And there are so many other things that go into what quality of life really means, how often do you move and your spouse get a job, that sort of thing. In terms of quality of service, were hearing more and more from our people that theyre sort of surprised by all this. What really matters to them more than keeping this high rate of growth is they want to fight in a modern and ready force. They want to go to work every day, and they want to have parts in the bin where they can repair the thing that they are entrusted with, they want to be able to drive it or fly it or sail it and feel confident that they are on a winning team. That matters. Its an intangible, but it makes a tremendous difference for our people, and we have to look after that as well as the quality of life piece. Secretary fox . Senator, i would just add that i think admiral winnefeld laid it out beautifully. I these intangibles, i think, are important as we look at any changes to retirement, for example, Going Forward. I do believe we have really excellent, ive dug into them, models of the broad economics. And i am pretty convinced that whatever we do can we can find ways to tweak it with pays and incentives and so forth. Its very hard for those models to account for those intangibles. And the individuals view of what theyre there to do and what theyre able to do given the way we support them in, you know, this broad term thats overused, readiness, but that means the things that admiral winnefeld outlined about their ability to operate, their ability to have parts to fix it, their ability to show up for duty on a ship and have other people there. Theyre not trying to do three or four jobs. All of the things that i think are eroding the morale of our force right now. And, and another way of putting it might be the sense that the country appreciates what theyre doing as well, that theyre not only on the best team, the winning team, the gold medal team, but that the country appreciates the work that theyre doing. You cant even begin to understand how important it is to our young soldiers, sailors, marines, when ordinary americans come up to them and thank them for their service, its huge. You know, one other question in the limited time i have left. I though that you do surveys that you, that you try to apply some Scientific Method to assess the incentives and so forth that youve just described. And, of course, we all have our personal experiences. Senator kaine has a con who is serving, i son who is serving, i have two. We know friends and so forth. I wonder how well you think those surveys, the scientific effort are doing in measuring the kinds of incentives and so forth that are at play here. Thats a good question. You always have to take any kind of survey or data with a grain of salt, and if youre not listening to the drum beat that youre hearing from people anecdotally, what theyre saying to you, what your Senior Leaders who are terribly important to this process are saying to you, then you dont get it. So we have to temper anything we hear in the surveys. I dont have a crisp answer on whether theres a dichotomy there, but i think in general its what were hearing. Theyre both reflecting the same thing. And i do think were very aware surveys can lag. And i do think thats why our Service Chiefs and our secretaries spend so much time out talking to the force, to the men and women in uniform. Thank you. Thank you for your excellent testimony this morning. Thank you, mr. Chairman. Thank you, senator blumenthal. Senator vitter. Thank you, mr. Chairman, and thank you both for your service. Certainly, i want to express strong support for fixing this problem absolutely as soon as possible as well. I voted against the budget deal in december, and this issue was the single biggest reason why, so we need to get it fixed. And i want to express strong support for fixing anytime a way that doesnt fixing it in a way that doesnt increase the deficit in any way. That would be doing through two steps what the huge majority of us vowed absolutely not to do. And so that would be a failure as well. So im very hopeful well get this done. I just have one question for both of you. This provision essentially treated folks in uniform fundamentally differently and worse than federal civilian employees, all other federal civilian employees. It sort of penalized them, if you will, retroactively on this issue while the change is made for all other federal employees was prospectively only. Do you think theres any justification for that different treatment . I think it was surprising. I dont think that the vast majority of our force actually, you know, thought that through. They werent aware, i think. It was really just a cola minus one piece itself that registered with them. But it is, it is definitely a difference. Sir, i think, again, thats why we support grandfathering and believe that you have to look forward. Maybe theres a change. Whatever change that is, its for new people coming in. Well, great. Im glad most of them dont realize it, but my description, unfortunately, is accurate. And its the fact of it. And i just want to underscore that i think thats fundamentally wrong and inappropriate. Thank you. Thank you, senator vitter. Senator, senator king. Thank you, mr. Chairman. In light of the fact that we have a second panel, i think ill submit my questions for the record. I just have one observation. In light of senator kaines comments, i always thought that the passing of the first budge out of a budget out of a divided congress in 28 years was somewhat miraculous, but i think today weve established that this provision, this cola minus one provision confirms that because we cant find parenthood. It was an immaculate concession, i think [laughter] this provision, immaculate misconception might be a better term for it. But i appreciate your testimony, and im going to have some