Defense budget and addressed sequestration and budget challenges posed by syria, r ussia, and iran. This runs about one hour and 50 minutes. If the committee will please come to order. Today, our subcommittee on defense appropriations reviews the budget request of the department of defense. We are very pleased to welcome secretary of defense Ashton Carter and chairman of the joint chief of staff general Martin Dempsey of the United States army. This is our final schedule hearing of the year on the 2016 Defense Budget request. The subcommittee recognizes the uncertainty of the current fiscal environment and the impact it has only department of defense in its planning. We also appreciate the complexity of building the first year 2016 budget request and we look forward to comments from secretary carter and general dempsey on how we can support our men and women in uniform and our National Security interests. We are pleased to recognize dr. Carter on his first appearance before the subcommittee in his capacity as secretary of defense. Mr. Secretary, we look forward to working with you. I also want to recognize that this will be general dempseys final appearance before the defense subcommittee as chairman of the joint chiefs of staff. General dempsey you have served with distinction sense of 2011 since 2011 and this committee is grateful for your contributions. We will miss your insight when your term it comes to an end in october. The Committee Also welcomes mr. Mike mccord, the undersecretary of defense and chief Financial Officer for the department. I am confident that mr. Mccord it will provide the committee with useful information as the subcommittee relates subcommittee formulates the 2016 budget. Thank you for appearing before us this morning. Your full statements of course will be included on the record. I now turn to my friend and vice chairman of the committee senator durbin for his opening remarks. Senator durbin thank you mr. Chairman, and thank you all for being here. Secretary carter, good to see you. Mr. Mccourt, thank you as well for being part of this. Special thanks to general dempsey for your many years of service in the u. S. Army and to the United States in terms of our National Defense. You have risen to the top rank within the white house administration. I appreciate all the talent that you brought to it and dedication. I wish you the best where life takes you with your wife and grandchildren. You will now be able to enjoy a lot more. It is important for us to hear your advice on a number of pending issues. The first is a threat of our own creation called sequestration. Their efforts within the house and senate to increase defense spending by using what is in fact a budget gimmick. Namely to shift tens of billions of dollars in funds in the base budget over to the overseas Contingency Operations account. I believe this effort is not the right way to address the problem. While i support avoiding sequestration, Congress Must address funding shortfalls for the entire government, and do it responsibly. Moving programs from the base built to overbroad accounts moves our problems instead of fixing them. The doj cannot fix problems if the u. S. Government moves from one fiscal crisis to another year after year. I want to hear on you from that subject. This manufactured budget crisis comes retire quickly changing Global Security environment where our military is operating all over the globe operations in afghanistan africa, responding to russian aggression in eastern europe. Since last years hearing we have added operations in iraq and syria to a busy military operational tempo. There are many issues i hope to get to any questioning maintaining our innovative Competitive Edge in research, ending what i believe is the exportation of it Service Members and families by predatory, forprofit colleges, making certain that the department of defense can keep track of contractors working for them, and lastly, keeping in mind general dempseys persistent admonition not, last week, the repore department reported on number of Sexual Assaults. Itmore than half of those individuals experience retaliation for doing so. We need to make progress. This is a daunting array of challenges, and just of the many of you face. I look forward to your testimony. Secretary carter, you may proceed. Secretary carter mr. Chairman, thank you, members of the committee, thank you for inviting me here today. Mr. Chairman, i especially want to recognize the sense of civility and courtesy with which you conduct all you do, including the leadership of this committee. It does not go unnoticed, at least not funny. It is much appreciated. At least not by me. Vice chairman, i will make sure we get to the issues you raised in a private conversation and just now. Thank you for your leadership and thank you all. I want to thank my friend and shipmate Marty Dempsey for his wonderful service. Im going to miss him. I know all of you on this committee share the same devotion that i do to the finest fighting force the world has ever known and to the great defense of our great country. I hope that my tenure as secretary of defense will be marked by partnership you on their path. I am gratified that this committee, as well as the three other defense committees, recognized the urgent need to halt the decline in defense spending imposed by the budget control act. President obama and i deeply share in that recognition. And indeed, i want to commend you and your colleagues for both recognizing and deciding and saying that sequestration threatens our military readiness, the size of our fighting forces, the presence and capabilities of our air and naval fleets, our future technological security, and ultimately tjehe lives of our men and women in uniform. The joint chiefs have said the same thing, and have specified the kinds of cuts that their services would have to make it sciquest ration