to the outbreak of pandemic diseases. In support of these U.S. 
Geographic Combatant Command missions, the Army has approximately 
190,000 soldiers deployed to 140 countries. Largely due to deliberate 
investments in soldier training, equipping, and leader development, 
today's Army continues to excel at these diverse and enduring missions. 
However, we cannot become complacent, remain static, and look to the 
past or present to be a guarantor of future victory. To sustain this 
high performance and remain prepared for potential contingencies, the 
Army must make the most of the resources entrusted to us by the 
American people. This ultimately requires a balance of competing 
requirements--readiness, end strength, and modernization--to ensure 
America's Army remains ready to fight and win both today and in the 
future.
    Throughout history, successful armies anticipated the future, 
adapted, and capitalized upon opportunities. Today, the Army faces a 
rapidly changing security environment that requires the Army to make 
difficult decisions in order to remain an effective instrument of the 
Nation's military power. An Army ready for combat is the most effective 
tool to continually assure allies and deter or defeat adversaries. 
However, given the past three years of reduced funding coupled with the 
uncertainty of future funding, the Army risks going to war with 
insufficient readiness to win decisively. Therefore, the Army's number 
one priority is readiness.
    Increasing Army readiness provides additional options for the 
President, Secretary of Defense, and Congress to successfully implement 
American foreign and security policy. In this budget, the Army will 
focus investments on readiness, key modernization programs, and soldier 
quality of life to sustain the world's greatest Army. Our benchmark of 
success is to: sustain and improve our capabilities to prevent 
conflict; shape the environment by building partner capacity; win the 
current war against terrorists in Iraq, Afghanistan, and elsewhere; and 
prepare ourselves to win the next war decisively.
    A ready Army is a manned, trained, equipped, and well-led force 
that can conduct Joint missions to deter and defeat a wide range of 
state and non-state actors. No American soldier should ever go to 
combat unready for the brutal and unforgiving environment of ground 
combat--that is the contract we must ensure is rock solid between the 
American people and the American Army. Therefore, this budget requests 
Congressional support to fund readiness and end strength, provide our 
soldiers with modern equipment, and ensure adequate soldier quality of 
life.
                  adapting to new strategic realities
    The global security environment is increasingly uncertain and 
complex. Opportunities to create a less dangerous world through 
diplomacy, economic stability, collective security, and national 
example exist, but military strength is both a complementary and 
foundational element of National power in a dangerous world. Each 
element is necessary in combination with the others; however, each 
alone is insufficient to win a war or maintain a peace. The conditions 
of diplomatic success, for example, are more likely if military options 
are credible, real, and perceived as unacceptable to an adversary. 
Therefore, for the Nation to advance its enduring national interests, 
our Joint force as a whole, and the Army in particular--in terms of 
capacity and capability--must remain strong.
    In Europe, Russia continues to act aggressively. While we cannot 
predict Russia's next move, its record of aggression in multiple 
domains throughout the last decade--Georgia in 2008 and Ukraine (both 
eastern and Crimea) in 2014--clearly illustrates the need to be 
prepared to deter or defeat further Russian aggression. Russian acts of 
aggression are a direct threat to the national security of the United 
States and our NATO allies. Accordingly, in this budget we ask for your 
support to modify the Army's posture in Europe, including more 
rotational forces, prepositioned equipment, and increased operational 
use of the Army National Guard and Army Reserve.
    Throughout the Middle East and South Asia, radical terrorism 
threatens regional order. The Islamic State of Iraq and the Levant, al 
Qaeda, and other transnational terrorist groups present a significant 
threat and must be destroyed. The Islamic State of Iraq and the Levant 
is the most lethal and destabilizing terrorist group in modern history. 
There are more members of radical Islamic terrorist groups operating in 
Iraq, Syria, Egypt, Saudi Arabia, Libya, Algeria, Morocco, and 
elsewhere than ever before. Their ability to seize and hold territory 
and spread their ideology through social media is a significant 
challenge. They also have demonstrated both capability and intent for 
global reach into Europe, Asia, and the United States Homeland. 
Additionally, although the imminent threat of Iran's nuclear weapons 
development has reduced, Iran remains a supporter of various terrorist 
groups and is a considerable threat to stability in the Middle East and 
United States interests. Destroying the Islamic State of Iraq and the 
Levant and other radical terrorist groups will take considerable time. 
It is a necessary commitment and we ask Congress for continued 
resources to sustain our efforts in the Middle East and South Asia for 
the long term.
    Strategically in Asia and the Pacific, there are complex systemic 
challenges from unresolved territorial disputes, economic and 
demographic change, a little noticed ongoing arms race, a perceptible 
rise in nationalism, and a lack of multilateral collective security 
regimes in Northeast Asia. China is not currently an enemy, but their 
rapid military modernization and activities in the South China Sea are 
warning signs that cause concern. China continues to militarize 
territorial claims in the South China Sea and impede freedom of 
navigation in the Asia-Pacific region. The Army, in support of naval, 
air, and diplomatic efforts, will play a significant role in 
maintaining peaceful relations with a rising China. Meanwhile, North 
Korean nuclear and missile developments, in combination with routine 
acts of provocation in the Demilitarized Zone, continue to pose an 
imminent threat to regional security in Northeast Asia. The Army's 
assigned and rotational forces in the Republic of Korea, Japan, and 
throughout the Asia-Pacific region today provide a deterrent and 
contingency response capability that strengthens defense relationships 
and builds increased capacity with our allies. We must sustain and 
improve that capability to execute our national strategy to rebalance 
to the Asia-Pacific. In short, the conditions for potential conflict in 
Asia, as in Europe, are of considerable concern and our Army has an 
important role to prevent conflict and if conflict occurs, then to win 
as part of the Joint force.
    Politically, socially, economically, and demographically, Africa's 
potential for positive growth is significant. Realizing this potential 
depends on African governments' ability to provide security and 
stability for their people against terrorist groups such as the Boko 
Haram, al Shabaab, and al Qaeda in the Islamic Maghreb as well as the 
Islamic State of Iraq and the Levant in Libya. Army forces partner with 
ministries of defense to develop and shape the environment and 
establish strategic frameworks that employ forces, build professional 
military institutions, and partner with European Allies to achieve 
shared strategic objectives.
    In Central and South America, criminal gang and drug trafficking 
activities have wrought devastating consequences in many of our partner 
nations, degrading their civilian police and justice systems, 
corrupting their institutions, and contributing to a breakdown in 
citizen safety. Our annual multinational training exercises with our 
partners promote regional cooperation and enhance readiness of partner 
nation military forces. To date, we have active partnerships with 
defense and security forces from 26 nations in the Caribbean, Central 
America, and South America.
    Today, state and non-state actors are destabilizing major regions 
of the world by combining conventional and irregular warfare with 
terrorism. Acts of aggression also occur through surrogates, cyber and 
electronic systems, organized criminal activity, and economic coercion. 
These groups mobilize people, resources, and sophisticated modern 
weapons in unconventional ways that enable hostile actors to be more 
agile than traditional militaries. Since these advantages are low cost, 
it is likely this form of conflict will persist well into the future 
and our Army must adapt.
    The U.S. Army, as the principal land force of a global power, does 
not have the luxury of preparing to fight only one type of enemy, at 
one time, in one place. We cannot forecast precisely when and where the 
next contingency that requires Army forces will arise. However, history 
indicates that the next contingency will likely require a commitment of 
conventional and unconventional forces to conduct operations of 
significant scale and duration to achieve strategic objectives. If a 
major crisis occurred today, the Army would likely deploy all 
uncommitted forces--from all components--into combat on very short 
notice. Therefore, the readiness of the Army is key to the security of 
the Nation. Unfortunately, less than one-third of Army forces are at 
acceptable readiness levels to conduct sustained ground combat in a 
full spectrum environment against a highly lethal hybrid threat or 
near-peer adversary. The risk of deploying unready forces into combat 
is higher U.S. casualty rates and increased risk to mission success. To 
mitigate this risk, the Army will continue to prioritize readiness to 
reverse declines from the past 15 years of continuous combat and 
reduced resources. We welcome continued Congressional support in this 
effort.
                  the foundation of america's defense
    Fundamentally, America's Army protects the Nation by winning wars 
as part of the Joint Force. As the Nation's principal land force, the 
Army organizes, trains, and equips forces for prompt and sustained 
campaign-level ground combat. The Army is necessary to defeat enemy 
forces, control terrain, secure populations, consolidate gains, 
preserve joint force freedom of action, and establish conditions for 
lasting peace. To do the core tasks globally against a wide range of 
threats, the Army must have both capability and capacity properly 
balanced. Although important, it is not just the size of the Army that 
matters, but rather the right mix of capacity, readiness, skill, 
superior equipment, and talented soldiers, which in combination, are 
the key to ground combat power and decision in warfare.
    Today's Army maintains significant forces stationed and rotating 
overseas that provide a visible and credible deterrent. However, should 
war occur, we must terminate the conflict on terms favorable to the 
United States--this requires significant ready forces and the 
operational use of the Army National Guard and Army Reserve. Only the 
Army provides the President and the Secretary of Defense the ability to 
rapidly deploy ground forces, ranging in decisive ground capabilities 
from Humanitarian Assistance and Countering Terrorism to high-end 
decisive operations. Moreover, the Army conducts these operations in 
unilateral, bilateral, or coalition environments across the range of 
conflict from unconventional warfare to major combat operations. In the 
end, the deployment of the American Army is the ultimate display of 
American resolve to assure allies and deter enemies.
    While the Army fights alongside the Navy, Air Force, Marines, Coast 
Guard, and our allies, the Nation also relies on a ready Army to 
provide unique capabilities for the Nation's defense. Unique to the 
Army is the ability to conduct sustained land campaigns in order to 
destroy or defeat an enemy, defend critical assets, protect 
populations, and seize positions of strategic advantage. Additionally, 
as the foundation of the Joint Force, the Army provides critical 
capabilities--command and control, communications, intelligence, 
logistics, and special operations--in support of Joint operations. In 
short, a ready Army enables the Nation to deploy ground forces in 
sufficient scale and duration to prevent conflict, shape outcomes, 
create multiple options for resolving crises, and if necessary, win 
decisively in war.
                         ready to fight tonight
    The Army's primary focus on counterinsurgency for the last decade 
shaped a generation of Army leaders with invaluable skills and 
experiences. Nonetheless, this expertise comes at a cost. Today, most 
leaders of combat formations have limited experience with combined arms 
operations against enemy conventional or hybrid forces. Moreover, the 
current operational tempo and changing security environment continues 
to place significant demands on Army forces, stressing our ability to 
rebuild and retain combined arms proficiency. The Army currently 
provides 40 percent of planned forces committed to global operations 
and over 60 percent of forces for emerging demands from combatant 
commanders.
    The four components of readiness--manning, training, equipping, and 
leader development--describe how the Army prioritizes its efforts to 
provide trained and ready forces ready to fight and win our Nation's 
wars. Even though investing in readiness takes time and is expensive, 
the result ensures that our soldiers remain the world's premier combat 
land force.
    The first component of readiness, manning, is about people--the 
core of our Army and keystone to innovation, versatility, and combat 
capabilities. Unlike other Services that derive power from advanced 
platforms, the collective strength of the Army is people. America's 
Army must recruit resilient, fit people of character and develop them 
into quality soldiers. After recruitment, the Army develops men and 
women into competent officers, non-commissioned officers, and soldiers 
who possess combat skills and values essential to the profession of 
arms. Unfortunately, in order to meet Regular Army end strength 
reduction requirements, the Army has involuntary separated thousands of 
mid-career soldiers. While numbers are not the only factor, end 
strength reductions below the current plan will reduce our capability 
to support the National Military Strategy. Additionally, manning 
requires an appropriate mix of forces across the Army--Regular Army, 
Army National Guard, and the Army Reserve--to accomplish our National 
military objectives. To support Joint Force commitments worldwide over 
the last 15 years, the Army increased its operational use of the Army 
National Guard and the Army Reserve. We will continue this trend as we 
draw down the Regular Army. With the support of Congress, we can 
maintain the appropriate force mix capable of conducting sustained land 
combat operations worldwide with increased operational use of the Army 
National Guard and Army Reserve.
    To win on the battlefield, the Army must sufficiently resource 
training--the second component of readiness--to provide sufficient 
combat ready units in a timely manner. Building readiness from the 
individual soldier to collective units across multiple echelons is time 
intensive. Moreover, a ready unit is not only prepared in the 
classroom; it is prepared by conducting rigorous and repetitive 
training under intense pressure and realistic battlefield conditions. 
Training at the highest level, the kind the Army conducts at combat 
training centers, brings all elements of the force together to practice 
firing, maneuver, and leader decisions against a skilled and determined 
enemy in all environmental conditions. In fiscal year 2016 and fiscal 
year 2017, the Army has programmed 19 combat training center rotations, 
giving soldiers and leaders intensive combined arms maneuver 
experiences in anticipation of future combat. Key to success of the 
combat training center exercises is preparing at home station. Both 
combat training center exercises and home station training have 
declined in the past 15 years. Ultimately, training is the most 
essential aspect of readiness and we must rapidly improve this area. 
Therefore, we request funding for training that will enable our 
soldiers to succeed.
    A trained army requires modern equipment to win--the third 
component of readiness. An unintended consequence of the current fiscal 
environment is that the Army has not equipped and sustained the force 
with the most modern equipment and risks falling behind near-peers. 
Instead, funding constraints forced the Army to selectively modernize 
equipment to counter our adversary's most significant technological 
advances. While we are deliberately choosing to delay several 
modernization efforts, we request Congressional support of our 
prioritized modernization programs to ensure the Army retains the 
necessary capabilities to deter and if necessary, defeat an act of 
aggression by a near-peer.
    The fourth component of Army readiness is leader development. As 
stated in the 2015 National Military Strategy, ``Military and civilian 
professionals are our decisive advantage.'' The Army is committed to 
build leaders of character who are technically and tactically 
proficient, adaptive, innovative, and agile. It takes time to develop 
soldiers who can successfully lead, train, and equip a unit for combat. 
Leader development starts with a framework of formal training coupled 
with professional education and operational assignments. Professional 
Military Education serves as the principal way leaders combine 
experiences gained during operational assignments with current and 
emerging doctrinal methods in preparation for combat. As such, we have 
re-established the requirement to have our leaders complete military 
education prior to promotion. Ultimately, predictable funding provides 
the facilities and faculty that develop Army leaders who provide the 
Nation an advantage that neither technology nor weapons can replace.
    The deliberate decision to prioritize readiness while reducing end 
strength and decreasing funding for modernization places the Army in a 
readiness paradox: devoting resources to today's readiness invariably 
decreases investments for future readiness. While the Army prefers 
investments for current and future readiness, the security environment 
of today demands readiness for global operations and contingencies. We 
request the support of Congress to fund Army readiness at sufficient 
levels to meet current demands, build readiness for contingencies, and 
understand the mid and long term risks.
                      strengthening army readiness
    Before the Army can significantly increase readiness, there must be 
an infrastructure to support Army manning, training, equipping, and 
leader development. Army readiness occurs on Army installations--where 
soldiers live, work, and train. Installations provide the platform 
where the Army focuses on its fundamental task--readiness. The Army 
maintains 154 permanent Army installations, and over 1100 community-
based Army National Guard and Army Reserve Centers worldwide. 
Regrettably, we estimate an annual burden of spending at least $500M/
year on excess or underutilized facilities. In short, smaller 
investments in Army installations without the ability to reduce excess 
infrastructure jeopardizes our ability to ensure long-term readiness. 
To continue the efficient use of resources, the Army requests 
Congressional authority to consolidate or close excess infrastructure.
    As we spend taxpayer's dollars, the Army makes every effort to 
achieve the most efficient use of resources and demonstrate 
accountability. The Army is conducting a 25 percent headquarters 
personnel reduction to minimize the impact of our end strength 
reductions to our combat formations. These headquarters personnel 
reductions and future reductions will reduce authorizations for 
soldiers and civilians at a comparable rate.
    The Army is also reviewing the recommendations of the National 
Commission of the Future of the Army. After a thorough assessment, we 
intend to implement recommendations that increase Army readiness, 
consistent with statute, policy, and available resources. 
Implementation of any recommendation will include the coordinated 
efforts of the Army's three components: the Regular Army, the Army 
National Guard, and the Army Reserve. The Army may request the support 
of Congress to reprogram funding and, if needed, request additional 
funds to implement the commission's recommendations.
    In addition to the recommendations of the National Commission of 
the Future of the Army, the size and mix of Army forces relates to the 
capabilities required in the 2015 National Military Strategy. To 
respond to global contingencies or domestic emergencies, the Army has 
37 multicomponent units--units that have members of the Regular Army, 
Army National Guard, and the Army Reserve. Multicomponent units 
strengthen Army readiness by training together today and if needed, 
fighting together tomorrow.
    The Army has excelled in providing trained and ready forces for 
combatant commanders across a wide array of missions for the past 15 
years of war. This creates the impression we are ready for any 
conflict. In fact, only one-third of Army forces are at acceptable 
combat readiness levels, a byproduct of near continuous deployments 
into Iraq and Afghanistan. To address this readiness shortfall, the 
Army has redesigned our force generation model to focus on Sustainable 
Readiness: a process that will not only meet combatant commander 
demands, but will sustain unit readiness in anticipation of the next 
mission. This process synchronizes manning, equipping, training and 
mission assignments in such a way to minimize readiness loss and 
accelerate restoration of leader and unit proficiency. Designed for all 
three components and all types of units, our objective within current 
budget projections is to achieve two-thirds combat readiness for global 
contingencies by 2023. But, we will do everything possible to 
accelerate our progress to mitigate the window of strategic risk.
                    modernization: equipped to fight
    While rebalancing readiness and modernization in the mid-term, from 
2020 to 2029, the Army will not have the resources to equip and sustain 
the entire force with the most modern equipment. Informed by the Army 
Warfighting experiments, the Army will invest in programs with the 
highest operational return and we build new only by exception. We will 
delay procurement of our next generation platforms and accept risk to 
mission in the mid-term. The Army Equipment Modernization Strategy 
focuses on the five capability areas of Aviation, the Network, 
Integrated Air Missile Defense, Combat Vehicles, and Emerging Threats.
    The Army will resource the first capability area, Aviation, to 
provide greater combat capability at a lower cost than proposed 
alternatives. Key to the success of this initiative is the divestment 
of the Army's oldest aircraft fleets and distributing its modernized 
aircraft between the components. The Army will upgrade the UH-60 Black 
Hawk fleet and invest in the AH-64 Apache. These helicopters provide 
the capability to conduct close combat, mobile strike, armed 
reconnaissance, and the full range of support to Joint operations. 
Though aviation modernization is a priority, reduced funding caused the 
Army to decelerate fleet modernization by procuring fewer UH-60 Black 
Hawks and AH-64 Apaches in fiscal year 2017.
    Second, the Army must maintain a robust Network that is not 
vulnerable to cyber-attacks. This network provides the ability for the 
Joint Force to assess reliable information on adversaries, the terrain, 
and friendly forces. This information provides a decisive advantage by 
enabling the Joint Force commander to make accurate and timely 
decisions, ultimately, hastening the defeat of an adversary. Key 
investments supporting the network are the Warfighter Information 
Network-Tactical; assured position, navigation, and timing; 
communications security; and defensive and offensive cyberspace 
operations.
    The Army will invest in the third capability area, Integrated Air 
Missile Defense, to defeat a large portfolio of threats, ranging from 
micro unmanned aerial vehicles and mortars to cruise missiles and 
medium range ballistic missiles. The Army will support this priority by 
investing in an Integrated Air and Missile Defense Battle Command 
System, an Indirect Fire Protection Capability, and the Patriot missile 
system.
    Army improvements to Combat Vehicles ensure that the Army's fourth 
modernization capability area provides future Army maneuver forces an 
advantage over the enemy in the conduct of expeditionary maneuver, air-
ground reconnaissance, and joint combined arms maneuver. Specifically, 
the Army will invest in the Ground Mobility Vehicle, Stryker lethality 
upgrades, Mobile Protected Firepower, and the Armored Multi-Purpose 
Vehicle.
    Finally, the Army will address Emerging Threats by investing in 
mature technologies with the greatest potential for future use. The 
Army will invest in innovative technologies that focus on protecting 
mission critical systems from cyber-attacks. To this end, the Army will 
invest in innovative technologies focused on active protection systems 
(both ground and air), aircraft survivability, future vertical lift, 
directed energy weapons, cyber, and integrated electronic warfare.
    The Army modernization strategy reflects those areas in which the 
Army will focus its limited investments for future Army readiness. 
However, our implementation of the strategy will fall short if we delay 
investment in next generation platforms. We request the support of 
Congress to provide flexibility in current procurement methods and to 
fund these five capability areas--Aviation, the Network, Integrated Air 
Missile Defense, Combat Vehicles, and Emerging Threats--to provide the 
equipment the Army requires to fight and win our Nation's wars.
    We support the ongoing Congressional efforts to streamline 
redundant and unnecessary barriers in the acquisition process. Our 
adversaries are rapidly leveraging available technology; our 
acquisition process must be agile enough to keep pace. Aligning 
responsibilities with authorities only improves the acquisition 
process. The Army remains committed to ensuring that we make the right 
acquisition decisions and that we improve the acquisition process to 
maintain a technological advantage over adversaries and provide 
requisite capabilities to soldiers.
         soldiers, civilians, and families: our greatest asset
    The Army's collective strength originates from the quality citizens 
we recruit from communities across America and place into our 
formations. We build readiness by training and developing American 
citizens into ethical and competent soldiers who are mentally and 
physically fit to withstand the intense rigors of ground combat. 
Additionally, the families of our soldiers make sacrifices for the 
Nation that contribute to Army readiness and play an important part in 
achieving mission success. As a result of the dedication and sacrifices 
of soldiers and their families, the Army is committed to providing the 
best possible care, support, and services.
    The Army is committed to improve access of behavioral health 
services. Beginning in 2012, the Army transformed its behavioral health 
care to place providers within combat brigades. These embedded 
behavioral health teams improve soldier readiness by providing care 
closer to the point of need. However, the Army only has 1,789 of the 
2,090 behavioral health providers required to deliver clinical care. 
The Army will continue to use all available incentives and authorities 
to hire these high demand professionals to ensure we provide our 
soldiers immediate access to the best possible care.
    The Army provides an inclusive environment that provides every 
soldier and civilian equal opportunities to advance to the level of 
their ability regardless of their racial background, sexual 
orientation, or gender. This year, the Army removed legacy gender-based 
entry barriers from the most physically and mentally demanding 
leadership school the Army offers--the United States Army Ranger 
School. To date, three female soldiers have graduated the United States 
Army Ranger School. We increasingly recognize that we derive strength 
from our diversity, varying perspectives, and differing qualities of 
our people. The Army welcomes the increased opportunities to bring new 
ideas and expanded capabilities to the mission.
    The Army does not tolerate sexual assault or sexual harassment. We 
are committed to identifying and implementing all proven methods to 
eliminate sexual harassment and sexual assault. As an example, the 
United States Army Cadet Command shared sexual harassment and sexual 
assault prevention best practices with universities and organizations 
nationwide. Currently, Cadet Command has 232 Army Reserve Officers 
Training Corps programs that have signed partnership charters with 
their colleges or universities. These cadets actively participate in 
education and awareness training on campuses that include programs such 
as ``Take Back the Night'' and ``Stomp Out Sexual Assault.'' Cadets 
also serve as peer mentors, bystander intervention trainers, and sexual 
assault prevention advocates.
    Prevention is the primary objective of the Army Sexual Harassment/
Assault Response and Prevention (SHARP) program. However, when an 
incident does occur, the Army initiates a professional investigation to 
hold the offender accountable while providing best-in-class support and 
protection to the survivor. Additionally, the Army performs assessments 
of SHARP program strategies to measure effectiveness. To increase 
effectiveness, the U.S. Army Medical Command ensures that every 
Military Treatment Facility operating a 24/7 Emergency Room has a 
trained and qualified Sexual Assault Medical Forensic Examiner. Our 
enduring commitment to the SHARP program strives to eliminate sexual 
assault and sexual harassment, strengthen trust within our formations, 
and ensure our soldiers are combat ready.
    Another program committed to keeping the faith and improving 
quality of life is the Soldier For Life Program. The Soldier For Life 
program connects Army, governmental, and community efforts to build 
relationships that facilitate successful reintegration of our soldiers 
and their families into communities across America. Currently, the 
Soldier For Life program offers support to 9.5 million Army veterans 
and soldiers. Moreover, the Army plans to support the transition of 
374,000 soldiers in the next three years. In 2015, veteran unemployment 
in the United States was at a seven-year low and employers hired 
veterans at higher rates than non-veterans. Additionally, the Army 
distribution of fiscal year 2015 unemployment compensation for former 
servicemembers was down 25 percent, $81.8 million, from fiscal year 
2014. The Army seeks to continue the positive trends for Army soldiers, 
family members, and veterans in 2015. Ultimately, this program provides 
a connection between the soldiers and the American people.
    The Army's most valuable asset is its people; therefore, the well-
being of soldiers, civilians, and their family members, both on and 
off-duty remains critical to the success of the Army. Taking care of 
soldiers is an obligation of every Army leader. The Army focuses on 
improving personal readiness and increasing personal accountability. 
Programs like ``Not in My Squad,'' first championed by Sergeant Major 
of the Army Daniel Dailey, empower Army leaders to instill Army values 
in their soldiers and enforce Army standards. Our soldiers and 
civilians want to be part of a team that fosters greatness. It is 
through personal conduct and proactive leadership that we seek to 
improve on a culture of trust that motivates and guides the conduct of 
soldiers. The American people expect and continue to deserve an Army of 
trusted professionals.
                       the army's budget request
    The Army requires sustained, long term, and predictable funding. We 
thank Congress for the Bipartisan Budget Act of 2015, which provides 
short-term relief and two years of predictable funding. However, 
funding levels are not keeping pace with the reality of the strategic 
environment and global threats. Moreover, while the current budget 
provides predictability, it does so at funding levels less than 
envisioned by the President last year. In short, the fiscal year 2017 
Army Budget base request of $125.1 billion is $1.4 billion less than 
the fiscal year 2016 enacted budget of $126.5 billion. As a result, the 
Army will fully fund readiness, reduce funding for modernization and 
infrastructure maintenance, and continue programmed end strength 
reductions.
    Our major goals in this budget request are to: improve readiness by 
fully manning in combat units, increase combat power, streamline 
headquarters, improve command and control, and conduct realistic 
combined arms training. The Army will also modernize in five capability 
areas: Aviation, the Network, Integrated Air Missile Defense, Combat 
Vehicles, and Emerging Threats. Additionally, the Army will ensure the 
recruitment and retention of high quality soldiers of character and 
competence. The fiscal year 2017 budget also provides adequate funding 
so that we can provide soldiers, civilians, and their families the best 
possible quality of life. Absent additional legislation, the Budget 
Control Act funding levels will return in fiscal year 2018. This 
continued fiscal unpredictability beyond fiscal year 2017 is one of the 
Army's single greatest challenges and inhibits our ability to generate 
readiness. This will force the Army to continue to reduce end strength 
and delay modernization, decreasing Army capability and capacity--a 
risk our Nation should not accept.
                               conclusion
    The Army's fiscal year 2017 budget prioritizes readiness while 
reducing our end strength and delaying modernization. Prioritizing Army 
readiness ensures the Joint Force has the capability to deter, and when 
required, fight and win wars in defense of the United States and its 
national interests. To fulfil this obligation to the Nation, the Army 
requires predictable and sufficient funding to build readiness, 
maintain Army installations, modernize equipment, and provide soldier 
compensation commensurate with their service and sacrifice.
    The Nation's resources available for defense are limited, but the 
uncertainties of today require a ready force capable of responding to 
protect our national interests. An investment in readiness is the 
primary means that allows the Army to meet the demands of our combatant 
commanders and maintain the capacity to respond to contingencies 
worldwide. By building readiness, the Army provides the Joint Force the 
ability to respond to unforeseeable threats, decisively defeat our 
enemies, and advance the Nation's national security interests. As a 
result of our current fiscal uncertainty, the Army prioritizes today's 
readiness and accepts risk in modernization, infrastructure 
maintenance, and sustained end strength in the mid and long term. We 
request the support of Congress to fund Army readiness at sufficient 
levels to meet current demands, build readiness for contingencies, and 
understand the mid and long term risks. Ultimately, the American people 
will judge us by one standard: that the Army is ready when called upon 
to fight and win our Nation's wars.

    Chairman McCain. General Milley?

