The Armed ServicesCommittee Meets today to consider the nomination of Richard Spencer to be secretary of the navy. I would like to acknowledge the tragedy in mississippi yesterday, 16 Service Members lost their lives in the crash of a marine corps kc 130 from cherry point, north carolina. It reminds us that these brave men and women put themselves in harms way everyday at home and abroad in training and in combat and service to our nation. We are keeping their families in our hearts and prayers. Nation. We are keeping their families in our hearts and prayers. Mr. Spencer, we think you for training us this morning and we welcome your family and friends with us today as is our tradition at the beginning of your testimony we invite you to introduce those who are joining him. It is standard for this committee to ask certain questions in order to exercise its legislative and oversight responsibility. It is upon that this committee and other committees are able to receive testimony and briefings and other communications and information. So im going to ask you the standard questions we ask every nominee before this committee. You adhered to yes. Will you ensure your stuff complies to requests for communications including questions for the record and hearings question marks i will. Will you cooperate in providing witnesses and briefers in response to congressionals request . I will. Will those witnesses be protected from reprisal . They will. Do agree to appear to testify before the committee on request . I do. Do agree to provide documents, including documents in a timely fashion regarding suchasis and providing documents . I do. Except you assumed any duties or undertaken any actions which would appear to presume the outcome of the confirmation process . I have not. Thank you. Navyext secretary of the will receive this role during a time of immense importance for United States seapower. I note the residents of one of distinguished members and a dear friend of every member of the committee, republican and democrat and perhaps it would be convenient for us to hear from senator warner. You are recognized, senator warner. Senator warner thank you mr. Chairman. Senator reid, and members of the others. E and it is very humbling for me to appear here and on behalf of this distinguished nominee. If i ever reflect on this great committee, i just think about the marvelous traditions it has established for the entirety of the senate throughout its long existence. I say to the new members of the committee, i wish you well. I am confident as you pursue you careers in life that will always look back on your membership in this committee as a very special privilege. Because after all, the function of this committee is to provide care to the men and women in the armed forces of the united , together with their families. I know the chairman expects me to be brief and i will be. But i would like to say that on mrs. Is mr. Spencer, spencer, his lovely wife and they will be a Magnificent Team is my humble judgment. To serve america and the men and women of the armed forces, most marinelarly the navy and corps. Mr. Spencer has a very interesting and broad career. He is quite adept and knowledgeable on all aspects of finance and not only domestically in our country, but internationally and together and this other achievement other achievements in his life which are manifold you have the papers before you i will point out he served on the department of defense and this board for some six years showing his interest in National Security for those years and then he was chairman of the marine corps heritage foundation. So, he has kept all of his priorities carefully throughout his life and i would like to say that he achieved something i always wanted to achieve. Gotdistinguished chairman the navy wings of gold and he got the marine wings of gold. His whole tour, several years as a pilot of helicopters. He did his wing time i am sure, before he got there. He loved the marine corps. He loved the military life. He looked forward to that day when he might be able to return and become more active. This is one of the most interesting and wonderful positions in our entire federal government. Secretary of the navy. So i would like to say that i am not a stranger to the proceedings you are undertaking. But there is an aspect of this particular confirmation proceeding that i have never encountered before. On his own initiative, he reached out and counseled with 10 secretaries of navy to ask of of theat they thought challenges of today, how best he might be able to fulfill those challenges, and we have with us , others johnthem lehman, sean okeefe, John Stafford who is acting as secretary. Jim webb. Don winter. And yours truly. I want to be very careful in my summary, having talked to all of them about this moment where i sort of represent the gang. We do not wish to be presumptuous so we couch our words in the following sentence and that is, we believe this are man and his lovely wife most worthy of being here today and being given the opportunity to appear before you as you perform your constitutional duty of advising and consent. With that, i conclude my remarks. Semper fi my good man, you are on your own. Laughter] senator warner, you bring unique credentials to this body having served as both secretary of the navy and chairman of this committee. The members on both sides of the aisle take your words with the utmost seriousness and we thank you for your return and your leadership and the many years in spent with me, helping me my responsibility as a member of this many. We thank you. I thank you. And for our long personal friendship. I recall when i became undersecretary of the navy pilot to becoming secretary, how your father, then commanding chief of all forces in the pacific, together with your extraordinary mother, reached out to help me as a very young man. I think about the youngest at that time when i took on these responsibilities in 1969, many years ago. Thank you very much. Thank