returns. If sequester returns. The Defense Department has taken over 3 4 of 1 trillion in cuts to its defense spending. The magnitude of these cuts would stress the most capable planers and programmers. But the stresses have been made even greater cause of the frequently sudden and unpredictable timing and nature of the cuts, as well as continued uncertainty over sequestration. As a result, dod has been forced to make a series of incremental inefficient decisions, often made well into a fiscal year, after prolonged continuing resolutions are finally resolved. Moreover, even as budget drop precipitously, our forces have been responding to an increasingly tumultuous world. I believe our Defense Budget is unbalanced. We have been forced to prioritize structure and readiness over monetization, taking on risks and capabilities in infrastructure at ftoo far a degree. This is a serious problem. High demand on a smaller force structure means the equipment and capabilities of too many components of the military are growing too old to fast. From our Nuclear Deterrent, to our tactical forces. Meanwhile, each of the past several years painful but necessarily formed, or posted by dod including eliminating overhead, retiring older force structure, and making reasonable adjustment in compensation, have been denied by congress. At the same time that sequestration looms. We are starting to see this double winning once again. Doublwe e whammy in a markup in legislation this year. I do not believe that we can simply keep making incremental cuts. As i have said before, we would have to change the shape and not just the size of our military. Significantly affecting parts of our defense strategy. In recent weeks some in congress have tried to provide dod with its full budget request for 2016 by transferring funds from the basic ounce to overseas Contingency Operations. Basic accounts. This approach clearly recognizes that the budget total we have requested is needed. The avenue it takes is just as clearly a road to nowhere. I say this because president obama has already made clear that he wont accept the budget that locks in sequestration in moving forward, as this approach does, and he wont accept a budget that severs the link between our National Security and our economic security. Legislation that implements this framework will therefore be subject to veto. We do not come together and find a different path by fdaall, when a budget is needed, it will put our department and troops in an alltoofamiliar and difficult position. We will yet again needed to make hasty and drastic decisions to adjust to the government to have an adequate dod budget. Decisions that none of us wants to make. The joint chiefs and i are concerned that if our congressional committees continue to advance this idea and dont explore alternatives, then we will be left holding the bag. That is not where i want to be in six. But since the oco funding approach is not the kind of widely shared budget agreement that is needed, we can see now that it wont succeed. Moreover, the one year oco approach does nothing to reduce the deficit. It risks undermining support for mechanism boco, which is meant to fund incremental cost of overseas conflicts in afghanistan, iraq, and elsewhere. Most importantly, because it doesnt provide the stable, multiyour budget horizon, this one your approach is managerially unsound and also unfairly dispiriting to outsource. Our military personnel and their families deserve to know their future more than just one year at a time. Dispiriting to our force. Not just them our Defense Industry partners too need stability, not end of your crises or shortterm fixes. There ought to be efficient and cutting edge, as we need them to be. Last and fundamentally, as a nation we need to base our Defense Budgeting on our longterm military strategy. And that is not a oneyear project. This funding approach also reflects a narrow way of looking at a National Security, one that ignores the vital contributions made by the state department, justice department, treasury department, Homeland Security department, and disregards the enduring longterm connection between our nations security and many other factors. Factors like scientific or entity to keep scientific r rd to keep our technological edge, and the general economic strength of our country. Finally, i am also concerned on how we deal with the budget is being watched by the rest of the world, by our friends and potential foes alike. It could give a misleadingly diminished picture of americas greatest strength and resolve. For all of these reasons, we need a better solution than the one mouthy the one now being considered. Two years ago we saw Congress Reach a twoyear agreement to be bipartisan budget act. Although we preferred a longerterm solution to sequestration, that deal was able to provide dod a measure of stability needed to plan for more than a just one year. Today, i hope we can come together for al longerterm, multiyour agreement that provides the budget stability that we need by locking in budget levels consistent with the residents request. President s request. I pledge my support this effort as well as the support of the entire staff of the department of defense. I would like to work with each of you as well as other leaders and members of congress to this end. If we are successful, i am confident we can build a force of the future that is powerful enough to underwrite our strategy and show resolve to friends and potential foes alike. A force that is equipped with bold new technology and ideas able to lead in cutting age to abilities in cyberspace. A force that is lean and efficient throughout the enterprise that continues to attract and inspire new generations of americans to contribute to this great mission. That is the vision for the force of the future i have been pursuing since i took office 11 weeks ago. And i hope to