STATEMENT OF GENERAL MARK A. MILLEY, USA, CHIEF OF STAFF OF THE 
                              ARMY

    General Milley. Thank you, Chairman McCain and Ranking 
Member Reed and other distinguished members of the committee 
for the opportunity to appear before you today to discuss our 
Army. Thank you for your consistent support and commitment to 
our soldiers, our civilians, and our families.
    The United States Army, as I mentioned six months ago when 
I took this job, must remain the most capable, versatile, and 
lethal ground force valued by our friends and most importantly 
feared by our enemies.
    This mission in my view has one common thread, and that 
thread is readiness. A ready Army is manned, trained, equipped, 
and well led as the foundation of the joint force in order to 
conduct missions to deter and if deterrence fails, to defeat a 
wide range of state and non-state actors today, tomorrow, and 
into the future.
    As mentioned by the chairman, 15 years of continuous 
counterinsurgency operations, combined with recent reduced and 
unpredictable budgets, has created a gap in our proficiency to 
conduct combined arms operations against enemy conventional or 
hybrid forces resulting in an Army today that is less than 
ready to fight and win against emerging threats. America is a 
global power, and our Army must be capable of meeting a wide 
variety of threats under varying conditions anywhere on earth. 
Our challenge today is to sustain the counterterrorism/
counterinsurgency capabilities that we have developed to a high 
degree of proficiency over the last 15 years while 
simultaneously rebuilding the capability to win in ground 
combat against higher-end threats such as Russia, China, North 
Korea, and Iran. We can wish away these cases, but we would be 
very foolish as a Nation to do so.
    This budget prioritizes readiness because the global 
security environment is increasingly uncertain and complex. 
Today in the Middle East, South Asia, and Africa, we see 
radical terrorism and the malign influence of Iran threatening 
the regional order. Destroying ISIS [Islamic State in Iraq and 
Syria] is the top operational priority of the President of the 
United States. The Army conventional and special operations 
forces are both playing a key part in that effort.
    In Europe, a revanchist Russia has modernized its military, 
invaded several sovereign countries since 2008, and continues 
to act aggressively towards its neighbors using multiple means 
of Russian national power. The Army will play an increasing 
role in deterring or, if necessary, defeating an aggressive 
Russia.
    In Asia and the Pacific, there are complex systemic 
challenges with a rising China that is increasingly assertive 
militarily, especially in the South China Sea, and a very 
provocative North Korea. Both situations are creating 
conditions for potential conflict. Again, the United States 
Army is key to assuring our allies in Asia and deterring 
conflict or defeating the enemy if conflict occurs.
    While none of us in this room or anywhere else can forecast 
precisely when and where the next contingency will arise, it is 
my professional military view that if any contingency happens, 
it will likely require a significant commitment of Army ground 
forces because war is ultimately an act of politics requiring 
one side to impose its political will on the other. While wars 
often start from the air or the sea, wars ultimately end when 
political will is imposed on the ground. If one or more 
possible unforeseen contingencies happen, then the United 
States Army currently risks not having ready forces available 
to provide flexible options to our national leadership, and if 
committed, we risk not being able to accomplish the strategic 
tasks at hand in an acceptable amount of time. Most 
importantly, we risk incurring significantly increased U.S. 
casualties.
    In sum, we risk the ability to conduct ground operations of 
sufficient scale and ample duration to achieve strategic 
objectives or win decisively at an acceptable cost against the 
highly lethal hybrid threat or near peer adversary in the 
unforgiving environment of ground combat.
    The Army is currently committed to winning our fight 
against radical terrorists and deterring conflict in other 
parts of the globe. Right now as we speak, the Army provides 46 
percent of all of the combatant commanders' demands around the 
globe and 64 percent of all emerging combatant commander 
demand. As pointed out by both the ranking member and the 
chairman, almost 190,000 American soldiers are currently 
deployed in over 140 countries globally.
    To sustain current operations and to mitigate the risks of 
deploying an unready force into the future, the Army will 
continue to prioritize and fully fund readiness over end 
strength, modernization, and infrastructure. This is not an 
easy choice, and we recognize the risk to the future. While the 
Army prefers our investment for both current and future 
readiness, the security environment of today and the near 
future drive investment into current readiness for global 
operations and potential contingencies.
    Specifically, we ask your support to fully man and equip 
our combat formations and conduct realistic combined arms 
combat training at both home station and our combat training 
centers. We ask your support for our modernization in five key 
limited areas: aviation, command and control network, 
integrated air missile defense, combat vehicles, and the 
emerging threats programs. Finally, we ask and appreciate your 
continued support for our soldiers and their families to 
recruit and retain high quality soldiers of character and 
competence.
    We request your support for the fiscal year 2017 budget and 
we thank you for the Bipartisan Budget Act of 2015, which did 
provide some short-term relief and two years of predictable 
funding.
    With your support, we will fund readiness at sufficient 
levels to meet our current demand, and we will build readiness 
for contingencies for the future.
    Thank you for your continued support, and I look forward to 
your questions.
    Chairman McCain. Well, thank you, General.
    I have read yours and Secretary Murphy's written testimony, 
which I think is excellent. It is not often that I quote from 
it, but in reference to the Budget Control Act, you state this 
continued fiscal unpredictability beyond fiscal year 2017 is 
one of the Army's single greatest challenges and inhibits our 
ability to generate readiness. I think that is pretty 
straightforward.
    Then it goes on to say this will force the Army to continue 
to reduce end strength and delay modernization, decreasing Army 
capability and capacity, a risk our Nation should not accept. 
Those are pretty strong words. I thank you for them.
    I am often a critic of the administration's policies, but 
that sentence can be laid at the doorstep of the Congress of 
the United States of America and our failure to stop this 
mindless meat axe reduction in our capabilities to defend this 
Nation. I thank you for the straightforward comments on that 
issue. If--God forbid--a crisis arises, part of the 
responsibility for our inability to act as efficiently and 
rapidly as possible will lay at the doorstep of the Congress of 
the United States of America which, by the way, is a majority 
of my party.
    General Milley, in your statement, you made it very clear, 
but let me just--are we at high military risk?
    General Milley. Senator, yes. I wrote a formal risk 
assessment, which you know is classified, through the Chairman 
and to the Secretary of Defense. I characterized this at this 
current state at high military risk.
    Chairman McCain. High military risk is a very strong 
statement, and I am sure you thought long and hard before you 
made it.
    Could we not substantiate that high military risk by 
pointing out that two of the brigade combat teams are at 
category one--the BCTs [Brigade Combat Teams]--and 
approximately--is it one-third that category one or two? Is 
that correct? Two-thirds of our BCTs would require some 
additional training, equipment, whatever before they would be 
ready to fight? Is that the correct interpretation of that 
classification?
    General Milley. Yes, Senator. In short, yes. I would say 
even those that are--the couple that are at the highest level--
we could deploy them immediately. In fact, one of them is 
forward deployed already. The others, even the ones on the 
second, third, and all the rest of them--they are going to 
require something in terms of training to get them ready. But 
roughly speaking, one-third across the board of our combat 
formations, our combat support, and our combat service support 
are in a readiness status that is ready to go.
    Chairman McCain. It would require, depending on the unit, 
some length of time to make them ready to get into category one 
or two.
    General Milley. That is correct.
    Chairman McCain. Two-thirds are not ready to defend this 
Nation immediately in time of crisis.
    General Milley. That is correct. They would require some 
amount of time to bring them up to a satisfactory readiness 
status to deploy into combat.
    Chairman McCain. You pointed out at the beginning--and so 
did I--the 186,000 soldiers in 140 locations around the globe. 
Can we maintain that if we continue to reduce the end strength 
of the Army down to 420,000, taking into consideration we are 
an All-Volunteer Force?
    General Milley. To my knowledge, 420,000 is only under 
sequestration. This budget takes it to 450,000. But even at 
450,000 for the Active force--and some of those forces deployed 
overseas are National Guard and Reserve. A 980,000 total Army 
is stretched to execute the global commitments. The real issue 
is if a contingency arises, and then some really tough choices 
are going to have to get made.
    Chairman McCain. Any sane observer of what is going on in 
the world would surmise, as we incrementally increase our 
particularly Army special forces deployments, that the 
requirements, at least in the short term or short and medium 
term, is going to require more deployments, more training, more 
equipment in order to counter the rising threats that we see 
that Secretary Murphy outlined in this opening statement. Is 
that true?
    General Milley. I think that is a correct assessment. Yes, 
Senator.
    Chairman McCain. Which is why you have come to the 
conclusion that we are at, quote, high military risk.
    General Milley. That is correct. On the high military risk, 
to be clear, we have sufficient capacity and capability and 
readiness to fight counterinsurgency and counterterrorism. High 
military risk refers specifically to what I see as emerging 
threats and potential for great power conflict, and I am 
specifically talking about the time it takes to execute the 
tasks. High risk would say we would not be able to accomplish 
all the tasks in the time necessary and the cost in terms of 
casualties. Combined, that equals my risk assessment.
    Chairman McCain. Well, I thank both you and Secretary 
Murphy for your very forthright testimony before the committee 
today. I think it is extremely helpful.
    Senator Manchin?
    Senator Manchin. Thank you, Mr. Chairman.
    I thank both of you for your service and appreciate you 
being here.
    In the past few days, General Milley, I have had a chance 
to talk with some of your general officers and came away with 
two big concerns: the reduction of the size of our Army and 
budget predictability--more so than I have ever been. I have 
been shaking my head at sequestration for years now. It is a 
foolish way to set budgets. It was a penalty that we put on 
ourselves because we never thought we would ever go there, that 
we would ever be dysfunctional or become in political discord 
the way we are and could not come together to prevent that from 
happening. But it did and we have got to move on.
    So, General Milley, what I would ask--could you walk me 
through specifically how the sequestration has forced the Army 
to reduce its size to the most critical level that I think we 
have ever faced right now with all the threats that we are 
facing?
    General Milley. I think there are a couple of points to be 
made. One is the unpredictability, the year-to-year budgeting. 
In reality because we go with continuing resolutions, it really 
ends up being about a 9-month cycle vice 12-month. The 
unpredictability, the short-term nature of it does not allow 
for longer-term planning projection and some certainty for 
equipment, for example, with industry or for training plans for 
units and so and so. That is a big deal, is the uncertainty.
    The second piece of it is just the magnitude of the cuts. 
Since 2008, the Army has had about a 74 percent or 75 percent 
cut in the modernization account at large and about a 50 
percent cut in R&D [Research & Development] at large. You know, 
less than 10 years. That is a significant cut.
    If we think 10 years ahead and look 10 years behind, if 
that trend continues, that is not good. What we are focusing on 
is today's readiness. A 20- and 21- and 22-year-olds, etcetera 
that are in the Army today--we are focusing on them being ready 
to deploy and to conduct combat operations because that is 
necessary. But if you are 10 years old today, I am worried 
about the 10-year-old who is going to be the soldier 10 years 
from now. That is a bigger risk that we are taking, but we are 
compelled into that risk based on the top line that we are 
given.
    Senator Manchin. We are time-limited right now, but we are 
going to 980,000, I guess, troop strength.
    General Milley. That is correct.
    Senator Manchin. For everything I heard from all of your 
front-line generals basically is there is no way that we can 
meet the imminent threat that we have around the world with 
980,000 people.
    General Milley. It is high risk.
    Senator Manchin. If you confirm that at high risk, what 
would it take for us not to be at high risk? These are 
artificial caps and all this other bull crap that we are 
dealing with.
    General Milley. I have got a series of studies that are 
ongoing. If we operate under the current National Security 
Strategy, the current Defense Planning Guidance, in order to 
reduce to significant risk or moderate risk, it would take, 
roughly speaking, about a 1.2 million person----
    Senator Manchin. We are over 200,000 troops short.
    General Milley. Right. At $1 billion for every 10,000 
soldiers, that money is not there. We are going to make the 
most efficient and effective use of the Army that we have.
    Senator Manchin. Secretary Murphy, if I may. I have a lot 
of concerns regarding the level of contract support. We have 
talked about that and I have never gotten a good handle on it. 
I think I have always heard it has been two for one. For every 
one soldier we have in uniform, we have two people backing that 
person up, roughly.
    My question to you, are the long-term savings that some of 
your bean counters tell us that by having a contractor, there 
is long-term savings that provide substantial--or is the number 
of contractors driven by the arbitrary troop force caps that 
prevent us from deploying the soldiers to do these jobs? Are 
they telling us it is long-term savings here, and with these 
caps here, the only way you are getting around the caps is by 
having more contractors on the back end to do jobs that 
soldiers in uniform should be doing?
    Mr. Murphy. Senator Manchin, after 9/11, when I deployed a 
couple months later, we went from our gate guards and our 
security forces at our compound in Tuzla, Bosnia from our 
soldiers to private contractors.
    Senator Manchin. Because of the caps?
    Mr. Murphy. I am not trying to be disrespectful. They were 
not at the level of readiness. But that is what we have been 
doing for 15 years, Senator. Again, I am not saying that is 
right. I have the numbers. We have cut civilians 46,000, 16 
percent civilians and contractors, 16 percent. That is 46,000 
of them. I am looking at this. The most lethal----
    Senator Manchin. How many troops have we cut over the same 
period of time?
    Mr. Murphy. Well, we cut 150,000. 13 percent in soldiers, 
16 percent in civilians and contractors. I am trying to balance 
this, Senator. You know, we talked about the cuts.
    Senator Manchin. Are you making decisions based on the caps 
that we have? Somebody has put caps in there for some reason 
because we did not want people in uniform, for whatever reason, 
which I cannot understand and cannot explain to the good people 
of West Virginia why you do not want people in uniform who we 
count on and are trained properly to do the job.
    Mr. Murphy. When I was where you were five years ago in 
Congress on the Armed Services Committee, we did not even know 
how many contractors we had. I have my arms around it now. We 
are getting after it, and we are making sure that it makes the 
most fiscal sense but sense mostly for national security.
    Senator Manchin. Very quickly. My time is running out.
    If I could say this, if we go to the 1.2 million, if 
somehow we had the resolve to do what we need to do here to 
meet the imminent threats we have, do we have proportionally 
contractors--we have to go up also in contractors. Will that 
1.2 million be able to do some of the jobs that contractors are 
doing now?
    Mr. Murphy. I would say that some of our soldiers will do 
more of the jobs, but our soldiers are geared for brigade 
combat teams to win.
    Senator Manchin. Thank you. My time is up.
    Chairman McCain. Mr. Secretary, we eagerly look forward to 
the day when you can tell us how many contractors are employed 
in the Department of Defense, and it will be one of the most 
wonderful days of my political career.
    Senator Fischer
    Senator Fischer. Thank you, Mr. Chairman.
    General, this committee has held a number of hearings about 
the future of warfare and what new technologies are going to be 
required. This is something that the Secretary and the Deputy 
Secretary have discussed at length as well. We have heard some 
very bold predictions about incorporating robotic systems on 
the battlefield as soon as the next 10 years. Do you think we 
are going to see a real revolution in the role of unmanned 
systems on the battlefield in the next 10 years? Do you think 
that is a goal that we should be working towards in the view of 
other near-term requirements that you are facing?
    General Milley. Thank you, Senator.
    I think ``revolution'' might be too strong a word. But I do 
see a very, very significant increased use of robotic, both 
manually controlled and autonomous, in ground warfare over the 
coming years. I do not see some sort of revolution like we are 
going to go from the horse to the tank or the musket to the 
rifle. But I do see the introduction at about the 10-year mark 
or so of really widespread use of robotics in ground warfare. 
We are already seeing it in air platforms and we are seeing it 
in naval platforms. The ground warfare is a much complex 
environment, dirty environment, but I do anticipate that we are 
going to refine the use of robots significantly and there will 
be a large use of them in ground combat by--call it--2030.
    Senator Fischer. As service secretary, what role do you 
have in the third offset initiative? We have heard that we will 
be exploring some new operational concepts and capabilities for 
ground combat. Is that something that the Army is leading on?
    Mr. Murphy. Senator, I would say with the third offset, we 
need to lead from the front. We are talking about leap-ahead 
technologies. When you look back at the second offset, we are 
talking about precision munitions. We are talking about GPS 
[Global Positioning System]. When I was in Iraq, we did most of 
our operations at night because we had night vision goggles. 
Again, this is the technology. When I say we do not want a fair 
fight, we want our soldiers at a technical and tactical 
advantage. When you talk about the leap-ahead technology, the 
third offset, I do think it is robotics. I think robotics, 
cyber, electronic warfare--the gains that we need to make there 
because, by the way, ma'am, our peer competitors are investing 
in those things too, and we cannot be outmanned and outgunned. 
We need to make sure that we have the technical and tactical 
advantage. I am definitely part of that within the Army and 
within the Department of Defense.
    General Milley. May I make a comment, ma'am?
    Senator Fischer. Yes, certainly.
    General Milley. I think for the next 5 to 10 years, for 
ground warfare you will see evolutions and you will see 
acceleration of some of these technologies brought in, but they 
will be episodic. I think 10 years and beyond, though, I do see 
a very significant transformation of ground warfare, the 
character of war, not the nature of war. That would include 
robotics, cyber, lasers, railguns, very advanced information 
technologies, miniaturization, 3D printing. All of these 
technologies that are emerging in the commercial world I think 
will end up having military application just past a decade from 
now. I think we, the Army, going back to risking the future, 
need to invest in the R&D and the modernization of that or we 
are going to find the qualitative overmatch gap between the 
United States and adversaries closed. We are already seeing 
that gap closing today.
    Senator Fischer. When we talk about the third offset, many 
times we focus on the stuff. We focus on the new technologies 
that are out there, and we hear about the robotics. We hear 
about the lasers. I would like to know how much input both of 
you would have when it comes to setting goals and missions and 
then trying to figure out what technologies are out there or 
what needs to be designed in order to meet those goals instead 
of reacting to the technology that is there. How do you view 
that?
    General Milley. I mean, it is an iterative, interactive 
process, number one. But number two, say 25, 30, 40 years ago, 
much innovation was done by the Department of Defense in terms 
of technology. Today most technological innovation is actually 
being done by the commercial world. It is important that we 
have linkages into the commercial sector, Silicon Valley, 128 
up in Boston, the Triangle, and down in Texas. It is all these 
innovative centers. We need to keep in touch with them closely, 
and we do have a lot of input not just personally but also 
through the organization of the Army. We do have a lot of input 
into it. There is a lot of technological advances out there.
    There are a couple of challenges. One is what does the year 
2025, 2030, 2040, 2050 look like demographically, politically, 
economically, socially, et cetera but also technologically. 
Those are some big questions. Once we can figure that out--and 
we are working hard at that--then we can drive the ways in 
which we desire to fight. Once you figure that out, then you 
can figure out the equipment, the organizations, the training 
plans, et cetera to create that organization. But we first have 
to define what exactly is that world going to look like, at 
least as best we can. We will not get it exactly right, but we 
want to get it more right than the enemy.
    Senator Fischer. Thank you, General. I wish you good luck 
in trying to figure that out and meet those goals for the 
future. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Reed?
    Senator Reed. Thank you very much, Mr. Chairman.
    Gentlemen, thank you for your testimony again.
    You have put the focus on readiness, which I think is 
appropriate. If additional resources could be freed up in this 
process, General Milley, where would you focus in terms of more 
emphasis on readiness?
    General Milley. A couple of key places, Senator. Thank you. 
One would be aviation flight hours. I think that is important. 
We dropped aviation flight hours from about 14, 15, which is 
really a requirement per month, down to about 10. We bumped it 
back up to 12, but we probably need some more. That would be 
one area.
    Secondly and very importantly is home station training. We 
all of the units, all the brigade combat teams to go either the 
joint readiness training center, the national training center, 
or the training center in Germany. Key to success at one of 
those big ticket training centers is the home station 
preparatory training prior to going, all the gunneries, the 
field training exercise, et cetera. That has been underfunded 
over the past years. If we can get home station training up to 
a level, then the units will come out of the CTCs [Combat 
Training Centers] at a much higher level in combined arms 
training.
    I would put it probably in aviation flight hours and in the 
home station training.
    Lastly, the third to last would be if we did have 
additional monies, I would probably put it towards additional 
CTC training for the National Guard. The National Guard is 
going to be very, very important because of the capacity issue 
of the regular Army to deal with the current day-to-day but 
also the contingency operation. We need to increase--in short 
order, we need to increase the readiness of the Army National 
Guard's combat formations.
    Senator Reed. This year, I believe you have two scheduled 
rotations to the training centers for National Guard brigades.
    General Milley. That is correct, Senator. We are trying to 
increase it to four.
    Senator Reed. A related issue in terms of the emphasis on 
flying hours and readiness, et cetera, particularly in Army 
aviation, the procurement and the acquisition process--are you 
at a point now where you could jeopardize long-term aviation 
programs, or do you still have a little bit of head space?
    General Milley. I think we are approaching the margin. It 
is very tight right now. What we have done is we have had to 
stretch out aviation modernization in order to reach some of 
that for readiness. Aviation is about, roughly speaking, 20 
percent or so--25 percent of the operating budget. We have 
stretched out aviation modernization to take those monies and 
put it into readiness.
    Senator Reed. One of the points I think that you have made 
in your comments is that the emphasis on training at home 
station, which means the units have to be at home essentially. 
It is the time element. It is the dwell element rather than the 
deploy element.
    General Milley. That is correct.
    Senator Reed. If we were to, not in terms of a major 
contingency, but in terms of the current situation, begin to 
increase our footprint in places around the world, the dilemma 
would be that would rob you of the time and the available 
troops to get ready for the next big battle. Is that a fair 
statement?
    General Milley. Sort of, Senator, in that some of these 
overseas exercises actually improve your readiness.
    Senator Reed. I am not talking about exercises. I am 
talking about a commitment in terms of a kinetic situation.
    General Milley. An operational commitment? Yes, that would 
consume readiness. That is correct.
    Senator Reed. That is the dilemma because we always have to 
be prepared to do that, and if it happens, then we will do it. 
But we have to understand the cost not only short term but long 
term is that we fall further behind in the readiness.
    General Milley. That is correct.
    Senator Reed. The point that has been made very, very 
powerfully by the chairman and myself is that sequestration has 
to be eliminated because this year might be manageable. Next 
year, if sequestration is imposed, it becomes frankly 
impossible and you would have to come up here and tell us that 
you probably could not perform your mission. Is that fair?
    General Milley. I think if sequestration were imposed and 
went to those levels, that we could not perform the missions 
assigned to us under the current strategy. Most important to 
me, as a commissioned officer, and I think important to this 
committee is we would risk American lives if we were committed 
into combat.
    Senator Reed. Well, again, thank you, sir, for your 
service. Thank you, Mr. Secretary, for your service.
    Thank you, Mr. Chairman, for this hearing.
    Chairman McCain. Senator Cotton?
    Senator Cotton. Thank you.
    Thank you, gentlemen, for appearing before us.
    General Milley, I would like to return to the priorities 
you just laid out for Senator Reed. If I heard them right, it 
was more aviation hours and more home station training for 
regular Army units and, finally, more CTC training time for 
National Guard.
    General Milley. Those would be three of the areas. There 
are other areas, but those would be three. That is correct.
    Senator Cotton. Those are the priorities you would spend if 
you got the first extra dollar in your budget, or are those 
limited just to your priorities for more readiness?
    General Milley. Those are readiness dollars.
    Senator Cotton. You had mentioned earlier about the 
soldiers we are sending to fight today and your priority for 
readiness, which you have said repeatedly during your tenure as 
the Chief. America's moms and dads, whose soldiers are serving 
in your Army, at 25 is an enlisted E-5 or a 1st lieutenant, can 
be assured that you would never send one of their sons or 
daughters into combat unready to fight.
    General Milley. That is correct.
    Senator Cotton. But that has a cost in modernization. Moms 
and dads around America, whose 15-year-old son and daughter 
aspire to be in the Army one day, have to be more concerned 
about the qualitative overmatch and capabilities of the future 
Army. Is that correct?
    General Milley. I think that is also correct, Senator.
    Senator Cotton. There is some discussion within the 
Congress about mandating a certain end strength of the Army at 
a higher level than 450,000. I think that would be a good idea. 
I would like to see it much higher than that. Could you talk 
about the consequences if this Congress does, in fact, mandate 
a certain end strength without increasing your budget numbers?
    General Milley. I think if we were mandated to go to a 
higher size, more soldiers, bigger end strength, and we did not 
have the dollars, I personally think that would be disastrous 
for both the Nation and the Army in that we would have to, at 
the end of the day, mortgage more modernization of the future. 
We would have to take down installations, quality of life 
programs. There are all kinds of things that would have to 
happen. At the end of the day, I think we would risk literally 
having a hollow Army. We do not have a hollow Army today, but 
many on this committee remember the days when we did and when 
people did not train and units were not filled up at 
appropriate levels of manning strength and there were no spare 
parts. All of those things would start happening if we 
increased the size of the force without the appropriate amount 
of money to maintain its readiness.
    Senator Cotton. Because a mandatory end strength without a 
budget to match would mean they do not have the money to train, 
to be equipped, go to CTCs, and so forth. However, you also 
mentioned the greater risk for modernization. I assume that is 
because if the Army mandated a certain end strength because of 
your bedrock commitment to send our sons and daughters overseas 
fully equipped, fully trained, fully manned, you would take 
even more money out of modernization.
    General Milley. That is exactly right. The three levels are 
end strength, readiness, and modernization accounts. We would 
have to take down--if end strength went up, then the first one 
out the door is modernization, and I certainly do not recommend 
that. If there were a mandated increase in the size of the 
Army, for whatever reason, then I would strongly urge that that 
happen with the money appropriate for the pay and compensation, 
for the readiness, et cetera. Absent that, I think it would be 
a big mistake.
    Senator Cotton. Thank you. I certainly support a much 
higher end strength than we are on the path to have. I also 
think it would be deeply inadvisable not to match that with a 
concomitant budget increase.
    Turning to modernization, because of the risk we are facing 
there, you were speaking with Senator Fischer about some of the 
commercial technology that we have seen. Could you talk a 
little bit about your new acquisition authorities and your 
desire to use more commercial, off-the-shelf technology. You 
famously said in the Army's handgun program, that if you had--
was it $34 million--you could go to Cabela's and buy 17,000 
handguns for the Army or something like that? You see it across 
other domains as well with the global response force desire for 
enhanced mobility or DCGS [Distributed Common Ground System] 
versus commercial technology.
    General Milley. I think the proposals that are out there 
now on the acquisition reform are absolutely moving in the 
right direction. I welcome that. I embrace it. I do not claim 
that I know everything there is to know about acquisition by a 
long shot. But I think empowering the chiefs to really take 
greater responsibility and with that, of course, comes 
accountability--and I welcome that as well. We should get into 
it. Roll our sleeves up, get after it and get the right 
equipment to the warfighters in a faster amount of time at a 
reasonable cost to the taxpayer. The pistol was just one 
example, but I am bumping into these things all over the place 
in a wide variety of programs.
    There have been an awful lot of sessions going on in the 
Army over the last, I guess, 6-8 weeks now. I am probably not 
on a lot of people's Christmas card list, but that is all okay. 
Our desire is to make sure our soldiers are taken care of.
    Senator Cotton. I cannot imagine that. Maybe they just want 
to bring you home for Thanksgiving.
    General Milley. That must be it.
    Senator Cotton. Well, I imagine you will continue to bump 
up against that unlike some of your counterparts who cannot go 
to Cabela's and buy a next generation fighter or bomber or a 
ballistic missile submarine. There are, of course, a lot of 
modernization opportunities in the Army that use commercial 
technology, and I know you are committed to that. Thank you.
    My time has expired.
    General Milley. Thank you, Senator.
    Chairman McCain. Fortunately, members of this committee are 
without controversy.
    Senator Shaheen?
    Senator Shaheen. Thank you.
    Thank you both for being here this morning and for your 
service.
    I want to begin by adding my support to those on the 
committee who believe that we need to deal with sequestration 
and that it poses an imminent threat to our national security 
and to a lot of other things with respect to our future.
    But I want to follow up on the conversation you were having 
with Senator Fischer, General Milley, talking about the 
importance of innovation, technological innovation, to our 
future. When we were having hearings on the future of our 
military, one of the things we heard is that as you pointed 
out, there has been a dramatic decrease in support for R&D on 
the part of the Department of Defense, and that the one program 
that has consistently provided the kind of innovation that DOD 
needs is the Small Business Innovation Research program. I 
wonder if you could just speak to the importance of that for 
providing the new technologies that the Army is looking for.
    General Milley. I think it is a great program and I fully 
support it. I think small business--not in all cases, but 
oftentimes small entrepreneurs are the most innovative partly 
because of survival techniques, I guess, in business. But they 
tend to be very adaptive, agile, and innovative. Supporting 
those initiatives in order to take advantage and leverage 
emerging technologies is something that I fully support.
    Senator Shaheen. Great. Well, hopefully we can get this 
reauthorized for next year without the kind of challenges we 
had the last time we tried to get it reauthorized.
    I had the opportunity recently to meet in Brussels with 
officials from Europe and from particularly Eastern Europe and 
the Baltics. They were very pleased to see our proposal to 
increase the European Reassurance Initiative fourfold. You both 
mentioned in your testimony the threat from Russia.
    One concern that they asked me about that I could not 
answer was why the decision seems to have been made to 
preposition the equipment, to do the rotational more in Western 
Europe than in Eastern Europe on the front lines. How do we 
explain the decision to do that?
    General Milley. First of all, I would defer an 
authoritative, definitive answer to General Breedlove because 
he is the one who determines where that equipment goes and so 
on and so forth.
    But there are a couple of issues here, not the least of 
which are political negotiations with foreign governments as to 
where it goes, where you base it, and building the 
infrastructure to support it and so on and so forth.
    What we are going to do is the initial tranche--the unit 
will bring its equipment. The rotational units will bring their 
equipment rather than have it prepositioned initially. Then you 
will see in 2017 and 2018 we will have a prepositioned 
divisional set of equipment in Europe.
    There are advantages and disadvantages to prepositioning 
and/or bringing it with you. Both are valued.
    The advantage of deploying with your equipment is to 
exercise the strategic deployment systems of the Navy and the 
Air Force, along with the Army, in order to long haul heavy 
equipment for heavy brigades. The prepositioned equipment--
obviously, the big advantage there is the speed. A combination 
of both actually is what would be required in time of crisis.
    But the positioning of that equipment physically inside 
Europe, I would like to defer that logic and rationale to 
General Breedlove, if that is okay.
    Senator Shaheen. It is. I have had the opportunity to ask 
him about it. But it sounded to me like you are saying that the 
locations are based not just on their military effectiveness 
but politics have also been part of those decisions.
    General Milley. I mean, sure. There are political 
negotiations, you know, diplomatic negotiations between 
countries that have to occur before we get that locked in.
    Senator Shaheen. One of the things that, obviously, our 
continued readiness depends on is the effectiveness of our 
Guard and Reserve. I was pleased to see that this budget 
included two military construction projects in New Hampshire 
that are very important. Right now, we rank 51st out of 54 in 
terms of the condition of our facilities and armories. Can 
you--I do not know. Maybe this is appropriate for you, 
Secretary Murphy--talk about how we ensure that the National 
Guard has the resources that it needs to be ready whenever we 
expect them to deploy?
    Mr. Murphy. Yes, Senator. The National Guard--we are a 
total force. We are not three different forces. We are one 
Army, one team.
    Senator Shaheen. Sorry to interrupt, but sometimes the 
resources do not always seem like we are a total force and one 
team.
    Mr. Murphy. Ma'am, all I can tell you is that when you look 
at MILCON [Military Construction] to the $1 billion budget, 10 
percent went to--again, the MILCON, which is part of the 
budget--it has been the lowest it has been in 24 years. But 
when you dive down in the numbers like I have, you know, 
Hooksett, $11 million; Rochester, $8.9 million because we are 
one team. There is a different leadership because we were 
asking a whole heck of a lot like we have the last 15 years and 
the next 10 years. There are not two different teams. We are 
one team. We are getting after it and we are giving them the 
resources they need to make sure that they do not have a fair 
fight and they have the resources in MILCON.
    But my other comment, ma'am. I mean, we have mortgaged 
modernization. I know time has run out, but I can expand on it 
later if you would like me to.
    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Wicker?
    Senator Wicker. Thank you, Mr. Chairman.
    General Milley, earlier this week, Lieutenant General 
McMaster testified before the Airland Subcommittee. Our 
chairman has already alluded to this in his opening statement. 
But his quote is exactly as follows. We are outranged and 
outgunned by many potential adversaries. He also said our Army 
in the future risks being too small to secure the Nation.
    Now, do you agree with his statement in whole or in part?
    General Milley. In part. H.R. [Herbert Raymond] is one--I 
love him like a brother.
    To say ``many'' is probably an overstatement. But to say 
that the gap is closing, the capability gap is closing between 
major great power adversaries and the United States in terms of 
ground forces, absolutely true. I think that was the intent of 
what he was trying to say.
    In terms of size of the force, yes, I agree with his 
comment on size of the force. But outranged, outgunned on the 
ground, I think it is a mixed bag.
    Senator Wicker. Are we outranged by any potential adversary 
at this point?
    General Milley. Yes.
    Senator Wicker. Which ones would that be?
    General Milley. I would have to say the ones in Europe, 
Russia on the ground.
    Senator Wicker. Would you tell the committee what it means 
to be outranged by Russia?
    General Milley. Well, with either direct or indirect fire 
systems, the ground-based systems, tanks, artillery, those 
sorts of things. I would have to get you the actual range of 
all these weapons. It is not overly dramatic, but it is the 
combination of systems. We do not like it. We do not want it. 
But, yes, technically outranged, outgunned on the ground, I 
think that is factually correct.
    Senator Wicker. Outranged and outgunned would have the same 
definition as far as you are concerned. We are outranged and 
outgunned by Russia to some extent at this point.
    General Milley. That is correct.
    Senator Wicker. Now, what does that mean for our Nation's 
security?
    General Milley. Well, again, it depends on what we want to 
do relative to--in Europe, for example. The fundamental task 
there is to deter, maintain cohesion of the alliance, assure 
our allies, and deter further Russian aggression. If we got 
into a conflict with Russia, then I think that it would place 
U.S. soldiers? lives at significant risk.
    Senator Wicker. What specifically should we do? What steps 
should this committee and this Congress take to reverse these 
trends and maintain the Army's supremacy over our adversaries?
    General Milley. I think there are a couple of things. One, 
I think in terms of the capability of the force, a subset and 
the most important one is what is emphasized in this budget is 
readiness. That has to be sustained.
    What is readiness? It is manning, making sure that we have 
got enough people to man the organizations at appropriate 
levels of strength.
    Senator Wicker. We are okay there.
    General Milley. It depends on the unit. We have a lot of 
non-availables in the force, for example, right now. It depends 
on the given unit. Right now, ideally you would want a unit to 
be well above 90 percent before you sent them off to combat. 
That is not necessarily the truth. Then when you get the 
availability of the force, you start peeling this back unit by 
unit, you will find that the foxhole strength, the number of 
troops that a given battalion or brigade that deploy to, say, 
NTC or JRTC [Joint Readiness Training Center] is not 
necessarily what you might have expected just from the paper 
numbers. Manning is an important piece. That is the end 
strength.
    The equipping piece is critical, things like spare parts. 
First of all, do they have the right and most modern equipment? 
Secondly, does the equipment work? That is a work in progress.
    More or less, manning and equipping is not too bad. 
Training is the long pole in the tent. Then there is more to 
it. It is leadership, cohesion, and good order and discipline 
and trust of the force. All of those in combination equal 
readiness. I would say that the number one thing, at least near 
term, would be readiness.
    But then in addition to that, because we have to look past 
lunchtime here, in addition to readiness, we have got to 
reinvest in our modernization and R&D over time. That is what 
H.R. was getting at. If we continue to attrit that, as we have 
over the last eight years--8 to 10 years or so--if we continue 
to attrit that, then that will result in a bad outcome 5 to 10 
years from now. I think those are the two things I would offer 
to you, Senator.
    Senator Wicker. Thank you very much. Perhaps you can 
elaborate on that.
    I do need to ask you about the light utility helicopter. 
You recently published an unfunded requirement for 17 Lakotas 
in fiscal year 2017. Of course, I was relieved to hear that. 
But can you elaborate on how these 17 Lakotas in your EUFR 
would be utilized and what risk would occur if you do not 
receive those 17 Lakotas?
    General Milley. Yes. Those 17 are specifically tied to the 
National Commission's recommendation, which we owe you a 
response to their recommendations. They have got 63 
recommendations. A lot of them have to do with aviation.
    The 17 Lakotas are specifically tied to their 
recommendations, and they would be utilized at Fort Rucker to 
free up Apaches to go to the Guard. They would specifically be 
utilized to train new helicopter pilots. As you know, the 
Lakota is not a combat aircraft. We have divested it, stopped 
procuring it. It does have great utility for things like 
training areas, using them as op forward to simulate enemy 
aircraft, using them as a medevac aircraft, use it to train 
pilots, and so on and so forth. But it is a not a combat 
aircraft. We have chosen to divest ourselves of it. But the 17 
are in there specifically to use as training aircraft at Fort 
Rucker, and it is linked directly to the National Commission's 
recommendations.
    Senator Wicker. They will free up combat----
    General Milley. They will free up combat aircraft that we 
could then transfer to the National Guard to execute the other 
parts of the commission's recommendation.
    Senator Wicker. Thank you, sir.
    Chairman McCain. General, would you add retention to that 
list?
    General Milley. Yes. Retention, recruiting talent. I 
mentioned the modernization piece, but the readiness piece is 
the most important piece. But absolutely to the list is 
retention.
    Chairman McCain. Senator King?
    Senator King. Thank you, Mr. Chairman.
    First, I want to associate myself with your comments in the 
opening statement and perhaps put a bit of context. We had a 
meeting in the Budget Committee yesterday talking about overall 
budget issues. I think what a lot of people do not realize is 
that the expenditures for defense and non-defense discretionary 
as a percentage of GDP [Gross Domestic Product] have fallen 
dramatically in the last 50 years and dramatically in the last 
25 years to the point where defense as a percentage of GDP is 
now the lowest it has been in 70 years, 3.3 percent. In 1965, 
it was about nine percent. It has fallen almost by two-thirds. 
We always focus on the numbers, which are very big, but as a 
percentage of our economy we are, as I say, at one of the 
lowest levels since World War II.
    Secondly, the budget numbers that we are now working with 
were established in 2011 before Syria, ISIS, Ukraine, Russia's 
militarization of the Arctic, China's race to military 
modernization, North Korea's nuclear capacity, cyber, 
encryption, and of course, on the domestic side, something like 
what we have seen in the last few years in the heroin epidemic.
    In other words, we have locked ourselves into a 
straightjacket of financing that does not allow us to deal with 
current realities. It is absolutely beyond comprehension that 
we should do this, particularly given the sacred responsibility 
in the preamble to the Constitution to provide for the common 
defense. That is the most fundamental responsibility of any 
government to keep its people safe. We are knowingly just 
blindly going through this process of trying to continually 
meet these new challenges that were established since these 
numbers were set up as the limits and fit the response of this 
country into a continually shrinking package. It is 
irresponsible and we have to start talking about the larger 
picture.
    To move beyond budgets, during the break, I spent some time 
in Poland and Ukraine. They are talking about a new kind of 
war, and I want to ask you, General Milley, about a new 
strategy and a new doctrine. They are talking about hybrid war, 
what happened in Ukraine, not a frontal attack, not sending in 
the Russian army, not sending tanks across the border, but 
using some indigenous Russian language speakers, some troops 
but not in uniform necessarily, a new kind of incursion, which 
clearly is a possibility in the Baltics, which are NATO [North 
Atlantic Treaty Organization] allies.
    General Milley, what is your thinking? We need to have a 
new strategy to deal with this. This is probably what the next 
conflict might look like.
    General Milley. Well, it is clear that in the Russian case, 
they are using a new doctrine that was developed, I guess it 
was, 2005, 2006, 2007, 2008 time frame by General Gerasimov and 
others. They have various names for it, indirect war, hybrid 
war, et cetera.
    What they are trying to do, I think, is to advance their 
interests at levels below direct armed conflict with the United 
States.
    Senator King. How do we respond?
    General Milley. I think one thing is the indigenous peoples 
of that region, the frontline states, if you will. The Baltics 
is an example. They want to be able to defend themselves and we 
should take actions and authorities and appropriate resources 
and help them to defend themselves because they are NATO 
Article 5 members. That is I think fundamental.
    Secondly, I think a lot of training exercises. I think what 
is embedded in the ERI [European Reassurance Initiative] 
relative to the Army piece--this is very, very important. We 
need to send a very strong message to the Russians. I think we 
are doing that by prepositioning equipment, rotating heavy 
forces, in this case an armored brigade, and conducting well 
over 40 exercises in Europe to let our allies know we are there 
and to let our enemies know that we are there.
    Senator King. I was surprised to learn over there that one 
of the ways we are really getting hammered is by a very 
effective propaganda and disinformation campaign on behalf of 
the Russians.
    General Milley. Correct.
    Senator King. It drives me crazy that the country that 
invented Hollywood and Facebook is losing the information war. 
We have got to do that better. They are laying the groundwork 
for this kind of hybrid war by a disinformation and propaganda 
campaign that is creating the rich soil in which a hybrid war 
can take place.
    General Milley. They are using all means of national power. 
They are using information. They are using the cyber domain. 
They are using space capabilities, as well as ground special 
operations, naval, et cetera. They are acting very aggressively 
relative to their neighbors and they are using all of those 
techniques, many of which are not necessarily new. There are 
new systems to deliver those techniques.
    Senator King. But we put the USIA out of business in 1997. 
We have got to get back into the business of communications, it 
seems to me.
    General Milley. That is right. That is correct, Senator.
    Senator King. I am out of time, but I want to commend you 
for the comments you made about procurement. We have got to 
start talking about 80 percent solutions, not perfect weapons 
and commercial, off-the-shelf. I think quite often--I mean, the 
old saying is the best is the enemy of the good. We need more 
timely and more affordable development of systems that use 
commercial, already available, already developed, already R&D'd 
equipment to the maximum extent feasible. We cannot keep going 
for these very perfect weapon systems that everybody has a 
piece of. I think your role as a chief in this process is very 
important.
    Thank you very much, Mr. Chairman.
    General Milley. Thank you, Senator.
    Chairman McCain. Senator Sullivan?
    Senator Sullivan. Thank you, Mr. Chairman.
    I want to thank both you gentlemen for a couple things. As 
the chairman mentioned, General Milley, your forthright 
testimony--it is very much appreciated on these what are 
clearly difficult issues.
    Secretary Murphy and General Milley, you know, the 
commitments you had made earlier about coming up, taking a look 
at some of the issues in Alaska, and kept you word on that, 
made an independent judgment after a very thorough review--I 
appreciate that as well.
    I also want to let you know that I think it is safe to say 
on this committee we are working--not that you are not doing a 
great job there, Secretary Murphy, but we are also recognizing 
the importance and quality of Mr. Fanning in terms of what he 
represents for the Army. I think a number of us are committed 
to working on that issue.
    General Milley, I want to go back to your statement in your 
testimony, which I think is a really big deal. It is kind of a 
warning bell. But when a Service Chief of the most important 
ground force for the most important military in the world talks 
about high military risk, that is a pretty remarkable 
statement. I certainly hope that Members of Congress will 
recognize what a remarkable statement it is.
    At what point does that become unacceptable risk? There was 
a subcommittee hearing recently with a number of the senior 
members of the military. Whose call is that? Is that our call 
as oversight and policymakers? Is that your call? Is that 
Secretary Carter's call, the chairman's, the President's? But, 
you know, we use ``high risk,'' but at what point is that 
unacceptable for where we are? Are we looking at another Task 
Force Smith situation that I know the Army and many other 
historians look at with a lot of trepidation.
    General Milley. Thanks, Senator.
    My job is to provide my best military estimate of what the 
risk is. It is our civilian leadership to determine whether 
that risk is acceptable to the Nation or not.
    Senator Sullivan. Just for the record, I believe when you 
are saying high military risk, which not many Service Chiefs in 
my recollection make that statement, it is a pretty important 
and significant statement. I certainly believe it is 
unacceptable risk for the country and, as you mentioned, for 
our troops.
    General Milley. Again, it is up to this body here, the
    United States Congress. It is up to the President. It is up 
to my civilian leadership to determine whether it is acceptable 
to the Nation. I think it is high military risk.
    Senator Sullivan. Well, thank you again for your forthright 
testimony on that. I know that is not an easy statement to 
make.
    I want to go back to Senator Manchin's question, which I 
thought was a very good one. He asked you, well, then at what 
level forces would we need to actually bring that risk down to 
something that is medium or low risk. He talked in terms of the 
overall number. I want to actually ask the question more 
specifically with regard to the Active force.
    Just so I am clear, the high risk assessment is that our 
number of 450,000 Active Duty soldiers--is that correct?
    General Milley. The high risk assessment is based on the 
total Army not just the Active. I based it off the 980,000 
because--and again, it is based on the contingencies of these 
higher end threats. The National Guard and the United States 
Army Reserve are going to play a fundamental role if in fact 
one of those contingencies were to happen. I based my risk on 
the total Army, not just the regular Army.
    Senator Sullivan. Have you looked at the 450,000 number and 
what will we need to get to a number on the Active force that 
would bring down that risk? I think again a number of us on 
this committee, bipartisan, believe the 450,000 number is too 
small.
    General Milley. Well, I did. You know, we have got a 
variety of studies that we did to determine the size of the 
force relative to the National Military Strategy and the 
Defense Planning Guidance. That answers the question of, you 
know, for what, what do you need the Army for. Well, you need 
it to do these tasks. We did that. We did the mission analysis. 
We did the associated force structure requirements. It is my 
estimate about a 1.2 million-man total Army would be required. 
Again, the money is not there.
    Senator Sullivan. Do you have that broken down?
    General Milley. We do. We have broken down with Active, 
Guard, and Reserve. The Active piece of that comes out at just 
a little more than 500,000 or so.
    But it is not just numbers, of course. I know you know 
this, but it is not just numbers. It is the readiness of that 
force. It is the technological capability of that force. It is 
how that force plays into the joint force. It is how we fight. 
It is the doctrine. It is the sum total of all of those things.
    We tend to laser-focus on size. I think that is critical, 
capacity, size. I think that is fundamental to the whole piece. 
But there are other factors to calculate beyond just the 
numbers of troops, and I think it is important to consider 
that.
    Senator Sullivan. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Heinrich?
    Senator Heinrich, Secretary Murphy and General Milley, I 
think from the hearing today, it is clear that we all agree you 
are rightly prioritizing the readiness of our men and women in 
uniform. But it is also very clear that because of the budget 
box that we have put the Army in, that we are not modernizing 
at a level necessary to stay ahead of our adversaries the way 
that we have in the past.
    I am a big believer in directed energy. It is where I 
started my career. I have seen not only what is possible but 
what is capable today. I believe it should be a fundamental 
piece of the Department's third offset strategy.
    If we are trying to truly develop a future weapon system 
that changes the nature of warfare as we the in the past, just 
like, Secretary, you talked about with the advantages of night 
vision goggles, GPS, we have to invest in the technologies that 
will give us a qualitative technological advantage to ensure 
that we have an unfair fight with the enemy.
    Unfortunately, this committee was informed that none of the 
funding provided last year by Congress for the tech offset 
initiative is going towards directed energy despite a clear 
direction from Congress to do so. I will just give one example. 
The Army's high energy LMD [laser mobile demonstrator], has 
already proven capable of destroying 90 incoming mortar rounds 
and UAVs with its 10 kilowatt laser, and there is a lot more to 
come.
    I want to ask you why there is not more emphasis on 
directed energy and what is the Army's plan to deliver an 
operational directed energy system in an environment where I 
think it is always too easy to invest in more R&D and the next 
big, fancy thing that is perfect, like Senator King mentioned, 
when we could be developing and fielding programs today.
    Mr. Murphy. Senator, part of the acquisition--and if I 
could just make one mention about White Sands real quickly, if 
that is okay.
    Senator Heinrich, Absolutely. That was kind of my next 
question.
    Mr. Murphy. It is not directed energy because I just want 
to make sure. It is on the top of my head.
    You all have the largest solar field in America in the 
Army, and that gives us a savings of $2 million. But when you 
talk about modernization, you talk about directed energy, et 
cetera, and modernization programs, when we talk about science, 
technology, and modernization, you have to follow the money. 
When I left Congress six years ago, the budget of the Army was 
$243 billion. We have had a 39 percent cut. We are asking--
including OCO [Overseas Contingency's Operations] then and now, 
what we are asking is the 125 base and 148, including OCO. But 
when you talk about modernization, we are asking for $25 
billion in this budget. It was $46 billion 6 years ago, fiscal 
year 2011. Again, you have to make these----
    Senator Heinrich, Mr. Secretary, I think we all recognize 
the stresses that you are under. I think more specifically what 
I am saying is given the money that was directed by this 
committee last year to look at third offset and to utilize 
those specific funds to look at the future of warfighting and 
how we maintain that qualitative edge, why not more emphasis on 
directed energy within that specifically?
    General Milley. Let me pile on here. Again, hard choices. 
We have chosen to take the R&D type monies and put them into 
some other areas. We are putting money into directed energy, by 
the way. But I think you are talking about in terms of scale 
and proportion that is less than some of the other areas.
    One of the reasons is because some of our sister services--
we operate as a joint force--are doing a lot of work on 
directed energy. We do not want to duplicate their work. We 
want to let them pump their money into it and see what comes 
out of directed energy weapon systems. Then we will modify that 
research for application in ground warfare. We can leverage the 
work of some of our other services, Senator.
    Senator Heinrich, I want to thank both of you for your 
leadership in strengthening the Army's integrated air missile 
defense and certainly in announcing an air defense detachment 
at White Sands. We are all very excited about that. The 
increasing proliferation of missile systems by our adversaries 
means that we have to enhance our training and our expertise to 
better protect men and women deployed around the world, as well 
as our Homeland.
    Can you just talk a little bit about the sophisticated 
missile threats that are emerging, what the Army is facing 
today, and what steps are being taken to counter that threat?
    General Milley. The countries that I mentioned in my 
opening statement, specifically Russia, China, North Korea, and 
Iran, all have increasingly--very sophisticated now and 
increasingly more sophisticated tiered integrated air defense 
systems that are very complex, very lethal, and very robust, to 
the point where U.S. fixed wing air from the U.S. Air Force or 
Navy assets or rotary wing air from Army and Marine helicopters 
are at risk. These are terrestrial-based integrated air defense 
systems in combination with the adversaries' fixed wing air 
defense systems. It is a growing, increasingly growing 
capability. You have heard about, I believe, from the Air Force 
and Navy many times about the anti-access/area denial threats. 
Those are real and they are in place today, and they are 
growing in capability.
    Senator Heinrich, Thank you, Chairman.
    Chairman McCain. Senator Lee?
    Senator Lee. Thank you, Mr. Chairman.
    Thanks to both of you for being here. Thanks to your 
sacrifice and your commitment on behalf of our Nation's 
security.
    The National Commission on the Future of the Army 
recommended in its report earlier this year that the Army 
maintain four battalions of age 64 Apache helicopters in the 
Army National Guard under the aviation restructuring 
initiative. I would just like to know from either or both of 
you what has been the Army's assessment of this recommendation 
and how does the Army plan to react to it, respond to it?
    General Milley. Thanks, Senator.
    Under the direction of the Acting Secretary of the Army, 
what we have done is a very rigorous study of the 63 
recommendations. Right now, more or less about 50 or so we 
think are achievable at relatively little or no cost or we have 
already started doing them. There is one that we absolutely 
disagree with. We recommend no. Then there are about nine--I 
think it is nine others or 10 others--that do incur some or 
significant cost in terms of dollars, and we are analyzing 
that. The one you mentioned is one of those. We are analyzing 
that.
    What we promised the Secretary of Defense is we would give 
him a written report on our recommendations on which ones we 
think are good to do, and of those, how would we pay for them, 
how would we execute, implement those recommendations. The 
Congress commissioned the commissioners, and that report will 
come to you after, of course, we submit it to the Secretary of 
Defense. We expect to do that to the Secretary of Defense on 
the 15th of April. I guess whatever that is--next week. That 
report also will be not only signed by the Secretary and I it 
will be signed by Frank Grass. It will be signed by Tim Kadavy 
and it will be signed by Jeff Talley, the heads of our National 
Guard and Reserve. A lot of meetings with all the stakeholders 
involved so we can come to what we think is our consolidated 
position.
    Thanks for that question. It is a really important priority 
that we are doing right now, is working through that 
commission.
    Senator Lee. Well, thank you. I look forward to reviewing 
that when we get it hopefully sometime next week.
    Can you tell me--if the Army does decide to maintain Apache 
capability within the National Guard, can you tell me how the 
Army would determine where these units would be assigned and 
what metrics might be used to review the current Apache 
battalions within the National Guard?
    General Milley. It would be Tim Kadavy and Frank Grass 
would analyze needs of the Guard units, look at how they are 
involved in various war plans or operational plans, and where 
they stack in the deck of readiness and responsiveness to the 
speed at which that unit has to respond, and then what Active 
unit they might integrated into once mobilized. All those 
factors would be at play. Lieutenant General Kadavy, who is the 
head of the Guard Bureau--he would make that recommendation to 
the Secretary and I and Frank Grass, and then we would approve 
or disapprove or modify that recommendation.
    Senator Lee. Thank you.
    Following the Chattanooga attacks last year, my office 
received a lot of calls, emails, letters, and communications of 
every sort from constituents having connections to all of the 
branches of the military. These constituents were expressing 
concerns about force protection at domestic bases and at 
international bases, especially for their families at soft 
targets outside the bases.
    Tell me what has the Army done to improve force protection 
in the United States and at bases in Europe and the Middle East 
where they are sort of targets for attacks, and what other 
options are being considered, including the possibility of 
allowing soldiers to carry personal firearms on the base in 
order to protect themselves.
    General Milley. I will defer to the Secretary on the policy 
pieces of that, but I have been involved in that issue for 
quite some time.
    With respect to posts, camps, and stations that are small, 
isolated, they are outside/inside communities such as 
recruiting stations, such as Chattanooga, the assessments are 
done by the local commanders. The Secretary--actually it was 
previous Secretary McHugh authorized the commanders to go ahead 
and conduct their assessment and make a determination whether 
it was appropriate or not appropriate to arm them. He delegated 
the authority in the assessment to the commanders, which is 
appropriate. Commanders should make those decisions because one 
size will not fit all. It will depend on locality, risk, and so 
on.
    But some of the constraints on it: people have to be 
trained. It must be a government-owned weapon. You cannot carry 
privately owned weapons, et cetera. That is out there.
    Secondly is on the larger camps and installations, a Fort 
Hood or Fort Bragg or Fort Lewis, for example, in terms of 
carrying privately owned weapons on military bases, concealed 
privately owned weapons, that is not authorized. That is a DOD 
policy. I do not recommend that it be changed. We have adequate 
law enforcement on those bases to respond. If you take the Fort 
Hood incident number two, the one where I was the commander of 
3rd Corps, those police responded within 8 minutes, and that 
guy was dead. That is pretty quick. A lot of people died in the 
process of that, but that was a very fast evolving event, and I 
am not convinced from what I know that carrying privately owned 
weapons would have stopped that individual. I have been around 
guns all my life. I know how to use them. Arming our people on 
our military bases and allowing them to carry concealed 
privately owned weapons--I do not recommend that as a course of 
action.
    Senator Lee. Thank you, General.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Donnelly?
    Senator Donnelly. Thank you, Mr. Chairman.
    Secretary Murphy, General Milley, thanks for your service 
and for your leadership.
    I was in Iraq last week to meet with General McFarland, to 
visit Al Assad out in Anbar province where we are training 
Iraqi security forces. I met with a number of our soldiers 
deployed in the fight. As you well know, they are a tremendous 
credit to our country and to the Army.
    I also want to note that it is my understanding that the 
Army is the first service to meet the annual mental health 
assessment requirement set out by the Jacob Sexton Act across 
every component, and we thank you for leading the way in this 
effort.
    Recently there is a report issued by Indiana University. 
Researchers at IU [Indiana University] have been able to use 
certain blood biomarkers, in combination with at-base 
questionnaires, to predict suicidal ideation with 82 percent 
accuracy and suicide-related hospitalization with 78 percent 
accuracy. If you would, I would like you, Mr. Secretary, to 
take a look at this report and let me know how we can be 
applying research like this to better identify soldiers who 
might be at risk. Can you take the time to do that, sir?
    Mr. Murphy. Yes, Senator. You have my commitment.
    Senator Donnelly. Thank you very much.
    In testimony today, you stated that the Army only has about 
1,800 of the 2,100 behavioral health providers necessary for 
adequate care. Two things. I think one is better education 
incentives can enable us to fund more care providers, will help 
boost recruitment and retention. The other is utilizing non-
physician provider types, nurse practitioners, physician 
assistants, licensed mental health counselors to help fill the 
gap.
    Do you support these tools, and do you have any other plans 
to address that gap that you have between 1,800 and 2,100?
    Mr. Murphy. I do, Senator. We appreciate your leadership on 
this. There is no doubt we have to get after it.
    I would say--I did not mention it--but the embedded 
behavioral health teams--they have been a great success in 
that. It is members of their own team in a brigade area where 
they are out there. There are 60 teams right now. But that 
really has been a game-changer, Senator, when you talk about 
getting rid of the stigma of mental health because it is a 
readiness issue.
    But in regards to when you look at other things--you know, 
when I was in Fort Hood, they could not hire certain folks 
because they did not have the certain licensing. We are looking 
at that, and there is potential that if they have their masters 
degree but not a license that maybe they can be supplemented to 
break that because if they do not have a license, what I found, 
those same people go to TRICARE and we farm out to TRICARE and 
TRICARE can have those people, but we cannot hire those people.
    Again, those things, you know, when I travel and I ask 
those tough questions to make sure that we could get these 
numbers up because, as you know, last year was 301 suicides. I 
write condolence notes every week to fallen soldiers, including 
the ones that are committed, and to their families and to their 
children. My first week in this job, three months, you know, we 
had lost 10 folks in my first week. It is something that weighs 
on all of us as leaders, but I think the Army is really leading 
the way and getting after it. But there is much more we can do, 
and I look forward to looking at that Indiana University report 
and looking at some of the criteria and certifications.
    Senator Donnelly. This is to both of you, whoever wants to 
answer.
    In my home State of Indiana, Crane Army Ammo--and this is 
in regards to demil technology. They partnered with researchers 
at Purdue to try to improve the technology that is used for 
demil. As they have done this kind of thing, I am interested to 
know if you have ideas on how we can boost the efficiency of 
our demil operations. For example, we are spending a 
significant sum transporting munitions from storage to demil 
locations. Can we take a look at maximizing proximity of demil 
operations to demil asset storage locations? I know that is a 
little bit technical, but are those the kind of things that we 
can be doing to help look at saving money as we move forward?
    General Milley. Right now, Senator, we mostly store, as you 
know, which comes in at--I forget what the exact numbers are, 
but I think it is something like $2 million versus $20 million 
to demil.
    From a technical standpoint, I will have to get back with 
the team and get some detail and get back to you and I will 
provide that to the Secretary so he can get back to you.
    Senator Donnelly. Thank you.
    I am running out of time. So, General, I just wanted to ask 
you, while I was in Iraq, it seems we are moving ISIS out of 
town after town at the present time. Things are moving in the 
right direction. The big action that is going to be taking 
place, as we look ahead, is Mosul. I was wondering in your 
conversations with General McFarland, with other people in the 
theater there, how you think that is shaping up as we look 
forward.
    General Milley. I took this job in August. I have served 
multiple tours over there. Went over in September, did an 
assessment. In September, I thought we were losing. I was 
absolutely convinced of it. The enemy had strategic momentum 
September of last year.
    Went back in December, and in between I have read the 
reports and have been in frequent contact and meetings and so 
on and so forth with the commanders.
    You are correct. Things are moving in the right direction. 
There is progress, but progress is not yet winning. No one 
should think that this thing is over. It is not. There is a lot 
of work to be done. It is true the Iraqis have taken Ramadi, 
and they are currently engaged in the battle of Hit and 
conditions are being set for the assault on Mosul. There are 
also significant efforts being done up in the northern areas, 
and the lines of communication have been cut between Mosul and 
Raqqa. Our basic strategy shifted in October, and we are seeing 
the results of that today with significant losses in enemy 
personnel, key leaders, increased pressure on their finances 
and loss of territory, and they are under a lot of pressure. We 
are doing that intentionally, multiple dilemmas, multiple 
problems, all simultaneous, and we are hitting them in a lot of 
ways.
    All that is to the good, but that is not exactly winning 
yet. The caliphate has to be destroyed. ISIS has to be 
destroyed, and they have also chosen to displace some of their 
forces into Libya and elsewhere and they have counterattacked 
into Europe. This is a tough fight and it is by no means over 
yet, and no one should be dancing in the end zone yet. There is 
a long way to go here.
    Senator Donnelly. I met with a number of the Sunni tribal 
leaders, and one of the things they said was if I saw you, to 
thank you for the cooperation and the assistance of the U.S. 
Army. Thank you, sir.
    General Milley. Thank you, Senator.
    Senator Donnelly. Thank you, Mr. Chairman.
    Chairman McCain. Senator Tillis?
    Senator Tillis. Thank you, Mr. Chair.
    General Milley, my colleague here, Senator Sullivan, and I 
were talking about how much we appreciate your candor and 
giving us the information we need to be instructed in the job 
that we have to do.
    I want to go back to acquisition reform, either for you, 
Mr. Secretary, or General Milley. You know, we made several 
recommendations in the fiscal year 2016 NDAA [National Defense 
Authorization Act] that was focused on improving cost, schedule 
execution, and performance.
    One question I would have is did you agree with or do you 
think that some of the things in the NDAA have actually been 
helpful, if some have and some have not, and then give me some 
specific examples of how it is changing your execution. General 
Milley, we will start with you.
    General Milley. Thus far, Senator, I think it has been 
helpful. Number one, it changed the tone. That is important. It 
changes people's views and attitudes, and I think that is not 
unimportant to clearly and unambiguously insert and pin the 
rose on someone's chest and hold them accountable, that being 
the Chief of Staff of the respective service. That also alerts 
a lot of people as to there are some new rules in town sort of 
thing.
    Secondly, I think for the Army, we have instituted a new 
process, really a revitalized process of the Army Requirements 
Oversight Council. It is unambiguous within the Army itself 
that the Vice Chief of the Army Dan Allyn or myself will be 
personally approving and are approving the requirements for 
every single program that the United States Army puts money 
against.
    In addition to that, we have made that a commander-centric 
program because the United States military operates off 
commanders. It is not staff-centric. It is commander-centric, 
and commanders will be held accountable. It is the commanders 
that are going to generate requirements and commanders that 
approve requirements.
    Then I think one key thing I think that was in the 
legislation that is important is the role of the Chief of Staff 
in milestone B authorities. I think that was really good and we 
appreciate that.
    We have made some other recommendations in writing. I would 
ask you to take those into consideration for enactment.
    Thank you.
    Mr. Murphy. Senator, I would say that there is no doubt 
that we are getting after it with acquisition reform, which is 
critically important. It is making our system more leaner and 
more responsive and decreasing the amount of time it takes to 
put these weapons or these systems back into the warfighters' 
hands. I think the frequency from when you start from one 
milestone to the next and the next, the next has improved about 
33 percent, but it needs to improve much more greatly than 
that.
    Senator Tillis. General Milley, some of the key acquisition 
programs, the joint light tactical vehicle, the Stryker 
lethality upgrades, and the distributed common ground system--
do you consider them to be some of the key programs that we 
have to focus on for modernization, and can you explain why?
    General Milley. Yes, they are. The JLTV [Joint Light 
Tactical Vehicle], the joint light tactical vehicle, mobility 
piece is very important because once light forces are on the 
ground and they have been moved strategically by air or sea, 
for example, what we want to make sure is that they have 
increased mobility to move around the tactical battlefield. 
That is a key system for that.
    As you know, the HUMVEE [High Mobility Multipurpose Wheeled 
Vehicle] fleet has been around for a while. Our wheeled ground 
mobility is going to be split about 50/50, about 50,000 
HUMVEEs, about 50,000 JLTVs over time. That is an important 
system.
    The Stryker lethality. When H.R. McMaster--and I am sorry 
Senator Wicker is not here, but when H.R. McMaster talked about 
being outgunned and outranged, in direct fire weapons, for 
example, the Stryker just cannot match a tank no matter which 
way you cut it. It is a good vehicle. It is a great vehicle, 
but it is not going to go toe to toe with any tank. That is 
what General Breedlove has. He has a Stryker regiment over 
there and a paratroop regiment. He has got light infantry, foot 
infantry, and Strykers and very little else over there. That is 
why we are rotating in an armored brigade. Stryker lethality is 
going to up-gun that particular weapon systems and that is 
critical and it is important to deterrence.
    On the DCGS, I am taking a hard look at DCGS, and I am 
keenly aware of all the various controversies. My rough 
assessment is that DCGS is performing reasonably well--the 
increment two is going to be online here in a couple years--
performing reasonably well at kind echelons above brigade. But 
when we get into the tactical level, we have to move it around 
and jump it from place to place, an ease of use for young 
soldiers, that there is a very high density of training 
requirement, et cetera.
    There may be some other options out there. I am not sure, 
but taking a hard look at that whole piece on the DCGS. I have 
got personal experience with it. A very, very good system. At 
the strategic level, operational level, your ability to pull 
down national intel assets, et cetera. But when it gets down to 
the tactical level, more difficult to work with, not quite as 
fast, and difficult to jump from location to location on a 
mobile battlefield. We are taking a look at that. But those are 
important systems, yes.
    Senator Tillis. Thank you.
    Actually just in a final comment, I share Senator 
Sullivan's concerns about--well, first, we appreciate your 
being clear on what the risk is and what we need to be mindful 
of. What I think we also need to do--and this comes from a 
CODEL [Congressional Delegation] that I was on in the Middle 
East. On the way back, we met with a group of marines who in an 
almost matter-of-fact way said that this capability that we 
have to cover threats in the region may be cut in half next 
year because of other competing priorities. In a matter-of-fact 
way like they had to do it because of the pressures that they 
are having on budget and limited resources.
    I think that we need to understand this particular case. I 
am going to follow up in a private setting. We need to do a 
better job--I told them give us that ghost of Christmas future. 
Give us a real meaningful idea of what your risk is going to 
look like if we are not successful. I know the chairman hopes 
to be successful with ending sequestration, but we also need to 
recognize that it is a high threat that we may have to deal 
with. If we do, what does that look like? If we are already 
concerned with where we are, where do we go from here?
    With the chair's indulgence, Secretary, you can----
    Mr. Murphy. If I could just real quick, Senator. I would 
say we know what the numbers are going to be if sequestration, 
which is grave--we are already testifying today that this is 
minimally adequate right now, but if you would go back to 
sequestration, if the Congress of the United States does this, 
we are down on the Active Duty side at 420,000, and that is not 
acceptable.
    Chairman McCain. Senator Hirono?
    Senator Hirono. Thank you, Mr. Chairman.
    General Milley, as the rebalance to the Asia-Pacific takes 
shape, while we do not stop training for the types of 
environments that we face in Iraq and Afghanistan, we also look 
to enhance our soldiers, sailors, airmen, and marines to 
perform in the Asia-Pacific. One of these environments that 
must be--that we have to be able to handle is the jungle 
environment. Our last official schools to perform jungle 
training were closed decades ago, there is an opportunity for 
our troops and our allies to learn how to perform in this 
environment, and this would be at the jungle operations 
training course at Schofield Barracks in Hawaii.
    Can you talk a bit about the importance of this kind of 
training for our soldiers' readiness, as well as the ability to 
train members of other branches of our armed services as well 
as those of our allies?
    General Milley. Thank you, Senator.
    Environmental training is very important. As I mentioned in 
my opening statement, the United States Army has to be prepared 
to deploy anywhere on earth. There are many, many places that 
have jungles or heavily forested areas.
    We did close our jungle school years ago, and General 
Flynn, commander of the 25th Division, and General Fuller, the 
previous commander, set up the jungle school out in Hawaii out 
in the Kiukas. It is a good school. It is a great school in 
fact, but it is mostly locally used right now. But I think we 
can expand the usage of that to other forces so they can get 
some environmental training.
    We do winter warfare training in Alaska. We do urbanized 
training at the training centers, and we do rural training at 
most installations, and we do jungle training in Hawaii. It is 
a critical thing. Environmental training is important to keep 
soldiers up to speed so we can operate in any particular 
environment.
    Senator Hirono. Is there any effort or any move to expand 
or strengthen the jungle training school's facilities?
    General Milley. He is operating the jungle school right now 
out of his own budget. I am taking a look at it. I did ask 
them--it is funny you asked because I asked him about, I guess 
it was, a month or two ago. I said send me the full POI 
[Program of Instruction]. I want to see the program of 
instruction. I want to see the program of instruction that you 
are using out there because I am considering anointing it as an 
official Army school as opposed to just a local 25th Division 
school. There are some things that come with that for soldiers, 
and you get awarded a little certificate and so on and so 
forth. It is all good.
    But baseline premise of what you are saying, though, is 
absolutely accurate. It is environmental training to be able to 
operate in any part of the world, and we support that. I am 
looking actually at expanding that.
    Senator Hirono. Thank you.
    Also, General, turning to the utilization of our National 
Guard, they are an important aspect of our total force. I am 
pleased to see your confidence in their abilities and support 
for the associate units pilot program happening this summer, of 
which the 3rd and 2nd Brigades of the 25th Infantry Division at 
Schofield Barracks in Hawaii will be a part.
    This pilot program will match one Reserve unit with an 
Active Duty counterpart unit which could lead to more formal 
training, coordination, improved readiness, guidance, and 
closer coordination.
    Can you comment on this pilot program and discuss the 
attributes of this kind of coordination and work with the 
National Guard?
    General Milley. Thanks, Senator.
    The purpose is to increase readiness and increase the 
cohesion and the bonding of the total Army. Just saying ``total 
Army,'' just saying we are all one team, et cetera is only so 
many words unless we walk the walk. We used to have a round out 
program years ago. It is sort of a revised version of that.
    The benefits of it are that the Guard is exposed to the 
regular Army. Equally important is the regular Army is exposed 
to the Guard. We break down whatever barriers there may be, 
internal Army cultural barriers. Then secondly is that each 
leverages the other's skills to improve the readiness of the 
force. Those are the fundamental big benefits of doing this.
    But importantly from a national strategic standpoint, if 
that regular Army unit goes and if we succeed in the pilot 
program and we get it all wired in the next couple years, if 
there is a contingency, then those Guard units--it would be my 
intent anyway that those Guard units would be alerted, 
marshaled, and mobilized and they would deploy with those 
Active units. We would in fact have one Army not only in 
training but in deployment.
    Senator Hirono. I commend you for those efforts because we 
can talk about one Army and all of that, but you actually have 
to provide those opportunities for them to interact and to work 
together in the kind of cohesive way that you are talking 
about.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Ernst?
    Senator Ernst. Thank you, Mr. Chair.
    Secretary Murphy and General Milley, I want to thank you 
for being a very active and cohesive team, and you are really 
making strides. I will follow up with what Senator Hirono said. 
I appreciate your efforts with the National Guard, of course, 
and I think that we have a great relationship there, one team, 
one fight. Thank you very much for that.
    General Milley, I am going to follow up on some concerns 
that Senator Tillis gave about the vehicle program for our 
infantry fighters and the rotation that you mentioned for the 
armored BCTs through Europe.
    I am concerned about rotating those units through Europe 
instead of permanently standing one up in that region. I am 
just not certain that that will show the commitment that we 
need to have for our allies in that region, as well as 
projecting that strength to Russia as well. I am just very 
concerned about that.
    As you know, the National Commission on the Future of the 
Army included forward-stationing an armored BCT in Europe. That 
was one of the recommendations, and I agree with that 
recommendation.
    General Milley, do you believe that rotating an armored 
brigade in Europe is the optimum course of action to reassure 
our allies and defeat Russian aggression rather than having one 
permanently positioned?
    General Milley. There are advantages and disadvantages to 
both, Senator. I personally actually favor rotation, and here 
is why.
    When we permanently station--first of all, the 
infrastructure has been torn down over the years. But it would 
be pretty costly to rebuild some of that stuff for families and 
PXs and commissaries and schools and all that stuff to 
permanently station a forward force.
    But also important is that when a unit rotates, they have a 
sole focus, which is to train and be prepared to close with and 
destroy the enemy. There are no families. Your family is not 
with you. You are focused. You are mission-focused. I think 
that in terms of readiness and your ability to deter, assure, 
and if necessary defeat, I actually think rotation is a better 
way of doing it.
    Then in terms of strategic effect to deter, the idea of 
permanent presence is that the armored brigade would be 
permanent. The plan is to go heel to toe. The effect of 
permanency is being achieved without the costs of permanency. 
We are going to deploy an armored brigade for nine months, and 
right on their heel comes the next armored brigade and then the 
next armored brigade and then the next armored brigade. There 
is never a gap between that armored brigade in this rotation 
cycle that we have set up.
    The effect of a permanent armored brigade for General 
Breedlove will be achieved, and the disadvantages of forward-
stationing, costs, et cetera are not going to be incurred. The 
advantages of rotation, battle focus, mission focus--that does 
get achieved. I personally think the advantages of rotation 
outweigh the disadvantages.
    Senator Ernst. That is a great explanation and I appreciate 
that feedback.
    I am going to go back to something we have discussed many 
times over and that is the modular handgun program. I would 
love to have you visit a little bit more about this. It really 
has turned into quite a boondoggle. Just to work on this issue 
has turned into something more than it really should be. I do 
appreciate your high level of motivation and attention to the 
issue.
    We just want to make sure that we are getting the program 
right and that we are streamlining this so that we can get a 
better pistol in the hands of our soldiers. If that is what is 
needed, that is what we need to do.
    Can you give me an update on your efforts and where we 
stand in this process right now?
    General Milley. I think you got a little bit of an update 
or some members of the committee got a little update the other 
day from General Murray, General Anderson, General McMaster, et 
cetera, and they described the various levels of pain that 
folks have been going through.
    But it is all good and we are going to deliver. Then we are 
going to make it right for the soldiers and the taxpayer and 
make sure that we get a new handgun. I do believe there is a 
requirement for a new handgun. I think the 9 millimeter Beretta 
has run its course, and it is more expensive to replace it or 
to buy new ones or to repair it than it is actually to purchase 
a new weapon.
    I do think the system has been very frustrating in the 
sense of lots of paperwork, lots of bureaucracy, ridiculous 
amounts of time, 2 years of testing, $17 million to do a test 
and so on and so forth.
    We are ripping all that apart. We are just ripping all that 
apart, and we are going to make it better. In short order here, 
I think pretty soon, measured in weeks not years, we will have 
some decisions. We will be moving forward, and we will be able 
to provide the joint force, all the services--we are the lead 
for the handgun. We will be able to provide the joint force 
with an acceptable quality handgun that will work and it will 
do what we need it to do in combat.
    Senator Ernst. Thank you. Thank you both very much for your 
service and attention. I appreciate your candor, General 
Milley. Thank you.
    Thank you, Mr. Chair.
    Chairman McCain. Senator Blumenthal?
    Senator Blumenthal. Thanks, Mr. Chairman.
    I want to thank Senator Kaine for yielding to me.
    Just a couple of questions pursuing the line of inquiry 
that Senator Donnelly began on mental health, the 1,700 of 
2,000, roughly, that are needed in terms of psychiatric 
personnel. Is there a plan to fill those positions, and what is 
being done to do so?
    Mr. Murphy. Senator, we are getting after it on this issue, 
and we need to as an Army because it is all about our people 
and our soldiers. It is our soldiers, civilians, and their 
families as well. When I gave you the number, as I did earlier, 
that there were 301 suicides, that is the total force. That is 
our whole family.
    We are looking at things like levels of certification. Do 
you really need a masters degree? Could you have different 
things that otherwise--because we got to fill the ranks. We are 
not just competing out there in the market within the Army. It 
is other sources of government. It is private industry that are 
making these investments as well and trying to get these 
recruiters. We are trying to help make this push that we need 
these young Americans to go out there, get their degrees, get 
their certifications, get this profession so we could use them 
and bring them within our ranks.
    But as I said earlier, there is no doubt that a game-
changer for the Army has been our embedded behavioral health 
teams. We have 60 of these teams where it is breaking down the 
stigma that these professional mental health providers are in 
the brigade areas.
    Senator Blumenthal. I understand that and I commend you on 
it. As you know, the VA [Veterans Affairs] has a very active 
recruitment effort using scholarship assistance and loan 
repayment incentives. I wonder whether the Army is doing the 
same.
    Mr. Murphy. We are looking at everything, Senator, and we 
will continue to work with you and your office to do just that.
    Senator Blumenthal. I think what is necessary is a plan 
with specifics, and I understand that great progress has been 
made. But I think you would agree that more has to be done. I 
would welcome your working with us and thank you very much.
    General, have you received complaints about the EOTech 
sight? It was a subject of a recent report in the ``Washington 
Post.'' I am wondering whether any of the men and women under 
your command have raised questions or concerns about it.
    General Milley. Senator, I am going to have to dig into 
that. Obviously, there is something out there or you would not 
be asking. So, no, personally I have not. That is not ringing a 
bell, but I will dig into that.
    Senator Blumenthal. I would appreciate your doing that and 
getting back to us.
    General Milley. You called that complaints at the Equal 
Opportunity----
    Senator Blumenthal. No. It is a sight used on rifles.
    General Milley. Oh, rifle sights.
    Senator Blumenthal. Made by a company named EOTech.
    General Milley. No, I am not aware of that. I thought you 
were talking about something else. I am not aware of that.
    Senator Blumenthal. Sorry to confuse you.
    General Milley. Yes, weapon sights. Now you are talking 
guns, so I am good. No, I have not, but I will look into it and 
get back to you. I will find out about the EOTech sight. I got 
it.
    Senator Blumenthal. I would appreciate it. You can look for 
reference to the ``Washington Post'' of I believe this week. 
There was a story on the front page about the discrepancies and 
issues that have arisen with respect to this.
    General Milley. I will do that. I just made a note.
    Senator Blumenthal. Affecting primarily the Army and the 
Marine Corps.
    General Milley. Yes, sir. Got it. We will do that.
    Senator Blumenthal. Thank you, Mr. Chairman.
    Chairman McCain. I take it, Secretary Murphy, that you are 
taking great effort to implement the Clay Hunt Suicide 
Prevention Act.
    Mr. Murphy. No doubt. Yes, Senator.
    Chairman McCain. I hope that is an outline for--I hope that 
members of this committee are aware that we passed unanimously 
the Suicide Prevention Act, which calls for most of the things 
that we are concerned about. It is not perfect, but I am sure 
that many of those provisions agreed to unanimously are being 
implemented.
    Mr. Murphy. That is correct, Chairman, and we are getting 
after it. We have made great strides in personnel over doubling 
these teams.
    Chairman McCain. Maybe you could tell some of the members 
of the committee, if questioned, when you get a chance to talk 
about giving them a report on the progress that has been made. 
Maybe you could just send a letter to all of us so we can know 
what measures are being taken. Thank you.
    Senator Kaine?
    Senator Blumenthal. That would be very helpful. Thank you, 
Mr. Chairman.
    Senator Kaine. Thank you, Mr. Chairman.
    Thank you to the witnesses.
    I want to also associate myself with the comments of the 
chair with respect to the effects of sequestration and the need 
for us to find a better solution.
    A compliment and a question. The compliment. Earlier this 
week, the Army made a decision. There had been an earlier 
temporary decision, but earlier this week--I actually think it 
might have been Thursday or Friday of last--a decision to allow 
an Army captain, Paul Singh, who is a Sikh, to wear both the 
beard and the turban that is a foundational part of his 
religion as he serves. He is a combat veteran with an 
Afghanistan tour. This is something that Senator Gillibrand and 
I have been writing letters to DOD about for a couple of years. 
I wanted to just commend you on that.
    I am very passionate about this issue. Maybe just being 
Virginia biased, the statute of religious freedom that Thomas 
Jefferson authored that became the basis for the First 
Amendment that basically says in our country, you can worship 
or not and you will not be preferred or punished for how you 
worship and you can freely exercise your faith was one of only 
two ideas that was unique to the American Constitution. The 
rest of it was a great borrowing job, but freedom of religious 
exercise and interestingly enough that war should be started by 
Congress, not the President were the only two things that were 
unique to our Constitution. It is very foundational.
    I know that there are issues of how you balance people's 
religious practices with you can wear a helmet or a gas mask, 
and you want people to be who they are without proselytizing. 
Those are all challenging questions. But particularly in the 
world we are living in today and in the war of today, sadly in 
the future, this is becoming more and more important.
    All over the world, we see violence and even war that is 
driven by sectarian tensions whether it is Hindus and Muslims 
in Myanmar, whether it is ISIL's [Islamic State of Iraq and the 
Levant] atrocities against religious minorities like Yazidis or 
Christians or other groups they do not agree with, whether it 
is--I said Buddhists and Muslims in Myanmar--Hindus and Muslims 
in areas of India and elsewhere.
    You also see, even when there is not war, rifts within 
armed services. You know, one of the reasons that the Iraq 
military many cited as having been very ineffective against the 
initial wave of attacks by ISIL was because of deep sectarian 
tensions between Sunnis and Shias within the Iraqi military 
that renders it less effective.
    One of the virtues that the United States plays generally 
and in our military is demonstrating that people can live and 
work and go to school together with different religious faiths 
and we can make it work.
    I was on a CODEL that Senator Gillibrand led in early 
January in Israel and Turkey. It was interesting. In both 
nations, leaders said to us, wow, what is with the anti-Muslim 
rhetoric that we are seeing in your political space right now. 
As we dug into it a little bit, what they sort of disclosed is, 
hey, we live in a neighborhood of the world that has a lot of 
sectarian tensions, but we do not always want to be that way. 
But for us to get better, we have to have an example. The U.S. 
has been our example of a place where people of different 
faiths could freely be who they are, but we could make it work 
together.
    The decision to allow one Sikh for the first time in 
history of the Army to wear a turban and beard might seem like 
a small thing, but it is actually about a deeply critical 
American value that sadly is really wanting and needed in the 
world today.
    I certainly would encourage the Army and the DOD generally 
to look at this policy. The defense minister of one of our 
greatest allies, Canada, is a vet who has been deployed 
multiple times in Afghanistan. He is a Sikh who has been able 
to wear his beard and turban in the service. We have got a lot 
of Sikhs who are in and a lot of Sikhs who would want to be in 
the military. I would hope that we would recognize that as not 
only true to our values but also as something where we could 
hold up an example in the world in a way that is really needed 
right now.
    The question that I have is about the European Reassurance 
Initiative, and it is a little bit about sequester politics and 
the readiness issues. The tug of war is in putting the budget 
together.
    We have got all these readiness gaps, and at the same time, 
the proposal is to quadruple the investment in the European 
Reassurance Initiative and to take it up to $3.4 billion. I 
just would be curious as you talk about hard choices, how do 
you trade off the need to do this dramatic increase in the ERI 
with the fact that we are still short in some of the readiness 
investments that we need to make.
    General Milley. Senator, the ERI is really important, and 
it trades off what tradeoffs DOD made to make that happen in 
other accounts. You know, those are priorities set by the 
Secretary of Defense.
    But I can tell you that the ERI is really important because 
the deterrence of Russia from further aggression is a critical 
national security priority. They have been aggressive since 
2008. That behavior needs to change. This is only one of many 
other initiatives that are being done and actions that are 
being done by the U.S. Government across all domains and by a 
whole of government approach. But this is important.
    Deterrence happens because an aggressor perceives that the 
cost of further aggression is going to exceed the benefit of 
aggression. By putting a division's worth of equipment and 
rotating an armored brigade there, it will be clear, we think, 
that cost of further aggression, especially into NATO allies 
like the Baltics or Poland, will come with a very high cost 
relative to the United States of America.
    Senator Kaine. Thank you very much.
    Thanks, Mr. Chair.
    Senator Reed. On behalf of the chairman, Senator McCaskill 
please.
    Senator McCaskill. Thank you.
    Secretary Murphy, as you are aware, the Army has been 
investigating concerns regarding the Guard recruiting and 
assistance program for years. In 2012, a preliminary report of 
the Assistant Secretary of the Army for Financial Management 
found that all expenditures made through the RAP [recruiting 
assistance program] program, a total of almost $400 million, 
violated ADA [the Anti-Deficiency Act].
    At the time, the Army anticipated that a final report on 
the matter would be released by October 2014.
    In late December, trying to be patient, I penned a letter 
to your predecessor, Secretary McHugh, and asked for a status 
update on this report.
    I need a date, Secretary Murphy. I cannot understand. There 
is no way this report is not finished. I cannot understand what 
this stall is about. All it does is just incredibly irritate me 
that we are this non-responsive in how we fix problems if we 
are not willing to be forthcoming when we find problems, 
dealing with the way that our military has spent almost $400 
million.
    Mr. Murphy. Senator, I have been straight with you since 
the beginning that I will always be honest and straightforward 
with you. I will get you an answer within a week on where it 
is. I have been here for 12 weeks as Acting Secretary of the 
Army. I have said what is going with that, and it is said it is 
coming, it is coming. I will get you an exact date.
    Senator McCaskill. I do not want you to camp out. But it is 
coming, it is coming. It has been since October of 2014 that it 
was supposed to be here. I need that report or I need a date 
when that report is going to be produced.
    Mr. Murphy. You will have that date within a week.
    Senator McCaskill. Thank you.
    Mr. Murphy. Just for the record, I have also taken 
responsibility on the enterprise marketing and that program. 
Mistakes like that will never happen again.
    Senator McCaskill. Thank you.
    Mr. Murphy. You are welcome.
    Senator McCaskill. General Milley, I had the pleasure of a 
briefing from Colonel Eichoff, the Command for U.S. Air Defense 
in Europe, last week. I believe she is the first woman to hold 
that position. I was very impressed and proud and just wanted 
to convey that.
    I was taken aback when she talked about some of the 
European Reassurance components that are in the budget, that 
they are all in OCO. You know, there are not very many members 
left here, but this is like one of these embarrassing things 
that we are doing. Is there any rational reason why our 
strength of equipment and troops in Europe would not belong in 
the regular budget of the military? Have we gone past the 
Rubicon? Is there now everything we can stick in OCO, we stick 
in OCO because of the unwillingness of Congress to step up to 
its responsibility as it relates to sequestration?
    General Milley. Senator, I will not comment. I do not even 
know the techniques of whether it is right or wrong or 
indifferent. What I care about as a member of the Joint Chiefs 
of Staff, as the Chief of Staff of the United States Army and 
provide best military advice is to deter Russia from further 
aggression. Where that money comes from, whether it is OCO or 
base budget, is frankly somewhat less concerning to me.
    What is important to me is that we get a division's worth 
of equipment and other capabilities over there to help Colonel 
Eichoff, General Breedlove, General Hodges, to deter aggression 
from Russia.
    Senator McCaskill. You and I could not agree more on that. 
I think most Members of Congress would agree on that. I just 
think this artifice we are using, this rouse that we are 
performing on the American public that somehow if we put it in 
OCO, it does not count as us spending money is damaging long 
term for the military. We ought to step up. You all step up to 
our responsibility every day. We ought to step up to our 
responsibility and fund our military in a way that is 
forthright, transparent. That sends an important message to the 
world. Us playing this game that pretending that because it is 
in this fund, we do not have to pay for it is I think beneath 
the honor and respect that we should show the military. I just 
wanted to get that on the record.
    General Milley. I would second your motion, Senator.
    Senator McCaskill. First, I want to thank both of you 
before I ask this question about your trips to Fort Leonard 
Wood. I know, General Milley, you went, and I know, Secretary 
Murphy, you were just recently there. I am sorry I could not be 
there at the same time. I do not need to convince either of you 
of the importance of that institution as it relates to the 
generating force, say nothing of the other capabilities, 
engineering capabilities and military police capabilities and 
the other joint operations that are so important at Fort 
Leonard Wood.
    But I know as we try to get women into our military in all 
roles, women in the generating force are very important because 
they are in fact very visible to women that might be 
considering a career in the armed services.
    I wanted to ask is there any plan in place to get the 
proper leadership at these training facilities as it relates to 
gender as we try to encourage more women to say please take me, 
I am willing to give my life for my country?
    General Milley. Yes. We try to encourage that throughout 
the force. As you know, we have got--the infantry and armor 
have been recently opened up. One principle of that program 
that we are going to implement, one of the first principles is 
to put leaders, female infantry leaders in those units first.
    Not specific to Leonard Wood, but we are going to graduate 
now coming up in the May-June time frame from both West Point 
and ROTC--I think it is 44 women have volunteered to be 
infantry lieutenants. If they meet all the appropriate 
standards, then they will go through the various infantry 
schools, BOLIC [basic officer leadership course], at Fort 
Benning. Then they will graduate in the fall. Then they will do 
their follow-on training that is normal for infantry such as 
Ranger school. If they continue to meet all those standards, 
then they will be assigned to infantry units sometime about 
this time next year. January, February, March, April time 
frame, you will start seeing infantry female, infantry in 
armor, officers, noncommissioned officers and junior soldiers 
in those combat units.
    The idea of starting with leaders is a fundamental first 
principle, and there is no doubt in my mind that we want to 
take advantage of 50 percent of the world's population or the 
American population and maximize their talent to increase our 
readiness.
    Senator McCaskill. Thank you so much. Thank you both for 
your service and the hard work you are doing. Very appreciated.
    Mr. Murphy. Senator, can I just mention real quick? When I 
was at the Sapper school graduation, we had three females of 
the 33 that graduated. Secondly, Army Lieutenant Colonel Lynn 
Ray, first battalion commander, combat engineer commander. That 
is--again, as the Chief mentioned, we have instructed and 
initiated a leaders first program at these units where you have 
two women per company at the leadership level before we send 
the lower ranks.
    Senator McCaskill. You all know how tough Sapper is, and 
the fact that we have been putting women through Sapper for a 
number of years--we can learn a lot about how to prepare women 
for some of the toughest jobs in the military by what they have 
done with Sapper. Thank you for that, Secretary Murphy.
    Senator Reed. On behalf of the chairman, let me recognize 
Senator Gillibrand.
    Senator Gillibrand. Thank you.
    I am going to continue with the line of questioning of 
Senator McCaskill.
    Before he retired, then-SOUTHCOM Commander General John 
Kelly raised concerns that lowering standards was the only way 
to ensure that women became infantry SEALs and Rangers in real 
numbers. That position has been vehemently contested by you and 
your fellow Service Chiefs, as well as the commander of SOCOM 
until recently General Votel. Yet, General Kelly's comments 
represent prevalent views in combat units.
    Do you plan to allow the lowering of standards and how do 
you both plan to deal with these views from the leadership in 
junior personnel levels?
    General Milley. Absolutely not. Standards are standards. 
Those standards are developed through years upon years of 
blood-soaked lessons learned from combat. They are neither male 
nor female. They are combat standards, and they are related to 
combat. If you meet the standard for combat, then you pass go, 
collect $200, and move on your way. If you do not, then you do 
something else in life. Those standards are inviolable. They 
are based on combat, and we would place unit discipline, 
cohesion, and ultimately effectiveness at risk if we compromise 
those standards. We must guard against that. All of us, Members 
of Congress, members of the executive branch, members of the 
uniformed military, et cetera must guard against the lowering 
of standards.
    General Kelly and General Votel, their comments exactly 
right in the sense of raising the flag, a warning flag, that 
this initiative in the infantry and armored and special forces 
has the potential to lower standards. The rest of us must be 
the guardians of those standards. We must not allow the 
lowering of standards. Those are related to combat. If we do 
that, we are actually putting at risk the unit and the women 
that would go into those services and potentially putting at 
risk the lives of their teammates as well. Standards are 
inviolable. They must not and will not be lowered.
    Senator Gillibrand. How do you deal with the views of 
personnel that you are lowering standards, that the mission of 
all these women--clearly you have lowered standards? How do you 
reinforce that these women are properly trained, are ready and 
have met everything and will do a great job?
    General Milley. I think there are a couple of things. One 
is, first, do not lower the standard and then ensure that you 
educate people that they understand the standards have never 
been lowered. You know, Ranger school. I have heard a lot of 
comments about Ranger school, you know, the three women, one of 
whom was a mother of two, that graduated Ranger school. The 
standards were lowered. I said really. I said why do you not 
rock up and start walking 12 miles with 35 pounds on your back? 
Why do you not climb the hills of Dahlonega? Why do you not run 
the swamps of Florida? Those standards have not changed. Those 
swamps have not changed. Those hills have not changed. 12 miles 
is still 12 miles. It is still a 5-mile and 40-minute run. 
Those standards have not been changed. They met those 
standards.
    Part of it is education and leadership, making sure that we 
have everyone understand the standards. But the key principle 
of do not lower those standards, that is inviolable. We cannot 
allow that.
    Mr. Murphy. Senator, I would just agree that it is a 
leadership for our Army, that we could not be more clear that 
we--first of all, women do not want those standards to be 
lowered. When they went to Ranger school, they were not asking 
for it to be lowered. They know they could meet the standard. 
They met the standard, and that is why they are Rangers. We are 
a standards-based Army. We could not be more clear from the 
top, and it is emanating throughout the force.
    Senator Gillibrand. But I just hope you have their back 
when they do pass through these requirements because if they 
are getting feedback that they are still not good enough, that 
is problematic, especially since you did not lower the 
standards. Right?
    General Milley. I have huge confidence, male or female, if 
they meet the standard, they will be mutually respected by 
their fellow peers and soldiers. I have no doubt in my mind.
    Senator Gillibrand. I do have a doubt in mind that they 
will not be respected. What I am asking you to do is to be 
vigilant that these women who do pass and do meet the standards 
are then respected for meeting the standards because you did 
not lower the standards. I just cannot tolerate this notion 
that after these women have been through hell and proven their 
mettle, that they are still discounted when given their 
mission.
    General Milley. There will not be.
    Senator Gillibrand. Okay.
    General Milley. If they meet the standard, they will not be 
discounted.
    Senator Gillibrand. Good luck. I give you many blessings on 
that.
    I would like to shift to cyber. Last year, the Army 
National Guard announced the establishment of 10 cyber 
protection teams, including one in New York and New Jersey 
National Guards. This was a huge step forward for our national 
security, and these teams, each located deliberately within 
nine of the country's 10 FEMA regions, can serve both Federal 
and State purposes, including bolstering civilian authorities 
in case of domestic response to cyber attack. New York has 
already experienced the hacking of a small dam, and we are 
constantly alerted to the threats of cyber attacks to America's 
financial hub.
    Absolutely no funding in the Army's fiscal year 2017 budget 
request was set aside for these new units, and months after the 
announcement, we are still left wondering how they will be 
supported. I am concerned these teams have not been given a 
mission by the Army. Unlike the Air Guard Captains they are not 
designated to the cyber mission forces. The Army has not funded 
them, and it is not clear when they might get trained.
    General Milley, since becoming Chief of the Army, you have 
made it a priority to talk about one Army and to look for ways 
to take advantage of the benefits of the different components. 
How do you envision we can we use the National Guard CPTs to 
address cyber threats, and do you know why there is no money 
allocated for these CPTs in the budget? Can you tell us when we 
might expect to see Army Guard's cyber protection teams fully 
operational?
    General Milley. There are 41, I think it is--21 and 10--for 
the regular Army, split up with offensive and defensive 
capabilities, and then there are 10 in the Guard, as you noted, 
and I think there are 10 or 11 in the United States Army 
Reserve.
    They are coming online at various paces. By 2018, all of 
these teams across the total Army should be trained. I will not 
say it is super-long, but there is a process that we have to go 
through of vetting or identifying and selecting and vetting 
because of the higher-order skills involved in cyber war. That 
goes up front to recruit them and then organize and train and 
equip these teams.
    I will go back and double check, but I think by 2018 all of 
these teams are online and at least have initial operating 
capability. I will get you a better answer with a definitive 
date, if you do not mind, but I think it is 2018.
    Senator Gillibrand. Thank you both for your service.
    Chairman McCain. I am afraid that General Sullivan has 
another question.
    Senator Sullivan. Thank you, Mr. Chairman. Just a few to 
follow up.
    Very quickly on lowering the standards, General, just to be 
clear, that is a joint responsibility. Right? Senator 
Gillibrand's questions are about the military leadership, but 
you also do not want Congress to mandate lower standards. 
Correct?
    General Milley. I do not want anybody to lower standards, 
regardless of where they are.
    Senator Sullivan. You know, General, you have been very 
focused on this issue of the tooth-to-tail ratio in the Army. 
This committee has been looking at that. I know you have been 
looking at that. Are we there yet? Are we at a satisfactory 
point in terms of what you believe is the proper balance 
between combat forces and tail forces? Whose responsibility is 
that? Is that something that you can work out through your 
authorities as the Chief, or is that something you need 
additional support from the Congress on? Because I think it is 
a critical issue, and I commend you for focusing on it so much.
    General Milley. Senator, you are always looking at tooth-
to-tail to make sure you got the right balance in the force 
structure, et cetera.
    I think we have some room to improve particularly in 
headquarters. I think our headquarters--they played a very 
important function, and today is different than it was, say, 50 
or 60 years ago, advances in technology and information, et 
cetera, et cetera. But my own observation is I think our 
headquarters remain still a little bit bigger than what needs 
to be for combat.
    For example, if you were to deploy a brigade or a division, 
say, the on-the-ground footprint of that headquarters is very 
large. In today's environment and in tomorrow's environment, 
increasingly in tomorrow's environment, if you have a large 
footprint, you are emanating a variety of electronic signals 
from radios and all these computers and everything else that we 
have. Given the electronic warfare capabilities, the 
acquisition and the capabilities of some of our adversaries--
Russia, for example--we have seen in the Ukraine they can 
acquire the electronic signal very quickly. They will fly 
unmanned aerial vehicles over there, acquire the target, and 
they will amass artillery on you. You will be dead.
    What do we have to do? We need to pare down our 
headquarters--this is just one example--to very small, nimble, 
mobile capabilities that can, in fact, survive what we think is 
the lethal environment that we would see in the future. That 
could mean increases in reach-back, for example, where much of 
your headquarters footprint and the processing of intelligence 
information, the processing of friendly unit situations is done 
at home station at a garrison or at a base here in the United 
States. Given today's technologies and the electronic pipes 
that are out there today, we can push a lot of that information 
forward rather than put an 800- or 1,000-man headquarters on 
some tactical battlefield in the future with nothing but a big 
target.
    We are taking a hard look at that. There is definitely some 
streamlining that needs to be done to reduce the tooth-to-tail 
because in my professional opinion, especially in the potential 
future contingencies we are looking at, large tails are going 
to result in significant amounts of casualties and potentially 
battlefield losses or loss of a battle, a campaign, or even a 
war.
    Senator Sullivan. Well, I think you have the support of 
this committee on your focus on that, and please let us know if 
there is statutory authority that you need additionally to what 
was in the NDAA last year that the chairman led on the issue of 
headquarters.
    Let me ask one final question. You know, there is a lot of 
discussion on the end strength. You know, when the Chairman and 
Secretary Carter were testifying, and in your testimony there 
is this focus on the conventional challenges, Russia, North 
Korea, Iran, China, ISIS, other terrorist groups. I think there 
is this notion--and I would like you to talk about it a little 
bit--that a lot of what we can defend ourselves with, because 
there are certainly capable forces, is our special forces. They 
get a lot of press. They do a lot. They are all over the world. 
They are incredibly capable.
    But I think it is also very important to recognize that on 
certain of these threats, in fact, almost all the ones that are 
listed right here, it is the conventional forces that are what 
we need the most.
    Can you talk a little bit about the difference in their 
capabilities and how important it is to have airborne brigade 
combat teams that can drop out of the sky 5,000 soldiers, in 
addition to the special forces? Because I think sometimes there 
is so much focus on the SF forces, that we lose the focus on 
how important our conventional forces are.
    General Milley. Senator, I think there are several myths of 
war, so to speak, that are prevalent in various communities. 
One of those key myths I think is that you can win wars from 
afar, from standoff distances, et cetera. Another key myth is 
that special forces can do it all. As a proud member of special 
forces, special forces cannot do it all.
    It depends on what you are trying to do. If you are 
involved in a war, if you are using the language of war and you 
are defining yourself as at war, then you need to apply all of 
the synergistic effects of the entire joint force in time and 
space to impose your political will. That is a lot more than 
special forces. That is everything from all the domains of 
space, cyber, naval, air, marines, special operations forces, 
and conventional ground forces, all of that converging in time 
and space to rip the shreds out of an enemy if you are at war.
    You can do lots of other things. You may not define 
yourself at war, but you just want to impose cost or you want 
to attrit or you want to deter or you want to punish. Those 
things can be done in a variety of ways. You can do that from 
just standoff weapon systems or perhaps just special forces.
    But the idea that special forces can do it all is not true, 
and the professionals in special forces will be the first to 
tell you.
    One of the fundamental roles of conventional ground forces, 
whether Army or Marine, is to seize and control territory and 
deny that same territory to enemy forces. Special forces does 
not seize and control territory. They never were designed to do 
that. But if you want to impose your will on an enemy, that is 
one of the key tasks that is likely going to have to get done 
if you define yourself in a state of war.
    Thanks for the question, but it is a myth out there. It is 
very prevalent. Special forces has huge talents, love it to 
death, and they can do a lot of things. But winning wars in and 
of themselves, not capable.
    Senator Sullivan. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Some of us think that that myth has been 
adopted into a Pentagon strategy to defeat ISIS.
    General, we will be doing more on this tooth-to-tail issue 
because it is not only the size of the staffs and bureaucracies 
but in many cases, it is absolute duplication of effort. 
Different branches of the Defense Department have staffs that 
are all doing the same thing, and that is one of the aspects of 
reform that we will be acting on in this year's NDAA.
    Secretary Murphy, to each member of the committee, if you 
would send a letter describing what actions are being taken on 
this whole issue of mental health, suicide, I would appreciate 
it. Obviously, from what you have heard today, there is 
significant interest in the issue, as there is amongst the 
American people. We have to work on this suicide rate not only 
of Active Duty personnel, but we also know that 8,000 veterans 
a year are committing suicide as well. That has to be one of 
our highest priorities.
    We thank you for your very forthright testimony. I think 
this has been a very beneficial hearing, and I thank you.
    Senator Reed?
    Senator Reed. I just second those comments, Mr. Chairman, 
and thank the witnesses for their service and their testimony. 
Thank you, Mr. Chairman.
    Chairman McCain. You are still too young, Mr. Murphy.
    [Laughter.]
    The Chairman. The committee stands adjourned.
    [Whereupon, at 11:56 a.m., the hearing was adjourned.]