you, senator warner. The next secretary of the [no audio] the next secretary of the navy will assume this role during a time importance. Some of the greatest challenges will be in the maritime domain and it is critical our navy and marine corps are prepared to fight and win decisively. It is a bug responsibility for departments including maintaining naval forces. As cap from the chief of Naval Operations and commandant of the marine corps last month, our forces face significant shortfalls and we need to grow modernize. Look forward to hearing how you ofld address the challenges the 15 billion shortfall and priorities. Plans to serve the marine corps need to deliver on cost, on schedule, and with the promised capability. The sad truth is in recent years with not given our sailors and marines what they need to succeed. As we have asked ever more of them, we have failed in our responsibility to provide them what they need with equipment and resources and this puts their lives in greater danger every day. We can waste no time restoring the course and modernizing to regain the technological advantage of our forces. It requires strong leadership from the next navy secretary. I look forward to discussing theseand to discuss plans. This committee was grateful for your Prior Service as well as your willingness to serve again. You have demonstrated your dedication to this nation. I am confidence your decades of largeence leading corporations and businesses has prepared you to take on this role if you are confirmed. The committee honors sacrifice and service of all of our Service People. We look forward to hear how you plan to lead the navy during this crucial time. Thank you very much mr. Chairman. Let me join you in welcoming mr. Spencer to the committee and thank you for your willingness to serve. Let me also thank your family. We also recognize senator warner. You are an example that continues to inspire this committee. We will get there eventually. Chairman andn the recognizing and paying tribute to Service Members of the navy and marine corps. We are sad about the loss of life during the recent incident on the uss fitzgerald. Our prayers go out to the crew and families of units the next secretarys efforts will be critical. As a first priority, the secretary of the navy should focus on improving readiness of existing forces. For example, it seems very shortsighted to me to allow the diving certifications to expire and then have to tie that boat to ap or for more than one year while Combatant Commanders demands are not met. Our environment dictates. Eased needs for while readiness is very important, there are other challenges that face our navy. Many of us have expressed concern about the size of our navy and the number of ships rebuild each year. Last year, report was released which recommended a total fleet of 355 ships. As challenging as their might be to increase the number of ships, numbers alone are not enough. This past may, paper was also the futureitled navy. It said more platforms are necessary but not sufficient. The navy must employ new concepts and technology. It is a goal you will with obstacles. The challenges faced are exacerbated by the budget control act. Left unaddressed, it will limit the navys ability to confront the Global Threats to our country. I look forward to hearing your testimony on how we can modernize our fleet. Mr. Chairman, thank you for calling this hearing. I look forward to working with mr. Spencer in the future. Mr. Spencer, welcome. As i mentioned earlier if you would like to introduce members of your family please proceed so we can interrogate them as quickly as possible. [laughter] thank you senator. First of all i would like to thank senator warner and secretary mattis for their intinued confidence nominating me. At this time i would like to use my wife polly, daughter april, son peers, and stepson who are with me today. For ad like to reflect minute. The navyrecord team was struck us that with a tragedy. 15 marines, one sailor perished. I would like us all to keep their loved ones and families and families in our prayers as we conduct our business today. Chairman, Ranking Member read, members of this committee. 36 years ago to the month i was driving to the tomato fields surrounding the landing pad and of mice my Trustees Deed was a vw bus that carried me out of the gates for the last time for marine squadron 161. Headed to the us of the coast highway, i can tell you without hesitation the thought of me sitting before this a gust group and being considered as secretary of the navy was not to be found even in the most remote parts of my mind. I was educated in Financial Management and it increased in scope as i progressed through my career. The leadership skills developed work strengthened and honed divisions inus public and private sector. I was a student and then practitioner of Disruptive Technology while being respective and is just you science. Science. Rial i believe i have the knowledge and skill set to tackle the issues at hand. It is a great honor for me to appear before you seeking confirmation as the 76th secretary of the navy. The owner is magnified by the current state of play in the world today which is nothing less than a perfect storm. Weve been out war for the past 16 years with the operational temple of the various conflicts denying us the needed time and resources for modernization. Add to that the growing requirements generated by the Combatant Commanders who are facing continually evolving threats from all corners of the globe, and you have a navymarine corps team that has been continually engaged in stretched then. At the same time the impact of the budget control act, which gave birth to sequestration coupled with the inability to have consistent funding with the annual budgets has produced an environment where, as secretary mattis said, we are no longer managing risk, we are gambling. We must commence the heavy lifting to buttress the storm and build readiness into the near torment and increase