continue doing so in partnership with all of you. Mr. Chairman, this is the time for coming to governor and problemsolving, coming together and problemsolving. Much like in december 2013, our only choice is to come together to find a real solution that reflects our strength and security as a nation. I look to this committee and its many leaders who sit on it to help us get on the right path out of this wilderness. Thank you. Thank you, mr. Secretary. I noticed in the submission we had before us this morning, you created or proposed to create a new unit. A point of partnership socalled. Apparently to be led by a civilian with a military deputy and staffed with an elite team of active duty reserve and civilian personnel. It sounds like an ambitious undertaking. May be complicated. There is the suggestion that the team will vote for breakthroughs in emerging technologies. I wonder if you could let us know how much you think this is going to cost, and how long it will take to be up and running . Secretary carter i surely can provide you with the costs and i will do so. As far as the mechanism is concerned, it is an important effort. It is an experimental effort as is our socalled Defense Innovation unit. I announced the creation of it a week and a half ago. It has a couple things that it brings together. One is our need to continue to be on the cutting edge, especially the cyberedge represented by the Silicon Valley tech industry. Second, our need, which i mentioned in my statement, to attract the very best to defense. We want to have an open door. We are and exciting and attractive lease for the attractive place for the countrys smartest people to come and work, even if they can only work for a period of time. And third it combines an ingredient you mentioned, which is the use of the reserve component, which is a huge treasure for our department. A lot of reservists are technologically savvy. They will contribute to the region. It brings a number of ingredients together for the future. We are going to try it out. It is an experiment, but it is not a costly experiment. I think it is critical for us to have an open avenue between us and Silicon Valley. We need to be an Innovative Department so that we stay fresh and attractive. Senator cochran thank you. Senator dempsey, i will ask if you would like to make your opening statement. You may proceed at this point. General dempsey thank you chairman. Thanks very much at the outset for the very kind words about my service. It has been a rare privilege to hold this position and be able to represent the millions of men and women and their families concern around the world. And thank you to this committee for their support. This is my last during. I last hearing. I think you for the opportunity. And if it is not, i suppose until we meet again. On that note, i fully support the nominations of general. Board as dougford as general vicechairman. You can trust them, which i think is the right word, to provide you timely, pragmatic, and effective military advice. I would like to reiterate something that i said in the previous hearings this fiscal year which is that the Global Security environment is as consistent is as uncertain as ive seen in 40 years of service. We are at a point where our global aspirations are exceeding our available resources. We have heard the congress of the United States loud and clear that we have to become a more efficient, and we have to do the rigorous Strategic Thinking to determine the minimum essential requirements that we believe are essential to protect our national interests. In my judgment, this budget represents a responsible, nation of capacity and readiness. But we are at the bottom edge are manageable risk in achieving and fulfilling our National Security strategy as it is currently designed. Funding lower than pv 60, and lacking the flexibility to make the internal forms internal reforms that we need to make will put us in a position where we have to change our National Security strategy. Let me describe what kind of change you might see. For the past 25 years the u. S. Military has secured the global commons, we have deterred our adversaries, we have reassured our allies, and we have responded to crises and conflicts, primarily by maintaining our presence forward or abroad. It is been our strategy to shape the future any interNational Security environment by our forward presence and by building relationships with regional partners. In general terms, about 1 3 of the force is forward deployed, and one third is getting ready to go. This puts significant strain on the men and women in europe, but we have kept the nation safe by following that paradigm. Meant and women in uniform. Sequestration would change the way we deploy the force, and change the way we affect the security environment. We would be almost 20 smaller from what we started than when i became chairman. Our forward presence will be reduced by more than 1 3. We will have less influence and we will be less responsive. Conflict will take longer to resolve, and will be more costly in terms of dollars and casualties. In an age where we are less certain about what will happen next but certain that it will happen more quickly, we will be further away and much less ready then we need to be. Sequestration will result in a dramatic change to how we protect our nation and how we promote our National Security interests. Our men and women in uniform are performing around the globe with extraordinary courage character, and professionalism. It seems to me that we owed them and their families clarity and predictability on everything from policy to compensation, health care, training, equipment, and readiness. Settling down the uncertainty we have experienced over the past 40 years and our decision processes and getting us out of a one year at a time cycle will hold us keep the right people. And that is our decisive edge. We w