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              

                        TUESDAY, APRIL 26, 2016

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.

                   F-35 JOINT STRIKE FIGHTER PROGRAM

    The committee met, pursuant to notice, at 10:04 a.m., in 
Room SD-G50, Dirksen Senate Office Building, Senator John 
McCain (chairman) presiding.
    Committee members present: Senators McCain, Inhofe, 
Sessions, Wicker, Ayotte, Fischer, Cotton, Rounds, Ernst, 
Tillis, Sullivan, Lee, Reed, McCaskill, Manchin, Shaheen, 
Gillibrand, Blumenthal, Donnelly, Hirono, Kaine, and King.

            OPENING STATEMENT OF SENATOR JOHN McCAIN

    Chairman McCain. The committee meets today to consider the 
status of the F-35 Joint Strike Fighter program as we review 
the fiscal year 2017 budget request.
    I welcome our witnesses, Under Secretary of Defense for 
Acquisition, Technology and Logistics Frank Kendall; director 
of Operational Tests and Evaluation, Dr. Michael Gilmore; 
program executive officer for the F-35, Lieutenant General 
Christopher Bogdan; and director of Acquisition and Sourcing 
Management for the Government Accountability Office, Michael 
Sullivan.
    The F-35 Joint Strike Fighter program is the largest and 
most expensive acquisition program in Department of Defense 
history. The full capabilities this aircraft will eventually 
provide are critical to America's national security, our 
ability to deter our potential adversaries around the globe, 
and, if necessary, respond with overwhelming force to any 
future conflicts that may require military intervention.
    At the same time, the F-35 program's record of performance 
has been both a scandal and a tragedy with respect to cost, 
schedule, and performance. It is a textbook example of why this 
committee has placed such a high priority on reforming the 
broken defense acquisition system.
    The F-35 schedule for development has now stretched to more 
than 15 years. Costs have more than doubled from original 
estimates. Aircraft deliveries amount to no more than a mere 
trickle relative to the original promises of the program.
    The original F-35 delivery schedule promised 1,013 F-35s of 
all variants would be delivered by the end of fiscal year 2016. 
In reality, we will have 179. Because the Air Force, Marines, 
and Navy were all counting on the F-35s that never appeared, 
combat aircraft and strike fighter capacity shortfalls in all 
three services have reached critical levels, severely impacting 
readiness and ultimately limiting the Department's ability to 
meet the requirements of the defense strategy.
    In the Department's fiscal year 2017 budget request, dozens 
more aircraft are being deferred from the future years defense 
plan, resulting in a situation where the last F-35 will be 
delivered in 2040.
    I cannot fathom how this strategy makes any sense, 
purchasing combat aircraft with a 40-year-old design in light 
of all the testimony this committee has received about how our 
potential adversaries are rapidly catching up with and, in some 
cases, matching America's military technological advantages.
    Those F-35 aircraft being delivered are not being delivered 
as promised. They have problems with maintenance, diagnostic 
software, radar instability, sensor fusion shortfalls, fuel 
system problems, structural cracks from service-life testing, 
engine reliability deficits, limitations on the crew escape 
system that caused pilot weight restrictions, and potential 
cyber vulnerabilities. This list is as troubling as it is long.
    At long last, we are approaching the end of the long 
nightmare known as ``concurrency,'' the ill-advised, 
simultaneous development, testing, and production of a complex 
and technologically challenging weapons system that the 
Department estimates will end up costing the American taxpayers 
$1.8 billion.
    But many questions remain, such as the total number of 
these aircraft the Nation should buy or can even afford, the 
cost of future upgrades to keep these aircraft relevant in the 
face of an ever-evolving threat, and the management and 
administration of a so-called joint program that General Bogdan 
himself has admitted consists of aircraft that have only 20 
percent to 25 percent commonality across the three variants as 
compared to the original goal of 70 percent to 90 percent.
    The F-35A, F-35B, and F-35C are essentially three distinct 
aircraft with significantly different missions and capability 
requirements. The illusion of jointness perpetuated by the 
structure of the F-35 joint program stifles the proper 
alignment of responsibility and accountability this program so 
desperately needs.
    There are also questions as to when the system development 
and demonstration phase, or SDD, will actually be completed so 
that initial operational tests and evaluation can begin. 
Originally scheduled to conclude in 2017, we have every 
indication that schedule pressures will likely extend SDD well 
into fiscal year 2018.
    I am very concerned the Department may attempt to take 
shortcuts by deferring mission capability content into later 
block upgrades and, by doing so, shortchange the warfighter 
once again by delaying necessary capabilities.
    The F-35 was designed to replace multiple aircraft of all 
three services, the A-10, the F-16, the F-18, and the Harrier. 
That is why the operational testing and evaluation must be of 
such high fidelity.
    There can be no question in the minds of the American 
people that their gigantic investment in this program will pay 
off with greatly improved capabilities that far surpass the 
mission capabilities of all these individual combat aircraft. 
The Congress will not likely allow any more of these legacy 
aircraft to be retired from service until there is no doubt the 
F-35 can adequately replace them. Nor is the Congress likely to 
entertain a ``block buy'' or other multiyear procurement scheme 
until the initial operational test and evaluation is completed 
and a positive milestone decision is made to commence full-rate 
production, both of which I understand are scheduled to occur 
in fiscal year 2019.
    The Department appears to be considering managing the F-35 
follow-on modernization, which is estimated to cost over $8 
billion for the first block upgrade within the overall F-35 
program. This is incredible given the Department's dismal track 
record on these upgrade programs as the F-22A modernization and 
upgrade debacle showed.
    I have seen no evidence that DOD's processes have improved 
to a level that would remove the need for a separate major 
defense acquisition program that would enable close scrutiny by 
Congress. Moreover, I expect the Department to use fixed-price 
contracts for the F-35 modernization effort in order to protect 
taxpayers.
    Despite this programs many stumbles, there are some 
positive signs for the F-35. The Marines declared initial 
operational capability, or IOC [Initial Operating Capability], 
last July in Yuma, Arizona, and are preparing for their first 
F-35B overseas deployment next year.
    Air Force personnel at Hill Air Force Base in Utah who fly 
and maintain the aircraft are preparing for Air Force IOC this 
fall. They report that the latest lots of F-35As are flying 
very well with a significant jump in reliability in warfighting 
capability as compared to earlier aircraft.
    General Bogdan has steadily pushed down aircraft 
procurement unit costs; reliability metrics are on the rise; 
and each lot of aircraft deliveries possess increasingly 
effective warfighting capabilities.
    All of this is a testament to hard work of military and 
civilian personnel inside this program today. They are doing 
their best to overcome misguided decisions taken long ago, and 
they are having success in important areas.
    However, there is a lot of development left to complete in 
this program, and with it comes the potential for more 
problems, schedule delays, and increased costs. This committee 
will remain steadfast in its oversight responsibilities to 
ensure our warfighters get the capabilities they need on time 
and at reasonable cost.
    Since a quorum is now present, I ask the committee to 
consider a list of 920 pending military nominations. Included 
in this list are the nominations of General Vincent K. Brooks, 
USA, to be commander of United Nations Command, Combined Forces 
Command, U.S. Forces Korea; General Curtis M. Scaparrotti, USA, 
to be Commander of U.S. European Command and Supreme Allied 
Commander Europe; and General Lori J. Robinson, USAF, to be 
Commander, U.S. Northern Command, Commander North America 
Aerospace Defense Command.
    All these nominations have been before the committee the 
required length of time.
    Is there a motion to favorably report these 920?
    Senator Reed. So moved.
    Chairman McCain. Is there a second?
    Senator Ayotte. Second.
    Chairman McCain. All in favor, say aye.
    The motion carries.
    Senator Reed?

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Thank you very much, Mr. Chairman.
    Let me join you in welcoming the witnesses today. We are 
grateful for your service. Thank you very much, gentlemen.
    Today, we will seek a better understanding of the progress 
the Department is making in fielding the Joint Strike Fighter; 
what actions the Department has taken to ameliorate problems 
with the program; what is the best judgment available of how 
effective these actions will be in preventing problems with the 
program, including additional cost overruns and delays.
    Overall, the production program has been delivering on 
expected cost reductions on aircraft lots. However, we still 
have to complete the system development and demonstration, SDD 
[System Development & Demonstration], program that is expected 
to deliver complete warfighting capability of each of three 
variants of the F-35. We may not have seen all the potential 
schedule changes in SDD, since not all the program difficulties 
are behind us.
    Quoting from Dr. Gilmore's prepared testimony, ``Although 
the Marine Corps has declared initial operational capability, 
IOC, and the Air Force plans to do so later this calendar year, 
the F-35 system remains immature and provides limited combat 
capability, with the officially planned start of initial 
operational test and evaluation, IOT&E [Initial Operational 
Test & Evaluation], just over 1 year away.''
    Dr. Gilmore also says assesses that the F-35 program will 
not be ready for IOT&E until calendar year 2018 at the soonest, 
and these assessments are of concern.
    Several years ago, we required the Department to estimate 
the dates for initial operating capability, IOC, of the three 
variants to the F-35. The Marine Corps declared IOC last year 
in July. The Air Force is scheduled to declare IOC later this 
year. The Navy is scheduled to clear IOC in 2018.
    The Marine Corps IOC was based on a version of the program 
software called the Block 2B. The Air Force's declaration of 
IOC will be based on the Block 3i software. The Navy's 
declaration of IOC will be based on the Block 3F software 
version.
    Until recently, in order to support the IOC dates, the 
program office has been working on versions of both Blocks 3i 
and 3F of the software simultaneously. The Block 3F software 
depends on having a stable baseline for the Block 3i software.
    With the contractor team working on multiple releases of 
software, correcting deficiencies and achieving software 
stability has proved elusive. Working on the two software 
packages simultaneously was intended to save time, but that 
time was lost when the project had to be redone because of 
mistakes stemming from concurrency.
    Within the past year, the program executive officer halted 
work on the Block 3F software until the problems with the Block 
3i software could be sorted out. We need to understand what 
effect this altered approach may have on the overall program 
schedule.
    Beyond that, we are planning for sizable upgrades in F-35 
capability through spiral development efforts to the Block 4 
program. The Block 4 program will likely be a multibillion-
dollar effort. We want to make sure that we do not repeat past 
mistakes.
    Beyond the SDD program, there is an even larger issue of 
the cost to sustain the F-35 once we have bought it. These 
estimates were at one point as large as $1 trillion. We need to 
understand what the Department is doing to reduce these 
potential costs. If we do nothing, we run the risk of allowing 
increased costs to sustain and support the F-35 to reduce the 
funds available for investment in the future force.
    This committee has been a strong supporter of the JSF 
program from the beginning. However, we must continue our 
vigilance on cost so there is a proper balance between F-35 and 
other important DOD acquisitions.
    Thank you very much for calling the hearing, Mr. Chairman.
    Chairman McCain. Thank you.
    I welcome the witnesses.
    Secretary Kendall?

 STATEMENT OF HONORABLE FRANK KENDALL III, UNDER SECRETARY OF 
       DEFENSE FOR ACQUISITION, TECHNOLOGY, AND LOGISTICS

    Mr. Kendall. Thank you, Chairman McCain. Chairman McCain, 
Ranking Member Reed, members of the committee, I am happy to be 
here today with Lieutenant General Bogdan, the program 
executive officer for the F-35 program, as well as with Dr. 
Gilmore and Mr. Sullivan, to discuss the status of the program 
and the President's Budget request for fiscal year 2017.
    In my opening comments, I would like to discuss my own 
involvement with the F-35. Lieutenant General Bogdan will 
provide more detail on the current state of the program.
    My first exposure to the F-35 was in the fall of 2009, as I 
was awaiting confirmation to be the Principal Deputy Under 
Secretary for AT&L. I was briefed by a member of Dr. Gilmore's 
staff, and my reaction at the time was one of surprise at the 
extremely long period of low-rate initial production, 
approximately 10 years, and at the very high amount of 
concurrency in the program, as you mentioned, Mr. Chairman, 
concurrency being the overlap in this case between development 
and production. It was one of the highest and, therefore, most 
risky that I had ever seen.
    Production was started in 2007, well before the stability 
of the design could be confirmed through testing. I later 
called the decision to start production so early acquisition 
malpractice, a phrase which seems to have stuck.
    In early 2010, also before I was confirmed, the program 
manager was replaced. The new program manager was Admiral David 
Venlet, a very seasoned and competent professional. At that 
time, the F-35 went through a Nunn-McCurdy review, as a result 
of the cost increases. As a result of the review, the program 
was rebaselined under Admiral Venlet to the baseline that it is 
operating against now and has ever since.
    In 2010, my predecessor, Dr. Carter, ended the use of cost-
plus contracts for production, starting with Lot 4.
    In the fall of 2011, I became the Acting Under Secretary. 
One of my early decisions was to bring Lieutenant General 
Bogdan in to replace Vice Admiral Venlet.
    Lieutenant General Bogdan has proven to be highly competent 
and professional program executive officer.
    In the fall 2011, based on an early operational assessment 
report from Dr. Gilmore's office, I commissioned an independent 
review of the technical status of the program focused on the 
design stability of the program. At that time, the extent of 
the open design issues and the risk of high concurrency costs 
for retrofitting aircraft that had already been produced with 
fixes that were found later led me to seriously consider 
halting production. Based on several considerations, I made the 
decision to hold production constant at 30 aircraft per year 
for the next 2 years, and to assess progress before increasing 
production at that point.
    Under Lieutenant General Bogdan's leadership, the program 
has made steady progress for the past 4 years. Cost and 
development have remained within the baseline. Production costs 
have steadily decreased, beating the independent cost estimate 
each year. The cost of sustainment has also been reduced by 
approximately 10 percent since the program was rebaselined.
    There have been a few months of schedule slip primarily due 
to software complexity.
    While I do continue to monitor progress monthly and conduct 
annual program deep-dive reviews, the F-35 is no longer a 
program that keeps me up at night. There are some design issues 
that still need to be resolved. The test program is about 90 
percent complete, and I do expect additional discovery, but I 
will be surprised if a major design problem surfaces at this 
point.
    Our task now is to complete the test program, achieve IOC 
for the Air Force later this year and the Navy in 2018, 
complete OT&E, and support our many partners and foreign sales 
customers as they become operational over the next few years.
    We also need to move forward with the follow-on 
development. I appreciate this committee's support for 
authorizing and funding that important work.
    The F-35 is a game-changing, state-of-the-art weapons 
system. But our potential adversaries are not standing still. 
Threat advances in areas like integrated air defense systems, 
air-to-air weapons, and electronic warfare must be continuously 
countered. We must continuously improve the weapons system to 
keep pace with emerging threats.
    I thank the committee for its support and look forward to 
your questions.
    Chairman McCain. Thank you.
    General Bogdan?

 STATEMENT OF LIEUTENANT GENERAL CHRISTOPHER C. BOGDAN, USAF, 
               PROGRAM EXECUTIVE OFFICER FOR THE
                F-35 LIGHTNING II JOINT PROGRAM

    General Bogdan. Thank you, sir. Chairman McCain, Ranking 
Member Reed, distinguished members of the committee, thank you 
for the opportunity here today to discuss the F-35 Lightning II 
program.
    My purpose here today is to provide you an honest, balanced 
assessment of where the program stands today. That means I will 
tell you the good, the bad, and the ugly about the program, and 
tell you what my team is doing to reduce costs, improve F-35 
performance, and meet our scheduled commitments.
    The F-35 Lightning II is of vital importance to the 
security of the United States. As the program executive officer 
and program director, I am committed to delivering an 
affordable, reliable, and sustainable fifth-generation weapons 
system to our warfighters and those of our international 
partners and foreign military sales customers.
    Overall, the F-35 program is executing well across the 
entire spectrum of acquisition to include development and 
design, flight test, production fielding, base standup, 
maintenance and support, and building a global sustainment 
enterprise.
    The program is at a pivot point. It is now rapidly 
changing, growing, and accelerating. We will be finishing our 
development program in late 2017 and begin a transition to a 
leaner, more efficient follow-on modernization program. We will 
see production grow from delivering 45 aircraft in 2015 to 
delivering over 100 airplanes in 2018, and up to 145 by 2020.
    Additionally, in the next four years, we will continue the 
standup of 17 new operating F-35 bases all over the world. We 
are also accelerating the creation of our heavy maintenance and 
repair capability and supply chain in the Pacific, European, 
and North American regions, creating a truly global sustainment 
capability.
    However, the program is not without risks and challenges, 
as these come with any program of this size and complexity. But 
I am confident the current risks and issues we face can be 
resolved, and we will be able to overcome future problems and 
deliver the F-35's full combat capability.
    I have often said that the mark of a good program is not 
that it has no problems but rather that it discovers problems, 
implements solutions, improves the weapons systems, and at the 
same time keeps the program on track. I believe we have been 
doing that for a number of years now.
    Let me highlight a few of our recent accomplishments.
    Last year, we began U.S. Air Force and partner pilot 
training at Luke Air Force Base in Arizona where a blend of 
U.S. and partner F-35 instructor pilots are helping to train 
U.S. Air Force and other partner pilots. The Air Force is now 
receiving F-35As at Hill Air Force Base in Utah, and training 
is underway to ready its first combat-coded F-35 squadron to be 
operational later this year.
    Also, the United States Marine Corps is successfully flying 
and deploying to austere sites for training, and dropping and 
shooting live weapons with the F-35B today.
    In addition, industry committed to and then successfully 
delivered 45 airplanes last year, including the first aircraft 
produced in the Italian assembly facility in Cameri, Italy. 
From a production perspective, we have delivered a total of 176 
of our test, operational, and training aircraft to date.
    On the cost front, the price of purchasing F-35s continues 
to decline lot after lot, a trend I believe will continue for 
many years. I expect the cost of an F-35A with an engine and 
fee in then-year dollars to be less than $85 million in fiscal 
year 2019.
    As I said before, the program is changing, growing, and 
accelerating, but it is not without its issues, risks, and 
challenges. Let me highlight some of these areas and what we 
are doing about them.
    On the technical front, we have a number of risks I would 
like to mention. At the top of my list are both aircraft 
software and our maintenance system known as the Autonomic 
Logistics Information System [ALIS]. We have seen stability 
issues with our Block 3 software. However, we believe we have 
identified the root cause of these problems and have tested 
solutions in the lab and in flight test, and are now completing 
our flight tests with these solutions.
    Our initial indications of this flight testing was 
positive, and we see software stability improved to two to 
three times better than what we have seen in the past. By the 
end of this month, I am encouraged that we will have an enough 
data to consider this problem an issue closed.
    We have also experienced schedule issues with the 
development of our next version of ALIS, version 2.0.2. I am 
prepared to discuss this issue as well as topics such as our 
egress system, U.S. Air Force IOC, initial operational test, 
and recent U.S. Air Force and U.S. Marine Corps deployments, 
and the status of our partners and FMS customers during the 
questions and answers.
    In summary, the F-35 program is moving forward, sometimes 
slower than I would like, but moving forward and making 
progress nonetheless. We are nearing the completion of 
development and flight test in 2017. We are ramping up 
production, standing up new bases, and growing a global 
sustainment enterprise. We have also stabilized and reduced the 
major costs on this program.
    As with any big, complex program, new discoveries, 
challenges, and obstacles will occur. The F-35 is still in 
development, and this is a time when challenges and discoveries 
are expected. However, we believe the combined government and 
industry team has the ability to resolve our current issues and 
any future discoveries.
    I intend to continue leading this program with integrity, 
discipline, transparency, and accountability. It is my 
intention to complete this program within the resources and 
time I have been given, and I intend on holding my team and 
myself accountable for the outcomes on this program.
    We never forget that someday your sons and daughters, your 
grandsons or granddaughters, will take an F-35 into harm's way 
to defend our freedom. Delivering them the best possible 
weapons system is a responsibility I and my team take very 
seriously.
    Thank you again for the opportunity to discuss the program. 
I look forward to your questions.
    [The joint prepared statement of Mr. Kendall and General 
Bogdan follows:]