the Navy Marine Corps capacity in the near future. Before i answer your questions addressing my ability to lead the department of the navy, let me briefly provide you with navy matters and my views. First, people our our most valuable resource. Families,eam, their and their civilian teammates have never failed our nation and never will. Are failingve we them through such actions as the budget control act and continuing resolutions. Due to their patriotism they continue to do more with less. I also believe their diligence, tension to duty, and commitment to putting the nation and teammates about themselves of not been reciprocated in all instances. If concerned if confirmed, i do not want to stifle their attitude but i also do not want to send the signal we are taking them for rented. It is not the secretary of the navy nor department of defense nor congress who is bearing the brunt of the situation. Theer it is our soldiers, citizens in the reserve, and their families who are squarely shouldering the burden. All the while the competition for ourvate companies soldiers and sailors. We must Work Together to find ways to make the navy a preferred career. Second, u. S. Navels appear your dsa cornerstone for the foundation of American Security and global security. A Navy Marine Corps team is an integral element to increase the whole ofvailable for a government solution to situations around the globe. We must address the capability and capacity of our fleet and forces. I believe the Nuclear Triad is one of the most effective threat deterrence. Maintain andask to modernize the component of the triad. As the navy steps out to act upon the intent of the president and secretary of defense, it must do so with renewed rigor and effectively apply the resources with enhanced urgency. It must analyze all of its platforms to extract all additional efficiencies while at the same time it incorporates the advantages provided by both internal research and development and advancements by the private sector. Urgency must be the theme as we enhance our readiness and existing capabilities all the while addressing the future buildout of the fleet. I believe the organizational construct needed to deliver the aforementioned goals is flat, lean, and agile. Those who face and manage Critical Situations have the withty to make decisions the full understanding of the responsibility and Accountability Associated with the outcome. My Business Career has been well by the credo that accountability starts at the top and permeates route the organization. Ive also warned that each member must be empowered to put forth changes that will enhance operational efficiencies. To adapt in the face of competition, the whole navy team must be engaged. If i am confirmed, i would use a tagline borrowed of the department of homeland security, and i paraphrase, if you see something, suggest something. In closing, let me say that i did not come before you with a preconceived agenda to address the issues facing the navy and the marine corps. I come before you ready to assess the situation and develop the tools needed to enhance its ability to fight and deliver on the responsibilities the office of the secretary of the navy has delineated in title x. If confirmed, i will accomplish effortscoordinating the of the chief of Naval Operations, the secretary, and the senators and members of congress through leadership that is grounded in transparency and accountability. Thank you, and i look forward to your questions. Thank you mr. Spencer. I was just on a trip with several of my colleagues, senator warren, senator perdue, senator graham, senator whitehouse, and among other places that we spent the fourth of july as i have for many years in kabul and outside of kabul with men and women of the military with a number of events that we do for them with the fourth of july, a town hall meeting with a large number of men and women who are in uniform. Senator graham, as happens once a decade, asked an astute question. He asked, how many in the room were there for more than the first time in afghanistan . Majority raised their hands. He said, how many have been here more than twice . Majority raised their hands. He said, how many have been here three times . A significant number raised their hands. In other words, to me, it was something that was a graphic demonstration of the incredible burden that our activeduty military has been bearing over the last 15 or 16 years. They are brave, proud, the best navy we have had in a long, long time, but they are not fully equipped, and they are not fully trained, and they are not given the authority and responsibility that they need in order to win this conflict. The fact is, in afghanistan, we are not winning. We are not winning. No less than our military commander in afghanistan will tell you that is a fact. That has to turn around. We cannot ask these men and women to keep going over there with a strategy that in order to defend an Afghan National army garrison, in order to defend itself, it has to have permission from somebody in the white house on the National Security council staff. I am exaggerating a bit, but the fact is if you ask any of these young men and women who have been there and there and there, they will tell you that they can win this fight, but they have to have the equipment and authority to do so. It is not that they are not well led. They are. It is not that they are not capable. They are. But it is a do not lose strategy, which is epitomized by the former president s speech at west point, where he said, we are going to surge and increase the number of troops there, and we will win, and by the way, we are leaving on a certain day. You are mr. Baghdadi and you hear that, i think the conclusions you draw are obvious. We have troops stuck at the pier, two Nuclear Submarines have been sitting at the pier for a year because of a lack of spare parts. 60 of our f16s are grounded. It has to do with the budget control act, one of the greatest act of cowardice ever en