DEPARTMENT OF DEFENSE APPROPRIATIONS

FOR 2004

THURSDAY, MARCH 27, 2003.

FISCAL YEAR 2003 SUPPLEMENTAL APPROPRIATIONS FOR IRAQ AND AFGHANISTAN

WITNESSES

HON. DONALD H. RUMSFELD, SECRETARY OF DEFENSE

PAUL WOLFOWITZ, DEPUTY SECRETARY OF DEFENSE

GENERAL RICHARD B. MYERS, CHAIRMAN, JOINT CHIEFS OF STAFF, UNITED STATES AIR FORCE

DOV ZAKHEIM, UNDER SECRETARY OF DEFENSE (COMPTROLLER)

INTRODUCTION

Mr. LEWIS. The Committee will come to order.

Today it is my pleasure to welcome the Secretary of Defense, Donald H. Rumsfeld, and General Richard B. Myers, Chairman, Joint Chiefs of Staff. Thank you very much for taking the time to be with us. Dr. Paul Wolfowitz, Deputy Secretary of Defense, and Dov S. Zakheim, Under Secretary of Defense, Comptroller, are also back again. We had a great session yesterday by the way, Mr. Secretary.

I have a rather detailed and wonderfully prosed introductory speech that I am going to pass on. In the meantime, by way of introduction nonetheless, let me say that we hear every day from our constituents across the country about the American people's pride as they view and share both the frustration, the pain, and the concern of our great young men and women doing the job that they are doing for us and for freedom in the Middle East. And they are going above and beyond that which anyone could really expect, but they are themselves individually, as well as collectively, in the business of eliminating from the face of the Earth an administration, a scourge on governmental processes like the world has seldom seen.

There is little doubt that the effort to free the people of Iraq is going very well. We have a problem, Mr. Secretary, that I do not know exactly how to deal with, and that is that we have now an explosion of talk show hosts around, who spend most of the day having to say something almost every minute of the day, and so small things are repeated dozen of times as though it was brandnew news. It is part of our modern world and we must deal with that.

Between now and then, there is little doubt that the American people support the Commander in Chief's effort, and they admire

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the work that is being done by the commanders, chiefs, those people who are in front of us.

It is a privilege to have you here. I understand there are some limitations on General Myers's time. The Secretary has to leave no later than 3 o'clock. We have to get out of this room, by the way, at about 10 minutes after 3, for there is another Committee meeting after this one in this same room. In the meantime, gentlemen, your entire statements will be included in the record. I will give you my speech if you would like to read it. But between now and then, welcome and please proceed, Mr. Secretary.

Secretary RUMSFELD. Thank you very much.

Mr. LEWIS. Maybe you ought to let me yield to Jack Murtha. He really was apologizing because he was late, but in the meantime that had to do with votes.

REMARKS OF MR. MURTHA

Mr. MURTHA. I just want to say what a good job your Comptroller did. We have never had such frank, open testimony from a Comptroller. Comptrollers are usually this, that, and the other. But this guy did a masterful job. He is as good as I have ever heard, and I just wanted to compliment him before the Secretary, so that you would know he is representing you well.

SUMMARY STATEMENT OF SECRETARY RUMSFELD

Secretary RUMSFELD. I would like to say I taught him everything he knows. The problem is it is just the reverse. Thank you, I appreciate that.

Mr. Chairman and members of the Committee, I will make a brief statement. General Myers has a brief statement, and at that point Dick Myers and I have to leave while Dr. Wolfowitz and Dov Zakheim take over.

STATUS OF THE WAR IN IRAQ

We appreciate this opportunity to discuss the President's emergency supplemental. We are now less than a week into Operation Iraqi Freedom. The major ground war began last Thursday at 10 p.m. at night, and the major air war started on Friday, the following day, one week ago at 1 p.m. So while the conflict is well begun, it is only begun, and we are certainly still closer to the beginning than we are to the end.

Already, coalition forces have made good progress, and certainly the men and women in uniform, U.S. and coalition alike, are doing a superb job. They face an adversary that has demonstrated its contempt for the laws of war, dressing its forces as liberated civilians, sending them out waving white flags, feigning surrender in order to draw coalition forces into ambushes and then shooting them. They are using hospitals as a base from which to launch attacks and they are hiding behind human shields.

Coalition forces have raced across more than 200 miles of Iraqi territory, coming from the south towards Baghdad, through enemy fire and inhospitable terrain, with difficult weather as you have read, some winds gusting up to 60, 70 miles an hour, to reach a

point about 50 miles south of Baghdad in less than a week. It is an impressive rate of advance.

They have successfully secured the Iraq southern oil fields, prevented an environmental disaster in the destruction of the critical resources that the Iraqi people will certainly need once this regime has been removed.

Given the fact that the Republican Guard have moved towards Baghdad from the north coming south, from the South going north, from the west moving toward the east, the campaign could well grow more dangerous in the coming days and weeks as the forces close in on Baghdad, as coalition forces close in on Baghdad. But the outcome is assured: The regime will be removed. The only thing that remains unclear is precisely how long it will take.

FISCAL YEAR 2003 SUPPLEMENTAL REQUEST

We do know that these efforts cost money and the cost of the operation and the other missions currently underway in the global war on terror can no longer be absorbed without an emergency supplemental appropriation that the President has requested.

Since the new fiscal year began, every month since October of 2002-we've been through October, November, December, January, February, and most of March-we have had to borrow from other programs to pay for the costs of the war. The pattern cannot continue much longer. The services have already gone through their discretionary spending for the first, second, and, for the most part, third quarters of 2003, and they will soon have exhausted the fourth quarter of discretionary funding. If this continues we will run out of discretionary funds by late spring or early summer is their estimate, which could force us to curtail training, maintenance, and other activities.