 Joint Prepared Statement by the Honorable Frank Kendall and Lt. Gen. 
                         Christopher C. Bogdan
                            i. introduction
    Chairman McCain, Ranking Member Reed and distinguished Members of 
the Committee, thank you for the opportunity to appear before you today 
to discuss the F-35 Lightning II.
    The F-35 Lightning II is the Department of Defense`s largest 
acquisition program, matched by its importance to our Nation's 
security. The F-35 will form the backbone of U.S. air combat 
superiority for decades to come, replacing or complementing the legacy 
tactical fighter fleets of the Air Force, Navy, and Marine Corps with a 
dominant, multirole, fifth-generation aircraft, capable of projecting 
U.S. power and deterring potential adversaries. For our International 
Partners and Foreign Military Sales (FMS) customers who are 
participating in the program, the F-35 will become a linchpin for 
future coalition operations and will help to close a crucial capability 
gap that will enhance the strength of our security alliances. 
Accordingly, delivering this transformational capability to front-line 
forces as soon as possible remains a top priority.
    Our overall assessment is that the program is making solid progress 
across the board and shows improvement each day while continuing to 
manage emerging issues and mitigate programmatic risks. We are 
confident the F-35 team can overcome these challenges and deliver on 
our commitments. In this testimony, we will present a detailed update 
on the progress that has been made over the past year, providing a 
balanced assessment of the current status of the program, highlighting 
both the accomplishments and the setbacks, as well as articulating 
where we believe risks remain.
                          ii. accomplishments
    The F-35 program is executing well across the entire spectrum of 
acquisition activities, to include development and design, flight test, 
production, fielding and base stand-up, sustainment of fielded 
aircraft, and building a global sustainment enterprise. In February 
2016, the F-35 reached 50,000 flight hours, including approximately 
26,000 for the F-35A, 18,000 for the F-35B and almost 6,000 hours for 
the F-35C. We are pleased to report many accomplishments by the F-35 
team during the past year. Of note, we have seen declaration of Initial 
Operational Capability (IOC) for the F-35B by the U.S. Marine Corps 
(USMC) last summer, providing our combatant commanders with a 5th 
generation strike fighter capable of operations from expeditionary 
airstrips and sea-based carriers, the delivery of the first ten F-35A 
aircraft to Hill Air Force Base (AFB) in Utah in preparation for the 
U.S. Air Force's (USAF) declaration of IOC later this year, and 
delivery of Block 3F software to flight test in support of U.S. Navy 
(USN) F-35C IOC in 2018. The F-35 team remains committed to sustaining 
and expanding these fielded capabilities.
    Accomplishments in flight testing over the past year include:
      Completion of F-35B Block 2B operational assessment 
aboard the USS WASP and successful completion of the second round of 
sea trials with the F-35C aboard the USS Dwight D. Eisenhower (CVN 69).
      Completion of five sea trials with the F-35B and F-35C.
      Steady progression of the developmental test program with 
a focus on wrapping up testing of the Block 3i software this Spring. 
This last iteration of Block 3i software will give the F-35A the combat 
capability required for USAF IOC.
      Completion of F-35A high angle of attack and performance 
testing and continued flight envelope expansion for all aircraft 
variants. F-35B and F-35C high angle of attack flight testing will 
complete by the end of 2016.
      For the F-35A, performance of a series of successful AIM-
9X air-to-air missile launches and airborne test firings of its 
internal GAU-22 internally-mounted 25-millimeter cannon. Air-to-Ground 
accuracy testing of the GAU-22 is expected to commence later this year 
and complete in summer 2017.
      Successful completion of the first operational fleet 
weapons drops for the USMC and USAF, and completion of all Block 3i 
weapons delivery accuracy events.
                            iii. development
    Steady progress continues toward completion of the F-35 System 
Development and Demonstration (SDD) phase in the Fall of 2017. A year 
ago, the program was nearing completion of Block 2 software development 
and was closing in on completing all flight testing necessary to field 
our initial warfighting capability, also known as Block 2B. We are now 
in the same position for our next increment, Block 3i. We should 
complete all 3i testing this Spring and convert fielded aircraft with 
earlier versions of Block 3i to the latest version starting this 
summer.
    The final block of F-35 development program capability, known as 
Block 3F, provides a fully capable F-35 aircraft and marks the 
completion of the SDD program. Block 3F Mission Systems software is 
currently undergoing Developmental Test (DT), and many of the 
deficiencies discovered in Blocks 2B and 3i software will be corrected 
in Block 3F. However, since both 2B and 3i testing took longer than 
originally planned, the program estimates there is a risk to completing 
Block 3F on time--it is now projected to be about four months late and 
will be delivered in late Fall of 2017. This delay is an improvement 
over our projection from one year ago, and it is not expected to impact 
USN IOC for the F-35C in 2018 or the other U.S. and coalition partners' 
operational milestones. The stability issues we discovered in both 
Block 3i and 3F software have been thoroughly analyzed and the root 
causes of these problems are now known. We have incorporated numerous 
fixes based on this analysis; and, as of April 13, 2016, we had flown 
29 sorties and 75 hours with the new improved software. The results 
have been promising with both pilots and engineers seeing a marked 
improvement in stability. The newest version of software has shown 2 to 
3 times greater stability than previous versions, and we are confident 
that this particular set of issues has now been resolved to the Program 
and Warfighter's satisfaction. We can now proceed with the testing of 
the final version of software, Block 3F.
    Looking beyond the SDD program, the ensuing effort, known as 
Follow-on Modernization, will be the means to deliver improved 
capabilities to the weapon system to ensure its relevance against 
advanced and emerging threats. The program anticipates the Joint 
Requirements Oversight Council will approve the Follow-on Modernization 
/ Block 4 Capabilities Development Document this summer. Work continues 
with the U.S. services and International Partners to ensure the 
Modernization Program will be ``right-sized'' for affordability and 
sustainability. We awarded the initial Planning and Systems Engineering 
contract in June 2015, and execution remains on track to conduct a 
comprehensive System Requirements Review this Fall. Two additional 
contract actions are planned in the near term. The first will allow for 
the decomposition of system level requirements through a rigorous 
systems engineering effort, and the second will continue that work 
through Preliminary Design Review planned in Spring 2018 and will 
support a Defense Acquisition Executive decision point to move forward 
with the Block 4 development program in mid-2018.
    From a cost and programming perspective, the Department and the F-
35 Joint Program Office (JPO) are fully committed to complete 
transparency when it comes to reporting progress on the Follow-on 
Modernization program. We view the modernization effort as a 
continuation of the existing F-35 program, one that continues to be the 
Department's most closely managed acquisition program. The existing 
oversight mechanisms, management structure, and decision processes are 
more than adequate to continue to manage the modernization program. We 
will award a separate modernization contract that tracks full cost, 
schedule and earned value management reporting metrics. The 
modernization budget already has separate program elements and budget 
lines and we are working with the Office of the Director, Cost 
Assessment and Program Evaluation (CAPE) and Congressional Defense 
Committees to devise the format and frequency of reporting progress on 
the modernization effort. We also plan for a CAPE independent cost 
estimate that assesses the effort required to execute the modernization 
effort.
    F-35A Dual Capable Aircraft (DCA) continues to be aligned with and 
included in the Block 4 Follow-on Modernization effort. In mid-2015, we 
conducted a series of test flights to assess the vibration, acoustic, 
and thermal environments of the F-35A weapons bay with the B61-12 
weapon. Nuclear Certification planning efforts have been initiated as 
part of the Block 4 contracting activity in anticipation of beginning 
B61-12 integration on the F-35A in 2018.
    Commensurately, we have begun to ``right size'' the DT fleet of 
aircraft in preparation for Follow-on Modernization. As part of this 
process, the services and program office are working together to 
determine the correct mix of capacity and capabilities to allow us to 
operate a flight test fleet that is representative of the Warfighter's 
fleet. This will provide the needed capability at a lower cost, 
allowing the services to put more resources toward capability 
enhancements.
    Although solid progress is being made--we are now 90 percent 
complete with all of SDD--F-35 development is not without technical 
discoveries and deficiencies, which are expected for a system that has 
not completed development.
    On August 27, 2015, the U.S. Services and International Partners 
restricted pilots weighing less than 136 pounds from operating the F-35 
after safe escape tests indicated the potential for increased risk of 
injury to this pilot population. Currently, no F-35 pilots are impacted 
by this restriction. The restriction is focused on this population, as 
lighter pilots are assessed to have lower neck strength and are 
therefore more susceptible to injury as a result of neck loading 
observed during testing.
    There are three technical solutions that, when in place, will 
reduce the risk of neck injury to all pilots and will eliminate the 
restriction to any pilot population. All three of these solutions have 
now been verified through testing, and will be ready to incorporate 
into production aircraft and retrofit to delivered aircraft by the end 
of 2016. These solutions include a head support panel between the 
parachute risers that prevents neck over-extension; a pilot-selectable 
weight switch, which adds a very slight delay in the opening of the 
main parachute, thus reducing opening shock loads; and, a lighter F-35 
helmet. This lighter helmet is also expected to field by the end of 
2016 in line with the seat time frame. Once these three measures are in 
place, we can remove the weight restriction and pilots weighing less 
than 136 pounds will be safely able to fly the F-35. These improvements 
will make the F-35 ejection seat and escape system the safest we have 
today, and will also implement an escape system that provides 
protection for the widest weight and size range of pilots--from 103 
pounds to 245 pounds, and from the smallest to largest-sized pilots--of 
any ejection system ever built.
    Another deficiency the Program is resolving involves the Ground 
Data Security Assembly Receptacle (GDR), which is part of the Off-board 
Mission Planning system and is used to encrypt and decrypt the mission 
and maintenance data carried on the Portable Memory Device to and from 
the airplane by the pilot. In 2015, the program faced significant 
challenges with the pilot debrief timeline, because the GDR required 
approximately 1.5 hours to download a 1.5 hour flight--far too long. We 
have now developed an improved GDR that will decrease the timeline to 
download mission data. When these units are fielded, the mission 
download time for a 1.5 hour flight will be reduced to approximately 20 
minutes. Qualification and integration tests are now underway. We will 
deliver the new GDR in the summer of 2016 with the first ten units 
delivered to Hill AFB in Utah in support of USAF IOC. Further GDR 
deliveries to backfill other units will begin in the Fall of 2016.
    In September 2013, during F-35B full-scale durability testing, we 
experienced a significant bulkhead crack at 9,056 Equivalent Flight 
Hours (EFH). The root causes have been established and redesign efforts 
for the bulkhead is well underway. A laser shock peening process is 
being developed to address specific locations requiring additional 
material improvement to meet full life. The qualification of this 
process is progressing satisfactorily and is expected to be available 
for both production and retrofit of fielded aircraft by the end of 
2017.
    The F-35B durability test restarted in February 2015 and progressed 
to 11,915 EFH by August 2015. At that time, cracking had developed at 
previously identified short life locations and required repair. That 
repair work is complete, and testing resumed February 29, 2016. The 
test completed 12,000 EFH and is currently completing Level 1 
inspections. The F-35B durability test is expected to complete its 
second life of durability testing sometime in the Fall of 2016.
    In October 2015, the F-35C test article experienced cracking in the 
wing front spars at 13,731 EFH. The root cause has been established and 
the redesign effort for the spars has begun. Standard redesign 
techniques, such as local material thickening and cold-working are 
expected to be used to achieve full intended life. This finding does 
not affect the F-35A or B variant spars because the F-35C spars are 
designed differently to account for the aircraft's larger wings. In 
addition, at 13,931 EFH additional cracking was found in the left side 
of a main fuselage bulkhead. While under investigation a similar, 
though smaller crack was also found on the right side of the same 
bulkhead. This new cracking is under investigation and analysis in 
ongoing. There is no near-term airworthiness concern for fielded or 
test aircraft due to either case of cracking because these aircraft can 
fly for approximately 10 years or more before these structural issues 
require repair. The F-35C is expected to complete its second life of 
durability testing in late 2016.
    The F-35 Program Office is making progress in resolving two 
technical issues involving the fuel system: fuel tank overpressure at 
elevated g-loading and fuel tank inerting for lightning protection. The 
technical solution for the fuel overpressure has been designed, tested 
and is in the process of being fielded for the F-35A and F-35B 
variants. The F-35C design solution is also complete and testing will 
complete in the Spring of 2016. This will allow all F-35 variants to 
reach their full structural capability. Additionally, the F-35 team 
recently qualified the improved fuel tank inerting system, and the 
operational restriction to avoid lightning in-flight was lifted for the 
F-35A and F-35B in late 2015. The fuel systems' differences among the 
three aircraft variants require additional measures to qualify the new 
inerting system for F-35C. The F-35C will be corrected with a hardware 
change to commence in the summer of 2016. Implementation of both 
overpressure and lightning corrective actions will provide full g-
envelope and full lightning protection for all three variants prior to 
SDD completion and is expected to meet all IOC requirements.
   iv. cost, schedule, and performance metrics and production status:
    Affordability remains our top priority. We continue to make it 
clear to the program management team and the F-35 industrial base that 
the development phase must complete within the time and funding 
allocated, we must continue to drive cost out of aircraft production, 
and explore all measures to reduce life-cycle costs. To that end, the 
program has engaged in a multi-pronged approach to reduce costs across 
production, operations, and sustainment. The government/industry team 
is reducing aircraft production costs through ``blueprint for 
affordability'' initiatives and reducing F135 engine costs via ongoing 
engine ``war on cost'' strategies. These efforts include up-front 
contractor investment on cost reduction initiatives, mutually agreed 
upon by the government and contractor team. This arrangement motivates 
the contractors to accrue savings as quickly as possible in order to 
recoup their investment, and it benefits the government in realized 
cost savings at the time of contract award.
    The price of F-35s continues to decline steadily with each 
production Lot. For example, the price (including airframe, engine, and 
contractor fee) of a Low Rate Initial Production (LRIP) Lot 8 aircraft 
was approximately 3.6 percent less than an LRIP Lot 7 aircraft, and an 
LRIP Lot 7 aircraft was 4.2 percent lower than an LRIP Lot 6 aircraft. 
LRIP Lots 9 and 10 contract negotiations are nearing completion, and 
LRIP 9 contract award is anticipated in the near future. We plan to 
award LRIP 10 when the Secretary of the Air Force certifies that F-35As 
delivered during fiscal year 2018 will be full Block 3F capable. The 
goal is to reduce the flyaway cost of the USAF F-35A to less than $85 
million dollars by 2019, which is anticipated to commensurately 
decrease the cost to the Marine Corps F-35B and Navy F-35C variants.
    Program costs, as reported in the December 2015 Selected 
Acquisition Report (SAR) reflect improvements in affordability. RDT&E 
costs remained stable with a slight increase representing a zero sum 
re-phasing between Service Procurement accounts and RDT&E. The estimate 
for procuring F-35 aircraft over the life of the program decreased by 
$7.5 billion (BY12$) and $12.5 billion (TY$). Life cycle Operations and 
Support (O&S) costs increased by $10.5 billion (TY$), less than 1 
percent, due primarily to revised assumptions by the Services that 
added approximately 1.6 million flight hours and a 6-year extension 
(from 2064 to 2070) to the life of the program. The changes to these 
estimating assumptions overshadowed cost reductions in annual 
sustainment costs and cost per flight hour of 2-4 percent, the result 
of improved maintainability and sustainability as the weapons system 
matures, the design stabilizes, and the maintenance of the aircraft 
becomes more efficient and effective.
    The program met its 2015 production goal of delivering 45 aircraft 
and projects to deliver 53 aircraft in calendar year 2016, with 48 of 
those aircraft produced in Fort Worth, Texas and another five produced 
in the Italian Final Assembly and Check Out facility at Cameri, Italy. 
As of mid-April 2016, a total of 176 aircraft have been delivered to 
our test, operational and training sites. The delivery schedule for 
aircraft also continues to improve. LRIP Lot 6 aircraft averaged 68 
manufacturing days behind contracted delivery dates, and LRIP Lot 7 
aircraft have improved to an average of 30 manufacturing days behind 
contract dates. We expect to see continued improvement with LRIP Lot 8 
deliveries and project future aircraft to be delivered by the contract 
delivery date by early 2017. We continue to work with both Lockheed 
Martin and Pratt & Whitney to prepare the program for the production 
ramp increase projected over the next few years.
    The F-35 enterprise is exploring the possibility of entering into a 
Block Buy Contract (BBC) for LRIP Lots 12-14 (fiscal year 2018-2020). A 
BBC would achieve significant program cost savings by allowing the 
contractors to utilize Economic Order Quantity (EOQ) purchases, 
enabling suppliers to maximize production economies of scale through 
batch orders. To substantiate the potential savings of a BBC concept, 
the F-35 Program Office contracted with RAND Project Air Force to 
conduct an independent assessment. RAND's assessment, delivered in 
March 2016, indicated that savings on the order of $2.5 to $3.0 billion 
can be achieved by providing a total of 4 percent EOQ funding to 
selected suppliers. The Department of Defense plans to consider 
beginning the Block Buy in Lot 13 rather than Lot 12. However, we are 
considering an option to allow the F-35 Partners and FMS customers to 
begin a BBC in Lot 12, followed by U.S. participation in Lots 13 and 
14. This option will still result in significant cost savings although 
less than the amount stated above. RAND's study has been extended to 
assess the savings associated with this option, with results due in May 
2016.
    Overall, we believe the risk of entering into a BBC in Lot 12 
(fiscal year 2018) to the F-35 International Partners and FMS customers 
is low. By the time it is necessary to commit to a Block Buy, we will 
have completed durability testing for all three variants, reached 98 
percent completed of all hardware qualification, completion of the 
majority of 3F software and weapons delivery testing, and have stable 
and mature production processes.
    Earlier this year, the program reached agreement with Pratt & 
Whitney on lots 9 and 10 of F135 propulsion systems and awarded lot 9 
earlier this month. The F-35A/C propulsion system costs were reduced by 
3.4 percent from the previously negotiated LRIP Lot 8 price to the 
negotiated LRIP Lot 10 price. The F-35B propulsion system costs 
(including lift systems) were reduced 6.4 percent from the previously 
negotiated LRIP Lot 8 price to the LRIP Lot 10 price. For calendar year 
2015, all F135 production deliveries met contract requirements. 
However, recurring manufacturing quality issues have created issues 
with delivered engines. Recent quality escapes on turbine blades and 
electronic control systems resulted in maintenance activity to remove 
suspect hardware from the operational fleet prior to delivery. Even 
with these events, Pratt & Whitney still met its timeline for the 
Lockheed production line. Pratt & Whitney has taken action to improve 
quality surveillance within its manufacturing processes and is 
executing a rigorous quality program with its suppliers. Additionally, 
the program office manufacturing quality experts have engaged both 
Lockheed and Pratt & Whitney to ensure quality improvement processes 
are in place to meet production ramp requirements. We are also 
continuing to conduct Readiness Reviews throughout the supply base to 
ensure the production ramp will be achievable and smooth.
                             v. sustainment
    During 2015, the program began delivering F-35As to Hill AFB in 
support of the USAF's first operational F-35 wing. The program has also 
started F-35B pilot training at Marine Corps Air Station Beaufort in 
South Carolina. As of mid-April 2016, there are 156 operational (fleet 
and operational test) and 20 DT F-35s in the inventory operating at 
eight different sites. Together, the entire fleet has logged more than 
50,000 flight hours since our first flight in 2006. F-35A deliveries to 
Eglin AFB in Florida are complete; and the program continues deliveries 
to Luke AFB in Arizona, which is the main training base for the USAF 
and Partners, including Australia's and Norway's first two F-35As. In 
the next four years, we will add another seventeen operating bases to 
the F-35 enterprise across all three regions of North America, the 
Pacific and Europe.
    As additional aircraft come off the production line, the program is 
working to ensure sites across the globe are ready to accept the F-35. 
Since January 2015, the program has sent out 51 site activation teams 
supporting detailed planning at 25 different locations around the 
globe. These sites include stand up of F-35 capability for six of the 
Partner Nations, all three of the foreign military sales customers, and 
additional sites for USAF, USMC and USN. Planning commenced in 2015 for 
base standups in Norway, the Netherlands, Turkey, United Kingdom, 
Israel, Japan and Korea. The site activation highlight for 2015 was the 
successful preparation and arrival of the F-35 at Hill AFB, forming the 
foundation for a projected 2016 USAF IOC.
    Aircraft availability rates continue to be a focus area for the 
program and various program initiatives are now showing a positive 
trend in this area. A disciplined Reliability & Maintainability 
program, improved maintenance procedures and manuals, continued 
improvement in the Autonomic Logistics Information System (ALIS), 
better forecasting of spares requirements, improved repair turnaround 
times from suppliers, and incorporation of aircraft design improvements 
have resulted in gains in mission capability rates and aircraft 
availability rates. Today, across the fleet, we are seeing 55 to 60 
percent availability rates with units performing at 63 percent mission 
capability. These reliability and maintainability metrics compare 
favorably to a year ago when fleet availability was averaging below 50 
percent.
    Last year the program provided information regarding its efforts 
toward the establishment of the Global Sustainment posture across 
Europe, Asia-Pacific, and North America. In 2015, the program made 
progress in standing up regional Maintenance, Repair, Overhaul, and 
Upgrade (MRO&U) capabilities for airframes and engines in the European 
and Pacific regions. These initial MRO&U capabilities will support 
overseas F-35 airframe and engine heavy-level maintenance for all 
customers, including the U.S. Services, and will continue to provide 
the best-value to the enterprise. Italy will provide initial airframe 
MRO&U capability in the European region in 2018. Turkey will provide 
engine heavy maintenance in the European region in 2018, with the 
Netherlands and Norway providing additional capability a few years 
later. F-35 airframe MRO&U capability in the Pacific region will be 
provided by Australia in 2018 and then by Japan. Australia will also be 
providing initial engine heavy maintenance, followed by Japan about 
five years later.
    In 2015 the program also kicked-off initial planning efforts for 
expansion of component repair into the European and Pacific regions. 
Efforts began to identify ``best value'' repair sources in each region 
for approximately 18 key depot-level repairable items. International 
Partners and their respective industries will be requested to propose 
component groupings, which leverage their strongest industrial 
competencies to deliver optimum repair capability at the best cost to 
the global sustainment solution.
    The program will continue this process in 2016 and 2017 with the 
Department of Defense assigning to our Partners and FMS customers 
repair capabilities such as wheels and brakes, electrical and hydraulic 
systems, maintenance of support equipment, and warehousing for the 
global supply chain. These same capabilities either currently exist or 
are being developed at the U.S. Services' continental United States 
(CONUS) depots in accordance with current U.S. law.
                         vi. risk & challenges
    Although improving, the Program is not without risks and 
challenges. Currently, our most significant technical concerns are the 
development and integration of mission systems software and the 
development and improvement of ALIS.
    The F-35 aircraft has approximately eight million lines of code, 
with another 16 million lines of code on the off-board systems. This is 
an order of magnitude greater than any other aircraft in the world and 
represents a complex and often frustrating element in the program. 
Several years ago the program instilled discipline in the way software 
is developed, lab tested, flight tested, measured and controlled. This 
has produced much better and more predictable results over the past two 
years. However, both the fielded Block 3i software and the 3F software 
in flight test were not as stable as they need to be to support our 
Warfighters. We have experienced instability in the sensors leading it 
to shut off and ``reboot'' in flight. We believe we have identified the 
root cause of these stability problems to be the timing of software 
messages from the sensors to the main F-35 fusion computer, and we have 
tested solutions in the lab environment. As of April 13, 2016, we had 
flown 29 sorties and 75 hours with the new software containing the 
stability improvements. Thus far, we have seen an improvement in the 
software's stability with a meantime between stability problems 
improving from once every four hours to greater than 10 hours. We are 
cautiously optimistic that these fixes will resolve the current 
stability problems, but are waiting to see how the software performs in 
an operational test environment. We have three Operational Test (OT) 
jets flying with the new software and expect 50 hours of additional OT 
testing by April 29th. At that time we will have enough data to 
consider whether the software stability issue can be closed. If the 
fixes are successful, we will add them to a new version of 3i software 
and field that in time for USAF IOC. We will also incorporate the fixes 
in the 3F software we are developing and flight testing. To ensure we 
completely understand these issues the program office has also launched 
an in-depth look at this issue in the form of a software stability 
``Red Team.'' This team, made up of a group of experts from the Navy 
and Air Force, has started in-depth analysis of all reported issues and 
is working to develop recommendations to ensure the F-35 software is 
robust and resilient into the future.
    The final software version, Block 3F, has the most software risk 
facing the program for a number of reasons. First, 3F testing started 
later than planned because we had to spend more time fixing Block 2B 
and 3i software. Second, 3F has the same stability issues as Block 3i 
as described above. Third, Block 3F software must receive information 
from other external air and ground operational sources and fuse this 
with F-35 information, giving the pilot a more complete and accurate 
picture of the battlespace. Additionally, the remaining flight loads, 
buffet, and weapons delivery accuracy flight testing needs to be 
accomplished. We estimate there is about four months of risk to the 
planned schedule, projecting full 3F capability to the Warfighters in 
the late Fall of 2017.
    The next version of ALIS, version 2.0.2, which includes new 
capabilities to support USAF IOC, also has some schedule risk. This 
version of ALIS combines the management of F135 engine maintenance 
within ALIS and tracks all the life-limited parts on each and every F-
35 aircraft. The development of these capabilities is proving to be 
difficult because they require integration with Lockheed Martin's and 
Pratt & Whitney's Enterprise Resource Planning systems, or the ``back 
end'' of ALIS. We anticipate that this latest version of ALIS (2.0.2) 
is approximately 60 days behind schedule.
    We are also working closely with the Joint Operational Test Team to 
finalize the F-35 fiscal year 2016 Cyber Test Plan. This testing is 
scheduled to begin this month and will perform end-to-end Vulnerability 
and Adversarial Testing on ALIS and the F-35 Air Vehicle. Hundreds of 
penetration and cyber security tests have already been accomplished on 
the system, enabling us to connect the F-35 systems to the DOD Global 
Information Grid (DOD and Services networks).
    We have also instituted an ALIS initiative aimed at fixing prior 
deficiencies and rapidly fielding them to the Warfighter. As we 
continue to develop new capabilities, the Program has set up a parallel 
effort--known as ``Service Packs''--to fix many of the deficiencies the 
maintainers in the field have brought to our attention. These 
deficiencies usually result in workarounds and add workload to our 
maintainers' already demanding responsibilities. Service Packs are 
developed, tested and fielded on a much quicker timeline than our 
larger increments of ALIS. We fielded the first Service Pack in 
January, and feedback from the field has been encouraging. We will 
continue to rapidly field Service Packs to improve the usability of 
ALIS for our maintainers, the next of which will be fielded in the next 
few months.
    One final comment concerning risks and issues on the program deals 
with the recent report issued by the Director of Operational Test and 
Evaluation (DOT&E). This report is factually accurate and was written 
entirely based on information that came from the F-35 Program Office--
there is no information in the report that was not already known by the 
Program Office, the U.S. Services, and our Partners. While not 
highlighted by the DOT&E report, among the 14 issues cited in the 
report, the F-35 Program fully concurs with nine of them and partially 
concurs with the other five. The F-35 Program has a dedicated effort 
underway to resolve or otherwise mitigate them.
                   vii. delivering combat capability
    Following the declaration of IOC in June of 2015, the USMC has 
continued to train and exercise its combat capable F-35B aircraft. At 
the beginning of December 2015, Marine Fighter Attack Squadron 121 
deployed eight F-35Bs to Twenty-nine Palms in California for Exercise 
Steel Knight. The team executed 32 sorties in support of the combined 
arms live-fire exercise, taking an important step toward integrating 
the F-35B into the Marine Corps Combined Arms Team and demonstrating 
their capability to execute close air support and strike missions from 
an austere operating site.
    The USAF also showed its increasing capabilities with the F-35A, 
executing a deployment of six Operational Test aircraft from the 31st 
Test and Evaluation Squadron at Edwards AFB, California to Mountain 
Home AFB, Idaho. The squadron executed 54 sorties over 12 days of 
flying as part of a joint training exercise with U.S. Navy Seals, F-
15Es, A-10s, and Apache and Blackhawk helicopters, delivering 10 GBU-31 
and 20 GBU-12 precision guided inert munitions. This is the first time 
the F-35A has deployed to and operated from a base with no organic F-35 
support or presence.
    An F-35 Lightning II Joint Program Office top priority is meeting 
USAF IOC at Hill AFB, Utah with Block 3i capabilities between August 
and December 2016. Hill's active-duty 388th Fighter Wing and Reserve 
419th Fighter Wing will be the first USAF combat-coded units to fly and 
maintain the Lightning II. In support of meeting the USAF's IOC date, 
Hill AFB has already received its initial F-35As and is now training 
with them, including the first weapons employment from an operational 
F-35A.
    The USN has set August 2018 as its IOC objective date with the F-
35C. In support of meeting the USN IOC, sea trials will continue this 
year and culminate in the third and final DT period afloat. This test 
is expected to last approximately 21 days and will test and certify the 
remaining embarked launch and recovery environmental envelopes, 
including those with various ordnance and fuel load combinations 
expected in fleet use. The test will also complete all initial 
shipboard flight deck and hangar deck supportability procedures and 
processes, paving the way to Operational Test and Fleet use.
            viii. international partner and fms participants
    International participation on the program with eight Partners and 
three FMS customers remains solid. The program has now delivered the 
first Royal Norwegian Air Force F-35 to Luke AFB expanding the 
International Partner pilot training currently ongoing there. The first 
Italian Air Force F-35A was also delivered from the production facility 
in Cameri, Italy, and then subsequently completed the first F-35 trans-
Atlantic flight in February, landing at Naval Air Station, Patuxent 
River in Maryland. After completion of some program testing, this 
aircraft will also join the pilot training effort at Luke AFB. F-35A 
has also conducted aerial refueling flight testing with a Royal 
Australian Air Force KC-30A tanker and completed aerial refueling 
flight testing and certification with an Italian Air Force KC-767 
tanker. Most recently we completed aerial refueling flight testing with 
a Dutch KC-10.
    In 2015, as part of initial site planning, we commenced standup of 
maintenance capabilities in Norway, Netherlands, Turkey, United 
Kingdom, Israel, Japan and Korea. Also, the Japanese Final Assembly and 
Check Out assembly facility is now complete with both Electronic Mate 
Assembly Stations tools installed and accepted. Construction and 
installation activities remain on schedule, and the major components 
are now being shipped. The first Japanese F-35A is scheduled to rollout 
of the facility in November 2016.
    We anticipate that Denmark will make its final decision on its 
fighter replacement late Spring 2016. Additionally, although Canada has 
indicated that it will conduct a new fighter replacement competition, 
it still remains a full partner in the F-35 program. We continue to 
provide the Canadian government with the most up-to-date and accurate 
information to aid them in its future selection process.
    The Government Accounting Office (GAO) conducted two focused F-35 
reports in 2015--one on the overall program and the other on 
sustainment. Both reports were completed with the F-35 program's full 
cooperation and unfettered access to information. The GAO annual F-35 
program report had a single recommendation to establish the Follow-on 
Modernization program as a Major Defense Acquisition Program. DOD non-
concurred with the recommendation and contends that the modernization 
effort is a continuation of the baseline program and that the existing 
oversight mechanisms, management structure, and decision processes are 
more than adequate to continue to manage the modernization program. The 
GAO had four recommendations on ALIS in the sustainment report. DOD 
concurred with all four recommendations and in many of the areas, the 
program has already initiated appropriate action.
                             ix. conclusion
    In summary, the F-35 program is making solid progress across all 
areas including development, flight test, production, maintenance, and 
stand-up of the global sustainment enterprise. As with any big and 
complex program, new discoveries, challenges and obstacles will occur. 
While nearing completion, the F-35 is still in development, and 
technical challenges are to be expected. However, we believe the 
combined government-industry team has the ability to resolve current 
issues and future discoveries. The team's commitment to overcoming 
these challenges is unwavering and we will maximize the F-35's full 
capability for the Warfighter.
    We will continue executing with integrity, discipline, transparency 
and accountability, holding ourselves accountable for the outcomes on 
this program. The team recognizes the responsibility the program has 
been given to provide the pillar of the U.S. and allied fighter 
capability with the F-35 for generations to come, a responsibility we 
take very seriously.
    Thank you again for this opportunity to discuss the F-35 program. 
We look forward to answering any questions you have.

    Chairman McCain. Thank you.
    Dr. Gilmore?

       STATEMENT OF HONORABLE J. MICHAEL GILMORE, Ph.D.,
  DIRECTOR OF OPERATIONAL TEST AND EVALUATION, DEPARTMENT OF 
                            DEFENSE

    Dr. Gilmore. Mr. Chairman, Senator Reed, members of the 
committee, I will focus my remarks on readiness for initial 
operational test and evaluation, and achievement of full combat 
capability.
    My estimate is the program will not be ready to begin 
operational test and evaluation until mid-calendar year 2018 at 
the earliest. That is about a 1-year delay relative to the 
program's objective date and 6 months relative to the threshold 
date.
    There are a number of reasons that that is my assessment. 
The most complex mission system testing remains, as does 
verification of fixes to a number of significant problems. In-
flight stability of mission systems with the new Technical 
Refresh 2 processor has been poor, but there is recent 
indication of significant progress in achieving stability, 
although those stability issues while they were being fixed led 
to delays in Block 3F development, which provides full combat 
capability. Nonetheless, there is good news on the stability 
front.
    Significant ground startup instabilities persist, however. 
Inadequate fusion of sensor information from sensors on a 
single aircraft, as well as among a four-ship of aircraft, 
resulted in cluttered and confusing displays and are still a 
problem. Four-ships will be frequently used in combat to enable 
key multi-ship sensor applications that are necessary to deal 
with the increasingly complex and stressing integrated air 
defense systems potential adversaries began fielding in the 
middle of the last decade.
    Shortfalls in electronic warfare and electronic attack, 
geolocation, electronic countermeasures persist. There are 
shortfalls in the performance of the distributed aperture 
system, including missile warning and situational awareness; 
long aerial refueling times up to two to three times those of 
legacy aircraft; lack of viable moving target capability, which 
is crucial for successful conduct of close-air support and 
other missions; lack of display to pilots of failures in 
critical mission systems components, which is unacceptable in 
combat; and there are other issues that are classified.
    Regarding mission systems, the program has now changed its 
approach, as has been discussed, from executing parallel 
schedule-driven software releases to a serial capability-based 
approach, which does take longer. But that approach has been 
validated in the recent achievement of improved stability with 
the TR2 processor. That approach, the new approach, allows the 
extra time needed to actually fix problems and, as I mentioned, 
has been validated by the progress recently seen.
    Stealth aircraft are not invisible. Mission systems 
infusion must work in some reasonable sense of that word. They 
do not have to be perfect, but they have to, in some sense of 
the word, work to prevail in combat against the modern, very 
capable, and mobile integrated air defense systems potential 
adversaries have been fielding since the middle of the last 
decade. The ability to prevail against these threats is a key 
rationale for this $400 billion program.
    To continue with other reasons that there may be a delay in 
operational testing, time is needed to complete and certify 
full weapons usage throughout the full flight envelope. The 
most recent test community estimates are October 2017 for F-
35A, February 2018 for F-35C, and May 2018 for F-35B. These 
estimates assume an increase in the rate at which weapons tests 
are accomplished that may be a challenge to achieve.
    As has been mentioned, there are problems that continue 
with the Autonomic Logistics Information System, or ALIS, which 
remains immature, requiring problematic and resource-intensive 
workarounds not acceptable in combat. Under the program's 
current schedule, the final version of ALIS 3.0, the full 
capability production version required for IOT&E and full 
combat capability, will not be released until the first quarter 
of calendar year 2018. But this schedule could be delayed by 
the ongoing problems with ALIS version 2.0.2, which attempts to 
integrate the engine data and incorporate other functionality 
and fixes.
    Concurrency-driven extensive modifications would be 
required. The early lot aircraft that originally had been 
bought for IOT&E when IOT&E was planned to begin in 2013. The 
current unmitigated schedule for accomplishing those 
modifications, including those for the gun, which is turning 
out to be very problematic on all variants, extends into the 
third quarter of 2019. The program is working on a multipronged 
approach to pull those modifications to the left. That includes 
taking production aircraft slated for operational use and 
taking hardware from recently fielded aircraft, and a 
definitive decision on that approach is needed now.
    There are inadequacies that remain in U.S. reprogramming 
laboratory that are precluding the ability to generate combat-
effective mission data files, enabling aircraft to deal with 
the air defense threats I mentioned. They are only going to 
worsen in the future.
    The current schedule shows USRL hardware upgrades required 
to handle current threats extend into calendar year 2020. The 
program can and has delivered mission data files, but they are 
not optimized or fully tested to handle the current threat 
because of the hardware and software deficiencies in the USRL.
    The program's optimistic schedule for delivery of a 
validated but probably inadequate MDF to support IOT&E is the 
first quarter 2018. But this assumes USRL receives the 
functional lab version of Block 3 this month, which may be 
problematic.
    For all these reasons, delays to IOT&E and full combat 
capability are likely. I want to remind everyone that IOT&E 
will constitute the most realistic and stressing test of JSF 
that will be performed. Therefore, discovery of new, 
significant deficiencies during IOT&E, as was the case with F-
22, is pretty much assured.
    Thank you.
    [The prepared statement of Dr. Gilmore follows:]