questions for the other, for the other panel. I associate myself with everyone else here. I dont think we should wait until the commission, i think we should fix this. Its not a huge item. It should be fixed, and i think our veterans and people that are receiving pensions for some odd reason may not fully trust i us to resolve this trust us to resolve this in 2015. So i think we should take care of it as soon as we can. Thank you, mr. Chairman. Thank you very much. That will complete the questions for our first panel, and we will now call up our second panel. Thank you so much, both of you, for your testimony. [inaudible conversations] we now welcome our second panel for witnesses, outside witnesses, socalled. Retired army general john tilelli jr. , the chairman of the board of the military Officers Association of america. Retired army general gordon r. Sullivan, president and chief executive officer of the association of the United States army. Retired air force Master Sergeant richard delainey, national delaney, National President , retired enlisted associate. Dr. David chu, president and chief executive officer of the institute for defense analyses. And dr. Chu served as undersecretary of defense for personnel and readiness under president bush from 2001 to 2009. We also want to note in our audience that we have with us a number of veterans, particularly, im informed, that we would welcome veterans all our veterans, but that would, obviously, include a special group that are veterans of our wars in iraq and afghanistan. We also have statements for the record from the following individuals and groups, and they will be entered into the record. The Fleet Reserve association, the iraq and afghanistan veterans of america, the american legion, the veterans of foreign wars, the National MilitaryFamily Association and Lieutenant Colonel michael parker, usa retired, whos a wounded war advocate. We are now going to start with generality hellly. General tilelli. And by the way, this is a reunion of a sort, and we want to tell you that were delighted to see you all here, and we, of course, very much treasure the relationships which have been established between this committee and all of you and treasure the service which you have performed for our country. We thank you. General the city hellly. Chairman eleven, senator inhofe, members of the Armed Services committee, thank you for the opportunity to appear before you today. Ive also submitted a statement for the record, but its an honor for me to speak today to you on behalf of those who serve and have receive served and their families. On behalf of the members of the military Officers Association of america, i have the honor and privilege of serving as the chairman for the rest of this year. We thank the Armed Services committee for holding this hearing on military Retirement Program. The purpose of our Retirement Program is to offset the extraordinary demands and sacrifices inherent in a service career. Retirement benefits are a powerful incentive as weve heard today, but those who serve 20 or 30 years in uniform, despite the sacrifices that they and their families have to endure over the period. The critical element top sustaining a high quality career military force lies with establishing a strong reciprocal commitment between the Service Member and the government and the people that they serve. And if that reciprocity is not fulfilled, if we break faith with those that serve, retention and readiness will inevitably suffer. The cola cut to Service Members retirement pay in the bipartisan budget act is a clear breach of that reciprocal commitment. Although the recentlypassed omnibus exempted chapter 61 retirees and survivors from the cola cut, we believe that the partial deal breaks the sacred trust with the rest of the entire Retiree Community and their families. We belief it should be repealed now. The Financial Impact has been called in various quarters as teensy weensy and small. But, for example and weve heard it today a noncommissioned officer in the grade of e7 retiring this year with 20 years of service would see a cumulative loss of 83,000 by the time he or she reaches the age of 62. More than three years of his original retirement pay of 23,000 a year annually. The ongoing rhetoric about spiraling, outofcontrol personnel costs has emboldened some to propose drastic changes to military benefits and compensation in the name of fiscal responsibility without fully understanding the unintended consequences of their action. Suggested costcutting proposals are gaining traction because critics continue to cite personnel cost growth since 2000 as a motive to gut paying benefits. And when we think about that, we need to think about that in the context of people, soldiers, sailors, airmen and ma reaps, who are serving in harms way every day rather than look at it in a budget context. We believe its important to put the two the growth since 2000 in context. Have costs grown since 2000 . Yes. But using the 2000 baseline without Historical Context is grossly misleading. First, it implies that 2000 was an appropriate benchmark for estimating what reasonable personnel and Health Care Spending should be. We dont believe thats correct. At that time years of budget cutbacks had depressed the military pay, cut retirement value by 25 for post1986 end tragedies. Entrants and booted other bebb fishery beneficiaries out of the military health care system. Retention was on the ropes, if we recall, and at the urging of the joint chiefs of staff, congress fixed the problems to prevent a readiness crisis. Congress worked diligently over the next decade to restore military pay comparability, repeal the retirement cuts and restore promised Health Care Coverage for older retirees. In other words, the cost growth was essential to keep the previous cutbacks from breaking the career force. Now many