The President submitted a supplemental of $74.7 billion dollars of which $62.6 billion is for the Department of Defense:

The request for DoD includes, among other things, $7.1 billion for the round-trip cost of transporting our forces and equipment from their permanent bases to the theater of operation;

$13.1 billion to provide warfighters in theater with fuel, supplies, repairs, parts, maintenance and other operational support;

$15.6 billion for incremental personnel costs such as special pay and compensation for mobilized reserves;

$7.2 billion to start reconstituting the forces by replacing the many cruise missiles and smart weapons and other key munitions that are being expended;

$12 billion for stability operations, military operations to root out terrorist networks and deal with any remaining pockets of resistance, humanitarian assistance, and operations to search for and destroy weapons of mass destruction. We have teams of people that are prepared to go in, following the forces, to search out suspect sites as soon as the ground is occupied;

$1.5 billion for coalition support in the global war on terror, including $1.3 billion for reimbursement to Pakistan and other key cooperating countries assisting in that effort, and $165 million for training of the Afghanistan National Army; and

$6.1 billion for other requirements outlined in the request to support military operations in Iraq and the global war on terror.

Of the $62.6 billion requested for DoD, some $30.3 billion have already been spent or committed. By "committed," I mean that if you are flowing the forces over and you know you have to bring them back, that is committed. If the Iraqi regime had agreed to voluntarily disarm and prevent a war, the cost of sustaining our military pressure in support of diplomacy through the rest of this fiscal year would have been in excess of $40 billion. So even without a war, the costs of disarming Iraq would have been significant.

OTHER SOURCES OF FUNDS

When it comes to reconstruction, before we turn to American taxpayers, we will turn first to the resources of the Iraqi Government and the International Community. That is why the President last week seized foreign Iraqi assets in the United States, so that they can be put to good use. The sources of funds are frozen assets of— Iraqi assets in the U.S. and other countries.

Second, the Oil for Food funds which run varying between $10 and $12 billion, of which currently some $7 billion I am told are committed to contracts. On the other hand, those contracts were entered into by the regime of Saddam Hussein, and I suspect that a lot of those contracts ought not be honored and certainly there ought to be a very careful review of those contracts, which would free up some of that estimated $7 billion and increase the amount of difference between contracts that are committed and good and the total amount of $10 to $12 billion.

INTERNATIONAL SUPPORT

In addition, an international coalition of countries will be participating; indeed, they already are. A number of countries have volunteered a variety of different things, including food and medical assistance and the like.

Once Saddam Hussein is gone, the U.S. will work with the Iraqi Interim Authority that will be established to tap Iraq's oil revenues, the funds Iraq is owed in the U.N., as I mentioned.

Reconstruction will require a significant international effort. The threat posed by this regime is a global threat. That is why some 49 nations today are publicly supporting the coalition against Iraq. There are another 11 countries, I am told, which are privately supporting it but prefer not to be mentioned publicly. There are a growing number of countries that are participating with military capabilities.

FINANCIAL FLEXIBILITY

In addition to needing a supplemental, we also need greater flexibility as to how we spend it. We need to be able to adjust to the constantly changing circumstances of the war. It is our hope that the period of intense combat will be short and that the coalition operations can shift from combat to restoring stability and civil order, supplying humanitarian assistance, and helping Iraq's people rebuild and assume functional and political authority over their country from the coalition.

That is our hope. But when it will happen is certainly not knowable.

We do not know when the period of intense combat will end. We do not yet know how much damage there will be to Iraq's infrastructure, although I should say the coalition forces are making efforts to keep that damage minimal while inflicting maximum damage to regime targets.

We do not know how the international efforts will unfold and the specifics of what other countries will be able to offer.

With all those unknowns, it is clear we need flexibility.

Just as the military plan General Franks has developed has flexibility built into it so that our forces can deal with the unexpected events of the battlefield, including weather, our budget plan must also have flexibility to deal with changing circumstances on the ground. That is why it is important that the funding requested for the Defense Emergency Response Fund, or DERF, be appropriated in that Fund, with its own transfer authority, so we will have the flexibility to respond to the inevitable changes on the ground.

It is also important that Congress approve the general provision that the President has requested in the supplemental, especially the request for increased general transfer authority. The President has requested a general transfer authority ceiling of 2.5 percent of the fiscal 2003 DoD budget. That figure we believe is reasonable and certainly supports our clear need for flexibility.

SUMMARY

$74.7 billion is not the cost of the war. That figure is the best estimate of the money that the State Department, the CIA, the Department of Homeland Security, and the Department of Defense need to carry us from October 1, 2002 to the end of this fiscal year. Since we cannot know how long the effort in Iraq is going to last, we certainly cannot tell what it is going to cost. It is not knowable. What I do know is whatever it ends up costing will be small compared to the cost of lives and the threat of another attack like the one we experienced on September 11 or a weapons of mass destruction attack that could be far worse.

Our mission in the global war on terror is to do everything in our power to prevent a chemical, biological, or nuclear attack that would make September 11 seem modest by comparison; an attack where we could lose not 3,000 people, but 30,000 or 300,000.

Mr. Chairman, we need the funds. We need the flexibility as to how they are spent so we can adapt to unforeseen and unknowable circumstances that will unfold in the weeks and months ahead. We appreciate the strong support that you have shown for the President and this Committee has for men and women in uniform. They are doing a truly remarkable job and there is no question but that they will succeed in their mission.

[The statement of Secretary Rumsfeld follows:]