                Prepared Statement by J. Michael Gilmore
    Good afternoon, Mr. Chairman, Ranking Member Reed, my testimony 
today discusses the status of the F-35 program using my fiscal year 
2015 Annual Report as the basis. There are a few updates since the 
report was released in January 2016, which I will highlight today.
    Overall, the program is at a critical time. Although the Marine 
Corps has declared Initial Operational Capability (IOC) and the Air 
Force plans to do so later this calendar year (CY), the F-35 system 
remains immature and provides limited combat capability, with the 
officially planned start of Initial Operational Test and Evaluation 
(IOT&E) just over one year away. Over the past year, flight test teams 
continued to accomplish test flights at the planned rate, and a new 
version of software capability, Block 3i, was fielded. However, there 
are still many unresolved significant deficiencies, the program 
continues to fall behind the planned software block development and 
testing goals, and sustainment of the fielded aircraft is very 
burdensome. (The latter is not a surprise, since, as the Program 
Executive Officer has noted, F-35 remains under development 
notwithstanding the Services' declarations of IOC.) The program is 
working to resolve the many issues it confronts, and has recently made 
some progress addressing problems with the stability of Block 3i 
mission systems, but my assessment is that the F-35 program will not be 
ready for IOT&E until CY18 at the soonest. Because aircraft continue to 
be produced in substantial quantities (all of which will require some 
level of modifications and retrofits before being used in combat), 
IOT&E must be conducted as soon as possible to evaluate F-35 combat 
effectiveness under the most realistic combat conditions that can be 
obtained. Over 300 aircraft are planned to be built by the end of 
fiscal year 2017 when IOT&E is currently scheduled to begin.
    Test Flights and Software Development. Before operational testing, 
developmental test teams fly sorties under very specific conditions to 
examine the system's performance. This year, those teams executed very 
closely to the planned sortie production rate throughout the year, as 
has been the case in previous years. It will be important to ensure the 
government flight test centers and the associated ranges and facilities 
at Edwards Air Force Base (AFB) and Patuxent River Naval Air Station 
(NAS) remain sufficiently resourced to overcome the remaining test 
challenges, which are significant. However, sortie production does not 
necessarily mean that planned test points were completed successfully, 
the system under test functioned as designed, the data collected were 
usable to sign off contract specification compliance, or that the 
system will actually be effective and suitable in combat.
    In fact, the program did not accomplish the amount of test points 
planned in several flight test venues, and the program continued to add 
testing via ``growth points'' while deleting many mission systems test 
points as no-longer-required. This continues to be the case, as the 
program recently deleted Block 3F test points and added test points to 
address Block 3i deficiencies in mission systems performance and 
stability. Because of a change by the program in defining growth in 
test points, the amount of this re-defined growth was less during the 
last year than in previous years.
    Regarding mission systems test progress over the past year, the 
program focused on culminating Block 2B development and testing in 
order to provide a fleet release enabling the Marine Corps F-35B Joint 
Strike Fighter (JSF) declaration of IOC, while transitioning 
development and flight test resources to Block 3i and Block 3F.
    The program terminated Block 2B development in May 2015, and the 
Marine Corps declared IOC in July 2015, despite many known deficiencies 
and, as expected, with limited combat capability. Block 3i 
developmental flight testing restarted for the third time in March 
2015, after two earlier attempts in May and September 2014. As 
mentioned in my annual report, Block 3i began with re-hosting the 
immature Block 2B software and capabilities into new avionics 
processors. Although the program originally intended that Block 3i 
would not introduce new capabilities and would not inherit technical 
problems from earlier blocks, both of these things occurred. The 
combination of re-hosted immature software and new processors resulted 
in avionics stability problems that were significantly worse than Block 
2B. Despite the problems with avionics stability, sensor fusion, and 
other inherited issues from Block 2B, the program terminated Block 3i 
developmental flight testing in October 2015, and released Block 3i 
software to the fielded units. This decision was made, despite the 
unresolved Block 3i deficiencies, in an attempt to meet the program's 
unrealistic schedule for completing development and flight testing of 
Block 3F mission systems.
    The Air Force insisted on fixes for five of the most severe 
deficiencies inherited from Block 2B as a prerequisite to use the final 
Block 3i capability in the Air Force IOC aircraft; Air Force IOC is 
currently planned for August 2016 (objective) through December 2016 
(threshold). However, as the program attempted to concurrently develop 
and test Block 3i and Block 3F software, the latter of which began 
flight testing in March 2015, the immaturity and instability of the 
Block 3i mission systems software continued to manifest problems in 
flight testing. In February 2016, when the latest version of Block 3F 
software--version 3FR5--was delivered to flight test, it was so 
unstable that productive flight testing could not be accomplished. 
Consequently, the program elected to reload a previous version of Block 
3F software--version 3FR4--on the mission systems flight test aircraft, 
to allow limited testing to proceed. The program then converted its 
developmental labs back to the Block 3i configuration in another 
attempt to address key unresolved software deficiencies, including the 
avionics instabilities troubling both Block 3i and Block 3F. This 
decision by the program to return to the Block 3i configuration and 
address the poor mission systems performance should be commended. It 
has caused some near-term delays, but it is a necessary step to ensure 
the Air Force has adequate Block 3i software for IOC and that the 
additional full set of combat capabilities planned in Block 3F can be 
effectively tested with a stable baseline of software and eventually 
fielded to operational units. The program recently loaded all the 
mission systems test aircraft with a new build of Block 3i software--
version 3iR6.21 -- which started flight testing on March 25. The 
program is in the process of completing Block 3iR6.21 flight testing, 
which includes 4-ship test missions, to evaluate performance prior to 
providing this software to the fielded units. The avionics stability of 
Block 3iR6.21 during these recent test missions appears to have 
improved compared to previous versions, however incidences of start-up 
and in-flight instability were still observed. Although analyses of the 
test data are still on-going, test reports indicate that inflight 
stability has potentially improved to be comparable with the fielded 
version of Block 2B while the significant initial startup problems 
continue to be a challenge. During the first 30 flights with Block 
3iR6.21, which accumulated 75.6 hours of flight time, no less than 27 
power cycles were required to get all systems functioning between 
initial startup and takeoff. These power cycles varied in degree--from 
``cold iron'' resets, where the aircraft had to be shut down and then 
restarted, to component or battery power recycling. The extent to which 
the initial startup sequence has improved--or not--compared to earlier 
versions of Block 3i software is not known, as the program does not 
track startup events in the same manner as flight instability events. 
The status of the other ``must fix'' deficiencies is unknown at the 
time of this testimony.
    Delivering and testing the numerous new and advanced capabilities 
planned to be in Block 3F mission systems, which are specified in the 
program's Operational Requirements Document (ORD), presents significant 
challenges for remaining development and flight test. Before the 
program's decision to pause Block 3F developmental flight testing and 
rework Block 3i software, test progress was limited as flight testing 
had only accomplished approximately 20 percent of the Block 3F baseline 
test points by the end of March 2016. This is because many of the test 
points, including the more complex weapons delivery accuracy events, 
could not be flown until stable, functioning Block 3F software was 
available. While the new Block 3iR6.21 software was in flight testing, 
the program finished developing and testing an updated version of Block 
3FR5 in the lab, released it to the test centers, and started loading 
it on the mission systems aircraft to resume Block 3F flight testing in 
mid-April. Because of the reworking of Block 3i software and the added 
capability being incorporated in the remaining Block 3F software, it is 
incorrect to assume that the difficult testing is behind the program. 
In fact, the most stressing missions systems testing remains to be 
completed, since the final Block 3F capabilities are both complex and 
important to the F-35's viability. A relatively recent example of the 
problems with an earlier version of Block 3F software was an attempted 
four-ship Electronic Warfare ``Super Scenario'' mission that resulted 
in only two aircraft arriving at the range because the other two 
aircraft ground aborted due to avionics stability problems during 
startup. Also, when the aircraft operated in a dense and realistic 
electromagnetic environment, the current avionics problems caused poor 
detection and fusion performance, which is exacerbated in multi-ship F-
35 formations. Due to the large amount of difficult flight testing 
remaining, it is likely there will be discoveries of additional 
significant deficiencies that will need to be rectified before IOT&E.
    United States Reprogramming Laboratory (USRL). Significant, 
correctable deficiencies exist in the U.S. Reprogramming Laboratory 
(USRL) that will preclude development and adequate testing of effective 
mission data loads for Block 3F. Despite a $45 million budget provided 
to the Program Office in fiscal year 2013, the required equipment was 
not ordered in time and the USRL is still not configured properly to 
build and optimize Block 3F Mission Data Files (MDFs). The program 
still has not designed, contracted for, and ordered all of the required 
equipment--a process that will take at least two years for some of the 
complex equipment--after which significant time for installation and 
check-out will be required. The estimate of earliest completion, with 
the required signal generators and other upgrades to properly test 
Block 3F mission data loads, is late 2019, which is after the planned 
IOT&E of Block 3F. As I explain in my annual report, the corrections to 
the USRL are needed to provide the F-35 with the ability to succeed 
against the modern threats that are the key rationale for pursuing this 
$400 centsllion program. If the situation with the USRL is not 
rectified, U.S. F-35 forces will be at substantial risk of failure if 
used in combat against these threats. Further, I note that the 
laboratory being built to provide MDFs to the partner nations will be 
more capable than the USRL is when we are preparing for IOT&E. 
Therefore, the full set of required upgrades for the USRL should be 
pursued immediately, without further delay.
    Cybersecurity testing. The limited and incomplete F-35 
cybersecurity testing accomplished to date has nonetheless revealed 
deficiencies that cannot be ignored. Multiple tests are scheduled for 
spring 2016 and some are on-going at this time; however, the JSF 
Program Office (JPO) and contractor are still reluctant to allow 
testing of the actual, operational Autonomic Logistics Operating Unit 
(ALOU) including its many connections, fearing the testing might 
disrupt its operations. Even though the program is providing alternate 
systems for ALOU testing in the near term, which is better than 
foregoing all testing, it must allow full, end-to-end, cooperative and 
adversarial cyber tests on every level and component of the operational 
Autonomic Logistics Information System (ALIS). The program must also 
designate an aircraft and provide the authority to test it, as soon as 
possible, a process the Program Office has been hesitant to do to date. 
Cybersecurity testing on the next increment of ALIS--version 2.0.2--is 
planned for this fall, but may need to be delayed because the program 
has not been able to resolve some key deficiencies and complete content 
development and fielding as scheduled.
    IOT&E readiness and adequacy. IOT&E will be the first rigorous and 
operationally representative evaluation of the combat capability of the 
F-35. Unlike previous developmental testing, IOT&E will examine the 
completed, fully operational aircraft to ensure it is capable of 
prevailing in combat against realistic threats. However, the slow rate 
of maturation of required combat capabilities renders the current 
schedule to complete development and enter IOT&E by August 2017 
unrealistic. Essential systems are not becoming stable and viable 
enough quickly enough to successfully begin testing at that time. Based 
on the historical performance of the program and the large amount of 
testing that remains, my estimate for completion of developmental 
flight test is no earlier than January 2018. For these reasons, the 
test organizations' capacity should be maintained at current levels, 
and not reduced in a counter-productive effort to meet unrealistic 
budget targets. Several other significant obstacles remain to be 
overcome before IOT&E can begin, including the following:
      Weapons integration. A significant amount of weapons 
integration developmental testing remains in order to integrate and 
qualify for operational use of the full suite of Block 3F weapons, 
including the gun. Since my annual report, nothing has changed my 
estimate that the program must complete weapons employment test events 
at a pace three times faster than it has previously been able to do. In 
fact, most mission systems Weapons Delivery Accuracy (WDA) testing has 
been on hold for months while awaiting a version of Block 3F with the 
required capabilities and maturity to complete these important and 
difficult tests. Eliminating or failing to execute some of the 
remaining planned developmental WDA test events will only result in 
deferring them to be done later by the operational test squadrons, 
which will likely delay identification and correction of significant 
new discoveries and, therefore, increase the risk of delays to IOT&E. 
The developmental WDA test events are critical in preparing for IOT&E 
and the Block 3F weapons events are much more complex than previous 
testing for Block 2B and Block 3i. For example, critical air-to-air and 
air-to-ground gun accuracy testing still has not occurred because test 
aircraft have not received the required gun modifications, which are 
expected in late summer 2016. Whether the F-35, the first modern 
fighter without a heads-up display, can accurately employ the gun in 
realistic air-to-air and air-to-ground situations, with the Generation 
III Helmet Mounted Display System, remains to be seen until this 
testing can be conducted.
      Modification of aircraft. One of numerous penalties 
associated with highly-concurrent F-35 development and production is 
that all the early operational aircraft now need many significant, 
time-consuming, and costly modifications. The 18 U.S. aircraft (6 each 
of F-35A/B/C) required for IOT&E need to be representative of the 
configuration of the weapons system that will be bought at full 
production rates, which is Lot 9 or Lot 10 and later; recall that the 
operational test aircraft were purchased in early production lots (Lot 
3 through 5), when the program planned IOT&E to occur in 2013. The 
program and the Services need to decide whether to pursue all of the 
modifications needed to those early-lot aircraft prior to IOT&E, or to 
equip later production aircraft, requiring few or no modifications, 
with the necessary instrumentation for IOT&E. Other than continued new 
discoveries of structural deficiencies which may cause further 
modifications and delays, nothing substantive has occurred since my 
annual report to change my estimate that if the former course is 
pursued, the aircraft designated for IOT&E will not be ready before 
April 2019. This is despite ongoing efforts by the program to 
accelerate the modification schedule. An example of a recent discovery 
of a structural deficiency is overloads that are occurring while 
carrying external AIM-9X missiles that may require a structural 
modification to the wings of some F-35 variants. The program is also 
pursuing other options for mitigating some of the other modification 
delays, including taking some of the new Block 3i processor sets from 
the production line to modify some of the IOT&E aircraft. However, the 
program apparently does not have enough new processor sets to provide 
even two sets without significantly affecting the production line and 
delaying aircraft deliveries. This situation is indicative of poor 
management of the production and modification plans since the 
requirement for modifying the operational test aircraft has been known 
for many years. The program and Services are also considering swapping 
new Block 3i processors from other delivered aircraft with the 
operational test aircraft that are currently configured with Block 2B 
hardware. The primary problem with staying on the course of completing 
modifications of the older aircraft is that the production line and the 
depots--where earlier lot aircraft are being modified--compete for the 
same materiel. Of course, this issue affects not only the IOT&E 
aircraft, but all of the aircraft produced before at least Lot 9 as 
well. Also, since the program and Services still have not agreed on a 
plan for modifications, it is still not clear if a schedule with the 
required modifications, including the gun and follow-up radar signature 
testing, is even executable prior to IOT&E due to the demand on 
available parts and depot capacity. A decision is needed now on the 
approach to be taken, so I have asked the program to brief me on their 
plan to either complete the required modifications or provide 
instrumented production-representative operational test aircraft prior 
to IOT&E by June 2016.
      Mission data. I already addressed earlier in my statement 
the problems with the USRL with respect to the need for upgrades in 
order to be able to produce mission data loads for Block 3F IOT&E. 
Again, this is a significant problem for the program, and the processes 
involved in completing the Block 3F laboratory upgrades need to be 
accelerated, or IOT&E could be delayed well into 2019, with the combat 
capability of the F-35 remaining deficient. Besides programming the 
mission data loads, the laboratory is also used as a test venue for 
optimizing the performance of scan schedules within the data loads. 
These schedules control the time-sharing of the radar and the 
electronic support systems to ensure threat signals are detected, geo-
located, and correctly identified for battlespace awareness. Such 
testing takes time in the laboratory and should be completed prior to, 
and refined after, testing on the open-air ranges. Failure to properly 
develop, test and optimize these data loads could adversely impact F-35 
mission capability during IOT&E or, worse yet, in combat.
      Sustainment. In my annual report I provided details on 
operational suitability. I highlight here, with respect to IOT&E 
readiness, that if the program is only able to achieve and sustain its 
goal of 60 percent aircraft availability, the length of IOT&E will 
increase significantly because a combat-ready availability of 80 
percent is planned and needed to efficiently accomplish the open-air 
mission trials with the number of aircraft planned for IOT&E. 
Improvements in reliability and maintainability, along with significant 
improvements to the ALIS, are all needed. The program has worked and 
achieved better performance in these areas over the past two years, but 
progress is still too slow if the program is to be ready for IOT&E in 
less than two years. Of course, this is not only an issue for IOT&E 
execution, but also for the fielded operational units.
      Operator preparedness. In addition to having production 
representative aircraft, effective mission data, and improved 
sustainment, the units that will execute the operational test trials 
need viable tactics and enough time to become proficient by training to 
them. For example, the pilots will need time to adapt to and train with 
the new lightweight Generation III Helmet Mounted Display System that 
will begin testing later this year. The operational test team has 
always planned for this training to occur; however, the program 
continues to believe that this can be done concurrently with 
development. Concurrent development and training for test has been 
tried in other programs, and is fraught with difficulty and failure.
      Test range improvements. I have been working within the 
Office of the Secretary of Defense and with the Service staffs for the 
past five years to improve the test venues for operational testing of 
F-35 and other platforms, in particular the open-air test resources. 
These efforts have resulted in putting improvements on track for F-35 
IOT&E to be able to include already fielded advanced threats that 
previously were not going to be available for testing and training. 
However, resistance and bureaucratic delays to adequately integrating 
these assets have made progress difficult, despite the decision having 
been made by the Secretary of Defense to ensure a full and complete 
test capability that is no less than that available with older threat 
systems. I will continue to work to bring the needed level of 
integration to fruition, and appreciate the support provided so far.
      IOT&E plans. IOT&E will include trials in various mission 
areas, specifically Close Air Support (CAS), Surface Attack, 
Suppression/Destruction of Enemy Air Defenses (SEAD/DEAD), Air Warfare 
(both offensive and defensive), and Aerial Reconnaissance. The IOT&E 
will also include tests that compare the ability of the F-35 to 
accomplish CAS, Combat Search and Rescue and related missions--such as 
Forward Air Controller (Airborne)--with the A-10, plus Suppression of 
Enemy Air Defenses (SEAD)/Destruction of Enemy Air Defenses (DEAD) 
missions with that of the F-16, and Surface Attack missions with that 
of the F/A-18. These comparison test trials are essential to 
understanding the new capabilities expected from the F-35 program, 
relative to the legacy systems it is designed to replace. The trials 
will be designed to answer the question, ``Is the new system as good as 
or better at accomplishing the mission than the legacy system under the 
same conditions and in the same environment?'' Comparison testing is 
not new with the JSF. Of note, the F-22 completed comparison testing 
with the F-15 during its IOT&E. Typically, many variables are present 
during operational testing that cannot be controlled, especially in 
force-on-force exercises. Areas where commonality in the variables can 
be sought among trials to enable valid comparisons include: the type of 
mission; the size, organization, and capability of the enemy force; the 
terrain (or environment) where the test is conducted; the size, 
organization, and capability of the supporting blue forces; and time 
available to accomplish the mission. These comparison test trials will 
be designed as ``matched pairs'' where the F-35 aircraft will fly the 
mission trial and then the comparison aircraft will fly the same 
mission trial, under the same operational conditions, with pilots 
making best use of the differing capabilities and tactics for employing 
each aircraft.
    Block 2B Capabilities Fielded. As mentioned in my annual report, if 
used in combat, the Block 2B F-35 will need support from command and 
control elements to avoid threats, assist in target acquisition, and 
control weapon employment for the limited weapons carriage available 
(i.e., two bombs and two air-to-air missiles). Block 2B deficiencies in 
fusion, electronic warfare, and weapons employment result in ambiguous 
threat displays, limited ability to respond to threats, and a 
requirement for off-board sources to provide accurate coordinates for 
precision attack. Since Block 2B F-35 aircraft are limited to two air-
to-air missiles, they will require other support if operations are 
contested by enemy fighter aircraft. The program deferred deficiencies 
and weapons delivery accuracy test events from Block 2B to Block 3i and 
Block 3F, a necessary move in order to transition the testing 
enterprise to support Block 3i flight testing and Block 3F development, 
both of which began later than planned in the program's integrated 
master schedule. The program fielded new software for the ALIS during 
2015. These versions included new functions, improved interfaces, and 
fixes for some of the deficiencies in the earlier ALIS versions. The 
program also fielded a new version of the Standard Operating Unit (SOU) 
which is more modular and easier to deploy. However, many critical 
deficiencies remain which require maintenance personnel to use 
workarounds to address the unresolved problems. For example, 
transferring aircraft data between SOUs, which is needed to support 
deployments, does not function seamlessly within ALIS--as it was 
designed--but often requires manual updating or corrections to data 
files after a transfer has occurred. The program's failure to integrate 
propulsion data into ALIS, a feature which was originally planned to be 
included in version 1.0.3 but is now scheduled for a two-phased release 
in ALIS 2.0.2 and ALIS 3.0, causes field units to rely heavily on 
contractor support and maintenance applications entirely separate from 
ALIS to complete post flight maintenance actions. This process adds 
time to the maintenance timeline for preparing aircraft for subsequent 
flights. Other ALIS functions, such as customer support, have failed to 
improve as planned. Supply functions that should be autonomic, such as 
identifying where to send failed parts for repair and routing 
replacement parts to operating units, are manual and labor intensive, 
contributing to supply delays. Training programs for ALIS are immature 
and require maintenance personnel to learn ALIS processes in the 
fielded locations. In addition, the process for creating and receiving 
action requests, needed for resolving maintenance issues when technical 
data are insufficient or not clear, is lengthy and burdensome. Lack of 
standardization of supply procedures across the F-35 enterprise also 
impacts aircraft availability. For example, prioritization of 
requisitions that are not designated as ``most critical'' has led to 
lower priority customers receiving needed spare parts first and has 
resulted in the low levels of F-35B engine and module sparing currently 
available. The Marine Corps has found that the Level of Repair Analysis 
(LORA) study conducted by the Program Office has not led to a path 
forward to achieve repair capabilities at the unit or intermediate 
levels that would support expeditionary warfare. They have also found 
that program guidance is overly restrictive in designating when to make 
repairs to the outer mold line and air vehicle structure based on 
damage limits and tolerances. In general, these repairs are done at the 
depot level, but small repairs can be done at the unit level, although 
the guidance on how to do so is lacking. Instead, unit maintenance 
personnel must generate action requests for assistance or 
clarification, a process which slows down the necessary repair actions.
    Marine Corps units have noted that their aircraft have a range of 
configurations as they are from different production lots and each has 
undergone some level of required modification. This increases the 
variability in which spare parts are acceptable on each aircraft. 
Accurately tracking aircraft configurations is manually intensive and 
is a potential safety issue since ALIS parts management functions may 
allow de-modification of aircraft by permitting installation of parts 
that are no longer acceptable after an aircraft has completed 
modifications.
    The Marine Corps conducted a deployment demonstration to the USS 
WASP in May 2015, which provided lessons learned and highlighted 
limitations for conducting ship-borne operations. The Marines also 
conducted a deployment demonstration to the Strategic Expeditionary 
Landing Field near Marine Corps Air Station (MCAS) Twentynine Palms, 
California, in December 2015. Both deployments required extensive time 
to transfer data to the deployed ALIS and ensure files were formatted 
correctly to support operations. In addition, low aircraft availability 
rates resulted in less than planned sortie generation rates.
    The Air Force also conducted deployment demonstrations--one as a 
``cross-ramp'' deployment of three F-35A aircraft across the ramp at 
Edwards AFB, California, in April and May 2015 and another with six F-
35A aircraft to Mountain Home AFB, Idaho, in February 2016. Like the 
Marine Corps demonstrations, the cross-ramp deployment required 
extensive time to get ALIS set up and data files transferred from the 
operational unit. ALIS set up and data transfer during the Mountain 
Home deployment was more efficient than in other demonstration, being 
completed within four hours for each of the six aircraft. The Air Force 
attempted two alert launch procedures during the Mountain Home 
deployment, where multiple F-35A aircraft were preflighted and prepared 
for a rapid launch, but only one of the six aircraft was able to 
complete the alert launch sequence and successfully takeoff. Problems 
during start-up that required system or aircraft shut-downs and 
restarts -a symptom of immature systems and software--prevented the 
other alert launches from being completed.
    There are several issues affecting the F-35's CAS capabilities, as 
mentioned in my annual report. Both the Air Force, with the F-35A, and 
the Marine Corps, with the F-35B, have flown simulated CAS missions 
during training or in support of training exercises, with the aircraft 
in the Block 2B configuration. These training missions have shown that 
the Block 2B aircraft will need to make substantial use of voice 
communications to receive target information and clearance to conduct 
an attack. This is because of the combined effects of digital 
communications deficiencies, lack of infrared pointer capability, 
limited ability to detect infrared pointer indications by a controller 
(which may be improved in the Generation III Helmet Mounted Display 
System), and inability to confirm coordinates loaded to GPS-aided 
weapons. Many pilots consider the Electro-Optical Targeting System 
(EOTS) on the F-35 to be inferior to those currently on legacy systems, 
in terms of providing the pilot with an ability to discern target 
features and identify targets at tactical ranges, along with 
maintaining target identification and laser designation throughout the 
attack. Environmental effects, such as high humidity, often forced 
pilots to fly closer to the target than desired in order to discern 
target features and then engage for weapon employment, much closer than 
needed with legacy systems, potentially exposing them to threats around 
the target area or requiring delays to regain adequate spacing to set 
up an attack. When F-35 aircraft are employed at night in combat, 
pilots with the currently-fielded Generation II helmet will have no 
night vision capability from the helmet, due to the restriction on 
using the current limited night vision camera, which is planned to be 
subsequently upgraded after aircraft are retrofitted with Block 3i and 
pilots are equipped with the Generation III helmet, which is still in 
development and testing. In general, using Block 2B F-35 aircraft, 
pilots would operate much like early fourth generation aircraft using 
cockpit panel displays, with the Distributed Aperture System providing 
limited situational awareness of the horizon, and heads-up display 
symbology produced on the helmet.
    Fuel and weapons limitations also affect F-35 CAS performance. For 
example, a combat-loaded F-35B, assuming a 250-nautical mile ingress to 
a CAS area contact point, would have only approximately 25--40 minutes 
to coordinate with the controller, assess the tactical situation and 
execute an attack using its two air-to-surface weapons before needing 
to depart for fuel. By comparison, an Air Force A-10 would have 
approximately one hour (without external tanks) and one and one half 
hours (with external tanks) of time in the CAS area under the same 
conditions, but would be able to autonomously acquire and identify 
targets, while using datalink to receive and/or pass target and 
situational awareness information. Also, an A-10 would be able to 
employ at least four air-to-surface weapons, including a mixed load of 
ordnance and its internal gun, which provides flexibility in the CAS 
role. Although F-35 loiter time can be extended by air refueling, 
operational planners would have to provide sufficient tankers to make 
this happen, similar to current contingency operations. Recent 
exercises involving the use of F-35A and F-35B aircraft in limited CAS 
mission environments have shown that the fuel burn rate with internal 
weapons (two bombs and two air-to-air missiles) is 10 to 20 percent 
higher than the F-16, depending on variant, and about 50 to 70 percent 
higher than the A-10. This creates a burden on the air refueling 
resources if used to increase F-35 time on station. With additional 
external weapons, the fuel burn rate would be even higher due to the 
additional weight and drag. Also, the recent exercises were flown from 
medium altitudes, where fuel burn rates are less than at lower 
altitudes or during climbs back to altitude. Gun employment, which will 
be available with Block 3F aircraft and needed for the CAS mission 
environments, will likely increase fuel burn rates as the F-35 would 
accomplish gun strafing maneuvers at lower altitudes and then climb 
back to higher altitudes for subsequent CAS attacks. Of course, the F-
35 is designed to do more missions than CAS, which is the primary 
mission for which the A-10 was designed. Also, the F-35 is designed to 
do these missions in a high-threat area.
    F-35 development is still not complete, but if the capabilities 
stated in the ORD are realized, Block 3F aircraft will have the ability 
to carry additional weapons externally, for an increased payload, as 
well as a gun. For example, a Block 3F F-35A aircraft could carry six 
Guided Bomb Unit (GBU)-12 laser-guided bombs (vice two in Block 2B) 
along with four air-to-air missiles (two Air Intercept Missile (AIM)-
120C and two AIM-9X). The gun capabilities of the F-35 and A-10 are 
significantly different. The F-35 has a lightweight, 25-millimeter 
cannon, internally mounted on the F-35A with 182 rounds, and in an 
external pod with 220 rounds for the F-35B and F-35C, while the A-10 
has a 30-millimeter cannon with 1,150 rounds. Even though the A-10 gun 
has a higher rate of fire, the A-10 gun can fire for over 17 seconds 
versus approximately 4 seconds for the F-35, providing the capability 
for many more gun attacks. Also, while both guns have a similar muzzle 
velocity, the rounds fired by the A-10 are twice as heavy, providing 
twice the impact energy on the target. The F-35's fusion of information 
from onboard sensors and data from off-board sources (i.e., F-35 
aircraft in formation via the Multi-function Advanced Data Link (MADL) 
and other aircraft via Link 16), along with all-weather ground-moving 
target and synthetic aperture radar capability, are planned to be more 
capable in Block 3F and should provide better battlespace awareness 
than that being fielded with Block 2B and better capability in these 
aspects than an A-10. The extent that these capabilities improve combat 
capability over legacy systems will be evaluated during IOT&E.
    Mission planning time and the debriefing times for the F-35 with 
the current version of ALIS--which must account for the long download 
process for cockpit video--are much longer than those of legacy 
platforms and will affect operations when the F-35 unit is a member of 
composite air and surface forces, since planning timelines will have to 
be adjusted. The program plans to field an improved Ground Data 
Receptacle--which downloads maintenance and flight data files, 
including the cockpit video for mission debrief--later this year. Early 
end-to-end testing shows that transfer times have been cut in half, 
although the Program Office is working with the contractor to correct 
software deficiencies that are expected to improve transfer times by a 
factor of five--from the current times--once completed.
    Software--Block 3. As I explained above, Block 3i was intended to 
be a simple re-hosting of Block 2B mission systems software on new 
hardware and processors. However, Block 3i content also includes 
attempted fixes for five significant functional deficiencies related to 
mission systems identified by the Air Force as necessary for its IOC 
declaration. Four additional discoveries in Block 3i have since been 
identified as deficiencies in need of fixes. The final version of Block 
2B, version 2BS5.2, had 32.5 hours between stability events during 
flight testing, versus only 4.3 hours for Block 3iR6. Because Block 3i 
is the basis for the final new and challenging Block 3F capabilities, 
the program has rightly determined to focus on Block 3i problems in 
lieu of further Block 3F development. The program is currently flight 
testing another version of Block 3i software--version 3iR6.21--on its 
mission systems test aircraft at the Edwards test center. The initial 
test sorties with Block 3iR6.21 show improved stability in flight, with 
indications that the mean time between stability events is again 
comparable to the fielded version of Block 2B; but, as mentioned 
earlier, initial start-up continues to be challenging. Moreover, the 
estimates of mean time between stability events provided above are 
contractor-reported from developmental testing and almost certainly do 
not count all the events operational pilots would consider significant 
in combat. The status of the other ``must fix'' deficiencies is unknown 
at the time of this testimony. The Block 3i software instabilities, 
unresolved deficiencies, lab delays, and the potential for additional 
discoveries are adversely affecting Block 3i tactics development and 
the IOC Readiness Assessment, currently underway at Nellis AFB, and are 
likely to affect Air Force IOC. However, some of the Nellis aircraft 
have now loaded 3iR6.21 and they are also seeing improved avionics 
stability in flight. Nevertheless, the program continues to deliver 
Block 3i aircraft configured with the available software to fielded 
units and will continue to do so into next year.
    Success of Block 3F mission systems depends on the program 
resolving the problems with Block 3i. The stability and functionality 
problems in the initial versions of Block 3F, including those inherited 
from Block 3i and problems caused by new Block 3F capabilities, were so 
significant that the program could not continue flight test. As a 
result, the program recently announced a shift to capability-based 
software releases, rather than schedule-driven and overlapping 
releases. While this may cause further short-term delays to the 
program, I agree with the program's decision to shift to a serial 
process of testing and fixing software in the lab before releasing the 
next software version, and the recent improvements observed in Block 3i 
stability validate this serial approach. The program recently released 
an updated version of Block 3FR5 software to flight test in April and 
then Block 3FR6 later this summer. If the fixes to stability programmed 
into the latest Block 3i software continue to suppress the need for 
avionics resets in flight, mission systems testing and weapons releases 
can potentially resume in earnest and the test point completion rate 
will increase, which is essential given the significant amount of 
testing that remains.
    The program continues to carry a heavy load of technical debt in 
open and unresolved deficiencies. As of the end of March 2016, the 
program had 1,165 open, documented deficiencies, 151 of which were 
Category 1, defined as deficiencies which may cause death, severe 
injury, or severe illness; may cause loss of or major damage to a 
weapon system; critically restricts the combat readiness capabilities 
of the using organization; or result in a production line stoppage. Of 
the 151 Category 1 deficiencies, 128 were associated with the air 
vehicle and the remaining 23 were associated with the ALIS or support 
equipment. Furthermore, 95 of the 151 open Category 1 deficiencies were 
categorized as ``high severity'' by the program or Services. The 
Program Office, in cooperation with representatives from the Services, 
developmental test and operational test organizations, recently led a 
detailed review of the open deficiencies. This effort, which I applaud, 
assessed the effect of each deficiency with respect to both combat 
capability and IOT&E. The resulting list of critical deficiencies 
should be the top priority fixes for the program prior to finalizing 
Block 3F and conducting IOT&E.
    Mission Data. The problems in the USRL described earlier will not 
only adversely affect Block 3F combat capability; they are crippling 
the ability to produce effective mission data loads for today's fielded 
aircraft. The current tools and software in the lab are very difficult 
to work with, resulting in a lengthy, inefficient process to produce 
and test the mission data. Along with the decision to delay moving the 
lab equipment from the contractor facilities in Fort Worth, Texas, 
these inefficiencies created sufficient schedule pressure that the 
program and the Marine Corps directed the lab to truncate the planned 
testing of the Block 2B mission data so that an immature version could 
be fielded in mid-2015 to ``support'' Marine Corps IOC. The lab 
provided a Block 2B mission data load, but the risks of operating with 
these mission data are not understood, and will not be characterized 
until the full set of planned testing, including operational test 
flights with the mission data, are conducted later this year. Because 
the hardware in aircraft equipped with Block 3i cannot operate with the 
Block 2B mission data, Block 3i mission data must be developed and 
tested independently of, but concurrently with, the mission data for 
Block 2B. This creates an additional significant strain on the lab, 
which is already burdened with inefficient reprogramming tools. Block 
3i mission data will likely incur the same fate as Block 2B mission 
data, as inevitable schedule pressure to field immature mission data 
will drive product delivery despite incomplete optimization and 
testing. In any case, the risks in combat associated with operating 
with these early mission data versions will remain unknown until the 
planned lab and flight testing are complete.
    Escape System. The F-35's pilot escape system is immature; it 
requires modifications and additional testing if the Services are to be 
reasonably confident the system is safe for their intended pilot 
populations. The failures during sled tests last summer simulating 
controlled, low-speed ejections caused the program and Services to 
restrict pilots below 136 pounds bodyweight from flying the aircraft. 
Also, the risk to pilots weighing up to 165 pounds, while lower than 
the risk to lightweight pilots, is still considered ``serious'' by the 
program. Last year the program assessed the risk for this 136 to 165 
pound weight class, which accounts for approximately 27 percent of the 
pilot population. The program assessed the probability of death during 
an ejection in these conditions to be 23 percent and the probability of 
some level of injury resulting from neck extension to be 100 percent. 
However, the program and the Services decided to accept that risk and 
not restrict pilots in this weight category from flying. Subsequently, 
the program conducted ``proof of concept'' tests last fall for 
modifications to the escape system including a ``lightweight pilot'' 
switch on the seat and a fabric head support panel between the 
parachute risers behind the pilot's head, intended to restrict the 
severe backward neck extension. The tests apparently showed that the 
lightweight pilot switch and head support panel prevented a neck load 
exceedance after parachute deployment and opening shock. However, these 
changes do not prevent the high loads on the pilot's neck earlier in 
the ejection sequence due to the rocket firing and wind blast. Full 
testing of these fixes using the new Generation III Light helmet and 
full range of mannequin weights across different airspeeds is expected 
to extend through this summer with flight clearance this fall and 
modification kits in 2017. The first of these tests with all the 
proposed fixes was recently completed on March 31st using a 103-pound 
manikin ejected from a rocket sled at 150 knots while wearing a Gen III 
Light helmet. The JPO assessed this test to be a success and therefore 
plans to continue the testing through this summer. Even if these fixes 
are successful, additional testing and analyses are also needed to 
determine the risk of pilots being harmed by pieces of the transparency 
from the canopy removal system during ejections (the canopy must be 
explosively shattered during ejection) in other than stable conditions 
(such as after battle damage or if out-of-control), referred to as 
``off nominal'' conditions.
    Structural testing. Major findings are continuing in the durability 
test articles, particularly in the titanium bulkhead in the F-35C test 
article. Significant limitations to the life of the fielded F-35C 
aircraft can only be addressed with intrusive structural modifications 
prior to the expected full service life, and show again the high cost 
of concurrent production and development. In the past year, discoveries 
of unpredicted cracks continued to occur, and in some cases required 
pauses in testing to determine root causes and fixes. This occurred in 
all three variants. Currently, only the F-35A structural test article 
is being tested; it recently started the third lifetime test phase, or 
the third series of 8,000 equivalent flight hours of testing on March 
11, 2016. The F-35B test article is undergoing inspections at the mid-
point of its second lifetime of testing. The F-35C test article 
restarted testing in mid-February but stopped three days later when 
strain gauges indicated cracking in a titanium bulkhead; it is expected 
to restart in May.
    ALIS. The program has developed a new version of the ALIS hardware, 
termed Standard Operating Unit version 2 (SOU v2), which possesses all 
of the functional capabilities included in the original version--SOU 
v1--but in a modularized, more deployable form. As I described earlier 
in my statement, in recent months, both the F-35A and F-35B have 
conducted deployment demonstrations in an effort to learn how to 
forward deploy with, and conduct flying operations using, the SOU v2. 
The Marine Corps and Air Force needed several days to successfully 
establish a new network in an austere expeditionary environment or to 
integrate ALIS into an existing network at a non-F-35 military 
installation before ALIS was able to support flying operations. 
Although the hardware for the SOU v2 was much more manageable to move 
and set up, the processes for connecting to the main Autonomic 
Logistics Operating Unit (ALOU) at Lockheed Martin facilities in Fort 
Worth took time, as did ensuring the data from home station units was 
transferred correctly to the deployed unit.
    These two Service-led deployment demonstrations showed that ALIS 
operations will require significant additional time to initiate beyond 
setting up hardware modules, since the details of a network 
configuration and data file structure vary among base operating 
locations. ALIS requires a secure facility to house hardware, including 
SOU modules, mission planning workstations, and receptacles for 
transferring data to and from aircraft storage devices, which must be 
connected to power and external communications and integrated into a 
network with data exchanges occurring at multiple levels of security. 
It is difficult to establish and configure a network in the precise 
manner that ALIS requires, so network personnel and ALIS administrators 
have needed several days to troubleshoot and implement workarounds to 
prepare ALIS for operations. Although Lockheed Martin has provided 
several techniques for transferring aircraft data from a main operating 
location SOU to a deployed SOU, data transfers have proven time 
consuming and have required high levels of support from Lockheed 
Martin. Also, relatively minor deviations in file structures relative 
to ALIS' specifications can cause the process to fail.
    The program plans to release another increment of ALIS software 
this year--version 2.0.2, with added capabilities to support Air Force 
IOC declaration. However, it is struggling to meet the current schedule 
to deliver the planned content. A recent Program Office schedule 
assessment shows delays from 60-90 days that will slip the ALIS 2.0.2 
installation at Hill AFB to at least October 2016, which does not align 
with the Air Force need date of 1 May for their planned IOC objective 
date of August 2016, but may support their planned IOC threshold date 
of December 2016. Cybersecurity testing of ALIS 2.0.2 is planned for 
this fall, but may need to slip or be accomplished using the earlier 
version of ALIS if the program cannot deliver version 2.0.2 it on time, 
adding associated risk to fielding systems and declaring IOC because 
adequate cybersecurity testing will not have been completed.
    Delays in completing development and fielding of ALIS 2.0.2 will 
likely compound the delay already realized for ALIS 3.0, the last 
planned increment of ALIS, which is needed for IOT&E but is currently 
not scheduled to be released until March 2018. Although the program is 
considering deferring content and capabilities to make up schedule, the 
full set of capabilities for ALIS 3.0 will be needed to comply with the 
program's requirements and therefore are required for IOT&E.
    Aircraft Reliability, Maintainability, and Availability. Although 
measurements of aircraft reliability, maintainability, and availability 
have shown some improvement over the last two years, sustainment relies 
heavily on contractor support, intense supply support to arrange the 
flow of spare parts, and workarounds by maintenance and operational 
personnel that will not be acceptable in combat. Measures of 
reliability and maintainability that have ORD requirement thresholds 
have improved since last year, but six of nine measures are still below 
program target values for the current stage of development; two are 
within 5 percent of their interim goal, and one--F-35B mean flight 
hours between maintenance events (unscheduled)--is above its target 
value. Aircraft availability improved slightly in CY15, reaching a 
fleet-wide average of 51 percent by the end of the year, but the trend 
was flat in the last few months and was well short of the program's 
goal of 60 percent availability that it had established for the end of 
CY14. The Marine Corps has recently described difficulties in 
completing pilot training requirements due to low aircraft availability 
with full functionality. For pilots to complete training tasks, 
aircraft must be nearly Fully Mission Capable (FMC), but low mission 
systems component reliability, software stability problems, and 
Prognostics & Health Management (PHM) limitations have contributed to 
limited aircraft ability to complete pilot training tasks. The FMC rate 
for the F-35 fleet has declined steadily since December 2014. Data from 
February 2016, the latest month available, show a fleet-wide FMC rate 
of 30 percent and an F-35B FMC rate of less than 14 percent. It is also 
important to understand that the program's metric goals are modest, 
particularly in aircraft availability, and do not represent the demands 
on the weapons system that will occur in combat. Making spare parts 
available more quickly than in the past to replace failed parts has 
been a significant factor in the improvement from 30 to 40 percent 
availability experienced two years ago. However, F-35 aircraft spent 21 
percent more time than intended down for maintenance in the last year, 
and waited for parts from supply 51 percent longer than the program 
targeted. At any given time, 10 to 20 percent of the aircraft were in a 
depot facility or depot status for major re-work or planned upgrades, 
and of the fleet that remained in the field, on average, only half were 
able to fly all missions of the limited capabilities provided by Block 
2B and Block 3i configuration.
    The program showed improvement in 11 of 12 reliability metrics by 
May 2015; however, as I depicted in my annual report, 8 of the metrics 
are still below the program interim goals for this point in 
development, and it is not clear that the program can achieve the 
necessary growth to reach the reliability requirements for the mature 
system, at 200,000 total fleet flight hours. Many components have 
demonstrated reliability much lower than predicted by the contractor, 
such as fiber channel switches, main and nose-wheel landing gear tires, 
the display management computer for the helmet, and signal processors. 
These low-reliability components drive down the overall system 
reliability and lead to long wait times for re-supply, which negatively 
affects aircraft availability.
    Maintainability metrics indicate flight line maintenance personnel 
are working extremely hard to keep up with the demands of unscheduled 
maintenance (e.g. trouble-shooting and fixing failures) and scheduled 
maintenance (e.g. inspections). Small improvements in maintainability 
metrics occurred in the past year, but the measures for all variants 
are far from the operational requirements. There are a few individual 
causes for long down times that may be addressed by the program, such 
as long cure times for low observable repairs, but many must be 
accepted as facts of life for the time being. Maintenance manuals and 
technical information must continue to be produced, verified, and 
validated for use by the military maintenance personnel so that they 
can learn how to generate combat missions in the most efficient manner. 
The current process requiring ``action requests'' to fill gaps in 
technical information, while improved, will not be acceptable for 
combat. F-35 maintainers must also dedicate a significant amount of 
time to scheduled maintenance, in addition to repairs. This accounts 
for over half of all maintenance time in the last year (from June 2014 
through July 2015), a result of fielding an aircraft with an immature 
structural design that must be inspected for evidence of wear and 
cracking, such as that which has been found in the structural static 
test articles.
    Fielded units, and the overall program, have a new challenge with 
managing multiple software and hardware configurations as aircraft 
emerge from depot and local modification processes. Modified aircraft 
include new parts and this should improve reliability metrics. However, 
managing multiple configurations requires continual, intense focus to 
ensure correct procedures and parts are used based on aircraft 
configuration and data elements tracked within ALIS.
    Deployment sustainment results. As I outlined earlier in my 
statement, Service-led deployments over the past year have revealed 
challenges to adequate suitability performance, and provided useful 
lessons for future operations. More detail is provided below.
    During the Cross Ramp Deployment Demonstration flying period at 
Edwards AFB during May 4--8, 2015, the operational test squadron flew 
20 of 22 planned missions. The squadron originally intended to deploy 
four F-35A aircraft and planned most fly-days with two aircraft flying 
two sorties apiece, but could only make three aircraft available to 
participate in the exercise. The ALIS data transfer problems forced the 
detachment to operate in an ALIS-offline mode until the morning of May 
7, which restricted aircraft maintenance to minimal, simple activities. 
The detachment was able to achieve a relatively high completion rate of 
planned sorties in spite of this largely because no mission systems 
were required for the flights, so failures in these components were 
left un-repaired. By the end of the deployment, one of three aircraft 
had to be towed back to the test squadron hangar because it was down 
for a flight system discrepancy that the detachment could not fix in 
time. The detachment also exposed problems with retaining spare part 
requisitions against aircraft when they are transferred between SOUs, 
and issues with keeping maintenance records intact when returning from 
ALIS-offline operations.
    The shipboard flying period of the USS WASP deployment 
demonstration from May 18--28, 2015, excluding the return flights from 
the ship to home base on May 29, was not intended to maximize aircraft 
utilization rates, but showed difficulties in achieving adequate 
availability to support planned flight schedules. The six deployed F-
35B aircraft were mission capable for flight operations approximately 
55 percent of the time, which led to the detachment flying 61 of 78 
planned missions. The Marine Corps reports a higher number of sorties 
than missions, since each vertical landing constituted a sortie, while 
each post-flight engine shut down constituted a mission. Several 
missions were canceled for weather, or other operational reasons, but 
13 missions were canceled, apparently due to a lack of available 
aircraft. In order to consistently generate tactically relevant four-
aircraft mission packages day after day, out of the normal complement 
of six F-35B aircraft onboard an L-class amphibious ship, the F-35B 
would likely have to achieve availability rates closer to 80 percent; 
although during the deployment demonstration, the detachment did 
generate a four-aircraft mission on one day. Fuel system reliability 
was particularly poor. This is more burdensome in the shipboard 
environment than at land bases, as fuel system maintenance in the 
hangar bay can restrict the ability to perform maintenance on other 
aircraft in the bay. Due to a fuel system problem that would have 
required an engine to be pulled, one aircraft was transferred on a one-
time flight back to shore and swapped with an alternate aircraft, an 
option that would not exist in forward-deployed combat conditions. 
Aircraft availability and utilization varied widely among the seven 
different aircraft used in total on the deployment, with the top 
performing aircraft flying 20 missions, and the least performing 
aircraft flying only 2 missions, not including a one-time ferry flight 
to shore to be swapped. The ALIS data transfers also relied on combat-
unacceptable workarounds, including using commercial Wi-Fi access to 
download aircraft files. Several factors limited the ability to draw 
more conclusions about shipboard integration of the F-35B from this 
deployment demonstration. These included the lack of the rest of the 
Air Combat Element (ACE) aircraft onboard ship except for the required 
Search and Rescue (SAR) helicopters; the use of developmental Support 
Equipment (SE), vice the production-representative SE the Marine 
operational squadron is now equipped with; and no employment of 
ordnance.
    The Marine Corps conducted an assessment of F-35B austere site 
deployed operations at Twentynine Palms, California, from December 8-
16, 2015, with eight F-35B aircraft assigned. The Marines intended to 
fly four aircraft a day from an expeditionary landing field made of 
aluminum matting and with minimal permanent infrastructure, 
representing the type of temporary airfield that can be quickly built 
near the forward line of troops. The demonstration included the use of 
inert ordnance and production representative support equipment. 
Aircraft availability for this detachment was again in the 55 to 60 
percent range, which led to a significant number of missed flights on 
the planned flight schedule. The detachment flew 41 out of 79 planned 
missions; however, 22 of the 38 missions not flown were due to high 
crosswinds which made landing and taking off from the aluminum matting 
too risky. Overall, 16 missions were lost due to either lack of 
aircraft availability, difficulties in transferring and accepting 
aircraft data into the deployed ALIS, or ground aborts. Propulsion 
system maintenance was particularly burdensome. Two F-35B aircraft 
received foreign object damage to their engine fan stages, a result 
from operating in rugged conditions with jet wash likely blowing small 
rocks into aircraft intakes. This prevented those aircraft from further 
participation in flying activities until repairs were completed just 
prior to the ferry flights home. A contractor technician was called in 
from the East Coast and was able to repair the engine damage on site, 
as opposed to having to perform a full engine swap. A further engine 
system discrepancy required an aircraft swap around mid-way through the 
detachment. Routine flight operations, such as aircraft start-up and 
basic troubleshooting, also relied heavily on contractor maintenance.
    The Air Force sent a detachment of six F-35A operational test 
aircraft from Edwards AFB to Mountain Home AFB from February 8 to March 
2, 2016, to simulate a combat deployment of this variant in preparation 
for Air Force IOC later this year. This demonstration employed both 
inert and live ordnance in the CAS and Aerial Interdiction roles, in 
conjunction with legacy platforms. Results from this demonstration are 
still too preliminary to report on in full, although some early 
observations were made. The detachment discovered a major discrepancy 
in the technical data for loading free fall ordnance after a released 
bomb hit the weapons bay door and then impacted and gouged the 
horizontal stabilizer. The aircraft returned to base safely and was 
eventually repaired on station, and the detachment coordinated with 
Lockheed Martin to correct the appropriate ordnance loading 
instructions. The deployment also successfully transferred aircraft 
data files within the autonomic logistics infrastructure (i.e., using 
ALIS, the Central Point of Entry, and the ALOU); however, there were 
some difficulties in establishing ALIS on the host Air Force network on 
Mountain Home AFB. Finally, the relatively frequent requirement to 
shut-down and restart an aircraft on start-up before flying due to 
software instabilities in vehicle and mission systems hampered the 
detachment's ability to conduct alert launches.
    Key test range capability improvements are required for IOT&E, on 
which we have been working with the Office of the Secretary of Defense 
and Service staff for several years. In particular, these include the 
Air-to-Air Range Infrastructure-2 (AARI2) system, the instrumentation 
that allows the many engagements during complex test trials to be 
accurately assessed and shaped in real time; and the integration of the 
Electronic Warfare Infrastructure Improvement Program (EWIIP) emitters, 
that will simulate current, advanced threats on the range. For an 
adequate IOT&E, the integration of AARI2 with the F-35 should allow the 
F-35 Embedded Training modes to realistically emulate and display 
weapons employment data and threat indications to the pilot, and 
include the shot validation method that is being developed for this 
purpose. The planned schedule for AARI2 integration, however, does not 
align with the current plans for IOT&E and does not include these 
features. Therefore, the product may either be inadequate or late to 
need. The new EWIIP emitters, that will simulate current, advanced 
threats on the range, start arriving in fall of this year. However, 
until recently, Air Force integration plans fell short of what is 
needed for an adequate IOT&E, both in how the emitters are integrated 
with the range infrastructure and the degree of incorporation with the 
AARI2 battle-shaping instrumentation. We continue to work with the Air 
Force to correct these problems, and ensure we get the most of the 
investment made in these emitters. There is no alternative to 
correcting these problems if IOT&E is to provide a representative 
threat environment--an environment that has been in existence, and 
robustly so, in the real world for several years. Not properly 
incorporating these assets, in a realistic way, will result in a test 
of the F-35 only against decades-old threats, which do not represent 
the intended operational environment for this fifth-generation system. 
I assess the technical challenges to the integration requirements I 
mention here as relatively minor; this test concept is not new. 
Unfortunately, the issues seemed to stem primarily from cultural 
resistance to change and to the adoption of modern technology.
    Of all the issues mentioned earlier that threaten IOT&E spin-up and 
start, the most significant are the modifications needed for 
operational test aircraft, Block 3F completion (including flight test, 
weapons deliveries, and envelope release), and completion of ALIS 3.0. 
The program has an executable plan to pull completion of the 
modifications back from 2019 to 2018; however, the Services must commit 
to executing that plan, which has not yet occurred. The Block 3F 
schedule, even with significant improvements in software stability, 
deficiency resolution, and flight test rates, still appears to extend 
into 2018 before the capabilities will be ready and certified for 
IOT&E. Inadequately tested mission data and failure to provide the 
simulation environment will likely not delay the start of IOT&E, but 
will affect the results and adequacy of the test, respectively, and the 
former will likely limit significantly the ability of the F-35 to be 
used in combat against existing, modern, stressing threats. Therefore, 
despite recent progress with Block 3iR6.21 software stability, a mid-
2018 start for IOT&E appears to be the earliest viable date based on 
when the modifications, full Block 3F capabilities (including envelope 
and weapons), and ALIS 3.0 will be ready. Based on the issues above 
that will not likely be resolved or ready until 2018 or later, I am 
concerned that the program may not have adequate resources to complete 
the required System Development and Demonstration activities prior to 
IOT&E.
    Block Buy. In my annual report, I raised several questions 
regarding the program's proposed ``block buy'' to combine three 
production lots comprising as many as 270 U.S. aircraft purchases to 
gain near-term savings. My understanding is that the program and the 
Services have decided to delay the consideration of the block buy for 
at least another year, possibly starting in fiscal year 2018. 
Nonetheless, in that case, all of the questions I pose in my annual 
report remain valid, since IOT&E will not start until fiscal year 2018, 
at the earliest, and will not be complete until later that year.
    Follow-on Modernization (FoM). The program's proposed ``F-35 
Modernization Planning Schedule'' is overly optimistic and does not 
properly align with the program's current software development 
schedule, which is also unrealistic. The program recently announced 
that the FoM development effort will require new processors--referred 
to as Technical Refresh 3, or TR3--with more capacity to permit the new 
capabilities to be hosted on the aircraft, at a cost of $700 million. 
This additional cost was not part of the planned Block 4 FoM program, 
so it is currently unfunded and the Services must program this into 
their fiscal year 2018 budget submissions. Also, there is a four-year 
gap between the final planned Block 3F software release in 2016 and 
fielding of the first proposed modernization increment, labeled Block 
4.1, in late 2020. The proposed schedule also does not depict any 
incremental software releases to correct open Block 3F deficiencies and 
new discoveries, likely to be found during the remaining developmental 
testing and IOT&E, prior to adding the proposed new Block 4.1 
modernization capabilities. Such a schedule greatly increases risk to 
development and testing of Block 4 due to the inevitably substantial 
number of deficiencies and untested fixes upon which the new Block 4 
capabilities will be added. Despite the significant ongoing challenges 
with F-35 development, including the certainty of additional discovery, 
the proposed modernization schedule is very aggressive; it finalizes 
the content of Blocks 4.1 and 4.2 in early 2016. Then, before or during 
IOT&E, the program would award contracts to start simultaneous 
development of Blocks 4.1 and 4.2 in 2018, well prior to completion of 
IOT&E and having a full understanding of the inevitable problems it 
will reveal. Also, the proposed Block 4 FoM plan and schedule do not 
clearly depict acquisition milestones, despite the complexity and 
substantial number of capabilities to be implemented and funding 
required.
    Even though the baseline F-35 System Development and Demonstration 
(SDD) program, including delivery of Block 3F capabilities and ALIS 3.0 
(and therefore IOT&E start), is clearly going to slip into 2018, the 
program still claims that SDD will end in 2017. In fact, the program 
has apparently asked the Services to provide additional bridge funding 
for test infrastructure in fiscal year 2018-2019, even though the DT 
activities extending into 2018 (and IOT&E into 2019) are clearly part 
of SDD and therefore should already be funded. Also, the program plans 
to significantly cut the test force in the 2018-2019 timeframe, 
precisely when the program should be developing and testing an 
incremental software update of Block 3F to correct critical 
deficiencies and new discoveries from IOT&E prior to adding the new 
Block 4.1 capabilities. Furthermore, the Block 4 FoM plan and schedule 
still do not allocate adequate schedule and resources (i.e., enough 
test aircraft and time) for developmental test (DT) and operational 
test and evaluation (OT&E) of each increment, consistent with the 
approach being used for F-22 follow-on development. The proposed Block 
4 FoM plan reduces test infrastructure from 18 DT aircraft and 1,768 
personnel to just 9 aircraft and approximately 600 personnel. The 
proposed Block 4 FoM plan also does not allocate enough time for test 
of the significant new capabilities including in each increment. For 
example, the F-22 Block 3.2B program planned approximately two years 
for DT flight test and one year of OT&E spin-up and flight test, versus 
approximately one year for DT flight test and six months for OT&E of F-
35 Block 4.2, which has more new capabilities and weapons than F-22 
Block 3.2B. Also, the F-35 program claims the new F-35 Block 4 
software, which is designed to run on TR3 processors, will be backward-
compatible to run in the hundreds of aircraft with TR2 processors. 
However, the program's current proposed Block 4 plan apparently does 
not include resources (funding, schedule or TR2-equipped test aircraft) 
to conduct the necessary developmental laboratory and flight testing 
followed by OT&E of the new Block 4 capabilities in aircraft equipped 
with the old TR2 avionics hardware. For these reasons, any proposed 
reductions in test infrastructure for Block 4 FoM should be reexamined 
due to the substantial number and complexity of new capabilities to be 
developed and fielded, multiple aircraft hardware configurations, need 
for regression testing, and inadequate time allocated for DT and OT&E 
for each increment.
    In summary, it is increasingly clear that the current plans being 
described by the program office for F-35 Block 4 Follow-on 
Modernization are not executable. The program, warfighters, partners 
and taxpayers would be better served by a realistic plan that is 
informed by, and properly addresses, the many lessons learned from the 
ongoing F-35 program, as well as from the ongoing F-22 upgrade program. 
The corrective actions I recommend include the following:
      Updating the Block 4 cost estimate and schedule to 
include the inevitably required additional costs and time to actually 
execute FoM (i.e., $700 million for TR3, test infrastructure bridge 
funding for fiscal year 2018-2019, the additional test resources for 
regression testing for Block 4.1 on TR2 processors, etc.);
      Rigorously justifying the need for the new open-
architecture TR3 processors including the specifics of the shortfalls 
of the TR2 processors and the extent to which these shortfalls will 
affect Block 3F performance;
      Adding a software maintenance release in 2019 and 
slipping Block 4.1 development by a year to provide the time needed to 
correct the significant deficiencies that will inevitably emerge from 
IOT&E and remain from SDD;
      Re-structuring the content of the Block 4 increments to 
incorporate a realistic and lesser amount of content so development and 
testing will fit within the compressed two-year cycles driven by the 
planned aircraft production and delivery schedules;
      Adding the time and sustaining the test force needed to 
conduct adequate developmental and operational testing consistent with 
the complexity and number of new capabilities to be incorporated in 
each increment of Block 4.
    These changes to the program's current plans for Follow-on 
Modernization are essential for it to succeed rather than be set for 
failure from the outset.

    Chairman McCain. Mr. Sullivan, welcome.

 STATEMENT OF MICHAEL J. SULLIVAN, DIRECTOR OF ACQUISITION AND 
                SOURCING MANAGEMENT, GOVERNMENT
                     ACCOUNTABILITY OFFICE

    Mr. Sullivan. Thank you, Chairman McCain, Senator Reed, 
members of the committee. I have a written statement for the 
record, but I would like to just take this time to briefly 
highlight what we consider to be the most important challenges 
facing the program moving forward.
    In addition to my written statement, my report to this 
committee and others, which was issued on April 14, contains 
more details on the program's progress to date.
    First, although the program has managed costs very well 
since it is Nunn-McCurdy breach and subsequent rebaselining in 
2012, it still poses significant future affordability 
challenges for the Department and Congress. As the program 
begins procuring more aircraft, the Department is expected to 
spend on average about $13 billion per year over the next 22 
years, until all planned purchases are complete in 2040.
    These annual funding levels will present challenges as the 
program stacks its funding priorities against other large 
acquisitions, including the B-21 bomber, KC-46 tanker, the 
Ohio-class submarine replacement, the new carrier, and many 
more.
    Second, the Department now plans to add new capability 
known as Block 4 to the F-35 that is beyond its original 
baseline capability, and it is planning to manage that effort 
as part of the existing program, rather than establishing a 
separate business case and baseline for that effort. This has 
significant implications as far as Congress' ability to provide 
oversight and holding the program accountable.
    The new work has a projected cost of about $3 billion over 
just the next 6 years, and that price tag alone would qualify 
it as a major defense acquisition program in its own right. We 
believe it should be managed as such, with its own separate 
business case to allow for transparency and accountability.
    Third, the F-35 software development is nearing completion, 
but the program faces challenges in getting all of its 
development activity completed on time for operational testing, 
as we just heard Dr. Gilmore talk about. It has completed over 
80 percent of its developmental flight tests and is now working 
to close out flight testing of its final block of software, 
Block 3F. This final block is critical as it will provide the 
full warfighting capability to the aircraft.
    Program officials have estimated as much as a 3-month delay 
right now to completing Block 3F testing, and our own analysis 
indicates that it could be closer to 6 months. I think Dr. 
Gilmore's analysis, as he just stated, has it more than that. 
Getting that developmental testing done is critical, of course, 
to getting operational testing done and IOCing the aircraft.
    With regard to technical risk, the program has found fixes 
for earlier problems, problems such as the helmet display and 
the engine, and it is working now to find solutions for two 
other challenges, the ejection seat problem and the carrier 
variants wing structure. There are cracks in the wing 
structure.
    Perhaps the biggest outstanding technical risk for the 
program today, though, as has been discussed already, is the 
Autonomic Logistics Information System known as ALIS. As you 
know, ALIS is a complex system that supports operations, 
mission planning, supply chain management, maintenance, and 
many other processes.
    In our companion report also issued on April 14, we 
documented several issues with ALIS, most importantly 
concerning its inability to deploy right now and the lack of 
needed redundancy at this point that could result in 
operational and schedule risks in the future.
    Finally, manufacturing and production data continue to show 
a positive trend toward more efficient production, and that is 
good. The amount of labor hours to build each aircraft 
continues to go down. The engineering changes that are coming 
out of the test program have been reduced significantly. The 
contractor is now delivering aircraft on time or, in some 
cases, ahead of schedule.
    We continue to monitor the measures for aircraft and engine 
reliability and maintainability. While they still fall short of 
expectations, they continue to improve, and there is still time 
to achieve the program's required goals in that area.
    I will close with that, Mr. Chairman. I look forward to 
your questions.
    [The prepared statement of Mr. Sullivan follows:]
      
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]    
      