express shock that these fixes actually cost money. They forgot that congress deems that these changes were less costly than continued erosion of our defense capability. Moreover, military compensation studies have erroneously concluded that the cost trends of the last decade will continue indefinitely. We do not believe thats correct. Now that pay comparability has been restored, there wont be any further need for extra pay plusups above private sector pay growth which is in the law. Similarly, Congress Wont have to approve another tricare for life program or repeal redux which we had to do in order to maintain the readiness, asession and retension of the current force. Those were onetime fixes that wont be repeated, hopefully, and wont need to be repeated. Yet we continue to focus on recent growth trajectory and have adopted a new budgetcutting phrase which is slow the growth. We believe the math doesnt add up. Military personnel costs which have been derived from the omb data which include military personnel and the Defense Health program, continue to consume the same amount of the pentagon budget for the past 30 years, about onethird. Thats hardly spiraling out of control. Even so, were asking for deeper cuts. Leveraging our People Program versus readiness is simply a false choice of what this nation should be able to afford for its defense. The key to a ready force is and has been sustaining a topnotch Service Member for midyear, noncommissioned officers, midlevel noncommissioned officers and officers for another ten years. Without existing military career sniffs over incentives over the past ten years of this protracted warfare, the allvolunteer force would have been placed at serious risk. So in conclusion, we believe that the cola cut needs to be fully repealed now and not wait until the retirement commission. Secondly, we believe that any changes to todays Retirement Program needs to be grandfathered to existing retirees in the current force. And, three, any further changes recommended by the Commission Must be fully vetted through this committee to determine what impact it will have on our world class, allvolunteer force. Our obligation is clear, and thats protecting National Security. And as it always has been, the most key element to our National Security are the men and women who serve and the family members who serve also. Thank you again for the opportunity to appear before the committee. I look forward to your questions. Thank you very much. Thank you so much, general. General sullivan. Mr. Chairman, senator inhofe, distinguished members of the to panel of the panel, thank you for the opportunity to speak with you today as the president of the association of the United States army and as a former chief of staff of the United States army. The association of the United States army represents hundreds of thousands of members of the active army, Army National guard, army reserve, the retired community, civilians and the army families. 121 chapters worldwide. Our members and i are very well aware of the fact that much of the good done for soldiers over the last few years would have been impossible without the commitment of this committee, and we are indebted to each and every one of you and your predecessors. Your tireless and selfless personal staffs, professional staff as, we appreciate their efforts. And we understand that in these fiscal times these are very challenging times for our nation, certain things need to be done. Now, before i continue, i want to acknowledge the bipartisan bill. Ive never been sure what it was called, so lets say the murrayryan bill or the ryanmurray bill. But whatever it was, the chips into sequestration have been very important for all of the services and i just want to add the my voice to the thanks for everybody who made that bipartisan bill and the budget and the return to somewhat normal order which is taking place here. And i remain hopeful that these chips into the walls that surround money known as sequestration end permanently. Now, in many ways as has been stated by countless people here this morning, the bum deal was good news budget deal was good news. Unfortunately, included in it was a broken promise, and the broken promise has been talked about repeatedly. In spite of the fact that the president , the chairman of this committee, several secretaries of defense and the chiefs of the military services and the senior civilians in the pentagon and you heard it here this morning on the first panel had stated repeatedly that any changes to the military compensation and benefits package would be grandfathered for the currentlyserving force and for current retirees would be grandfathered. Yet it was changed. Now, this one line in the budget act has created doubt in the minds of the very people who do not need doubt created in their mind about the commitment of the American People for their well being and their ability to fight and win the nations wars, whatever those wars may be. And, frankly, we now have them worried about things i never worried about in my 36 years of active service. And i could not imagine that at this point in our history we need to cause them to be worried about their well being. The congressionallycreated military compensation and requirement Modernization Committee that was tasked with reviewing potential changes to military retirement system was directed to follow guidelines set by this committee and the president that included grandfathering the currentlyserving force and current retirees. In my view, the commission should be allowed to do its job, and i recommend strongly that this provision which gets into the retired pay of those between retirement age and age 62, be taken off the table now. And not passed to the commission. Based on some hope that someone else sometime down the road is going to change it. I dont think its ever worked in the past,