    Chairman McCain. Thank you very much. I thank the 
witnesses.
    General Bogdan, how many military, government civilians, 
and full-time equivalent contractor positions are assigned to 
the Joint Program Office? What is the annual cost to operate 
the office?
    General Bogdan. Sir, today, if you include the test force 
at Pax River and the test force at Edwards Air Force Base, 
which are not necessarily part of my program office but I pay 
for them, just like I do support contractors, the number is 
about 2,590. The annual cost to operate the JPO is on the order 
of about $70 million a year. That includes pay for salaries. 
That includes leasing facilities and space, computers, IT, 
everything wrapped up.
    Chairman McCain. The information that I have is that it is 
nearly 3,000 and the cost is $300 million a year, but $70 
million a year to run an office of a program is pretty 
disturbing.
    Secretary Kendall, last year's NDAA included report 
language that directed the Secretary of Defense to either 
revalidate the F-35 total by a quantity of 2,443 for all 
variants or submit a new number by May 25, 2016. Does the 
Department intend on meeting this requirement on time?
    Mr. Kendall. Mr. Chairman, as far as I know, yes, we are.
    Chairman McCain. I was interested, Dr. Gilmore, you said 
that the IOC is likely to be delayed. Have you any idea how 
long that delay would be in the IOC?
    Dr. Gilmore. Are you speaking, Mr. Chairman, about the IOC 
for the Air Force with Block 3i?
    Chairman McCain. Yes.
    Dr. Gilmore. I think it is unlikely the Air Force will meet 
its objective date, which is mid-2016, but it could meet its 
threshold date, which is later in the fall.
    Chairman McCain. In this issue, Mr. Sullivan, of pursuing a 
block buy, can you provide any examples of a program pursuing a 
block buy or multiyear procurement strategy prior to a full-
rate production decision?
    Mr. Sullivan. You are referring to the proposal right now 
to buy aircraft on a 3-year buy?
    Chairman McCain. Yes.
    Mr. Sullivan. I do not have any examples of that. The only 
example I know of a block buy situation is our usual multiyear 
procurements, which require a lot of criteria to show that the 
industrial base is stable, the design is stable, they are ready 
to produce. Usually, it comes much later in a production line.
    I do not think there is even any criteria for that kind of 
block buy.
    Chairman McCain. Dr. Gilmore, in your statement, you said 
the limited and incomplete F-35 cybersecurity testing 
accomplished to date has nonetheless revealed deficiencies that 
cannot be ignored. Can you elaborate on that?
    Dr. Gilmore. I would be happy to do so in the appropriate 
forum. It would require the discussion of classified 
information. We treat cyber vulnerabilities, the details of 
them, as classified. But they are significant, in my judgment.
    Chairman McCain. General Bogdan, Dr. Gilmore believes that 
there will be a delay in the IOC of the Air Force version. What 
is your response?
    General Bogdan. Sir, there are many things that the Air 
Force needs me to deliver to them before they can declare IOC. 
All of the things that are necessary for them to make that 
decision are on track for a 1 August 2016 declaration, with the 
exception of ALIS. I believe ALIS is approximately 60 days 
behind. Therefore, I would put ALIS delivery, which is a 
criteria for them, at about 1 October 2016, as opposed to 1 
August.
    They have until December, which is their threshold date, so 
I think they will meet their IOC criteria within that period, 
but not exactly on 1 August.
    Chairman McCain. The fiscal year 2016, General, limited 
funds for the procurement of F-35As until Secretary James 
certified that the F-35A aircraft delivered in 2018 will have 
the full combat capability with Block 3F hardware, software, 
and weapons carriage.
    Have you recommended or do you intend to recommend to 
Secretary James that she make the certification?
    General Bogdan. Yes, Senator. I am preparing the package 
now to forward to the Secretary of the Air Force with my 
recommendation that she make that certification. I needed a few 
pieces of information before I could feel confident asking her 
to certify. One of those pieces was that the software stability 
issues that were spoken about before were behind us. I believe 
they are now. Therefore, I believe that 3F will be delivered in 
fiscal year 2018, with the full capability, so I will forward 
the package to her now.
    Chairman McCain. Finally, Dr. Gilmore, given the size and 
cost of Block 4, would you believe it should be treated as a 
separate program for Nunn-McCurdy purposes or just as part of 
the F-35 program?
    Dr. Gilmore. Senator, I remind you that is not my decision. 
However, in taking a look at what I have seen in the current 
plans for Block 4, as I mentioned in my written statement, they 
need to be scrubbed, rigorously, in my view. Anything that will 
help in that rigorous scrub and bring clarity to desired 
performance and cost would be useful. I think that would be a 
good idea, but again, I hasten to say it is not my decision.
    Chairman McCain. Senator Reed?
    I thank the witnesses.
    Senator Reed. Mr. Chairman, with your permission, I would 
like to yield to Senator Donnelly. He has a pressing engagement 
elsewhere.
    Senator Donnelly. Thank you, Mr. Chairman.
    I want to thank the witnesses.
    Secretary Kendall, from 1996 to 2007, as the F-35 was under 
development, DOD supported an alternate engine program. The 
push for the F136 engine was controversial in later years, but 
I am interested to hear from you, and others who have thoughts 
on this, do you believe the alternate engine program was a 
smart strategy in those early R&D [Research & Development] 
years?
    Mr. Kendall. The question of the alternate engine, and I 
was in my position for the last couple years of that debate, 
was really a question of the economics associated with it. 
Basically, a decision was made that the economic case was not 
there to carry a second engine. That entailed taking some risk, 
of course, when you only rely on one. That has proven out.
    The engine of the F135 is performing. We are getting cost 
out of that, not as quickly nor as much as we would like, but 
we think that the strategy that we have embarked on is working.
    We are also funding some advanced development for follow-on 
engines. It is competitive development at this point. They 
could be cut into the production several years from now, if we 
can fund the EMD program for that. But affordability has been a 
major constraint on the program overall, including on the 
engines.
    Senator Donnelly. General Bogdan, I am particularly 
concerned about the performance of the F135, given that Pratt & 
Whitney was recently selected to build the engine for the B-21. 
I am concerned that looking back on the history of the F-35, 
the F-16, and others, there are performance issues, and I quote 
from the Department of Defense annual report, ``recurring 
manufacturing and quality issues'' that have been an issue with 
Pratt & Whitney for the F-35. Could you comment on that, 
please?
    General Bogdan. Yes, sir. The quality issues that you are 
talking about are primarily not at the Pratt & Whitney level. 
They are at their suppliers' level. Nonetheless, Pratt & 
Whitney is responsible for those suppliers.
    Over the last few years, we have improved our on-time 
delivery of engines significantly. But early on in the program, 
you are correct, sir, that we were seeing quality escapes and 
manufacturing issues with the lower tier suppliers. I think at 
this point in time, the manufacturing of the engine is much 
more mature than it was a few years ago.
    Relative to the performance of the engine, today, the F135 
engine has about 52,000 fleet hours on it, and it is 
maintaining about a 94 percent full mission capable rate. That 
is a very, very good number. In the endgame of the program, we 
were shooting for 95 percent, so here we are less than a 
quarter of a way through the full maturity of the airplane, and 
we are just about achieving that reliability we are looking 
for.
    However, that is not to say that there are not issues. We 
are dealing with the engine right now and changes we are making 
to make it more affordable, more producible, and increase the 
reliability.
    But from that perspective, I have been fairly happy with 
the performance of the F135.
    Senator Donnelly. Mr. Sullivan, they have said that their 
engines are well ahead of the 2020 requirements, but in your 
report last month, GAO [Government Accountability Office] wrote 
that the F-35A and F-35B engines are at about 55 percent and 63 
percent of where the program expected them to be. Can you 
explain the difference in that assessment, sir?
    Mr. Sullivan. I do not know that I can explain the cause of 
that, but we have found that the engine reliability and the 
measurements that we look at in terms of coming up a 
reliability growth curve for an engine during development, 
Pratt & Whitney has been pretty consistently below where they 
were expected to be, but I would say they have been improving 
in the last 2 or 3 years, in that respect. It seems like they 
are beginning to retire some of that risk.
    Senator Donnelly. This is to all the panelists. What is the 
top lesson you have learned through the F-35 acquisition 
process that can inform future major acquisitions across the 
services?
    Mr. Sullivan, I would like to start with you.
    Mr. Sullivan. I think, obviously, the first thing that we 
have learned with this is that you should not concurrently 
develop technology with a product, and you should not 
concurrently buy aircraft while you are still developing them. 
That is the number one thing.
    Senator Donnelly. Dr. Gilmore?
    Dr. Gilmore. The F-35 was an extreme example of optimistic 
if not ridiculous assumptions about how a program would play 
out.
    The decision to begin production before much of development 
had really been accomplished was a very bad one, as Mr. Kendall 
has discussed. But although an extreme example, it is not 
unprecedented because the Department is typically very 
optimistic about schedules and costs, which then sets up the 
program managers who are put in charge of these programs to 
look like failures from the outset, which is a terrible thing 
to do to them.
    Senator Donnelly. Thank you. I would love to hear the other 
two, but I am out of time.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Inhofe?
    Senator Inhofe. Thank you, Mr. Chairman.
    I think the question that I was going to ask may have been 
answered in the second sentence in your opening statement when 
you said the F-35 will form the backbone of the U.S. air combat 
superiority for decades to come.
    We keep hearing things to the contrary. You might remember 
when Secretary Hagel, just in February 2014, he said, 
``American dominance in the seas, in the skies, and in space 
can no longer be taken for granted.'' General Frank Gorenc, the 
USAFE [United States Air Force in Europe] commander, said, just 
in September last year, this is his quote, ``The advantage that 
we had from the air I can honestly say is shrinking. This is 
not just a Pacific problem. It is as significant in Europe as 
it is anywhere else on the planet. I do not think it is 
controversial to say they have closed the gap in capability.''
    General Bogdan, do you agree with that?
    General Bogdan. Sir, I would agree with that. Our 
adversaries today are full speed ahead and accelerating the 
development of significant military capabilities to thwart 
ours, both in air-to-air and air-to-ground.
    I believe that F-35 is absolutely necessary now and in the 
future to give you and the Nation options to take an airplane 
and go anywhere on the face of the Earth at a time of our 
choosing and be survivable and hit a target. I do not believe 
there is any other airplane in the world that can do that 
today. However, the F-35 can do it and will do it for many 
years.
    Senator Inhofe. You are talking about some fifth generation 
aircraft from both Russia and China. You have the T-50 and then 
the Chinese have the J-20. I think they also have the J-31 or 
something like that, maybe lagging behind a little bit.
    Now, when you compare those, normally they talk about we 
are going to be stealthier; we are going to have better radar. 
Why don't you give us an idea of what the opposition is doing 
right now, and specifically in what areas that we are better?
    General Bogdan. Senator, I will try to do that without 
walking across the line of sensitive information or classified.
    One of the things that folks like to think about when they 
look at those adversary airplanes is that they look a lot like 
ours. That is a true statement. Much of the design of those 
airplanes came on the outer mold line from what we developed in 
our F-22s and F-35s.
    Senator Inhofe. I understand that. Yes.
    General Bogdan. What makes us better and special is what is 
on the inside of these airplanes. Our radar, our multi-sensor 
fusion, our ability to take information in the battlespace and 
provide it to the pilot in such a way that he knows everything 
that is going on 360 degrees around him----
    Senator Inhofe. Okay, that is good.
    General Bogdan.--and the weapons to employ that knowledge 
are what makes it different.
    Senator Inhofe. That is good.
    Recently, some pretty high individuals are talking about 
the fact on the F-22s, they are really using those a lot more 
than we anticipated. This is for anybody here. Yet in your 
presentation, you talk pretty specifically about the numbers of 
copies we are going to have, the As, the Bs, and the Cs.
    Most of us here on this side of the table remember we went 
through this thing with F-22s. Originally, it was going to be 
750, then it was going to be 380-some, then 187 ultimately. Now 
that is quite a deterioration from the original numbers.
    Is there a reason that you do not believe we are going to 
experience the same thing with the F-35?
    General Bogdan. Sir, I cannot assume in the future what the 
U.S. services will do. But what I will tell you is that the 
major difference between an F-22-type program and the F-35 
program are significant in that we have many FMS [Foreign 
Military Sales] and foreign partners who are also buying the 
airplane. If they continue to buy the airplane, the price will 
continue to come down. That stabilizes----
    Senator Inhofe. That is where you come up with the $85 
million ultimately, taking that into consideration.
    General Bogdan. Yes, sir.
    Senator Inhofe. One last thing, we were all a little 
disturbed two years ago when we thought we were going to have a 
B model at Farnborough and at the last minute we had to bag it. 
Of course, we did not have anything at France, in Paris. Are 
you pretty confident it is going to make the Farnborough this 
year?
    General Bogdan. Yes, sir. We are planning a deployment of 
five F-35s to Farnborough and RIAT [Royal International Air 
Tatoo], two A models and three B models, one of those being a 
U.K. airplane.
    Senator Inhofe. How many of those will be flying?
    General Bogdan. We will fly all of those airplanes at 
Farnborough and RIAT.
    Senator Inhofe. I look forward to it.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Reed?
    Senator Reed. Thank you very much, Mr. Chairman.
    Dr. Gilmore, I just want to clarify one your comments. You 
were talking about, I think, the difficulty of operating with 
four aircraft and, essentially, the multi-sensor fusion of the 
four aircraft operating together. That seems to be the 
preferred form of operation. Is that an accurate recollection?
    Dr. Gilmore. Yes. Four-ship will often be used because that 
will provide information from four aircraft that must be fused 
in order to provide the situational awareness that General 
Bogdan just mentioned is so critical to dealing with future 
threats and current threats.
    Senator Reed. There is a current difficulty in making those 
systems, even if they operate in a single aircraft, operate 
effectively together?
    Dr. Gilmore. Fusion has been a challenge to make work well. 
It will, based on what I have seen, continue to be a challenge. 
It is a very hard problem. It does not surprise me that it is 
turning out to be a hard problem, to make the fusion work well, 
because you get information from different sensors on the same 
aircraft as well as from different aircraft. You have to have 
software that then sorts through all that and says, ``Oh, this 
signal that I got from this sensor is from the same target as 
this sensor on another aircraft.'' That is a very hard physics 
problem. It is not a matter of just simply writing code for 
graphical user interface. It involves detailed understanding of 
physics, of the propagation of the signals, and so forth, and 
the errors in the signals.
    That is going to continue to be a challenge, and it will 
require a lot of iterative test-fix-test where you guess at 
solutions and then use subject-matter experts to guess at 
solutions, try to implement them, test them to see how they 
work. That is a time-consuming process.
    Senator Reed. Just a clarification, in the IOC status, do 
you really get into that multi-aircraft fusion issue? Or is 
that just simply the aircraft being able to fly?
    Dr. Gilmore. The Air Force is the one, just as the Marines 
did for their own initial operational capability, the Air Force 
sets the standards for determining what constitutes sufficient 
performance for IOC.
    I cannot remember the details of what the Air Force has 
said about fusion, but obviously the more fusion capability 
they have, the better. It will be limited because Block 3i 
provides the same basic capability that Block 2B did with the 
new processor, and there were fusion shortfalls in Block 2B 
that Block 3F is meant to surmount.
    Senator Reed. Thank you very much.
    Mr. Secretary, from your perspective, what do you think the 
most significant challenges are? I know General Bogdan talked 
about ALIS as a key issue in terms of resolution. Any others 
that you would identify, that you are focused on, and your 
approach to deal with them?
    Mr. Kendall. I think ALIS is the leading problem in terms 
of achieving IOC for the Air Force on time. The issue that was 
mentioned earlier on stability I think was a concern, but that 
seems to be getting under control.
    There are a number of concerns with just the pace of 
testing and how much has to be done. I know some steps General 
Bogdan is taking to alleviate some of that schedule pressure 
that he has.
    I think it is a suite of a lot of things that have to 
happen. At the end of the day, the Air Force will make the 
decision as to when they think it is ready to clear IOC.
    My experience with the Marine Corps, I think the Air Force 
will be exactly the same. They are not going to do that until 
they are comfortable with the product that they have.
    Senator Reed. One of the major issues, long term, is the 
sustainment cost of the aircraft, which seemed to be quite 
significant. Can you describe steps that you and General Bogdan 
are taking to lower those costs? We want to lower the cost of 
the platform, but we certainly would like to lower the cost 
long term of maintenance and operation.
    Mr. Kendall. So far, we have been able to take about 10 
percent out of the cost estimate at the time of the 
rebaselining in a variety of things to do that. We are looking 
at various ways to structure the business case, if you will, 
for the sustainment. That is a work that is still in progress. 
We do not want to remain in a sole-source environment for any 
more of that than we possibly have to. Introducing competition 
is a big part of it.
    We are looking for creative ways to work with our partners 
so that we do things together as opposed to separately, because 
there are cost efficiencies associated with that.
    General Bogdan I think probably has a very long list he 
could give you in addition to that.
    Senator Reed. Can you give me your top two or three, 
General, in my time?
    General Bogdan. Yes, sir. We started a fully funded 
reliability and maintainability program about two years ago, 
where we looked at each and every component on the F-35 to 
determine if it was maintaining its performance on the airplane 
at the pace at which we needed it. That has proven to be very 
cost-effective for us, so we are going after those pieces and 
parts on the airplane that are not performing well.
    We also have a cost war room, where we look at every idea 
that comes from the field on how to better maintain the 
airplane. A perfect example of that is the original concept for 
tires, wheels, and brakes on this airplane was to ship all that 
off to a contractor somewhere. The U.S. Air Force, the U.S. 
Navy, the U.S. Marine Corps have that capability today with 
their legacy systems at their bases, so we are moving all of 
that work to them. That reduces about 40 percent or 50 percent 
of the cost and the turn time of fixing things like that. We 
are going about systematically trying to get every piece of 
cost out of the program.
    Senator Reed. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Ayotte?
    Senator Ayotte. Thank you, Chairman.
    General Bogdan, I wanted to ask you, recently, General 
Welsh came before our committee and said that the mission 
capability of the A-10 will not be replaced by the F-35, yet 
the Web site for the Joint Strike Fighter program says that the 
F-35 will replace the A-10. Can you answer this question for 
us? There is an inconsistency there, and I would like to know, 
is General Welsh right or is your Web site right?
    General Bogdan. Thank you for that question, ma'am.
    First, the force structure of the U.S. Air Force and its 
fighter inventory is well beyond my purview. I will not try to 
explain what General Welsh said or what the decision-making 
processes for the Air Force on replacing their fighter 
inventory.
    Senator Ayotte. But, General, I think this is an important 
question. If General Welsh comes before our committee and says 
the F-35A is not going to replace the A-10, and yet the Joint 
Strike Fighter Web site says that the F-35A will replace the A-
10, it is pretty important as we think about the capabilities 
of the A-10.
    Secretary Kendall?
    Mr. Kendall. I cannot speak for certain for General Welsh, 
but I think what he was trying to say was that we will in 
fact--first of all, I think both statements are correct. We 
will, in fact, replace the----
    Senator Ayotte. Both statements cannot be correct.
    Mr. Kendall. Well, we will, in fact, replace the A-10s with 
F-35s. That is the plan. But the F-35 will not do close-air 
support mission the same way the A-10 does. It will do it very 
differently.
    The A-10 was designed to be low and slow and close to the 
targets that it was engaging, relatively speaking. We will not 
use the F-35 in the same way as the A-10. It will perform the 
mission very differently.
    Senator Ayotte. Let me ask, Dr. Gilmore, it is going to 
perform the mission very differently. Is it not important that 
we understand how the two compare? I would ask you, will there 
be comparison testing, not just with the A-10 but with other 
comparative airframes that the F-35 is going to replace? How 
will the operational testing, comparing the close-air support 
capabilities of the F-35A and A-10, be conducted?
    Dr. Gilmore. Senator, if I could just point out, I have 
here the operational requirements document for the F-35. On 
page two, it says the F-35A will rely primarily upon the F-22 
for air superiority and will assume the current F-16 role as 
the low end of the USAF high-low fighter mix strategy and the 
A-10 role.
    That is in the operational requirements document.
    Senator Ayotte. Okay. If it is going to perform the A-10 
role, it is a pretty darn important role to our men and women 
on the ground. What about the fly-off? How will that go down?
    Dr. Gilmore. We are going to do a comparative test of the 
ability of the F-35 to perform close-air support, combat search 
and rescue, and related missions, with the A-10. We are also 
going to do a comparison test as integral part of operational 
test and evaluation of the ability of F-35 to perform 
suppression and destruction of enemy air defenses with the F-16 
and F-18. This operational requirements document has numerous 
citations to the performance expected in F-35 in relationship 
to the aircraft it is going to replace, so that operational 
testing is entirely consistent with the operational 
requirements document.
    The comparison testing is also not unprecedented. There was 
comparison testing between the F-22 and the F-15, and there has 
been comparison testing as part of other operational tests, 
including things like tactical vehicles, like the Joint Light 
Tactical Vehicle and the Humvee.
    To me, comparison testing just makes common sense.
    Senator Ayotte. Of course.
    Dr. Gilmore. If you are spending a lot of money to get 
improved capability, that is the easiest way to demonstrate it, 
to do rigorous comparison tests.
    With regard to CAS [Close Air Support], we are going to do 
it under all the circumstances that we see CAS conducted, 
including under high-threat conditions in which we expect F-35 
will have an advantage, and other conditions requiring 
loitering on the target, low-altitude operations, and so forth, 
in which there are a lot of arguments that ensue about which 
aircraft might have the advantage, the A-10 or the F-35. But 
that is what the comparison test is meant to show us.
    Senator Ayotte. I think that is really important, so that 
we can understand the capability comparisons there.
    General Bogdan, I wanted to ask you, I had asked a question 
of General Welsh in March as to when you expect the SDB [Small 
Diameter Bomb] II to achieve demonstrated full-mission 
capability for the F-35A.
    General Bogdan. Ma'am, our program of record has the SDB I 
coming in, in the end of Block 3F, which is in the 2017 
timeframe. But SDB II, which is a much more enhanced capability 
for that precision weapon, is planned for the first increment 
of our Block 4. That is approximately in the 2021-2022 
timeframe.
    Senator Ayotte. I think that is an important issue as well 
because the SDB II provides F-35A an ability to kill multiple 
targets in adverse weather, which is something that, obviously, 
the A-10 has capability on. I hope that is taken into 
consideration as we look at this comparison.
    Dr. Gilmore. The comparison testing will be done with 
mobile targets and targets in close proximity to buildings and 
civilian structures, in particular with mobile targets.
    As I mentioned, right now, the mobile target capability of 
the F-35 is problematic, and how much it will be corrected as 
we get to Block 3F remains to be seen. SDB II in 2022 will 
provide a weapon that can actually follow the target.
    Before that, in 2020, laser JDAM [Joint Direct Attack 
Munition] also may help in that regard, but the current moving 
target capability is limited.
    Senator Ayotte. I know my time is up, but one of the things 
that continues to worry me is, under the Air Force plan, the A-
10s are all retired by 2022. It seems to me that these are 
still important questions that remain, that very much matter to 
our men and women on the ground.
    Thank you.
    Chairman McCain. Senator Manchin?
    Senator Manchin. Thank you, Mr. Chairman.
    Thank all of you for your service.
    General Bogdan, the GAO report recommends an approach in 
which new development efforts are managed as separate 
acquisition programs. GAO recommended this type of separate 
acquisition program for the F-35 Block 4 follow-on 
modernization efforts. However, DOD has not concurred with the 
GAO recommendations and plans to include the F-35 Block 4 
follow-on modernization efforts under the existing cost-plus 
contracts.
    If DOD did not adopt GAO's recommendation, would that help 
eliminate cost-plus for the Block 4 phase of the program? Why 
would they not? I do not know why any of us do not pay 
attention to GAO, but why the Department of Defense does not 
makes no sense at all.
    General Bogdan. Sir, at a strategy level, I am going to 
defer to Mr. Kendall to answer that.
    Senator Manchin. Mr. Secretary, I am sorry.
    Mr. Kendall. Senator, I think we are talking about a 
distinction here that may not have a difference. The label MDAP 
[major defense acquisition program], brings with it a lot of 
statutory and mandatory oversight.
    Senator Manchin. Sure.
    Mr. Kendall. What we plan to do with Block 4 is ensure that 
it is accounted for separately, that we have an independent 
cost estimate, that we manage it very intensively, that there 
is full transparency and visibility into what we are doing.
    Senator Manchin. I am saying that----
    Mr. Kendall. All the things that I think are being asked 
for will be supplied. But if we add to that the label of a 
major defense acquisition program, that is going to bring a lot 
of additional bureaucracy and cost. I was hoping to avoid that.
    Senator Manchin. I agree. We do not want to put any more 
bureaucracy on top of you than you already have.
    But then I would ask, Mr. Sullivan, why would GAO make that 
report, if you thought it was going to throw more bureaucracy 
on top of it?
    Mr. Sullivan. We would not want to see any bureaucracy on 
top of that either. In fact, we did a report last year, we kind 
of call it our efficiency report. I know the Under Secretary is 
familiar with it, and agrees with a lot of it, I think.
    One of the things we are also attacking when we attack 
these kind of accountability questions is, let's reduce some of 
that bureaucracy that they have to deal with if they become an 
MDAP.
    But the reason we think it is important here is, number 
one, the dollars involved are such that, even according to 
current law, they meet the threshold for an MDAP program. The 
other thing is, on the F-22 program, we saw something very 
similar to this. When they decided to baseline new capabilities 
into the program, they did it under the existing program, and 
very quickly, a $2 billion estimate for development of those 
new capabilities became about $11 billion, and there was no 
accountability over it because it was in with the baseline 
program.
    Senator Manchin. First of all, I appreciate the job the GAO 
does. I really do.
    Mr. Sullivan. Thank you.
    Senator Manchin. I have to make apologies as to why we do 
not take your recommendations more seriously. You must have 
considered the bureaucracy versus the cost, as far as the 
contract versus cost-plus. It had to be significant savings.
    Mr. Sullivan. Yes. We sympathize with the desire to not 
have to go through so many reviews and so many offices and 
comments and everything else. We did the report on that, and it 
was eye-opening for us to see what they have to go through. But 
to me, they said if they had to go to a major defense 
acquisition program, it would cause a year's delay in getting 
that development effort going. I just do not understand why 
that would be the case. They are doing many of the things they 
would be required to do under MDAP anyway.
    Senator Manchin. Thank you. Let me go on.
    Yesterday, it was announced that we are sending 250 special 
operations forces to Syria. I understand that it costs us 
approximately $1 million to $1.5 million to train one special 
operator, equaling to roughly $375 million for the 250.
    General, you have indicated recently that the F-35 
currently costs $108 million per aircraft. I know it is going 
to come down to $85 million, you are hoping, by 2019.
    Conceptually, if we traded in 10 jets, just 10, we could 
increase the size of our special forces community by over 650. 
This is after General Milley came here and said we are about 
220,000 short of end-strength ground troops. We are looking for 
ways to make sure that we can meet the threats that we have.
    The F-35 pilot helmets alone cost $400,000. That is $10 
million for 2,500.
    As we look at the costs associated with F-35, and 
considering the current threats we are facing and how most of 
it is ground threats that we are facing and fighting, does it 
make sense to spend so much money on the F-35 while we 
currently depend so much more on our special ops forces around 
the world, since we have to make some choices?
    General Bogdan. Senator, what I will tell you is that the 
Department has many different kinds of choices they have to 
make and try to balance their requirements with the resources 
that they have.
    I will tell you that the F-35 is a long-term investment in 
the defense of this Nation. Our future adversaries are not 
sitting still. In the next 10, 20, 30 years, we may very well 
need the capabilities that the F-35 will provide us to maintain 
our leadership in the world. I consider the F-35 as an 
investment in the future.
    Senator Manchin. I appreciate that. My time is up, but I am 
saying we have 2,500 scheduled to be built, correct? Is that 
the number?
    General Bogdan. The U.S. services will build about 2,443, 
sir.
    Senator Manchin. For 10 less aircraft, we could put 650 
special ops people on the frontlines right now.
    General Bogdan. I believe your math is right, sir.
    Senator Manchin. Okay. Thank you, sir.
    Chairman McCain. Senator Fischer?
    Senator Fischer. Dr. Gilmore, in your prepared testimony, 
you state that cybersecurity testing has revealed deficiencies 
and that full testing of the logistics operating unit and the 
logistics information system has not been permitted.
    Can you give us an overview of the planned cybersecurity 
tests and whether, based on the deficiencies discovered so far, 
you believe the testing will be adequate?
    Dr. Gilmore. If we execute the plan that my office has been 
working on with the joint operational test team and the program 
office over the next couple years, that will be a very 
thorough, rigorous set of cybersecurity tests. The problems 
that we are running into, as you mentioned, are that the 
program is reluctant to let us test on the live systems for 
fear that we might damage them, and they had not made 
provisions for backup if the systems went down, although they 
are working on that now.
    Up to this point, and in the immediate future, we will have 
to test on surrogate systems and laboratory systems. The 
program office is making those available to us. That is 
certainly better than forgoing all testing, and we are learning 
from that, as was mentioned in my annual report and in my 
statement.
    But we need to do much more than that. We need to test on 
live systems. We are also going to have to find a way to do 
some sort of cybersecurity assessment of Lockheed's information 
systems because ALIS is plugged into the Lockheed corporate 
network.
    We are working through all of those issues. Over the next 
couple years, I expect that we will have done very adequate, 
rigorous, testing. But we are just at the beginning of it.
    Senator Fischer. General, how is the program office working 
to address these issues? The doctor mentioned some 
accommodations there, but there is still the need for live 
testing. How are you addressing all of this?
    General Bogdan. Yes, ma'am.
    What I will tell you today, ALIS, our logistics information 
system, is operating on the DOD networks. In order for me to be 
able to allowed to put that ALIS system on the DOD networks, it 
has gone through, over the last 3 or 4 years, vigorous 
cybersecurity testing and certification from agencies outside 
the JPO [Joint Program Office], to include the NSA [National 
Security Agency] and DISA [Defense Information System Agency].
    The idea that the ALIS system today is somehow untested is 
not an accurate statement. However, having said that, Dr. 
Gilmore is correct. I was hesitant last year to give the 
operational test community the authority to test end-to-end the 
operational system, because we did not have redundancy in part 
of the system. If the testing were to knock off that part of 
the system, I did not have a backup.
    We are building that backup today. As soon as that backup 
is in place, we will give the operational test community full 
authority to test the system as it operates in the field today. 
That should happen before the end of the year.
    Senator Fischer. Before the end of the year?
    General Bogdan. Before the end of the year, ma'am.
    Dr. Gilmore. I would like to comment, Senator, that we do 
cybersecurity testing as an integral part of operational 
testing of systems that have been through DIACAP [Department of 
Defense Information Assurance Certification and Accreditation 
Process] certifications and NSA certifications, and we get into 
them every time.
    I am not arguing against those certifications, which are 
specification-based kinds of assessments. They are certainly 
necessary, but they are hardly sufficient.
    Commercial organizations such as Microsoft have said in 
their advice, the advice they provide to their customers, 
assume that you have been penetrated and do continual red 
teaming, which is what we do in our operational tests.
    The certifications that the general talks about are 
certainly necessary, but they are hardly sufficient.
    Senator Fischer. Mr. Secretary, overall, what are the 
lessons learned from this process? What are we applying to 
other acquisitions? How is cybersecurity going to be included 
in the requirements process? Basically, what are we doing to 
integrate requirements for cybersecurity into the whole 
acquisitions process?
    Mr. Kendall. Cybersecurity is both a ubiquitous and 
basically an omnipresent problem. Our guidance to the 
acquisition work force basically is that you have to take 
cybersecurity into account throughout every phase of the 
product, development of product lifecycle, and every aspect of 
it.
    The Department is maturing its capabilities in this area, 
but I am in agreement with Dr. Gilmore on this, we still have a 
long way to go.
    Some of our older systems in the field were not designed 
with cybersecurity in mind. We have to go back and assess those 
and take corrective action on those. All of our systems like 
the F-35 that are in development, we have to integrate into the 
design process as we go, as well as into all of our business 
practices.
    It is a pervasive threat, and I worry particularly about 
loss of unclassified information, which is much easier to 
extract and attack. In a logistics system, that is a particular 
problem because you want to connect to the Internet somehow so 
you can order parts and so on.
    We are working this problem very, very hard. It is not 
going to be cheap to fix it, and it is not going to be quick to 
fix it, but we have to do so.
    Senator Fischer. Thank you, Mr. Chairman.
    Senator Reed. On behalf of the chairman, Senator Cotton, 
please?
    Senator Cotton. Thank you.
    I know that Senator Donnelly asked about lessons learned 
from the F-35 program and what we might take forward in other 
programs, given that some of the challenges of this program go 
back to some members' high school years. I think we only got 
through Mr. Sullivan and Dr. Gilmore, though. I would like to 
hear the answer to that question from Secretary Kendall and 
General Bogdan.
    Mr. Kendall. I was thinking, as my colleagues were 
answering, I think it is a combination of things. But at the 
end of the day, having a successful program depends on a 
handful of things, but they are all incredibly difficult and 
complicated. It starts with reasonable requirements. Then you 
have to have professional management that is empowered to do 
its job. You have to have adequate resources. You have to have 
a system that basically will support people doing the right 
thing.
    In our system, as I think others mentioned, there is a very 
strong bias that is sort of built into our incentive structure 
towards optimism. It is easier to get a program funded if it 
costs less. People want everything faster, and they want it 
cheaper, and they want it to be able to do more.
    Most of the problems I have seen in acquisitions stem from 
being in a hurry and being convinced, for whatever reason, that 
things will be cheaper, better, faster than they will actually 
be or that history would indicate they would be.
    My office was formed in 1986 because this problem was so 
pervasive. I think we have had, frankly, a mixed record of 
success. One of the things that I hope I have done over the 
last several years is to put in more realism and to structure 
programs with a more highly likelihood of success.
    A lot of the things that we to, like F-35, are incredibly 
complicated and difficult. Development is inherently very 
risky. When you create something that has never been created 
before, and you do it with cutting-edge technology, that is a 
process that inherently has a lot of unknowns in it, no matter 
how much risk reduction you do ahead of time.
    I think support for sound management, ensuring 
professionals are in place, resisting the tendency to spend the 
money just because it is in your budget and you are afraid you 
will lose it if you do not spend it, which is I think exactly 
what happened when we started production on the F-35, is 
something that has to be reinforced throughout the chain of 
command, starting with the Secretary of Defense.
    Senator Cotton. General Bogdan?
    General Bogdan. Thank you, Senator.
    I will not elaborate. The concurrency and the optimism 
piece are given. I will give you two other things, sir.
    When you set up a large acquisition program like this, you 
must ensure that the risk between industry and government is 
balanced appropriately. If the risk is all on the government, 
or if the risk is all on industry, you will get bad behaviors 
from both sides, so it is very, very important to make sure you 
have the incentive structures right and the risk balanced 
appropriately between the government and industry. We did not 
get that right at the early part of the F-35 program.
    Mr. Kendall, under his leadership, I have been trying to do 
that for a number of years now, and it has proven to be 
helpful.
    The second thing I would tell you that people do not talk 
about much is leadership continuity. If you have a very large 
program and very complex, like the F-35, it will do you no good 
to put leaders in place that are there for only 2 or 3 years. 
It takes them a year just to understand what is going on.
    I would tell you our bigger acquisition programs need 
stable leadership at the top for many, many years to help.
    Senator Cotton. Are you talking about uniformed leadership 
or civilian leadership?
    General Bogdan. Either one, sir. I believe government 
civilians and military personnel are both very capable 
acquisition leaders. You just have to leave them there in place 
for enough time to make a difference.
    Senator Cotton. To the extent it is uniformed leadership, 
is that an acquisition challenge or is that a personnel 
challenge?
    General Bogdan. It is both, sir. It is absolutely both. How 
do you provide the incentives for a military person to continue 
moving up in rank if you leave him in a job for 5 or 6 years? 
But that is sometimes what is necessary for very big, complex 
acquisition programs.
    Senator Cotton. I have heard from some of our partners 
overseas, and I do not mean just partners in the Joint Strike 
Fighter, but our security partners generally, when talking 
about acquiring certain weapons systems that, because they are 
small compared to the United States, they worry about being a 
plane with a country rather than a country with a plane.
    What is the risk that some of the partners in this program 
face in terms of the cost of this aircraft and the ability to 
acquire the number of aircraft needed to contribute 
meaningfully to the program? How many Joint Strike Fighters 
need a country acquire to have a meaningful contribution to 
their defense?
    General Bogdan. That is an interesting question, Senator. I 
think it really goes to what each country cares about in terms 
of its resources and what they care to defend.
    What I will tell you is that even our smallest nations on 
the F-35 program are looking at least two squadrons of F-35s. 
The idea that the partnership will be working together to 
sustain, maintain, and train the airplanes is a huge deal for 
them, because otherwise they could not afford a fifth-
generation capability like they are today.
    Senator Cotton. Thank you.
    Senator Reed. On behalf of the chairman, Senator Rounds?
    Senator Rounds. Thank you, sir.
    Dr. Gilmore, I am concerned by your testimony that the 
Marine Corps found they were not able to achieve aircraft 
repair capabilities at the unit or intermediate levels that 
would support expeditionary warfare. Can you expand on this and 
give your assessment as to whether ALIS, or the Autonomic 
Logistics Information System, is mature enough to support the 
sustained operations with a land- or ship-based forward-
deployed squadron of F-35s at this time?
    Dr. Gilmore. At this time, it is not sufficiently mature. 
There are a number of improvements that are planned, as the 
program moves forward to what is called ALIS 3.0, the fully 
capable version that is meant to be available for operational 
testing and full operational capability. If those improvements 
are realized, they will address a number of the issues that are 
mentioned in my testimony.
    But currently, there are immaturities in the system. There 
are lots of time-consuming workarounds that are required in 
order to keep aircraft flying. There is a heavy reliance on 
having contractors present.
    When we move forward to ALIS 3.0, the plan is to fix many 
of those problems. There is also a concern that I think General 
Bogdan alluded to when he was talking about tires that there is 
still too much reliance on sending parts back rather than 
repairing them closer to the frontlines.
    But again, the program is working on those issues, so we 
will see how well ALIS 3.0 does when we get to operational 
testing. My estimate will be in 2018.
    Senator Rounds. Lieutenant General Bogdan, can you comment 
on Dr. Gilmore's assertion that with the current number of 
aircraft planned for testing use, an 80 percent aircraft 
availability rate is needed to efficiently accomplish the 
integrated operational test and evaluation on schedule. What 
would you assess is the current aircraft availability rate? 
Does the JPO current projections estimate that the aircraft 
availability rate will be up to 80 percent by the time that 
IOT&E is scheduled to start? It seems as though right now you 
are not making that, and yet you are going to have more 
challenges between now and then to meet that.
    How are we going to meet the testing guidelines that are 
laid out in order to meet the deadlines that you have laid out? 
It does not appear as though it is possible. Can you comment on 
that and give us your thoughts, please?
    General Bogdan. Yes, sir. I am not quite sure where the 80 
percent comes from.
    Senator Rounds. Well, in order to have the number of 
aircraft, just for the number of hours and number of tests you 
have to do, you have to have 80 percent of them operational. 
You have not done that yet.
    General Bogdan. To finish IOT&E in a year, you are correct, 
sir. I do not believe we will, by the time IOT&E starts, get 
anywhere near 80 percent.
    Today, the fleet is hovering around 60 percent aircraft 
availability. The best we have seen so far are the U.S. Air 
Force airplanes at Hill Air Force Base. When they deployed to 
Mountain Home this winter, they achieved about a 72 percent 
aircraft availability rate.
    What we have seen is our newer airplanes are doing much 
better. But I will tell you it is very unlikely that we will 
get to 80 percent. What that means is IOT&E may take longer 
than we anticipated. That would be the major result of that.
    Senator Rounds. We talked a little bit, and I am going to 
follow up on Senator Ayotte's question a little bit, 
considering the A-10. As I look back to the information that 
has been provided for us, if you compare the two aircraft 
today, the A-10 time on-station is an hour to 1.5 hours; F-35B, 
and this is from what I can see the planned operational 
capabilities, of 25 minutes to 40 minutes on-station. With 
weapons, the A-10, 4 air-to-surface weapons; F-35B under the 2B 
software, 2 air-to-surface weapons, under the 3F, 6 air-to-
surface weapons. The fuel burn under the F-35 A and B, 10 
percent to 20 percent than F-16, 50 percent to 70 percent 
higher than A-10, which would suggest that we are also going to 
need additional capabilities just to service them close by 
those areas.
    On the gun itself, the F-35, and this is the way it was 
designed in the first place, apparently, the F-35, apparently, 
was not designed with a gun in mind, a lightweight 25 mm 
cannon, 402 rounds total, or about a four-second burst; A-10, a 
30 mm cannon, 1,150 total rounds, 17 seconds, and an A-10 round 
is double the weight of that carried by the F-35.
    Clearly, when we talk about having a similar mission, we 
are talking about doing the job in completely different ways. 
Would that be a fair assessment?
    Dr. Gilmore?
    Dr. Gilmore. Yes, the F-35, when you talk about close-air 
support, it will do it much differently than the A-10. We are 
going to do those comparison tests, the ability to perform CAS, 
between the A-10 and the F-35 as an integral part of 
operational testing.
    We are not going to say that that F-35 has to perform CAS 
the same way the A-10 does. We are going to let the F-35 pilots 
take advantage of the systems on that aircraft, deal with some 
of the limitations you mentioned as well as they can, and see 
how well the missions are carried out in terms of the ability 
to strike targets in a timely manner, and accurately, and then 
report on that.
    There are numerous arguments about how well each aircraft 
will do under different circumstances and different threats. 
Clearly, the F-35 should have an advantage in higher threat 
environments than the A-10 does. The comparison testing and our 
report will illuminate all of that.
    Senator Rounds. Mr. Chair, I am out of time, but Secretary 
Kendall looks like he wants to respond. I think, in fairness, 
we ought to give him an opportunity.
    Mr. Kendall. Thank you, Mr. Chairman.
    I am a huge proponent and fan of the A-10. I am an Army 
officer. It was purposely designed to be a close-air support 
aircraft, and it was a very good design for that purpose. But 
if you estimate time to do air-to-air, it is hopeless. The F-35 
is designed as an aircraft that can do a variety of missions, 
air dominance, strike, and close-air support.
    It does close-air support differently. It does not have the 
features that you mentioned. Those are all real world numbers 
that I think you gave. But what is different now than the time 
the A-10 was conceived is the use of precision munitions and 
the ability of a wide variety of aircraft to put a munition 
like a small-diameter bomb exactly where they want it to go.
    The Air Force today does close-air support with B-1 
bombers, for example, something that traditionally would not 
have been possible. Times have changed.
    If we could afford it, I think everybody would like to keep 
the A-10 in the inventory because it is such a good special 
purpose aircraft for that one mission. But given the 
constraints we have on both the size of our force structure and 
the financial resources that we have, maintaining a one-mission 
aircraft in the Air Force was not something that could fit into 
the balance that we were trying to achieve.
    Senator Rounds. Thank you.
    Thank you, Mr. Chairman.
    Senator Reed. On behalf of Chairman McCain, Senator Lee, 
please?
    Senator Lee. Thank you, Mr. Chairman, for calling this 
hearing.
    Thanks to all of the witnesses for your testimony today.
    The Utah delegation has had the opportunity to witness 
firsthand the rollout of the F-35 in the Air Force as the 388th 
and the 419th fighter wings at Hill Air Force Base in Ogden, 
Utah, prepare to reach initial operating capacity, or IOC, 
later this year.
    We have also been able to see the development of the 
logistics and maintenance functions of the F-35A at the Ogden 
Air Logistics Complex, which has been so effective that they 
have been called to assist both the Marine Corps and the Navy 
in meeting the modernization goals for their respective 
variants of the F-35, and we are very proud of that.
    The men and women who are working to train on, test, and to 
keep these jets in the air are models of American ingenuity and 
hard work and patriotism and dedication at its very best. I 
hope this Congress will provide them with the resources that 
they very much need in order to continue succeeding in their 
mission.
    General Bogdan, one of the main obstacles for the F-35A 
reaching its IOC goals this year, of course, involves the 
continued development of ALIS, which is, of course, used to 
manage the logistics and supply chain for maintaining the F-35, 
not just now during the rollout, but throughout its lifetime.
    Can you tell me how is the Joint Program Office working 
with industry to ensure this capability is functional and fully 
integrated into this weapons platform in a timely and effective 
manner?
    General Bogdan. Thank you, Senator.
    The ALIS system right now that the Air Force needs at Hill 
Air Force Base is on track to be about 60 days later than we 
planned. The biggest issue we have right now is getting the 
maintenance and supply chain and configuration management of 
the engine, the F135, integrated into the ALIS system. That has 
proven to be more difficult than we had anticipated, because it 
requires both Lockheed Martin and Pratt & Whitney's backend ERP 
[enterprise resource planning] systems, to talk to each other 
and to connect with ALIS.
    We have worked with Lockheed Martin across the whole 
company as well as some of their teammates, and we have brought 
in some software experts from within DOD to try over the last 
few months to figure out where those difficulties lie. The good 
news there is we understand where the difficulties are. Now we 
just have to go and execute.
    Like I said, I think we are probably going to be about two 
months late getting that done, but I think we, from a technical 
standpoint, will be able to get it done.
    Senator Lee. Okay, that is good to know. It is good anytime 
you can at least contain a delay and look forward and conclude 
that you have a known quantity.
    Because of budget reductions and the inability to retire 
the A-10, the Air Force is concerned about a potential 
shortfall of experienced uniform maintainers to transition to 
F-35 units and keep those weapons safe and keep them 
functional.
    General Bogdan, has the Air Force been able to resolve this 
problem in the short term? What long-term complications do you 
see that might still exist for ensuring that a generation of 
maintainers is being trained to keep pace with the process of 
integrating the F-35 into the Air Force?
    General Bogdan. Yes, sir.
    In the short term, when the Air Force was faced last year 
with a shortage of maintainers for their IOC capability at Hill 
Air Force Base, they asked the program office to populate an 
entire squadron at Luke Air Force Base with contractor 
logistics support personnel. We did that. The 62nd squadron at 
Luke Air Force Base today on the flight line is maintained with 
approximately 110 contractors as opposed to blue suit 
maintainers. That gave the Air Force the flexibility to take 
those maintainers that would have been at Luke Air Force Base 
and transfer them to Hill Air Force Base for IOC.
    That is just a Band-Aid, though, and that is a short-term 
fix. In the long term, I believe the Air Force needs the 
ability to move maintainers around for the growing fleet of F-
35s. We are committed to working with them to increase the 
throughput of maintainers through the schoolhouse and to work 
with our partners and to work with the Guard and Reserve in the 
Air Force who can provide some of that manpower.
    I will defer to the Air Force on those solutions, though, 
sir.
    Senator Lee. Let me ask you one more question as my time is 
expiring.
    Can you tell me, did the Department of Defense originally 
intend the F-35 to be a direct replacement for the A-10 in 
close-air support missions? Or was it designed to work with 
other Air Force and joint force systems to fulfill the 
Department's needs as far as close-air support goes? What is 
your assessment of how the services will be able to work 
together to meet close-air support needs through integrated and 
joint operations?
    General Bogdan. Sir, what I will tell you is, over time, 
the evolution of the way we conduct close-air support in the 
Department of Defense has evolved. It is no longer a single 
airplane out there talking to a ground controller and dropping 
a single weapon. It is a much more integrated fight. It is much 
more reliant on multi-platforms and multiple communication 
systems with both the ground and the air.
    Given that, the F-35 in the future, today and in the 
future, will have the capabilities to seamlessly integrate into 
that network to perform close-air support.
    Senator Lee. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you, Senator Lee.
    The chairman is on his way back from the second vote. I am 
also told that Senator Blumenthal and Senator King are coming 
for questioning.
    But at this point, if I may, on behalf of the chairman, 
take a short recess, perhaps for just a few moments until the 
chairman returns. We will stand in recess until the chairman 
returns. Thank you.
    [Recess.]
    Senator Reed. Let me once again, on behalf of Chairman 
McCain, call the hearing to order and, at this time, recognize 
Senator King for his questions.
    Senator King?
    Senator King. Mr. Gilmore, one of the concerns that I have, 
and it has been touched on in this hearing, is the length of 
time this platform is expected to serve, roughly 20 years from 
now, 30-plus years from initial inception. I think back to any 
product I may have bought in 2004. I was originally thinking of 
Senator Graham's flip phone. I would not want to be flying that 
in 2040.
    Are we building upgradability into this airplane so that it 
can keep up with the times? In other words, is it designed with 
that in mind?
    Dr. Gilmore. That question is to me, Senator?
    Senator King. Yes, sir.
    Dr. Gilmore. Well, I will defer the details to General 
Bogdan. This aircraft is going to be much more upgradable than 
the F-22s was. But having said that, we have already identified 
the need for an upgrade from the now being installed Technical 
Refresh two processor, which provides additional capability 
relative to the processors that have been in the aircraft to 
this point. We have identified a need for an upgrade to that, a 
Technical Refresh 3 processor.
    In this program, moving from one processor to another is 
not nearly as arduous a problem as in the F-22, where there was 
a lot of software that was developed with features that were 
tied very specifically to the processors in order to maximize 
capability. But it is still not a trivial matter, as has been 
demonstrated recently by the stability problems that we now 
hope have been resolved with the Technical Refresh two 
processor.
    Upgradability is being built in, but that does not mean it 
is going to be trivial to execute.
    Senator King. General Bogdan? Quickly, because I have 
several of the questions. But what is your thought, are we 
going to be able to upgrade this airplane so that is not going 
to be obsolete in 2025?
    General Bogdan. I believe we will, sir. There are a few 
points I will make.
    One is, when we do replace the next version of the computer 
or the brains in the airplane, we are requiring open standards 
and modular open system architecture, which will allow for the 
incorporation of new sensors and new capabilities much easier.
    Second, when we first originally designed the airplane, we 
knew many of our partners and FMS customers would want to put 
unique weapons on the airplane, so we have created a system 
that will allow us to integrate multiple kinds of weapons on 
the airplane, not trivial, but in an easier way.
    From both those perspectives, I believe the airplane is 
adaptable and growable.
    The third is, many of the capabilities inherent in the 
airplane today that make it special are software-based. 
Therefore, in the future, as new capabilities come on, like 
electronic warfare and electronic attack, we will be able to 
upgrade the software in an easier way than you would the 
hardware.
    Senator King. I think this has to be an important part of 
our whole acquisition process as we are buying 40-year assets, 
the Ohio-class submarine, the B-21, on and on.
    Secretary Kendall, was the attempt at jointness in this 
project a mistake in retrospect?
    Mr. Kendall. It is a good question, Senator. I think the 
honest answer is I am not sure.
    I was present at the inception of F-35. It started out as a 
technology program that was instituted by one of my 
predecessors when I was on the staff.
    We are now thinking about the follow-on aircraft for the 
Navy and the Air Force. I do not think we are going to repeat 
this. First of all, I think the design parameters are going to 
be quite different for the follow-on aircraft for the two 
services. We did get some benefit from commonality, but there 
is very little commonality in the structure. I think we still 
could get some of those benefits without having to have a 
single program.
    Senator King. You could get benefits in terms of?
    Mr. Kendall. Common avionics, common sensor systems, and so 
on. I think those still could be achieved without having a 
common program, necessarily.
    I think you would have to make that decision kind of as 
your plans for modernization and acquisition became more real 
and material as to whether or not it paid off or not. I think 
it is astonishing to me, frankly, that we have been able to 
keep this program together for so long, keep the three services 
fully committed, and keep all of our international partners 
fully committed. We have two that are on the fence right now. 
But at this stage of the game, everybody is still in.
    Pulling all that off is not a small achievement. That is 
very hard to do. I think we have to think very carefully about 
that. The more complexity you have in a program, the more risk 
you have. I do not know that the savings are necessarily worth 
that complexity and the risk that goes with it.
    Senator King. Thank you.
    Thank you, Mr. Chairman.
    Senator McCain. Senator Blumenthal?
    Senator Blumenthal. Thanks, Mr. Chairman.
    I thank you all for your being here today and for your 
insights on this very challenging program. It is as complex as 
it is critical to our national defense, and we should expect on 
this committee, and the American public should anticipate, that 
a weapons platform of this complexity will also have bumps in 
the road in its development and research. I take it none of you 
would disagree with that basic preposition.
    Despite that bumpy road, at some point, the F-35 as a whole 
has already made significant advancements in a number of areas. 
In particular, the F135 program provides truly a fifth 
generational power capability to the fleet.
    Every low-rate initial production LRIP [Low Rate Initial 
Production] contract, as I understand it, for the F135 has been 
on or below cost. The recent announcement of the LRIP lots 9 
and 10 will bring the price down another 3.4 percent from the 
LRIP 8.
    To date, the F135 conventional takeoff and landing engine 
cost has been reduced by 47 percent since the initial flight 
test engines. The STOVL [Short Take Off and Vertical Landing] 
engine cost has been reduced by 34 percent in the same time 
period. These are real achievements.
    In addition, Pratt & Whitney has already identified 
technology improvement options that will increase the thrust, 
durability, and fuel efficiency that could ultimately save 
billions of dollars for this program.
    The F135 is meeting the key fiscal year 2020 milestones--
again, my understanding--for mission capability and engine 
reliability.
    Are those facts accurately stated, so far as the panel 
knows?
    General Bogdan. Sir, they are very accurate.
    Senator Blumenthal. Thank you.
    All that said, I know that questions have been raised, 
General Bogdan, about the F135 performance. I take it from your 
testimony that quality has not been an issue, so far as the 
Pratt & Whitney supplier performance has been concerned?
    General Bogdan. Sir, 2 or 3 years ago, I would have told 
you that I was worried about that. I will tell you that Pratt & 
Whitney has done a good job of standing up a quality 
organization within Pratt & Whitney Military Engines that has 
dug down deep into their supply chain and helped improve that 
significantly.
    Senator Blumenthal. Thank you.
    Their supply chain, a lot of it is based in Connecticut. I 
can tell you from my experience in Connecticut that our 
suppliers and manufacturers have recognized the challenge we 
face for this century, literally. This weapons platform will be 
critical to our national defense throughout the century.
    We can look back and draw lessons, and we should, from the 
challenges that caused that improvement to take place, and 
maybe even the overall conceptual framework, as you suggested, 
Secretary Kendall. Should there have been more 
individualization of the platform for different services? But I 
can well recall that the conventional wisdom not so long ago 
was that the services ought to get together and collaborate and 
buy a single fighter. That was the wisdom du jour of 
contracting in its day, and now maybe lessons point in a 
different direction.
    I hope that we will learn lessons from this procurement 
experience, but I think there has to be a recognition that this 
weapons platform will do things that no fighter engine or 
platform has done in the past.
    Would you agree, Dr. Gilmore?
    Dr. Gilmore. The investment ranking is large, and the need 
that we have is large to deal with the threats that currently 
exist. If the F-35 does not succeed, we will be in a pickle.
    Senator Blumenthal. We have a common national interest in 
making sure it succeeds?
    Dr. Gilmore. Yes.
    Senator Blumenthal. Would you agree, Mr. Sullivan?
    Mr. Sullivan. Yes, I would. We definitely need to have this 
moving forward. This is the fifth generation.
    Senator Blumenthal. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Let me just say, in summary, it has been a 
scandal and the cost overruns have been disgraceful. This 
committee, in our authorization responsibilities, will take 
whatever actions we can to prevent a reoccurrence. It should 
not take 15 years and still not have an aircraft IOC, and with 
cost overrun after cost overrun.
    I guess my question, finally, Mr. Sullivan, do you think 
that we have learned the lessons and taken sufficient measures 
to prevent a reoccurrence? Or do we need to do some more?
    Mr. Sullivan. I think there is always room to do more. I do 
not think we have learned all the lessons yet. But I would say 
that if you go back 5 or 6 years, or go back to, say, 2010, we 
are not seeing as many F-35s or these big programs with 
requirements that are not achievable. I think we are learning 
some lessons that way.
    Some of that could be because of budget constraints. Some 
of it is from the work that Congress has done. Frankly, I think 
the Department has done a good job of trying to implement and 
drive down into the culture some better practices that talk 
about better buying power initiatives.
    We have a long way to go, though. I mean, there is still 
way too much cost growth on these programs. We are not using 
enough looking at requirements in an incremental way, using 
open systems, as Senator King was talking about. There are a 
lot of things that we can to do create more efficiencies.
    Senator McCain. Dr. Gilmore?
    Dr. Gilmore. I think Block 4 will be a good test of whether 
we have learned lessons. As mentioned in my written statement, 
I see a number of unrealistic assumptions with regard to Block 
4. I hope, as Secretary Kendall and General Bogdan take a look 
at how to structure that program, that they take a look at 
those issues. That will be a good test.
    Senator McCain. Secretary Kendall and General Bogdan, I 
hope you will pay attention to Dr. Gilmore's words, 
particularly given his responsibilities to the Department of 
Defense as well as to the Congress.
    I thank the witnesses. I believe that most of the takeaway 
from this is that we are making progress, that we have 
challenges that lie ahead, but there have been some significant 
improvements, as opposed to some years ago.
    I thank the witnesses for their hard work.
    This hearing is adjourned.
    [Whereupon, at 11:54 a.m., the hearing was adjourned.]

    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator John McCain
                        f-35 variant commonality
    1. Senator McCain. General Bogdan, how does the lack of commonality 
between the three variants complicate the management of the F-35 
program?
    General Bogdan. In some ways the F-35 variants are quite common 
(cockpit configuration, software, pilot-vehicle displays, helmet) but 
in other areas--mostly systems design (fuels, weapons bay) and 
structurally (bulkheads, wings, tails, lift-fan-B-model)--they are 
different. Despite the differences in the airframes, the manufacturing 
processes and tooling are common. Learning curve efficiencies and 
lessons learned from production processes will benefit all three 
aircraft variants.
    The variant differences do cause some complexities, including the 
need to clear each aircraft variants' flight envelope separately, 
conduct structural/durability testing on all three variants separately, 
and obtain separate airworthiness. However, there are many areas where 
commonality has reduced complexity, saved money, and limited the work 
needed to field combat capability. These include mission systems 
software, development and testing, weapons clearances and accuracy 
testing, ejection seat development and testing, a significant portion 
of maintenance technical data, simulator development and manufacturing, 
and most pilot and maintenance training curriculum. Because these are 
common across the three variants, they have reduced complexity, cost, 
and work.
    From an organizational perspective, the F-35 Joint Program Office 
(JPO) is a single organization focused on the overall program--
regardless of U.S. Service or International Partner. The JPO utilizes a 
single contracting, financial management, production management, 
security, engineering and legal office across all three variants. Our 
unified effort benefits from economies of scale through its contracts 
negotiations, test force, and global sustainment strategy.

    2. Senator McCain. General Bogdan, the original requirements for 
the F-35 called for 70-90 percent commonality between the three 
variants. You were recently quoted as saying in reality, they are 20-25 
percent common, mainly in their cockpits. In 2013, you were quoted as 
saying the F-35 program is really 3 aircraft programs running in 
parallel. Given the lack of commonality and the different requirements, 
priorities, and desires of the various customers, what benefits do you 
see as worthy enough to continue this program as a joint effort?
    General Bogdan. From an organizational perspective, the F-35 Joint 
Program Office (JPO) is a single organization focused on the overall 
program-regardless of US Service or International Partner. The JPO 
consolidates many actions including contracting, financial management, 
production management, security, engineering, testing and legal advice 
across all three variants. By consolidating these necessary program 
management functions, we gain the benefit of economies of scale, which 
makes the program more affordable and minimizes the amount of 
Government workload necessary to run the program. Continuing the 
program as a joint program will continue to benefit the US Services, 
International Partners and Foreign Military Sales customers in the 
areas of airframe and engine production contracts, spares procurement 
and supply, depot activities, and the Follow-on Modernization (FoM) 
program. We also believe it is in the tax payers' best interest to have 
one Government office speaking for and interacting with the F-35's 
airframe and engine contractors.
    Separating the Program may allow industry to uniquely charge the 
United States Air Force and United States Navy for work industry only 
does once. It may also cause significant variations in the manner in 
which global sustainment is delivered, significantly increasing the 
cost and complexity of the program.

    3. Senator McCain. Dr. Gilmore, how does the lack of commonality 
between the variants effect the operational testing of the F-35? Is the 
test community conducting, in effect, three separate testing plans?
    Dr. Gilmore. There is one operational test plan, but it is designed 
to have enough trials to be able to detect differences in operational 
effectiveness among the three F-35 variants. Differences among the 
variants in weapons carriage and loadouts, flight envelope (maximum 
``g'' available and maximum airspeed) and fuel loads may cause 
dissimilarities in combat performance among the variants. The test 
design uses statistical techniques to ensure adequate coverage of all 
operational missions (for example, suppression/destruction of enemy air 
defenses or defensive counter-air) and the operational mission 
environment (for example, day vs. night or threat severity) for all F-
35 variants without resorting to three separate tests of each variant 
for each mission and environment. The test designs were developed so 
that differences in performance between the variants could be detected 
and measured, independently (or nearly independently) of other factors 
in the operational space. Although each trial will be flown by a 
specific variant--i.e., ``mixed'' formations of multiple variants are 
not planned--there will be enough trials flown by each variant to 
ensure differences in combat effectiveness among the variants will be 
detected. While the test we are planning contains fewer trials than 
would three separate test plans for each variant, the test does contain 
more trials than would be required if all three variants were 
completely common and there was no expectation that performance 
differences among the variants existed.
                        the joint program office
    4. Senator McCain. The process the Joint Program Office has in 
place for determining what capability upgrades will be in which block 
increment, and when these capabilities are developed and procured, 
seems to be generally unsatisfying to all the services, and also the 
international partners. While the F-35 program has been filled with 
compromises, as many joint programs are, why would we continue in the 
future using a joint construct when there may be other alternative 
management structures to provide an F-35 customer with a particular 
capability when they actually need it?
    Secretary Kendall. Actually, I believe the U.S. Services and 
International Partners are generally satisfied with the process for 
determining capabilities and prioritizing and gating those capabilities 
into block increments. The majority of the capabilities planned for the 
initial block of Follow-on Modernization (FoM) are common capabilities 
that are agreed upon by the F-35 enterprise as requirements needed by 
all variants and all partners. In addition, there are multiple mandated 
capabilities that require integration to meet DOD requirements. The 
incorporation of unique Service and Partner capabilities is part of the 
process that has been vetted and agreed upon by the F-35 enterprise. 
Unique weapons and specific capabilities required by individual 
customers are being planned for integration in a process that factors 
in technology levels, required capacity, and need dates, much like the 
rest of the capabilities. Naturally, there are compromises involved, 
but not unlike any other single Service program that must factor in 
competing requirements. The FoM strategy is being structured with 
flexibility and agility in order to be able to meet the emergent 
requirements that will continue to come up in the future. In the case 
of the F-35, this joint and cooperative program will provide the United 
States and many of our allies with a 5th-generation strike fighter able 
to communicate, interoperate, and fight seamlessly across the spectrum 
of coalition warfare.

    5. Senator McCain. General Bogdan, how many people work for the 
Joint Program Office, including military, government civilians, and 
Full Time Equivalent (FTE) contractors?
    General Bogdan. At the time of the F-35 Lightning II hearing before 
the Senate Armed Services Committee on April 26, 2016, the F-35 Joint 
Program Office's records showed that there are over 2,500 professional 
men and women who go to work every day in support of the F-35 JPO and 
develop, test, procure, and support this world-class 5th-generation 
fighter for the U.S. Services, eight International Partners, and three 
Foreign Military Sales customers.
    The table below provides a breakdown of all F-35 JPO and Integrated 
Test Force (ITF) personnel, including military and Government 
civilians. Personnel are over multiple locations, including Arlington, 
Virginia, China Lake, California, Edwards Air Force Base (AFB), 
California, Eglin AFB, Florida, Fort Worth, Texas, Hill AFB, Utah, 
Jacksonville, Florida, Lakehurst, New Jersey, Marine Corps Air Station 
(MCAS) Beaufort, South Carolina, and MCAS Cherry Point, North Carolina.

 
----------------------------------------------------------------------------------------------------------------
               FTEs                        Authorized                 Assigned                  % Filled
----------------------------------------------------------------------------------------------------------------
USAF/USN/USMC Civilians...........                     1297                      1040                       80%
USAF/USN/USMC Military............                      185                       153                       83%
JPO Support Contractors...........                      518                       515                       99%
International Partner Personnel...                      166                       166                      100%
ITF Civilians.....................                      435                       381                       88%
ITF Military......................                      203                       180                       89%
ITF Support Contractors...........                      135                       132                       98%
----------------------------------------------------------------------------------------------------------------
    TOTAL JPO MANPOWER............                     2939                      2567                       87%
----------------------------------------------------------------------------------------------------------------

    It is important to note that the ITF personnel are the testers (693 
people), who are not considered part of the Program Office other than 
for cost and budget purposes. Any comparison of the size of the F-35 
JPO to other Navy or Air Force program offices should be made using the 
sum of Air Force/Navy/Marine Corps civilians, military, and support 
contractors (1708), not including International Partners or ITF 
personnel because that is the manner in which all other program offices 
in the Navy and Air Force measure and report their ``head count,'' or 
size. We included the International Partners and ITF personnel to be 
totally transparent.

    6. Senator McCain. General Bogdan, do you have responsibility to 
provide funding for the F-35? Who does?
    General Bogdan. The three United States Services (Air Force, Marine 
Corps, and Navy), eight International Partners, and three Foreign 
Military Sales (FMS) customers are responsible for providing the 
funding for the F-35 Program. As the Program Executive Officer (PEO), I 
manage and oversee the entire F-35 Program, to include the funds 
provided by the U.S. Services, Partner Nations, and FMS customers. The 
PEO's job is to deliver an affordable, reliable, and sustainable 5th-
generation fighter to our Warfighters, International Partners, and FMS 
customers who are participating in the program.

    7. Senator McCain. General Bogdan, do you have responsibility for 
the requirements of the F-35? Who does?
    General Bogdan. The U.S. Services and International Partners are 
responsible for establishing F-35 requirements through a disciplined 
governance structure. Overall, the Program Executive Officer (PEO) is 
responsible for meeting those requirements by delivering an affordable, 
reliable, and sustainable 5th-generation weapon system to our 
Warfighters, International Partners, and Foreign Military Sales (FMS) 
customers.

    8. Senator McCain. Secretary Kendall, in your estimation, does the 
current management structure of the F-35 program optimally align 
responsibility and accountability in providing the services the 
capability and capacity they require, when they require it, at an 
acceptable cost? Why or why not?
    Secretary Kendall. Yes I do. The F-35 Program Charter (Revision 2) 
was approved by the Deputy Secretary of Defense in March 2015. It was 
co-signed by the Secretaries of the Navy and Air Force. The purpose of 
the F-35 Charter is to document the business arrangements, management 
structure, funding guidelines, personnel support, and lead Service 
responsibilities. The Program Charter is an example of the level of 
attention and oversight afforded to the F-35 Program. The current 
management structure, which is codified in the F-35 Charter, provides 
optimal responsibility and accountability for a very complex Joint and 
Cooperative Program. U.S. Service requirements and capability are 
reviewed extensively and thoroughly as part of the DOD Joint 
Capabilities Integration Development System. The Joint Staff reviews 
the program semi-annually and, with Service input and feedback, 
provides U.S. guidance and direction for the F-35 Enterprise 
requirements review and decision bodies.

    9. Senator McCain. Secretary Kendall, do you believe that with the 
enhanced authorities for the Service chiefs provided in the fiscal year 
2016 NDAA, the Services could satisfactorily execute effective, but 
separate, F-35 follow-on modernization programs for their respective 
variants, as well as act as lead organizations for the international 
partners that also fly those variants?
    Secretary Kendall. I do not. The F-35 Program is in the process of 
completing the System Development and Demonstration phase; preparing 
for Initial Operational Test and Evaluation; transitioning from single-
year, production-based logistics and sustainment contracts to a longer-
term, Global Sustainment Strategy (GSS) and performance-based logistics 
contracts; and stepping off on the Follow-on Modernization (FoM) effort 
that will keep the F-35 viable and pacing the evolving threat for the 
next decade and beyond. The last thing that the F-35 enterprise should 
do right now is to break up the F-35 Joint Program Office (JPO) into 
separate, Service-led, variant-based entities. The FoM effort is 
largely a common-requirements effort. In other words, the U.S. Services 
and Partners have voted and prioritized common, DOD-mandated 
requirements and capabilities for integration across all three 
variants. That common effort is best managed and executed under the 
current program and management structure. While there are Service and 
Partner-unique weapons and capabilities planned for the initial block 
of FoM, these will also benefit from the synergies gained from 
experience, planning, and management structure resident in the current 
JPO arrangement. A transition to individual, Service-led F-35 variant 
program offices may be advantageous at some time in the future; 
however, now is not that time. The Services and our International 
Partners are actively and aggressively involved in the management, 
oversight, and execution of the F-35 JPO, and retaining the current 
structure for the foreseeable future is the most prudent approach.
            system development and demonstration (sdd) phase
    10. Senator McCain. General Bogdan, when do you project the System 
Development and Demonstration (SDD) phase to complete?
    General Bogdan. The testing portion of the Systems Development and 
Demonstration (SDD) phase will be completed by the fall of 2017. 
Release to the field of full 3F capability for the A model should occur 
in the late 2017 timeframe, with the B and C model's capabilities 
release in the early 2018 timeframe. This added time between the end of 
testing and release of capability accounts for the time necessary for 
the engineering and airworthiness communities to analyze the test data 
and certify the safety and 3F capabilities for operational use. The 
administrative closeout of the actual SDD contract will require some 
time beyond 2018, but all development and testing will be completed 
during this closeout period.

    11. Senator McCain. Dr. Gilmore, when do you project the System 
Development and Demonstration (SDD) phase to complete?
    Dr. Gilmore. SDD will likely not be complete before March 2018, at 
the earliest. This assessment is based on the following assumptions:
      Block 3i mission systems testing is complete and will not 
need to restart
      Block 3i stability fixes have been successfully 
transferred to the Block 3F software
      Block 3F mission systems has restarted in earnest with 
all SDD aircraft
      The balance of approximately 4,200 Block 3F mission 
systems baseline test points (the number as of the beginning of May) 
will be completed by the test teams, without significant deletions by 
the program
      No additional discoveries which cause significant delays 
or unplanned software releases (beyond those currently planned) occur 
in Block 3F flight testing
      All planned weapon delivery accuracy (WDA) events--which 
includes 25 events with air-to-air missiles or bombs and 19 WDA events 
supporting gun tests with the embedded gun in the F-35A and with the 
podded gun for the F-35B and F-35C--are completed before the end of 
SDD. As of the end of April, none of these weapons delivery accuracy 
events had been completed and will likely not begin before August 2016, 
after a version of software is released to flight test that will 
support the start the of the WDA events. The latest Program Office 
schedule shows that the missile and bomb events are planned to start in 
June and be complete by the end of November 2016, a schedule that I 
consider to be unrealistic. The program has prioritized 16 of the 25 
bomb and missile events to be completed to support flight certification 
of weapons releases for Block 3F; however, all events, including the 
WDAs with the gun, must be completed to support end-to-end fire control 
characterization for all required weapons prior to the start of IOT&E. 
The program's ability to complete these events before March 2018 will 
depend on efficiencies in completing WDA events and data analyses that 
has not been seen in the past (i.e., during the Block 2B and Block 3i 
WDA events) and the maturity of mission systems software to support the 
find-fix-track-target-engage-assess kill chain for each of these events

    12. Senator McCain. General Bogdan, will you need additional 
funding beyond fiscal year 2017 to complete System Development and 
Demonstration (SDD)?
    General Bogdan. The fiscal year 2017 President's Budget includes 
the needed System Development and Demonstration (SDD) funding 
requirements beyond fiscal year 2017 to complete SDD.
             initial operational test & evaluation (iot&e)
    13. Senator McCain. Dr. Gilmore, can you give us some perspective 
on what the historical rate of discrepancy discovery during IOT&E is 
for weapons platforms, and what that might look like for a system as 
complex as the F-35?
    Dr. Gilmore. Operational testing is designed to evaluate the 
mission capability of a system by exposing the system to the demands of 
an operational environment expected during combat. As such, IOT&E often 
leads to the discovery of problems not identified during development, 
or at least issues that were not fully characterized. Since 2011, I 
have documented in my annual reports many problems that were either 
identified during IOT&E, or were known prior to IOT&E but not addressed 
during development, of systems under DOT&E oversight. In 2014, DOT&E 
began to quantify the rates of problem discovery in all operational 
tests. In 2014 and 2015, approximately 40 percent of operational tests 
discovered new problems significant enough to negatively affect my 
assessment of the system, i.e., they contributed to my decision to call 
a system wholly or partially not effective, not suitable, or not 
survivable. If we add problems that were known but were not addressed 
during development, the percentage of operational tests in which 
significant problems are encountered climbs to 70 percent over the same 
period.
    For all systems, but for highly complex systems in particular, it 
is important for the program office to address known deficiencies 
during development, before commencing operational testing. In spite of 
a concerted effort by the F-22 program office to address deficiencies 
before IOT&E in 2004, testers identified 351 deficiencies in system or 
subsystem performance during IOT&E. As stated in my testimony, the F-35 
program had 1,165 open, documented deficiencies as of the end of March 
2016, 151 of which were Category 1--defined as deficiencies which may 
cause death, severe injury, or severe illness; may cause loss of or 
major damage to a weapon system; critically restrict the combat 
readiness capabilities of the using organization; or result in a 
production line stoppage. Of these 151 Category 1 deficiencies, 128 
were associated with the air vehicle and the remaining 23 were 
associated with the Autonomic Logistics Information System (ALIS) or 
support equipment. Furthermore, 95 of the 151 open Category 1 
deficiencies were categorized as ``high severity'' by the program or 
Services. The program continues to identify deficiencies at a rate of 
approximately 20 per month. During IOT&E, which will be the most 
realistic and stressing testing F-35 will undergo, the rate of 
discovery of deficiencies is likely to be greater than the current rate 
of 20 per month.
    New problems discovered in operational testing vary, in both type 
and severity, but tend to cluster into several categories. New 
suitability problems were typically caused by low reliability once 
placed in an operational environment, training and documentation 
issues, or usability problems that prevented operators from 
successfully employing a system in combat. New effectiveness issues 
primarily resulted from unexpectedly poor performance in a realistic 
operational environment or against a stressing threat. Survivability 
issues uncovered in operational testing in fiscal year 2015 were 
predominantly cybersecurity vulnerabilities. I expect the IOT&E for the 
F-35 will discover new problems in each of these categories, while also 
exposing the operational implications of known deficiencies in 
performance not corrected prior to the test.

    14. Senator McCain. General Bogdan, what is the program office's 
plan to ensure a successful start to IOT&E, including the plan to 
ensure sufficient test aircraft and appropriate simulators are 
supplied? How much is dependent on the services accepting and executing 
on your plan?
    General Bogdan. The F-35 Joint Program Office (JPO) has a plan in 
place to ensure delivery of sufficient test aircraft and simulators to 
begin Initial Operational Test and Evaluation (IOT&E). The aircraft 
requirement as specified in Revision 4 of the Test and Evaluation 
Master Plan (TEMP) called for 25 F-35s (6 instrumented aircraft from 
the United States Air Force, 6 instrumented aircraft from the United 
States Marine Corps, 6 instrumented aircraft from the United States 
Navy, 2 instrumented aircraft from the United Kingdom, 1 instrumented 
and 1 non-instrumented aircraft from the Netherlands, and 3 spare 
aircraft.)
    Instead of using all new Low Rate Initial Production (LRIP) Lot 9 
aircraft for IOT&E, the JPO worked with the JSF Operational Test Team, 
the Services, and International Partners to develop a course of action 
that reduced the number of required aircraft to 23 and modifies some 
earlier LRIP Lots 3, 4, and 5 aircraft to the Lot 9 configuration. This 
approach was fully vetted and accepted by the U.S. Services and 
International Partners. Additionally, the JPO worked with Lockheed 
Martin (LM) to give the IOT&E aircraft needing modifications priority.
    For simulators, the requirement is to have a Verification Simulator 
(VSim) available during IOT&E. To meet this requirement, the JPO is 
executing a development program to deliver a tactical simulation 
capability, formerly known as VSim, which will support IOT&E. This 
program is a combined LM and U.S. Government effort and is currently 
referred to as VSim/Joint Simulation Environment (JSE). LM is 
responsible for developing the aircraft simulation software model while 
the JSE team is responsible for developing the simulation environment 
and integrating all simulation models into that environment. The 
current VSim/JSE schedule is projecting availability in July 2018, 
which will be three months late to the IOT&E need date of April 2018; 
however, VSim/JSE capability will still provide utility as the full 
simulation capability will be delivered during the IOT&E period.
    The JPO anticipates all the TEMP requirements to begin IOT&E should 
be met by early 2018, which is about six months later than the original 
program plan put in place in 2013. There is an opportunity for an 
incremental or phased start of IOT&E earlier than 2018; however, this 
plan was not approved by Director, Operational Test and Evaluation.
                        follow-on modernization
    15. Senator McCain. General Bogdan, please explain the currently 
unfunded $700 million bill for the Technical Refresh #3 (TR3) 
processor? Why is this not included in the Follow-on Modernization 
budget? What other items are not included in the Follow-on 
Modernization budget?
    General Bogdan. The F-35 program initially projected the use of 
Diminishing Manufacturing Source funding, as required, to address 
hardware redesigns necessary for the treatment and/or replacement of 
multiple obsolescent parts. As threat analysis and requirements 
development efforts led to the identification of Follow-on 
Modernization (FoM) capability requirements and Block 4 content 
definitions, it became apparent that there were parallel and 
duplicative hardware changes and updates being forecast to meet both 
obsolescence and capability upgrade requirements. The most efficient 
and cost-effective solution was to consolidate hardware changes for 
obsolescence and Block 4 upgrades under a single comprehensive 
Technology Refresh #3 (TR3). The TR3 design will be competitively 
sourced and accomplished under the current fiscal year 2017 President's 
Budget. The full development, integration, and test/certification costs 
for TR3, following vendor down-select, are subject to POM-18 decisions 
to supplement the FoM budget. All other currently-defined Follow-on 
Modernization requirements are included in the FoM budget.

    16. Senator McCain. Dr. Gilmore, the requirements for the first two 
increments of follow-on modernization, Block 4.1 and 4.2 are due to be 
finalized this summer. What are the dangers of finalizing the 
requirements prior to completion of Initial Operational Test & 
Evaluation (IOT&E)?
    Dr. Gilmore. There will certainly be discoveries of deficiencies 
during IOT&E for which the program will need to develop fixes and 
conduct flight testing. Finalizing the requirements for Block 4.1 and 
4.2 before these deficiencies are addressed and ensuring the 
capabilities delivered in Block 3F allow the F-35 to be effective in 
combat, may cause the program to underfund these fixes and ``over 
commit'' to Block 4.1 and 4.2 capabilities, resulting in unrealistic 
and unachievable schedules and costs for executing Block 4. The program 
faced similar circumstances in early 2016, when instabilities and 
deficiencies in Block 3i software, in what was planned to be the final 
release, were carried into Block 3F software development. Failing to 
correct these deficiencies prior to adding capability in subsequent 3F 
builds became problematic and the program--rightfully so--stopped 
flight testing of Block 3F and returned to the Block 3i development to 
fix instabilities and address the Air Force's ``must fix'' deficiencies 
prior to that service's declaration of initial operational capability.

    17. Senator McCain. General Bogdan, your most recent program update 
indicates the program intends to pursue the F-35 modernization contract 
as a Fixed Price Incentive Fee (FPIF) contract. This is a change from 
previous plans to pursue the contract as a sole source Cost Plus Fixed 
Fee (CPFF) contract. Why the change? Why does a FPIF contract offer the 
government the best value?
    General Bogdan. In general, a fixed price contract provides the 
strongest incentive for a contractor to control costs. A Fixed Price 
Incentive Fee (FPIF) contract allows the contractor and the Government 
to share in cost savings and potential cost overruns and provides focus 
on the areas that are important to the Government. Provisions of this 
contract type also allow the Government to assist in managing potential 
cost growth and schedule delays yet provide a ceiling, beyond which the 
Contractor bears total cost responsibility. This contract type also 
provides the necessary insight into actual costs incurred, which is 
necessary to demonstrate program accountability. Although we recognize 
that the contract type is subject to approval by the Service 
Acquisition Executive, the Defense Acquisition Executive, and an 
element of negotiations, and not pre-determined until the time of 
award, the JPO believes that proceeding through the acquisition 
planning process while pursuing a FPIF contract type will result in the 
necessary rigor and discipline for our requirements review process, 
which will help us achieve our overall program objectives for 
Modernization.
           management of the follow-on modernization program
    18. Senator McCain. All witnesses, gentlemen, does the decision to 
manage the F-35 follow-on modernization program within the existing F-
35 program adhere to best practices identified by GAO and relevant DOD 
policies and statutes? Why or why not?
    Dr. Gilmore and Secretary Kendall. Managing the F-35 Follow-on 
Modernization program within the existing F-35 program does not adhere 
to the ``best practices'' identified by the GAO; it is also not 
consistent with the lessons learned from executing follow-on 
modernization of the F-22. As stated in my written testimony, the 
Department's current plans for executing F-35 Follow-on Modernization 
incorporate numerous unrealistic assumptions including, but not limited 
to, an overly optimistic schedule. For example, there is a four year 
gap between the final version of Block 3F software in late 2016 and the 
planned release of Block 4.1 in late 2020, without an interim software 
release to fix critical deficiencies found in the remaining 
developmental and operational testing. Pursuing this plan will 
inevitably result in new Block 4 capabilities being overlaid on the 
unresolved Block 3F deficiencies with a result analogous to the 
problems encountered when the program attempted to overlay unresolved 
Block 2B deficiencies onto Block 3i avionics hardware, and new Block 3F 
capabilities onto unresolved Block 3i problems. Another concern is that 
the proposed modernization schedule finalizes the content of Blocks 4.1 
and 4.2 in early 2016 and would award contracts to start simultaneous 
development of those two Blocks in 2018, well prior to completion of 
IOT&E and understanding the inevitable problems it will reveal. Also, 
the test periods and resources (test personnel and aircraft) allocated 
to complete Block 4 developmental and operational testing are not 
adequate to support the substantial and complex content planned for 
each increment of Block 4. Finally, the program recently identified the 
need for new Technical Refresh-3 processors, to provide the 
computational capacity needed to allow the new Block 4 capabilities to 
be hosted on the F-35, at a cost of $700 million that is currently 
unfunded. In my view, these issues demonstrate the need for the 
rigorous and critical oversight that would be provided by managing 
Block 4 as a separate program, thereby assuring the F-35 Follow-on 
Modernization program is executable and affordable, and that it does 
not repeat the substantial cost overruns and schedule slippages that 
have occurred during the ongoing F-35 Block 3F program.
    Mr. Sullivan. The decision to manage the F-35 follow-on 
modernization program within the existing F-35 program does not adhere 
to acquisition best practices. Managing the follow-on modernization 
program this way means that it would not have a Milestone B review-the 
DOD acquisition review that sets in motion oversight mechanisms 
including an acquisition program baseline; Nunn-McCurdy unit cost 
growth thresholds; and periodic reporting of the program's cost, 
schedule, and performance progress. These mechanisms form the basic 
business case and oversight framework to ensure that a program is 
executable and that Congress and DOD decision makers are informed about 
the program's progress. Best practices recommend an incremental 
approach in which new development efforts are structured and managed as 
separate acquisition programs. In addition, each separate program 
should have a business case that matches requirements with resources-
proven technologies, sufficient engineering capabilities, time, and 
funding-before product development begins. Because DOD does not plan to 
hold a Milestone B review, its approach for Block 4 modernization will 
not require the program to have such important reporting and oversight 
mechanisms in place.

    19. Senator McCain. Secretary Kendall, what lessons has the 
Department learned from the F-22 modernization program? Do you believe 
it was a good decision to establish the F-22 modernization program as a 
separate MDAP? Why or why not?
    Secretary Kendall. The Department learned many lessons from the F-
22 modernization program. The Department reviewed the F-22 
modernization program as well as the modernization efforts for the F-16 
and F/A-18 as we looked at the most cost effective, efficient, and 
flexible approach to F-35 modernization. One of the key lessons learned 
from F-22 was the need to establish a new contract for the 
modernization and to separate the budget for modernization into 
separate program elements and cost reporting elements. The F-22 
modernization program was initially added to the existing Engineering 
Management and Development contract, with budget included as part of 
the baseline development budget. F-35, on the other hand, has a 
separate modernization statement of work and contract. Additionally, F-
35 modernization is clearly broken out as separate program elements in 
the budget documentation with separate cost and earned value 
performance reporting. Due to the nature of how the F-22 program 
initially approached modernization, I believe it was a good decision to 
break out the modernization effort as a separate program. However, I 
believe that due to the prior planning and execution undertaken to 
provide full transparency and appropriate cost, schedule, and 
performance oversight, the F-35 modernization effort is best suited to 
be managed as an extension of the baseline program.
    The chart below shows those actions the Joint Program Office will 
implement to ensure full transparency without having the added 
administrative cost and burden of declaring a new separate Major 
Defense Acquisition Program.
    [Deleted. Chart retained in committee files]
    20. Senator McCain. Secretary Kendall, with the F-35 follow-on 
modernization effort being planned in increments for each block 
upgrade, it appears a good opportunity for fixed price contracts would 
be the best value for the American taxpayer for each increment of 
capabilities, would you agree?
    Secretary Kendall. I would envision a combination of fixed price 
type and cost reimbursable contracts as the F-35 Joint Program Office 
continues to mature the acquisition strategy for the Follow-on 
Modernization effort. A contract that includes mixed Cost Line Items, 
utilizing both fixed price and cost incentive where appropriate, will 
likely provide the optimum risk and responsibility apportionment.

    21. Senator McCain. Mr. Sullivan, what lessons regarding program 
management and execution can be learned from the F-22's follow-on 
development, yet another very complex fighter modernization program, 
but in many ways less complex than the F-35's program will be because 
the F-22 was for a single service from a single nation?
    Mr. Sullivan. Our experience with the F-22 highlighted that 
managing modernization programs of this magnitude within an existing 
program baseline hinders transparency. In March 2005, we found that the 
Air Force was managing its multi-billion dollar F-22 modernization 
efforts within the existing F-22 acquisition baseline and had not 
established separate knowledge-based business cases for each 
modernization increment. \1\ As a result, the F-22 baseline and 
schedule were not immediately adjusted to reflect the new timeframes 
and additional costs, comingling the funding and some content for the 
baseline development and modernization efforts-some content that had 
not been achieved under the baseline program were deferred into the 
modernization program. When the content, scope, and phasing of 
modernization capabilities changed over time, it appeared that the F-22 
program was fraught with new schedule delays and further cost overruns. 
The comingling of modernization efforts with the existing baseline 
reduced transparency and Congress could not readily distinguish the new 
costs associated with modernization funding from cost growth in the 
original baseline. We recommended that the Air Force structure and 
manage F-22 modernization as a separate acquisition programs with their 
own business cases-matching requirements with resources-and acquisition 
program baselines. In line with our recommendation, the department 
separated its F-22 modernization efforts, beginning with F-22 Increment 
3.2B, from the baseline program with a Milestone B review, which 
increased transparency and better facilitated oversight. Since then, 
the F-22 3.2B modernization program has achieved relatively positive 
outcomes.
---------------------------------------------------------------------------
    \1\ GAO, Tactical Aircraft: Air Force Still Needs Business Case to 
Support F/A-22 Quantities and Increased Capabilities, GAO-05-304 
(Washington, D.C.: March 15, 2005).

    22. Senator McCain. General Bogdan, do you believe the statutory 
and regulatory requirements for the management of a Major Defense 
Acquisition Program are a good for transparency and oversight? Why is 
the Follow-on Modernization program, estimated as costing over $8 
billion just for Block 4, so different that those requirements should 
not apply?
    General Bogdan. Follow-on Modernization (FoM) consists of 
improvements and upgrades to the existing Air System and is a 
continuation of the existing F-35 Program. FoM, as an element of the F-
35 Program, remains subject to all Major Defense Acquisition Program 
(MDAP) statutory and regulatory requirements and will be incorporated 
into existing and/or planned program documentation and reporting 
products, as appropriate. This approach provides a streamlined and 
efficient modernization effort that does not jeopardize visibility or 
oversight. To ensure congressional transparency and oversight into FoM 
performance, the Acquisition Program Baseline and Selective Acquisition 
Report will include FoM-specific Research, Development, Test and 
Evaluation Threshold and Objective targets. All FoM contracts will 
implement a capability-based work breakdown/reporting structure and 
will require cost and performance reporting data deliverables separate 
from the larger Systems Development and Demonstration program and 
consistent with MDAP requirements.
    Additionally, the JPO has reviewed the lessons learned from the F-
22 modernization program and ensured that the F-35 modernization 
program is fully transparent with respect to cost, schedule, and 
performance. The chart below shows those actions the Joint Program 
Office will implement to ensure full transparency without having the 
added administrative cost and burden of declaring a new, separate MDAP.
    [Deleted. Chart retained in committee files]
    23. Senator McCain. Dr. Gilmore and Mr. Sullivan, from your 
perspective, what would be the pros and cons of having the follow-on 
modernization program managed as a separate MDAP?
    Dr. Gilmore. Managing the F-35 Block 4 Follow-On Modernization 
program as a separate MDAP would assure the program rigorously 
addresses the significant content, cost, and schedule issues present in 
the program's current plans for executing Block 4 which are discussed 
in my written testimony. The current schedule for executing Block 4 is 
overly optimistic--the substantial upgrades in capability proposed are 
not consistent with the time being allotted for development and test, 
nor with the proposed test resources--and all costs are not well 
understood, as indicated by the recent $700 million unfunded 
requirement for new TR3 processors. The current estimate to fund the 
modernization program over the next six years is approximately $3 
billion, not counting the unfunded requirement for new processors, 
which exceeds the threshold to be designated as an MDAP. The Air Force 
initially tried to manage F-22 Follow-on Modernization as an extension 
of that aircraft's original program, but found that approach to be 
unworkable. Some assert making Block 4 a separate MDAP would increase 
its costs and delay its initiation. Those outcomes are hardly 
inevitable; in fact, at the insistence of the current Under Secretary 
for Acquisition, Technology, and Logistics, the Department's current 
acquisition procedures stress the need for, and provide numerous 
explicit opportunities for, streamlining, flexibility, and waivers in 
executing MDAPs that can be applied to F-35 Follow-on Modernization.
    Mr. Sullivan. Managing the F-35 follow-on modernization program as 
a separate program would increase transparency and oversight. Holding a 
Milestone B review would establish a new baseline and DOD would be 
required to separately account for cost, schedule and performance 
progress to Congress with regular, formal reports, known as Selected 
Acquisition Reports. This would provide Congress with clear insight 
into program cost, schedule, and performance progress and allow 
Congress to hold program officials accountable for achieving F-35 
modernization goals.
    One potential disadvantage to managing follow-on modernization as a 
separate program is that it could increase administrative burden on 
DOD. We recognize the potential for this. In 2015, we found that while 
programs spent considerable time and resources documenting the 
information required at milestone reviews, the majority of that 
documentation was not highly valued by acquisition officials. \2\ 
However, we also found that DOD can successfully streamline its 
milestone decision process like it did in cases of the F-16 and F-117, 
while still maintaining appropriate levels of transparency and 
oversight. Given the magnitude of the F-35 program, any additional time 
and money that might result from additional documentation is warranted.
---------------------------------------------------------------------------
    \2\ 22GAO, Acquisition Reform: DOD Should Its Decision-Making 
Process for Weapon Systems to Reduce Inefficiencies, GAO-15-192 
(Washington, DC: February 24, 2015)
---------------------------------------------------------------------------
            fiscal year 2016 ndaa certification requirement
    24. Senator McCain. Secretary Kendall and General Bogdan, the 
fiscal year 2016 NDAA limited funds for the procurement of F-35As until 
Secretary James certified that the F-35A aircraft delivered in 2018 
will have the full combat capability with Block 3F hardware, software 
and weapons carriage. Have you recommended or do you intend to 
recommend to Secretary James that she make the certification? Why or 
why not?
    Secretary Kendall and General Bogdan. The F-35 Block 3F 
incorporates advanced tactical avionics and opens the full flight 
envelope for the F-35. Block 3F weapons for the F 35A will include the 
GAU-22 internal 25-millimeter gun system, internally-carried AIM-120C 
Advanced Medium-Range Air-to-Air Missiles, GBU 31 Joint Direct Attack 
Munitions, GBU-39/B Small Diameter Bombs, GBU-12 Paveway II laser 
guided bombs, and externally-carried AIM-9X Sidewinder missiles.
    The F-35 Program Executive Officer provided a recommendation to the 
Secretary of the Air Force to certify, as required.
    That recommendation included a status of the Block 3F effort, 
related risk, and steps being taken to mitigate the risk so that she 
can reach her own decision whether to certify to the congressional 
defense committees that Low Rate Initial Production Lot 10 USAF F-35A 
Lightning II aircraft delivered during fiscal year 2018 will be fully 
combat capable.

    25. Senator McCain. Dr. Gilmore, in your opinion, will the aircraft 
delivered in 2018 have the full combat capability of Block 3F hardware, 
software and weapons carriage? Why or why not?
    Dr. Gilmore. Although I do not expect F-35 system development and 
demonstration to be complete prior to March 2018, it is possible that 
aircraft delivered by the end of 2018 could have the ``full'' combat 
capability the Services will ultimately decide to accept for Block 3F. 
However, the ``full'' Block 3F combat capability the Services accept is 
likely to be less than the Services now indicate they expect due to the 
high likelihood of significant unresolved performance deficiencies, 
even if completion of Block 3F development is delayed until mid-2018. 
It is unlikely all of the currently identified deficiencies will be 
rectified by mid-2018, let alone the additional deficiencies that will 
be discovered during the next year of developmental testing, as well as 
the deficiencies that will be revealed during initial operational test 
and evaluation. For example, a recent discovery is that the flight 
environment in the F-35 weapons bay may be too harsh for the tail fins 
of the Small Diameter Bomb (SDB) to withstand. The path forward for 
resolving this issue is currently undetermined, and the potential lack 
of the ability to employ the SDB, or substantial restrictions on the 
flight envelope in which it (or the AIM-120, if it is in the same 
weapons bay with the SDB) could be employed, would be a significant 
degradation relative to the F-35's currently expected combat 
capability.
                  total f-35 buy quantity revalidation
    26. Senator McCain. Secretary Kendall, last year's NDAA included 
report language directing the Secretary of Defense to either revalidate 
the F-35 total buy quantity of 2,443 for all variants or submit a new 
number by May 25, 2016. Can you update the committee on the 
Department's intention to meet this requirement, as well as any 
thoughts on the Department exploring other potential future force mixes 
of different capabilities?
    Secretary Kendall. The Deputy Secretary of Defense provided the 
Department's interim response to you and the other defense committees 
on May 25, 2016.
                   block buy / multi-year procurement
    27. Senator McCain. Mr. Sullivan, can you provide the committee any 
examples of a program pursuing a block buy or multiyear procurement 
strategy prior to a full rate production decision?
    Mr. Sullivan. While we have not done extensive analysis of DOD's 
use of the block buy approach, our most recent F-35 report does note 
that the use of a block buy prior to the full rate production decision 
has taken place on at least one other DOD program, the Littoral Combat 
Ship (LCS).

    28. Senator McCain. Secretary Kendall, do you consider the F-35 
block buy contracting proposal under consideration a multi-year 
procurement scheme? Why or why not?
    Secretary Kendall. A Block Buy Contract (BBC) is similar to a 
Multi-Year Procurement (MYP), with key differences. BBC is a contract 
strategy that purchases materiel in Economic Ordering Quantities (EOQ) 
for all lots of aircraft included in the Block Buy in the year prior to 
the first lot of aircraft. Unlike a MYP, a BBC does not imply a prior 
commitment to buy all aircraft in the out years of Block Buy because 
funding will be provided annually through congressional appropriations. 
There is no additional termination liability above the funds obligated, 
which are limited to regular Advance Procurement funding and EOQ 
funding for the first year. In addition, the material purchased with 
EOQ funding may be used in future lots of aircraft if quantities 
change. The Department requires authorization from Congress for any BBC 
strategy, aircraft quantities, and the purchase of advance materiel for 
EOQ in the year prior to the start of the BBC. The Department will work 
with the Senate Armed Services Committee and the other defense 
committees as we assess the merits of an F-35 BBC.

    29. Senator McCain. Secretary Kendall, would you consider 
supporting a block buy contracting proposal for the F-35 prior to 
completion of Initial Operational Test & Evaluation (IOT&E)? Why or why 
not?
    Secretary Kendall. I would consider supporting a Block Buy 
contracting proposal prior to completion of Initial Operational Test 
and Evaluation (IOT&E). I believe we will have a tremendous amount of 
knowledge relative to the capabilities and maturity of the weapons 
system as we begin IOT&E. Information gained during IOT&E will be 
valuable in pointing out areas where the program can improve as we 
transition to Follow-on Modernization. The Services and Department can, 
and will, continue to focus on modernizing the F-35 to meet and stay 
ahead of the evolving threat. However, I do not feel that waiting for 
completion of IOT&E is absolutely essential, particularly if the 
Department, Services, and Partners can realize significant savings for 
aircraft they intend to buy.
                             escape system
    30. Senator McCain. General Bogdan, the committee understands that 
the program office has identified three fixes to the escape system 
deficiencies and that they will all be complete by November of this 
year. Can you please provide the committee on the estimated timeline to 
complete the retrofit of all existing aircraft? What is the estimated 
cost to complete all of the retrofits, and who is responsible for 
funding these?
    General Bogdan. There are three technical solutions to the escape 
system that when in place will reduce the risk of neck injury to all 
pilots. All three are planned to be ready by the end of 2016. These 
solutions include:
    1.  A head support panel between the parachute risers. This 
eliminates the possibility of the head/helmet going between the 
parachute risers in low-speed ejections.
    2.  A pilot-selectable switch to delay parachute deployment for 
lighter weight pilots. This 80.5 second delay will reduce parachute 
opening shock and neck loads during the parachute deployment phase of 
the ejection.
    3.  A lighter Gen III pilot helmet. This will reduce neck loads 
during all phases of ejection (catapult, windblast, drogue, and 
parachute deployment).
    The current estimate to complete the entire retrofit effort is 24 
months. The first retrofits should begin in early 2017. The estimated 
cost for the complete fleet retrofit is approximately $35 million. It 
is the Government's position that this cost should be the 
responsibility of industry, particularly Martin Baker, and is in the 
process of negotiating this outcome with industry.

    31. Senator McCain. Dr. Gilmore, has the escape system been tested 
in other than stable conditions (i.e. out of control flight)? If no, 
what is the potential for further discrepancies to be discovered?
    Dr. Gilmore. DOT&E is not aware of any testing with the F-35 escape 
system in other than stable conditions. Off-nominal testing of other 
systems that have a similar escape system--where the canopy is 
shattered with the detonation of an embedded flexible linear shaped 
charge at the beginning of the ejection sequence--has shown that 
contact between canopy chards and the pilot can occur, adding risk to 
the ejection sequence; thus, the potential still exists for discovery 
of additional problems with the F-35 escape systems. To understand and 
characterize these interactions, the program should complete off-
nominal testing of the escape system as soon as possible, a 
recommendation I made in my F-35A Ready-for-Training Operational 
Utility Evaluation Report in February, 2013.
                        block 3i and 3f software
    32. Senator McCain. General Bogdan, please provide the committee an 
update on flight testing of the Block 3i and 3F software and current 
projected delivery of each
    General Bogdan. Block 3i Development:
      The final Mission System Block 3i development build was 
delivered to flight test on March 17, 2016, and completed flight 
testing on April 26, 2016. No additional Flight Science testing was 
required. The 3iP6.21 software was loaded on Operational Test aircraft 
and is currently still being flown.
      On April 28, 2016, the F-35 Program Executive Officer 
made the decision that all Block 3i work was complete and recommended 
to the Secretary of the Air Force that Block 3i software is ready for 
United States Air Force Initial Operational Capability.
    Block 3F Development:
      F-35 Block 3F software is now in development flight test. 
The software is projected to support remaining Weapon Delivery Accuracy 
surge events in summer 2016 (excluding gun events).
      All remaining required Block 3F capability is on track to 
begin flight testing in September 2016 and will support the final 
verification testing requirements for System Development and 
Demonstration.
      Development and testing continues to improve; activities 
include:
      -  increase/refine modeling, simulation, and software lab 
development cycles
      -  ground testing events for flight test risk reduction
      -  utilizing engineering test builds to safely and rapidly 
incorporate flight test feedback for final software capability 
solutions
      -  continuous reassessments of criticality and severity of 
``must-fix'' deficiencies for incorporation and verification of 
projected performance data requirements requested
      -  concurrent testing to include weapon surge events
    As previously stated, the full Block 3F combat capability will 
complete flight testing in the fall of 2017 timeframe, with A model 
capability fielded in late 2017 followed by B and C models capability 
in early 2018.

    33. Senator McCain. Dr. Gilmore, what are your biggest concerns 
regarding the Block 3i and 3F software and your estimate for their 
respective deliveries?
    Dr. Gilmore. My concerns with Block 3i are that even with 
improvements in its stability, it will still provide limited combat 
capability. Block 3i software was designed to simply enable the limited 
Block 2B mission systems capabilities, implemented using the F-35's 
original processing hardware, to work on the upgraded Technical Refresh 
2, or TR2, hardware used in the production of Lot 6 and later aircraft. 
An early version of Block 3i software was delivered in October 2014, 
when the Air Force accepted its first Lot 6 aircraft, although the 
capabilities this version provided were very limited and mission 
systems stability proved to be significantly worse than Block 2B. 
Subsequent versions of the software have undergone flight testing and 
fielding, the latest version having completed developmental testing at 
the end of April (referred to as 3iR6.21). The program recently 
completed an abbreviated flight test of Block 3iR6.21 and is conducting 
analyses of the stability of the mission systems to see if it is 
adequate to field to operational units and to be the final Block 3i 
build of software which would support the Air Force decision to declare 
initial operational capability (IOC). Initial indications are that the 
latest version of Block 3i has improved the stability of mission 
systems performance in-flight significantly relative to previous 
versions. However, pre-flight stability issues persist, and the status 
of the correction of the other deficiencies cited in my written 
testimony, for example in sensor fusion, is unknown. I expect that 
Block 3i will be accepted by the Air Force to support its IOC in the 
fall of this year, consistent with the threshold date for achieving 
that capability.
    My concern with Block 3F is that it is maturing slowly and is 
unlikely to ultimately provide the full set of combat capabilities the 
Services currently expect. Block 3F software development was paused in 
February this year when the latest version of Block 3F software--
version 3FR5--was so unstable that productive flight testing could not 
be accomplished. To fix the stability problems, the program reverted to 
Block 3i development and flight testing, and just recently restarted 
flight testing with an updated version of Block 3FR5 software that 
incorporates the new stability fixes from Block 3iR6.21. The program 
plans to release to flight testing the last build of Block 3F software 
that adds capability--3FR6--later this summer, then complete two more 
builds--3FR7 and 3FR8--to address problems expected to be discovered 
during testing. The efficiency in accomplishing test points during 
flight test may be improved from what was seen earlier in CY16, if the 
stability fixes completed in Block 3i and many critical deficiency 
fixes are realized in Block 3F. Delivering and testing the numerous new 
and advanced capabilities planned to be in Block 3F mission systems, 
which are specified in the program's Operational Requirements Document 
(ORD), presents significant challenges for remaining development and 
flight test. As of the end of April, over 80 percent of the baseline 
test points in the Block 3F test plans remained to be completed, 
including the most difficult envelope and avionics testing, along with 
most of the weapons deliveries. Based on the deficiencies currently 
cited as critical that must be fixed, and the program's currently 
booked test points, including weapon delivery events, I anticipate that 
development of Block 3F will complete no earlier than the middle of 
calendar year 2018. However, the Services may ultimately decide to 
accept significant deficiencies in Block 3F mission systems 
capabilities relative to their current expectations in order to keep 
the program within its currently stated cost and schedule. In that 
event, the costs and time required for correction of deficiencies and 
implementation of forgone capabilities would carry into Block 4 
development, and adverse findings during initial operational test and 
evaluation would be likely.

    34. Senator McCain. Secretary Kendall, under what type of contracts 
are the deliveries of software blocks, fixed price or cost plus?
    Secretary Kendall. Block 3i and 3F software is delivered under the 
F-35 System Development and Demonstration contract, which is a cost-
plus incentive fee contract. Block 3F will be the last block of 
software delivered under this contract.
             autonomic logistics information system (alis)
    35. Senator McCain. General Bogdan, please provide an update on the 
estimated delivery of ALIS version 2.02, which is required for Air 
Force Initial Operational Capability (IOC). DO you believe this will 
impact the Air Force's declaration of IOC within their planned window?
    General Bogdan. The basic Autonomic Logistics Information System 
(ALIS) 2.0.2 capability will be available for fielding in late 
September 2016. However, a portion of this capability (engine 
integration) has been delayed beyond this. We are working through 
technical software challenges and expect that full 2.0.2 capability 
will be available for fielding prior to the end of December 2016.
    It is important to note that United States Air Force (USAF) Initial 
Operational Capability (IOC) is not fully dependent on ALIS 2.0.2 
delivery. The USAF requirement for IOC with respect to ALIS is that the 
system be able to support deployed combat operations. The decision as 
to which version of ALIS is adequate for deployed operations is a USAF 
decision.

    36. Senator McCain. Secretary Kendall, what type of contract is 
ALIS being developed under?
    Secretary Kendall. Autonomic Logistics Information System (ALIS) 
development is covered under the F-35 System Design Development 
contract, with a cost-plus incentive fee construct.

    37. Senator McCain. Dr. Gilmore, can you provide an assessment of 
the ALIS program and what its greatest risks are?
    Dr. Gilmore. Overall, ALIS has demonstrated steady, but slow 
improvement. Nonetheless, deficiencies and usability problems require 
users to employ workarounds, which are often time- and labor-intensive, 
to complete normal maintenance tasks and set up operations for 
deployment. Service-led deployment exercises conducted during the past 
year have shown that, despite a more modular version of the hardware 
components, transferring data from the home-station unit to the 
deployed location is problematic, requiring the services of contractor 
personnel to ensure aircraft data files are accurate and complete.
    Two major software releases, ALIS 2.0.2 and 3.0.0, are planned 
before completion of F-35 development, but schedule risks exist in 
delivering the capability currently expected for each of these 
releases. As noted in my annual report, the program has previously 
deferred capability content of ALIS software releases (i.e., ALIS 2.0.1 
planned for Marine Corps initial operational capability (IOC)) to meet 
schedule; however, this pattern of behavior cannot be sustained through 
the rest of F-35 development. Completing the development, testing, and 
fielding of the capabilities planned for ALIS 3.0.0 before the end of 
development is high risk. ALIS 3.0.0 is required prior to the start of 
initial operational test and evaluation; however, progress has been 
limited as the program is still struggling to deliver planned ALIS 
2.0.2 functionality, which the program now says is at least 60 days 
late. Another area of high risk is cybersecurity. Although the risks 
from a breach in cybersecurity are not limited to ALIS components and 
its supporting network infrastructure (i.e., they apply to the F-35 air 
vehicle as well), the program and Marine Corps have been resistant to 
support cybersecurity testing of operational components due to a 
concern that such testing would disrupt day-to-day flight operations. 
The limited testing completed to date on ALIS components has revealed 
significant deficiencies that must be corrected which validates the 
requirement to complete all cybersecurity testing planned for the 
balance of F-35 development. Disruptions that could occur during combat 
resulting from a cyber attack that exploits unrealized vulnerabilities 
due to inadequate testing would clearly be much more disruptive and 
serious than disruptions occurring now when the F-35 is not being used 
in combat.
    Beyond these risk areas, the program also faces a number of 
challenges to address within ALIS:
      Deployability--Though the program has begun fielding the 
more deployable ALIS hardware and both the Air Force and Marine Corps 
have conducted deployment demonstrations with this hardware, software 
deficiencies and problems with data transfer make it difficult for 
units to rapidly achieve readiness for operations once they deploy.
      Data Integrity and Process Maturity--Units have 
difficulty maintaining data integrity when attempting to use spare 
parts or transfer data. Missing or inaccurate electronic equipment 
logbooks require manual tracking and time-consuming corrections which 
adversely impact maintenance and operations.
      Lack of Redundancy--ALIS data flow from operational units 
through the single U.S. Central Point of Entry (CPE) at Eglin AFB and 
the single operational Autonomic Logistics Operating Unit (ALOU) at 
Fort Worth. The program is working to create an alternate 
``Operationally Representative Environment'' that will allow testing of 
ALIS off of the operational grid, but currently has no redundant 
systems for the CPE or ALOU.
      Action Requests (ARs)--Maintenance personnel submit ARs 
to seek assistance from Lockheed Martin, but the process is inefficient 
and units do not have visibility into ARs submitted by other units 
which can delay completion of maintenance.
      Immaturity of ALIS Applications--Pilots find the Off-
board Mission System (OMS) used for mission planning difficult to use 
because it does not include all needed capabilities. Since the program 
does not provide dedicated OMS training, pilots also find OMS difficult 
to learn. The Training Management System (TMS), which is used to track 
pilot and maintainer qualifications, has generally not met Service 
needs, causing units to track qualifications outside of ALIS and 
increasing the risk personnel will be assigned to tasks for which they 
are unqualified. Other applications also have functionality and 
usability deficiencies.
      Immaturity of ALIS Training--Formal ALIS training relies 
on PowerPoint presentations that do not reflect how ALIS actually 
performs and does not address currently required workarounds. Many 
personnel are forced to learn to use ALIS on the job at the unit level, 
increasing the risk of inconsistent processes and inefficient practices 
while increasing the risk of errors.
                          lessons learned (?)
    38. Senator McCain. All witnesses, gentlemen, what are the lessons 
to be learned from the troubles of the F-35 program? How are they being 
applied to acquisition and program management decisions today? What 
specific steps have been put in place to ensure this ``acquisition 
malpractice'' is not repeated? What steps can Congress take to ensure 
future major acquisition programs such as the B-21 bomber, and Next 
Generation Air Dominance are developed and procured more rapidly and at 
reasonable cost to the American taxpayer?
    Dr. Gilmore. We must develop requirements that are technically 
feasible, operationally sound, combat mission-focused, and affordable, 
which can only be accomplished if both operators and engineers are full 
partners in that development, which is not now the case. We should 
pursue more evolutionary upgrades than revolutionary leaps forward, and 
develop and approve operational requirements accordingly. We must 
initiate programs using realistic, independently- and critically-
reviewed estimates of cost, schedule, and technical readiness. The 
independent cost-estimating provisions contained in the Weapon System 
Acquisition Reform Act have been very helpful with regard to cost 
realism. Similar initiatives are needed regarding independent, critical 
review of technical readiness and schedule. We must be realistic 
regarding what modelling and simulation can and cannot do, particularly 
with regard to (but not limited to) substituting for live testing, 
rather than imposing unrealistic assumptions regarding what modelling 
can do in order to make program costs and schedules fit unrealistic 
targets that will never be met. We should lengthen the tenure of 
program managers sufficiently to eliminate the existing incentive to 
rationalize away and pass on problems to a successor. We should 
continually critically review programs' progress and be prepared to 
recognize and, if warranted, re-structure or terminate programs that 
are failing. We must demand leadership with the expertise and courage 
to actually do what I list above and hold that leadership accountable. 
Prior to its re-structure in 2010, the F-35 program and its leadership 
(both within and above the program office) were deficient in all of the 
above areas. Developing realistic requirements, cost estimates, and 
schedules for executing F-35 Block 4 development using the principles 
cited above are critical to Block 4's success. Unfortunately, as I 
discussed during my testimony, the program's current plans for Block 4 
development incorporate numerous unrealistic assumptions.
    Secretary Kendall. There are numerous lessons learned from the F-35 
Program. The first lesson that became apparent early on was the 
requirement for technology demonstrators, nominally required to 
demonstrate vertical lift and common configuration concepts, as opposed 
to more robust representative prototypes was not optimal. Inadequacies 
in the technology demonstrators led to underestimating the weight of 
the aircraft, requiring additional time and money, and an almost 
immediate re-baselining of the development program. Much of the future 
of Joint Strike Fighter cost growth was largely written when budget and 
pricing decisions were made in 2001 based on those unrealistic and 
immature expectations with regard to cost and schedule. Additionally, 
acquisition reform initiatives from the mid-1990s had transferred much 
of the responsibility for requirements interpretation and integration 
from the Government to the contractor. This has proven to be a faulty 
arrangement. Finally, a critical lesson we learned was that 
concurrency, on the level of the F-35 Program, is not sound acquisition 
practice. Buying as many aircraft as we did, prior to having a stable 
and producible design, created difficulties across the F-35 enterprise 
and will result in large modification costs. Better Buying Power 
initiatives put in place over the last five years have resulted in an 
increased focus on cost reduction and responsible program management. 
Following the Nunn McCurdy cost breach, subsequent certification, and 
re-baselined program, cost and schedule performance have been largely 
as predicted and stable. There are still technical challenges that have 
surfaced and been addressed or are still being addressed, but that is 
normal for any program in development. However, the unrealistic and 
optimistic basis for which this program was initially established has 
been replaced by responsible realism and a ``prove it'' attitude on the 
part of the oversight and management team. The best thing that Congress 
can do to ensure future programs are established, developed, and 
procured at the most reasonable cost to American taxpayers is to leave 
in place the Department's current acquisition oversight structure. This 
will allow the positive trends seen over the past five years on this 
program and others to continue.
    Mr. Sullivan. While there are numerous lessons to be learned from 
the F-35 program, the primary lesson is that programs with high levels 
of concurrency between technology development and product development, 
and/or between developmental testing and production are likely to 
experience significant cost and schedule problems. Our prior work on 
knowledge-based acquisition approaches shows that a knowledge deficit 
early in a program can cascade through design and production, leaving 
decision makers with less knowledge to support decisions about when and 
how to best move into subsequent acquisition phases that commit more 
budgetary resources. Demonstrating technology maturity is a 
prerequisite for moving forward into product development, during which 
time the focus should be on design and integration. A stable and mature 
design, proven through testing, is also a prerequisite for moving 
forward into production, where the focus should be on efficient 
manufacturing. In 2016, our analysis of DOD's major defense acquisition 
programs found that programs still did not fully apply knowledge-based 
best practices aimed at decreasing concurrency. \3\ For example, some 
programs were still carrying technology risk well into system 
development or are proceeding into production before manufacturing 
processes are under control. We also found less use of competition 
measures throughout the acquisition life cycle and overlap between 
developmental testing and production, which threaten programs' 
abilities to meet their cost, schedule, and performance objectives.
---------------------------------------------------------------------------
    \3\ GAO, Defense Acquisitions: Assessments of Selected Weapon 
Programs, GAO-16-329SP (Washington, DC: March 31, 2016).
---------------------------------------------------------------------------
    There have been several recent initiatives by Congress and DOD that 
have been aimed at improving program performance such as the Weapon 
Systems Acquisition Reform Act of 2009 (WSARA) and DOD's ``Better 
Buying Power'' initiative. Both of which seem to have improved some 
program results. For example, programs that started development after 
the implementation of the WSARA and DOD's ``Better Buying Power'' 
initiatives began in 2010 have achieved cost reductions or shown less 
cost growth than those that began development before 2010.
    A particular challenge for Congress is the fact that committees 
must often consider requests to authorize and fund a new program well 
ahead of the start of product development-the point at which key 
business case information would be presented. For example, a budget 
request to begin system development could come 18 months before the 
actual program decision. Given this time lag, Congress could be making 
critical funding decisions-which in effect authorize the start of 
development- with limited information about program risk factors, 
systems engineering progress, and the soundness of the program's 
business case. Therefore, to ensure future weapon systems are developed 
and procured more rapidly and at a reasonable cost, Congress could 
focus on ensuring that programs have a knowledge-based acquisition 
approach with an executable business-case that matches requirements 
with resources before starting system development. Partly, this can be 
done by requiring DOD to report on each major acquisition program's 
systems engineering status in the department's annual budget request, 
beginning with the budget requesting funds to start development. In 
addition, ensure that programs demonstrate a product works as intended 
through development testing before production begins.
                               __________
              Questions Submitted by Senator Joe Donnelly
                         f135 engine components
    39. Senator Donnelly. Lt Gen Bogdan, I understand that certain 
components or subassemblies in the F135 engine are built overseas. 
Could you provide a comprehensive list of the components of 
subassemblies that are built or assembled overseas?
    General Bogdan. Of the over 4,000 F135 engine components (parts), 
there are 272 parts with an international source supplier--260 of the 
272 parts are sourced to suppliers in member nations of the F-35 
International Partnership. In addition to the international sources, 
there is a U.S. source for 150 of these 272 components. We are prepared 
to provide the Committee a briefing if any additional information is 
required.

    40. Senator Donnelly. General Bogdan, for any of these components 
or subassemblies, is any of the engineering and design effort 
supporting that work provided by overseas workers? If so, for which 
ones is this true?
    General Bogdan. Engineering and design effort is provided for 75 
out of the 272 parts with international suppliers. We are prepared to 
provide the Committee a briefing if any additional information is 
required.
                        alternate engine program
    41. Senator Donnelly. The Department of Defense included funding 
for the F-35 alternate engine from fiscal year 1996 through fiscal year 
2007. What benefits did the alternative engine program and the 
associated competition between the F135 and F136 yield for the F-35 
program overall?
    Secretary Kendall and General Bogdan. Almost $3 billion was 
invested in the F136 engine through fiscal year 2007. The F136 
alternate engine contributed significant risk reduction for the F-35 
propulsion program. While the F136 did not make it into competitive 
production, it did allow the Department to manage the program's 
propulsion efforts to a point where the risk involved with a single 
engine provider was deemed manageable. In addition, the F136 program 
provided the Department with a competitive industrial base alternative 
for tactical aircraft size propulsion systems. Development of the F136 
helped in enabling a competitive engine contractor to continue with the 
advanced propulsion programs the Department is working on now that will 
benefit us in the future. The Department does not have empirical data, 
but we also believe that the F136 program resulted in an increased 
emphasis on cost and responsiveness on the part of the F135 prime 
contractor.
    Mr. Sullivan. We have not conducted any recent analysis 
specifically addressing the benefits or effects of the competition 
between the F135 and F136. Our last assessment of the alternate engine 
program was in 2010. \4\
---------------------------------------------------------------------------
    \4\  GAO, Defense Acquisitions: Analysis of Costs for the Joint 
Strike Fighter Engine Program, GAO-07-656T (Washington, D.C.: March 22, 
2007). GAO, Joint Strike Fighter. Assessment of DOD's Funding 
Projection for the F136 Alternate Engine, GAO-10-1020R Washington, 
D.C.: September 15, 2010).

    42. Senator Donnelly. Mr. Sullivan, can you explain further the 
April 2016 GAO assessment that the F35A and B engines are at 55 percent 
and 63 percent (respectively) of where the program expected them to be?
    Mr. Sullivan. According to data provided by Pratt & Whitney, the 
reliability growth curves established for the F-35A engine-which is the 
same engine being used on the F-35C-projected that on average, the 
engine should have been achieving 142 hours between failures as of 
September 2015. However, as of as of September 2015, actual engine 
performance data collected and provided to us by Pratt & Whitney 
indicated that the F-35A engine was only averaging 79 hours between 
failures across the operational fleet. Similarly, Pratt and Whitney's 
growth curves projected that the F-35B engines should have been 
achieving 106 hours between failures as of September 2015, while the 
actual engine performance data as 0T September 2015 indicated that they 
were only averaging 67 hours across the operational fleet at that time.

    43. Senator Donnelly. Mr. Sullivan, General Bogdan's testified that 
``today the F-35 engine has about 52,000 fleet hours on it, and it's 
maintaining about a 94 percent full mission-capable rate.'' Please 
explain the 94 percent mission capable rate as compared to GAO's 
assessment of the engines being at 55 percent and 63 percent of where 
they were expected to be.
    Mr. Sullivan. We have not seen the specific data or analysis 
underpinning General Bogdan's claim that the F-35 engine was 
maintaining a 94 percent full mission-capable rate. That said, it is 
important to note that ``mission capable rate'' is a different measure 
than the reliability metrics we reported on, so the data points are not 
directly comparable. According to DOD, mission capable rates measure 
the ability of a system to perform its intended missions, while the 
reliability metrics we reported, mean time between failures-design 
controlled, track the amount of time between failures that are directly 
attributable to the design of the aircraft. In addition, General 
Bogdan's assessment appears to combine and average the data from all F-
35 engines (F-35A, F-35B, and F-35C) while the data we reported makes a 
distinction between the F-35A / F-35C engines and the F-35B engines.
                        f-35b lift fan overhaul
    44. Senator Donnelly. Indiana's Rolls Royce factory opened the 
first repair and overhaul facility for the F-35B lift fans in March 
2015. The facility serves a critical need in keeping the F-35B flying 
safely and does both the initial testing and regularly scheduled 
maintenance for the liftfan system. General Bogdan, what is the annual 
capacity of the Rolls Royce facility in Indiana to overhaul lift fans?
    General Bogdan. The annual capacity is estimated at 64 Lift Fans 
based on a normal 1-shift, 5-day work week.

    45. Senator Donnelly. Are there any barriers to increasing 
production/capacity at the Indiana lift fan facility?
    General Bogdan. There are no known barriers to increasing Lift Fan 
production/capacity.

    46. Senator Donnelly. Based on the USMC's procurement of 353 F-
35B's and their forecasted utilization of 25 flight hours per month, 
how many lift fan overhauls does the Joint Program Office estimate need 
to be completed for the fiscal years 2018 through 2030?
    General Bogdan. An estimated 330 Lift Fans will be overhauled 
between fiscal year 2018 and fiscal year 2030. The by-year breakout is 
shown below. In addition to Maintenance Repair and Overhaul (MRO) 
activities, all production Lift Fans utilize a common resource--the 
Lift Fan Acceptance Test Cell. A second shift serving this facility 
will allow the combined yearly MRO and production rates to exceed the 
64 Lift Fan per year.

 
------------------------------------------------------------------------
                     Fiscal Year                         MRO Forecast
------------------------------------------------------------------------
2018................................................                 17
------------------------------------------------------------------------
2019................................................                 13
------------------------------------------------------------------------
2020................................................                 15
------------------------------------------------------------------------
2021................................................                 24
------------------------------------------------------------------------
2022................................................                 20
------------------------------------------------------------------------
2023................................................                 22
------------------------------------------------------------------------
2024................................................                 25
------------------------------------------------------------------------
2025................................................                 27
------------------------------------------------------------------------
2026................................................                 28
------------------------------------------------------------------------
2027................................................                 31
------------------------------------------------------------------------
2028................................................                 33
------------------------------------------------------------------------
2029................................................                 36
------------------------------------------------------------------------
2030................................................                 39
------------------------------------------------------------------------
Total...............................................                330
------------------------------------------------------------------------

                               __________
             Questions Submitted by Senator Mazie K. Hirono
                           acquisition reform
    47. Senator Hirono. Secretary Kendall and Lt. Gen. Bogdan, 
sometimes a program can experience delays and issues as a result of the 
rules and regulations that make up our acquisition process. As you 
know, this committee under the leadership of Chairman McCain and 
Ranking Member Reed is looking at the acquisition process to find ways 
to improve the way we procure systems. Are there any areas where 
changes to the current process could have benefitted the Joint Strike 
Fighter program in the past and more importantly are there areas to 
change which can help this program as well as others succeed in the 
future?
    Secretary Kendall and Lt. Gen. Bogdan. I appreciate the support 
that the Senate Armed Services Committee (SASC) has provided to the F-
35 Joint Strike Fighter program as well as other acquisition programs 
in the past. With the help of the SASC, the F-35 Program has realized 
stable costs across the areas of development and procurement for the 
five years since the program was re-baselined following the Nunn 
McCurdy certification. SASC guidance was instrumental in the transition 
to fixed price production contracts earlier than initially planned. The 
move to fixed price production contracts, in conjunction with the 
Department's emphasis on should cost affordability initiatives, helped 
to put the F-35 unit costs on a path to realize significant savings for 
the U.S. Services and our International Partners and allies. The use of 
fixed price-type contracting was appropriate at that time for that type 
of contract. However, that reasoning cannot and should not be applied 
wholesale across the breadth of the Department's acquisition contracts. 
The ability to negotiate a fixed price-type contract for the Low Rate 
Initial Production (LRIP) Lot 6 contract was achievable because of the 
knowledge and insight gained into actual costs from the prior five LRIP 
contracts. If that same logic had been applied to the development 
contract, the Government would have been forced to accept far more risk 
and likely incur costs in excess of the negotiated cost-type contract.
    I believe the most effective way that the SASC can help the F-35 
and other programs in the future is to allow the Department to retain 
the current acquisition management and oversight structure. The 
Department has seen improvements in all measures of acquisition 
performance over the past seven years. This improvement can be traced 
to implementation of the Weapons System Acquisition Reform Act of 2009 
(WSARA) and the Better Buying Power initiatives from 2010 to the 
present. Both of these acquisition improvement initiatives involved the 
Department working together with Congress to actively reform and 
improve the acquisition process. However, initiatives in the current 
legislation, such as the dissolution of the Office of the Under 
Secretary of Defense for Acquisition, Technology, and Logistics (USD 
AT&L), among others, would reverse key aspects of WSARA and slow the 
implementation of many of the Better Buying Power initiatives.
                               __________
               Questions Submitted by Senator Jim Inhofe
                     f-35 operational capabilities
    48. Senator Inhofe. Lt. Gen. Bogdan, what capabilities does the F-
35B have with the Block 2B software? How do those capabilities compare 
to legacy aircraft and ability to execute combat missions in a denied 
access environment?
    Lt. Gen. Bogdan. Block 2B provides initial warfighting capability 
to the F-35 fleet, including basic avionic and mission system 
capabilities, improved flight envelope, and internal weapons carriage 
and employment for the AIM-120C Advanced Medium-Range Air-to-Air 
Missile and the GBU-31 Joint Direct Attack Munition. It enables the 
mission areas required by the U.S. Marine Corps to support Initial 
Operational Capability, including close air support, limited offensive 
and defensive counter-air, limited suppression and destruction of enemy 
air defenses, air interdiction, assault support escort, and armed 
reconnaissance. At the current time, Block 2B equipped F-35B aircraft 
are only capable of 5.5Gs. The Joint Program Office is exploring a path 
that will allow F-35B aircraft with Block 2B to operate out to 7.0Gs by 
the end of 2017. The F-35's unique combination of stealth, advanced 
sensor suite, data fusion, electronic warfare, and battlespace 
situational awareness allow it to perform all of these missions in a 
denied environment to a level that would not be possible with legacy 
platforms like the F-16, F/A-18, and AV-8B.

    49. Senator Inhofe. Lt. Gen. Bogdan, same questions for the F-35A 
with the Block 3i software--its capabilities and comparison to legacy 
aircraft?
    Lt. Gen. Bogdan. Block 2B and Block 3i End-State software loads, 
2BR5.3 and 3iR6.21 respectively, represent a common level of capability 
that we have begun to roll-out to the fleet. Block 3i aircraft stand 
out in that they operate on upgraded hardware that will allow for 
capability expansion with Block 3F software, and they utilize the full 
capability of the Generation III Helmet Mounted Display System. Block 
3i provides initial warfighting capability to the F-35 fleet, including 
basic avionic and mission system capabilities, improved flight 
envelope, and internal weapons carriage and employment for the AIM-120C 
Advanced Medium-Range Air-to-Air Missile and the GBU-31 Joint Direct 
Attack Munition. It will enable the mission areas required by the U.S. 
Air Force to support their Initial Operational Capability (IOC), 
including basic close air support, interdiction, and limited 
suppression and destruction of enemy air defenses in a contested 
environment. The F-35's unique combination of stealth, advanced sensor 
suite, data fusion, electronic warfare, and battlespace situational 
awareness allow it to perform all of these missions in a denied 
environment to a level that would not be possible with legacy platforms 
like the F-16, F/A-18, and AV-8B.

    50. Senator Inhofe. Lt. Gen. Bogdan, what additional operational 
capabilities does Block 3F bring to the F-35? What combat missions will 
it be able to execute?
    Lt. Gen. Bogdan. Block 3F will provide full F-35 warfighting 
capability by incorporating advanced decision aids, integration of 
internal and external sensors, additional radar modes, enhanced 
electronic warfare capabilities, enhanced geolocation, embedded 
training, full datalink capabilities, threshold weapons (to include 
external carriage and employment), and expanded flight envelopes. U.S. 
F-35s will be capable of employing the following weapons in Block 3F, 
in some cases depending on variant:
      AIM-120C/D Advanced Medium-Range Air-to-Air Missile 
(AMRAAM)
      GBU-31 Joint Direct Attack Munition (JDAM) 2,000 lbs
      GBU-32 Joint Direct Attack Munition (JDAM) 1,000 lbs
      GBU-12 Paveway II
      GBU-39/B Small Diameter Bomb (SDB I)
      AIM-9X Sidewinder
      AGM-154 Joint Stand-Off Weapon C (JSOW-C)
      GAU-22 Gun System (internal or external missionized gun 
pod)
    Block 3F takes full advantage of the Tech Refresh 2 suite of 
hardware by incorporating new software functionality that enables all 
of the mission areas specified in the Joint Strike Fighter Operational 
Requirements Document:
      Air Interdiction (AI), moving and stationary targets
      Offensive Counter Air (OCA), fighter sweep
      Defensive Counter Air (DCA), cruise missile defense, 
fighter and bomber
      Close Air Support (CAS), battlefield and urban
      Strategic Attack
      Suppression/Destruction of Enemy Air Defenses (SEAD/
DEAD), strategic and tactical
      Armed Reconnaissance (AR)
      Strike Coordination and Reconnaissance (SCAR) with 
inherent Electronic Protection (EP)
      Electronic Attack (EA) and Electronic Warfare Support 
(ES)
      Anti-Air Warfare (AAW)
      Tactical Air Controller (Airborne) (TAC(A))
      Forward Air Controller (Airborne) (FAC(A))
      Assault Support Escort
      Attack of Maritime Surface Targets
      Mining and Reconnaissance
      Combat Search and Rescue (CSAR)
    Across the entire F-35 Air System, Block 3F includes sustainability 
and supportability features like Prognostic Health Management and 
representative training devices.

    51. Senator Inhofe. Secretary Kendall and Lt. Gen. Bogdan, what 
impact will the F-35 have on our ability to fight in an anti-access/
area denial (A2/AD) environment?
    Secretary Kendall and Lt. Gen. Bogdan. The F-35 will play an 
integral role in the Department's ability to engage any adversary in an 
anti-access/area denial (A2/AD) environment. The F-35 has been 
developed with the objective of providing the Air Force, Navy, and 
Marine Corps, as well as our allies, with a 5th-generation strike 
fighter capable of executing the missions required to counter an 
increasingly advanced threat. The multi-role F-35 will complement the 
F-22 in the air superiority role required in an A2/AD challenge in 
addition to having the ability to penetrate robust air defenses and 
deliver a wide range of precision attack weapons. From a naval 
perspective, the F-35 will complement the F/A-18 E/F and provide 5th-
generation strike fighter capability for both Carrier Strike Groups and 
Expeditionary Strike Groups. Our ability to continue to procure the F-
35 in sufficient numbers required to recapitalize our legacy tactical 
aircraft fleet is critical to meeting the current and future A2/AD 
challenges.

    52. Senator Inhofe. Secretary Kendall and Lt. Gen. Bogdan, what 
outstanding airframe and hardware issues still need to be resolved for 
the F-35A, F-35B and F-35C?
    Secretary Kendall and Lt. Gen. Bogdan. Among the 734 unique Line 
Replaceable Components (LRCs), 717 have been qualified, 17 are still 
undergoing qualification, and all are on schedule to complete prior to 
the end of the System Development and Demonstration (SDD) Program. 
Below is a list and expected completion date for these 17:
      one for the F-35A refueling receptacle / scheduled to 
complete summer 2016
      one for the F-35C aileron actuator / schedule to complete 
summer 2016
      one for the 270-volt battery / schedule to complete 
summer 2016
      one for the 28-volt battery charger and control unit / 
schedule to complete summer 2016
      two for the F-35C tailhook / scheduled to complete winter 
2017
      one for the weapons bay / scheduled to complete winter 
2017
      ten for the landing gear / scheduled to complete fall 
2017
    In addition, the team is working to complete development of a 
carbon monoxide catalyst system in support of improved pilot protection 
when aircraft are in close proximity. The team is also working to 
complete development of the chemical and biological protective pilot 
flight equipment. Of significance, the 270-volt battery is experiencing 
challenges meeting gunfire vibration requirements and may need to be 
redesigned to higher vibration levels. Also, the F-35B main landing 
gear tire improvement effort will continue after completion of full 
qualification in order to provide improved tire life.
    As F-35 flight and ground testing continue, additional discoveries 
may occur. If they do, the F-35 Government and industry team will 
investigate to determine what, if any, mitigations are necessary.
    Durability testing is progressing. F-35A completed two lifetimes of 
testing in October 2015 and is approximately one-quarter of the way 
through third lifetime testing. F-35C has completed 87 percent of two 
lifetimes testing, with a number of findings affecting the portions of 
the fuel floor, forward root rib, and fuselage station 497 bulkhead. 
Production incorporation of redesigns is expected no later than Low 
Rate Initial Production (LRIP) Lot 11 for identified findings. F-35B 
testing has completed 62 percent of two lifetimes. Major findings 
previously identified on wing carry through bulkheads and wing rear 
spar have resulted in incorporation of redesigns for production no 
later than LRIP Lot 9. In addition to using conventional redesign/
retrofit processes, such as cold working for redesign and retrofit 
concepts, the team is qualifying Laser Shock Peening (LSP) for specific 
locations. LSP is a highly controlled process that changes the stresses 
in a metallic part to improve its damage tolerance. Qualification is 
expected to complete by October 2017, allowing LSP to be used in both 
production and retrofit processes.
                     aircraft production and costs
    53. Senator Inhofe. Lt. Gen. Bogdan, did the F-35 meet its 
production goal in fiscal year 2015? What is the current cost for each 
F-35 variant and projected cost through full rate production? How many 
F-35s are we producing on the line today, US and allied, and what is it 
maximum capacity of the plant? What is the cost difference in 
production between the low numbers we are producing today and 
increasing production to maximum or near maximum rate? How much money 
is saved purely from producing higher quantities?
    Lt. Gen. Bogdan. Yes, 45 of 45 aircraft were delivered.
    Low Rate Initial Production (LRIP) Lot 8 aircraft are currently 
being delivered by Lockheed Martin. The LRIP Lot 8 unit price, 
including the engine and industry's fees, of each F-35 variant is 
provided in the table below:

 
------------------------------------------------------------------------
                       Variant                           LRIP 8 Price
------------------------------------------------------------------------
F-35A...............................................              $108M
------------------------------------------------------------------------
F-35B...............................................              $134M
------------------------------------------------------------------------
F-35C...............................................              $129M
------------------------------------------------------------------------

      
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
      
    As of June 30, 2016, 126 F-35 aircraft are in various stages of 
production, including 54 Partner/Foreign Military Sales aircraft. This 
includes various subassemblies spanning multiple LRIP Lots.
    The current capacity at the Lockheed Martin Fort Worth facility is 
49 aircraft per year. Lockheed Martin's 2016 delivery commitment is 48 
aircraft comprising of 24 F-35As, 19 F-35Bs, and 5 F-35Cs. The current 
Lockheed Martin Fort Worth 2016 delivery mix is F-35 A = 24 aircraft, 
F-35 B = 19 aircraft, and F-35 C = 5 aircraft. Production capacity will 
continue to grow (year over year) as we approach peak production 
demand. For example, at Lockheed Martin Fort Worth, maximum capacity 
will grow from 49 aircraft per year in 2016 to 65 aircraft per year in 
2017.
    The URF difference between a LRIP Lot 8 and Lot 13 is $24 million 
for each F-35A and F-35C. The URF difference is $27 million for each F-
35B between these same two lots.
    When you increase quantity for a given LRIP lot, you move further 
down the learning curve in that lot thus reducing the average cost per 
unit. If you reduce the quantity in a given lot, the opposite is true. 
Learning curve theory tells us that for every doubling of quantity, UFR 
will reduce by 5 percent. If applied to future year procurements, when 
you convert to Then Year dollars that include inflation, some of the 
reduction goes away because of the inflation impact.

    54. Senator Inhofe. Secretary Kendall and Lt. Gen. Bogdan, are 
there still concurrency issues with the F-35 production line? If yes, 
what are the costs?
    Secretary Kendall and Lt. Gen. Bogdan. Concurrency within the F-35 
System Demonstration and Development (SDD) phase remains a part of the 
program of record. Modifications to the configuration baseline will 
continue until the end of SDD, at which time the aircraft will be fully 
qualified.
    Concurrency budgets are reducing in line with system maturity and 
are not adversely impacting the production line. Our latest concurrency 
analysis indicates the estimated average concurrency cost per aircraft 
has come down from approximately $26 million per aircraft at LRIP 1 to 
approximately $4 million per aircraft at LRIP 8, and it is estimated to 
be below $1 million per aircraft by LRIP 10. Additionally, as shown in 
Figure 1 of the April 2016 Concurrency Report to Congress (shown 
below), over 75 percent of the estimated concurrency costs are known 
issues and all issues will be known by the end of SDD.
    Figure 1, Fifth Report to Congress on F-35 Concurrency Costs
    
    
      

    55. Senator Inhofe. Secretary Kendall and Lt. Gen. Bogdan, how much 
savings could be achieved through a Block Buy Contract? What are the 
advantages and disadvantages? Is there a right time to execute a Block 
Buy Contract for this program?
    Secretary Kendall and Lt. Gen. Bogdan. RAND Project Air Force 
performed an independent assessment and determined that savings on the 
order of $2.5 to $3.0 billion over 3 lots of aircraft (Lots 12, 13, and 
14) can be achieved by providing 4 percent of aircraft cost as Economic 
Order Quantity funding in advance.
    The advantages of a Block Buy Contract are increased savings over a 
single lot buy and supplier/program stability.
    Disadvantages include possible reduction in savings due to 
configuration changes and aircraft quantity changes that drive the need 
to renegotiate. The Joint Program Office (JPO) intends to minimize this 
risk through contract language and a quantity floor that allows 
reduction in quantities without the need to renegotiate.
    The JPO has assessed the Program's stability and determined the 
risk to starting a Block Buy in Lot 12 is low.

    56. Senator Inhofe. Lt. Gen. Bogdan and Mr. Sullivan, I have seen 
numerous cost estimates regarding the life cycle costs for this program 
and I understand we are now estimating costs to operate over 60 years. 
How does the F-35 cost to operate over 60 years compare to other 
aircraft? Please provide the relative numbers for the B-52, the KC-135, 
and the F-16 and/or F/A-18 for a comparison?
    Lt. Gen. Bogdan. The F-35 program is the first aircraft program to 
estimate Operations and Support (O&S) costs over that extended length 
of time. The F-35's currently planned 30 years of procurement combined 
with a service life that could last 30 years make the F-35 O&S estimate 
unique and unprecedented in aircraft acquisition. The F/A-18 series was 
originally designed in the late 1970's to be operated for 6,000 hours, 
or about 20 years, and then be retired. We are currently flying F/A-
18A's with over 8,000 hours on the airframe. Similarly, the F-18E/F was 
also designed as a 6,000 hour/20 year aircraft. Rather than look at 
what the original estimate for a bomber, tanker, or tactical aircraft 
program was, then attempt to equate that with the current estimate for 
F-35, we are focused on reducing the costs to operate the F-35 and 
looking at all cost drivers that will lower those costs. The antecedent 
comparison in the F-35 Selected Acquisition Report (SAR) is useful in 
looking at how we are working toward reducing F-35 costs and comparing 
them with the aircraft that they will replace. The Cost-Per-Flight-Hour 
(CPFH) values for the F-16 and F-35A from the December 2015 and 
December 2011 F-35 SARs are shown below. The takeaway from this data is 
that F-35 CPFH estimates are coming down and the legacy CPFH is going 
up. It is not surprising that the F-16 costs are increasing as this is 
what we typically see as aircraft reach the end of their service life. 
The reduction in F-35 costs to operate are due to a combination of 
factors, which we will continue to assess, review, and validate as we 
continue to place more F-35 aircraft into operational service.

                            Costs FY 2012 $K
------------------------------------------------------------------------
                                                  F-35A        F-16C/D
------------------------------------------------------------------------
December 2011 F-35 SAR......................       31.923         22.47
------------------------------------------------------------------------
December 2015 F-35 SAR......................       29.806         25.54
------------------------------------------------------------------------

    Mr. Sullivan. From 2014 to 2015, DOD increased the life cycle of 
the F-35 program by six years from 53 to 59 years at a cost of an 
addition $1 billion over the life cycle. We have not conducted recent 
analysis to compare the costs of the F-35s to the B-52 and KC-135 nor 
have we conducted recent analysis comparing the new operating and 
supporting costs to other legacy aircraft. However, in 2014, we 
reported that the Cost Assessment and Program Evaluation (CAPE) office 
estimated that the combined costs to operate and sustain several legacy 
aircraft--the F15C/D, F-16C/D, AV-8B, and F-18A-D fleets-in 2010 
exceeded $11 billion. \4\ Based on CAPE's 2013 cost estimate, the 
annual cost to sustain the F-35 will be about $19.9 billion (in base 
year 2012 dollars) during its steady state. This $8.8 billion 
difference represents an increase of more than 79 percent in annual O&S 
costs for the F-35 as compared with the legacy aircraft CAPE examined.
---------------------------------------------------------------------------
    \4\ GAO, F-35 Sustainment: Need for Affordable Strategy, Greater 
Attention to Risks, and Improved Cost Estimates, GAO-14-778 
(Washington, D.C.: September 23, 2014).
---------------------------------------------------------------------------
                            foreign partners
    57. Senator Inhofe. Lt. Gen. Bogdan, what is the current status of 
international participation--countries that are or will be purchasing 
F-35s as well as countries who are or will be manufacturing aircraft 
parts as well as assembly locations around the world? How do these 
impact the overall program?
    Lt. Gen. Bogdan. [Deleted.]
                      software--aircraft and alis
    58. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, what is your 
assessment of the current status of the Block 3i and 3F software?
    Lt. Gen. Bogdan. The Block 3i software is demonstrating the level 
of performance we expected at this point while also being approximately 
twice as stable as previously fielded blocks of software. Because of 
this performance, on April 28, 2016, I made the decision that the F-35 
Program has completed all of the work needed for Block 3i, and I am 
recommending to the Secretary of the Air Force that Block 3i software 
is ready for United States Air Force Initial Operational Capability 
(IOC).
    Block 3F software development and testing had been on hold while 
the program focused its energy on Block 3i. However, with the 
completion of Block 3i, the team can now focus all of the program's 
efforts on Block 3F. Block 3F is currently undergoing development and 
testing and is progressing towards becoming the delivered capability. 
However, the combination of delays due to the focus on Block 3i, along 
with some challenges experienced by the prime contractor in delivery of 
capability, has resulted in a risk of about a four to six months slip 
in schedule for final delivery. Because the program had some margin at 
the end of the development program, I do not believe that the 
currently-projected schedule slip will impact the United States Navy's 
IOC.
    Dr. Gilmore. Block 3i software was designed to simply enable the 
limited Block 2B mission systems capabilities, implemented using the F-
35's original processing hardware, to work on the upgraded Technical 
Refresh 2, or TR2, hardware used in the production of Lot 6 and later 
aircraft. An early version of Block 3i software was delivered in 
October 2014, when the Air Force accepted its first Lot 6 aircraft, 
although the capabilities this version provided were very limited and 
mission systems stability proved to be significantly worse than Block 
2B. Subsequent versions of the software have undergone flight testing 
and fielding, the latest version having completed developmental testing 
at the end of April (referred to as 3iR6.21). The program recently 
completed an abbreviated flight test of Block 3iR6.21 and is conducting 
analyses of the stability of the mission systems to see if it is 
adequate to field to operational units and to be the final Block 3i 
build of software which would support the Air Force decision to declare 
initial operational capability (IOC). Initial indications are that the 
latest version of Block 3i has improved the stability of mission 
systems performance in-flight significantly relative to previous 
versions. However, pre-flight stability issues persist, and the status 
of the correction of the other deficiencies cited in my written 
testimony, a number of which have been characterized as ``must-fix'' by 
the Air Force, is unknown to DOT&E.
    Block 3F software development was paused in February this year when 
the latest version of Block 3F software--version 3FR5 -was so unstable 
that productive flight testing could not be accomplished. To fix the 
stability problems, the program reverted to Block 3i development and 
flight testing, and just recently restarted flight testing with an 
updated version of Block 3FR5 software that incorporates the new 
stability fixes from Block 3iR6.21. The program plans to release to 
flight testing the last build of Block 3F software that adds 
capability--3FR6--later this summer, then complete two more builds--
3FR7 and 3FR8--to address problems expected to be discovered during 
testing. The efficiency in accomplishing test points during flight test 
may be improved from what was seen earlier in CY16, if the stability 
fixes completed in Block 3i and many critical deficiency fixes are 
realized in Block 3F. Delivering and testing the numerous new and 
advanced capabilities planned to be in Block 3F mission systems, which 
are specified in the program's Operational Requirements Document (ORD), 
presents significant challenges for remaining development and flight 
test. As of the end of April, over 80 percent of the baseline test 
points in the Block 3F test plans remained to be completed.

    59. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, has the cause 
of the Block 3i and 3F software instability been identified? If yes, 
what is the fix?
    Lt. Gen. Bogdan. I believe the program has identified the root 
cause of stability problems in Block 3i and Block 3F software. The 
cause was traced to the timing of software messages from the sensors to 
the main F-35 fusion computer. A mismatch in timing of different 
messages would cause the system to repeatedly reboot, and we addressed 
this issue through changes in the timing of certain messages. We have 
tested the solution in a lab environment and in-flight test, and the 
fixes were successful. At the completion of developmental flight 
testing of the fixes, the system was demonstrating stability that was 
two times better than previously-fielded versions of software and four 
times better than prior to application of the fixes. The updated 
version of Block 3i software has been released to the operational 
fleet, and we incorporated the stability fixes in the Block 3F 
software, which is supporting flight test. However, as integration of 
new capabilities in the Block 3F software continues, we can expect to 
find more issues that could potentially affect stability. This is a 
normal part of the development cycle, and we will address any new 
issues that arise prior to the final fielding of Block 3F software.
    The graphics below show before and after stability fixes data for 
in-air mean flight hours between stability events and ground clean 
start-up rates.
      
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
      
    Dr. Gilmore. The program made corrections to address instability in 
the latest version of Block 3i mission systems software, Block 3iR6.21, 
and recently completed flight testing at the end of April. The program 
and test centers are currently analyzing the results of the flight 
testing--particularly the stability--and will determine whether another 
software build will be required prior to fielding. It appears that 
Block 3iR6.21 has significantly improved in-flight stability; 
nonetheless there are still system start-up problems that frequently 
delay takeoffs and it remains to be seen if there are any new problems 
caused by the software changes. Whether this version is fielded, or 
another version is built, flight tested, and fielded, the Air Force 
plans to declare initial operational capability later this year with 
Block 3i software, which will provide essentially the same, limited 
combat capability of the Block 2B software.

    60. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, have you made 
changes to how software updates are released and fielded? How will that 
improve software reliability, testing, training and operations?
    Lt. Gen. Bogdan. The F-35 Joint Program Office (JPO) continues to 
place strong emphasis on fielding a quality product to the Warfighter 
to support the full range of operations. In order to ensure that the 
final version of software delivered in the System Development and 
Demonstration program meets all of the documented requirements, I have 
modified how software updates are released and fielded. Rather than 
following a schedule-driven process to drive capability to the field, 
the JPO is now following a more event-based process to ensure that no 
capabilities are left behind. I am holding the line on software 
deliveries--I will not release to the fleet the software build that has 
been targeted for full capability without that build, in fact, having 
all capability, even if that means slipping schedule to ensure we have 
the full complement of capabilities.
    Additionally, I have encouraged the development team to quickly 
turn incremental engineering test builds to mature specific 
capabilities prior to final release of software to flight test, and the 
JPO is also using ground testing to facilitate earlier discovery and to 
supplement lab testing. To support getting capability to the Warfighter 
sooner, I have provided early releases of Block 3F software to support 
preparations and training for the Operational Test fleet.
    The JPO continues work to improve software reliability by ensuring 
that the software has full capability and is stable before it is 
released to the field. Additionally, stable software with full 
capability will improve how quickly and efficiently flight tests are 
executed. For the Warfighter, stable software with full capability 
improves the quality and quantity of training and operations.
    Dr. Gilmore. The stability and functionality problems in the 
initial versions of Block 3F that were provided to flight testing early 
this year, including those inherited from Block 3i and problems caused 
by new Block 3F capabilities, were so significant that the program 
could not continue flight test. As a result, the program recently 
announced a shift to capability-based software releases, rather than 
schedule-driven, overlapping releases. While this may cause delays 
relative to the current, unrealistic schedule, I agree with the 
program's decision to shift to a serial process of flight testing and 
fixing software in the lab before releasing the next software version, 
and the recent improvements observed in Block 3i stability validate 
this serial approach. Based upon the improved version of Block 3i, the 
program recently released an updated version of Block 3FR5 software to 
flight test in April and, after incorporating fixes to the deficiencies 
discovered during the remainder of this re-started testing, the program 
plans to release Block 3FR6 later this summer. If the fixes to 
stability achieved in the latest Block 3i software continue to reduce 
the need for avionics resets in flight, without unintended 
consequences, mission systems testing and weapons releases can resume 
in earnest and the test point completion rate will increase, which is 
essential given the significant amount of testing and limited time that 
remains before initial operational test and evaluation.

    61. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, what impact 
will these software issues have on Air Force reaching IOC by its 
threshold date of December 2016?
    Lt. Gen. Bogdan. The Block 3i software is demonstrating the 
performance we expected at this point while also being approximately 
twice as stable as previously fielded blocks of software. Because of 
this performance, on April 28, 2016, I made the decision that the F-35 
Program has completed all of the work needed for Block 3i, and I am 
recommending to the Secretary of the Air Force that Block 3i software 
is ready for United States Air Force Initial Operational Capability 
(IOC). This software has been released to the operational fleet, which 
meets the USAF requirement to declare IOC by December 2016.
    Dr. Gilmore. The decision to declare Initial Operational Capability 
(IOC) is one made by the individual Services. The Air Force is 
conducting an accelerated IOC Readiness Assessment to help inform their 
decision on when to declare IOC; however, no formal operational test 
and evaluation of the Block 3i set of capabilities is planned. To the 
extent that software stability has improved in flight, the Block 3i 
configuration may support the Air Force requirements for IOC before the 
end of calendar year 2016. Similar to the Marine Corps' IOC declaration 
in July 2015 with F-35B aircraft in the Block 2B configuration, the 
capabilities of the Block 3i-configured F-35A aircraft will be limited 
if called upon to be used in combat.

    62. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, what are the 
key obstacles to beginning IOT&E in August 2017? What actions can be 
taken to mitigate those obstacles? Is August 2017 for OT&E start 
achievable?
    Lt. Gen. Bogdan. The F-35 Joint Program Office (JPO), in 
coordination with the Service Operational Test Agencies (OTA), the 
Joint Strike Fighter Operational Test Team (JOTT), and other Initial 
Operational Test and Evaluation (IOT&E) stakeholders, has identified 
six key areas that present significant challenges to the beginning of 
IOT&E. These and the mitigating strategies follow:
    1) Providing sufficient test aircraft: The JPO worked with the 
JOTT, the Services, and International Partners to develop a course of 
action that reduced the number of required aircraft from 25 to 23 and 
modifies some earlier LRIP Lots 3, 4, and 5 aircraft to the Lot 9 
configuration. This approach was fully vetted and accepted by the U.S. 
Services and International Partners.
    2) Software and weapons capability: IOT&E requires use of the final 
Block 3F software and full Block 3F weapons capability and envelope. To 
provide as much capability as soon as possible, the JPO is planning a 
May 2017 Block 3F software release to the fleet. Additionally, early 
versions of Block 3F software will be released to Operational Test (OT) 
to enable familiarization, early feedback to JPO, and spin-up 
activities.
    3) Mission Data File (MDF): The United States Reprogramming Lab 
(USRL), which develops the MDF, is currently projecting an initial MDF 
delivery in February 2017 and the final MDF delivery, required for 
IOT&E, in August 2017. To mitigate this schedule, USRL will use earlier 
versions of Block 3F software to complete preliminary work. This allows 
for quicker development of the MDF when the final Block 3F software is 
released.
    4) Simulation. Testing the full capability of the F-35 within the 
limits of existing ranges against air and surface threats will be 
difficult. The use of a validated, high-fidelity simulation 
incorporating both the F-35 as well as advanced threats can improve our 
ability to judge the effectiveness of the weapon system in a broader 
environment and provide recommendations to the Warfighters on tactics 
and issues. The initial plan was to use a Lockheed Martin developed F-
35 multi-ship, real-time, Manned Tactical Simulator based 
representation of the F-35 air vehicle designed to replicate a high-
density simulation environment not available on open-air ranges, 
similar to the system used by the F-22. However, Lockheed Martin was 
behind schedule and over budget, and this solution had limited room for 
future growth. In 2015, the program made a strategy change to have the 
Government develop an open-system simulation environment that will 
endure beyond Block 3F testing while Lockheed Martin maintains a focus 
on delivering the F-35 specific simulation. This hybrid is called the 
Joint Simulation Environment (JSE) and is being developed cooperatively 
by the U.S. Navy, U.S. Air Force, and Lockheed Martin so the skill sets 
of industry and Government are leveraged for long-term sustainment of 
the end product. The risk to IOT&E due to the strategy shift to JSE is 
the same as would have been present had the original Lockheed Martin 
proprietary strategy been maintained, and is principally schedule. To 
mitigate this, JSE will be delivered to the JOTT incrementally to allow 
early trial use and feedback from OT, and full capability is planned 
for mid-calendar year 2018, which will be in time to support test 
events toward the latter part of IOT&E. As a further mitigation, the 
JOTT has increased some open-air test events to gather specific 
information that would otherwise be developed using the simulated 
environment. Given what we know of the JOTT planning, JSE will not 
prevent the start of IOT&E flight testing if the simulation is not 
available at the beginning of IOT&E.
    5) Autonomic Logistics Information System (ALIS): IOT&E is planned 
to begin with ALIS 2.0.2 and then upgrade to ALIS 3.0 (the final 
version of ALIS) upon its release in spring 2018.
    6) Air-to-Air Range Infrastructure II (AARI2): AARI2 flight test is 
currently scheduled for summer 2016, and recent lab tests indicate it 
will meet IOT&E performance requirements. However, the range is 
projected not to be ready to support IOT&E until winter 2018.
    In addition to the mitigations listed above, the JOTT is working on 
a phased entry into IOT&E. This approach allows the JOTT to conduct 
portions of the test when entrance requirements for those portions, but 
not necessarily the full test entrance requirements, have been met. For 
example, the JOTT can conduct much of the Close Air Support testing 
without going above 1.3 Mach, without AARI2, and with ALIS 2.0.2. This 
approach will allow the JOTT to conduct as much testing as soon as 
possible.
    Dr. Gilmore. As I stated in my testimony, the current plan to 
complete development and enter IOT&E by August 2017 is unrealistic. 
Several obstacles must be overcome before IOT&E can begin. These 
include:
      Completion of Block 3F development. The program has 
completed less than 20 percent of the baseline Block 3F test points as 
of the end of April 2016. Completing the remaining nearly 4,200 
baseline points will not occur until the end of January 2018, based on 
historical test point burn rates.
      Weapons integration. Much of the weapons testing remains, 
particularly to support the additional weapons being brought on with 
Block 3F (SDB, JSOW, AIM-9X, and the gun)
      Modifications to operational test aircraft. The 
operational test aircraft must be production-representative and have 
the required instrumentation called for in the Test and Evaluation 
Master Plan (TEMP). Modifying the currently designated fleet of 
operational test aircraft to the Block 3F configuration would extend 
beyond August 2017. Although the requirement to modify these aircraft 
has been known for years by the program and Lockheed-Martin, adequate 
plans were not made to accommodate these modifications. For example, 
all of the operational test aircraft need the Tech Refresh 2 (TR2) 
processors, which have been included in the production aircraft since 
Lot 6 aircraft were delivered in late 2014, but TR2 processors for 
retrofitting the OT aircraft were not ordered in time to support 
completing modifications prior to August 2017.
      Mission data. The programming lab that provides mission 
data needs to be upgraded to provide adequate, optimized, and tested 
mission data files for IOT&E; upgrades that have yet to be put on 
contract. As a result, the signal generators needed to adequately test 
the mission data loads will probably not arrive until 2019 at the 
soonest, causing risk to F-35 avionics performance during IOT&E and in 
combat.
      Sustainment. The program set a target of 60 percent 
aircraft availability for the fleet as an objective at the end of CY14, 
but has yet to reach that goal. To efficiently complete the mission 
trials during IOT&E, most of which will require 4-ship formations of a 
single variant (out of 6-aircraft fleets of each US variant), the 
program will need to have an availability of approximately 80 percent, 
which is consistent with the availability that will be needed to 
support actual combat operations. Improvements in reliability and 
maintainability, along with significant improvements to ALIS, are all 
needed.

    63. Senator Inhofe. Lt. Gen. Bogdan, what is the current status of 
ALIS and its ability to support F-35 operations from home station and 
while deployed? What actions are being taken improve ALIS?
    Lt. Gen. Bogdan. The Standard Operating Unit Version 2 (SOUv2) 
hardware, initially fielded to support United States Marine Corps 
Initial Operational Capability in July 2015, provides a more deployable 
version of Autonomic Logistics Information System (ALIS). This new 
hardware is ruggedized, modular, and an alternative to the original 
large server rack design. The Marine Corps and Air Force have 
successfully used the SOUv2 in several deployment exercises, and the 
Joint Program Office has received positive feedback on the 
deployability of ALIS.
    Dr. Gilmore. ALIS has supported operational and training units 
since early production aircraft were accepted by the Services in 2011. 
Although deficiencies in ALIS have made it difficult to efficiently 
support F-35 operations, continued development and releases of ALIS 
software updates have led to improvements. The program is attempting to 
address the functionality and usability deficiencies with quarterly 
service pack updates, which they began to field in January 2016. Two 
major software releases, ALIS 2.0.2 and 3.0.0, are planned before 
completion of F-35 SDD, but the schedule to deliver the planned 
capability requirements for each of these releases is high risk. As 
noted in my annual report, the program has previously deferred 
capability content of ALIS software releases (i.e., ALIS 2.0.1 planned 
for Marine Corps IOC) to meet schedule; this pattern of behavior cannot 
be sustained through the rest of SDD. Completing the development, 
adequate testing, and fielding of the capabilities planned for ALIS 
3.0.0 before the end of SDD is high risk. ALIS 3.0.0 is required prior 
to the start of IOT&E; however, progress has been limited as the 
program is still struggling to deliver planned ALIS 2.0.2 
functionality, which the program now says is at least 60 days late.
    As stated in my testimony, Service-led deployments over the past 
year have revealed challenges in setting up and supporting flight 
operations at forward locations. The fielding of the modularized 
version of the Standard Operating Unit (SOU) has allowed the Marine 
Corps and Air Force to conduct deployment demonstrations during which 
they moved ALIS hardware to a deployed location. However, they 
discovered difficulties in either building a network to support 
deployed operations or in integrating ALIS into an existing network. 
Transferring aircraft data between the home station and the deployed 
SOU, which is necessary to support deployed flight operations, does not 
function seamlessly within ALIS, as it was designed, but often requires 
manual updating or corrections to data files after a transfer has 
occurred. ALIS is a multi-level security system with particular 
infrastructure requirements to support high levels of server activity 
and data movement. Additionally, the program has not yet completed 
comprehensive deployability tests in a shipboard or overseas operating 
environment. ALIS currently has no hardware redundancy, so if the 
Central Point of Entry (CPE) at Eglin AFB, Florida or ALIS main 
operating unit at Fort Worth, Texas experience some type of failure, 
the entire F-35 fleet would need to operate offline until functionality 
is restored. While the program has made provisions for ALIS to operate 
offline, it would compromise some ALIS functionality such as supply 
chain management.
    The F-35 program is aware of these ALIS deficiencies, but it is 
still unclear if the program has a plan to prioritize and address them 
within the remaining SDD timeline.

    64. Senator Inhofe. Lt. Gen. Bogdan and Dr. Gilmore, what is the 
status of ALIS version 2.0.2 and how will it impact Air Force IOC?
    Lt. Gen. Bogdan. The Autonomic Logistics Information System (ALIS) 
2.0.2 software release has experienced challenges with the integration 
efforts between the Pratt & Whitney and Lockheed Martin enterprise 
systems that will support the overall management of the F135 engine 
system within ALIS. We are working through those issues and expect that 
full 2.0.2 capability will be available for fielding prior to the end 
of December 2016.
    It is important to note that United States Air Force (USAF) Initial 
Operational Capability (IOC) is not fully dependent on ALIS 2.0.2 
delivery. The USAF requirement for IOC with respect to ALIS is that the 
system be able to support deployed combat operations. The decision as 
to which version of ALIS is adequate for deployed operations is a USAF 
decision.
    Dr. Gilmore. ALIS version 2.0.2, which is planned to support Air 
Force IOC, is expected to upgrade earlier versions by adding 
functionality to some of the embedded capabilities and introducing the 
first phase of life-limited parts management, the latter of which 
includes propulsion integration. Propulsion data are currently 
downloaded and tracked separately by Pratt and Whitney during post-
flight maintenance activities, but ALIS 2.0.2 should allow the 
propulsion data to be downloaded and processed simultaneously with the 
rest of the air vehicle data.
    The program is facing delays in the release of ALIS 2.0.2 primarily 
due to difficulties with propulsion integration. The latest program 
estimates show a 60- to 90-day delay fielding the 2.0.2 release, 
resulting in delivery to Hill AFB in October 2016, vice August 2016 as 
previously planned. Delivery of ALIS 2.0.2 later this year might still 
support an Air Force IOC declaration by the end of the year. However, 
the Air Force may choose to declare IOC without fielding ALIS 2.0.2, or 
accept an interim version of ALIS 2.0.2 without the additional 
capabilities and/or with known deficiencies.

    65. Senator Inhofe. Lt. Gen. Bogdan, what actions are you taking to 
ensure both the F-35 and ALIS do not have cyber-vulnerabilities?
    Lt. Gen. Bogdan. We are continuing to implement the necessary 
Information Assurance controls and testing required by the Department 
and the individual Services to allow Autonomic Logistics Information 
System (ALIS) to be connected to the U.S. Air Force, U.S. Marine Corps, 
and U.S. Navy networks. The Joint Operational Test Team (JOTT) is now 
performing Adversarial and Vulnerability Cyber Testing on the ALIS and 
will continue this over the next year and a half. This testing will 
inform us of any deficiencies that may need to be addressed to mitigate 
risks of malicious attacks. Finally, we have contracted for backup 
hardware for key elements of the ALIS that we will be installing later 
this year in different geographic areas. This effort will eliminate 
single points of failure and mitigate risks from cyber-attacks and 
natural disasters.

                                 [all]
```