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Secretary White. Thank you.

Mr. Lewis. Before we move on to that testimony, I suggested earlier I would like to call on my friend and colleague from Pennsylvania, Jack Murtha.

Remarks Of Mr. Murtha

Mr. Murtha. As you know, Mr. Secretary, the Chairman, myself, Mr. Dicks and Mr. Hobson just came back from Kuwait. What a transformation. When I was there in August—I mean, in August I knew we weren't going to war in the near future; and today they are ready to go.

I stood there with my nephew, who is in the other branch of the service, in tents left over from the Army and a flag that I gave him that was flown over the Capitol and I listened to those young folks talk about how well prepared they were and some of the systems that we put in place.

The Chairman is too modest when he talks about the Predator. If it hadn't been for him, there would be no Predator. He was the guy who pushed it. He was the guy that got criticized, and he was the guy that they tried to stop from putting it out in the field. He persisted, and that Predator is one of the most important systems that we have. The combat systems that they have today, which have been improved so much, the batteries so much smaller, which gives them such an advantage. And they are confident that they will win this war. There is no question in our mind about it.

There is no question that the conditions are very austere and very difficult. But I was so impressed by the new logistic system we have where you can go in there—

And, by the way, I asked how many were Reserve and Guard people; and half of them held up their hands; and they were seamless. You couldn't tell the difference between who was the Guard and the Reserve.

But they will be able to save money by not stockpiling stuff in the front. They will be able to send it out where it is needed because of the computerized system that works so well.

And they are going to prevail. None of us want to go to war. But if we have to go to war when the President makes the decision, I am so confident under your leadership you have done such a good job. And, of course, the lighter Army is going to be the Army of the future; and you folks have done so much. Greg Dahlberg, who was here, was in the forefront—and Kevin Roper.

All of us in this Committee feel so strongly that we have got to move the Army in another direction, along with you. So I look forward to hearing your testimony and congratulate you and compliment you on the work that you have done, because the product is out there in the field ready to go.

Mr. Lewis. Mr. Secretary, please proceed. Your entire statement will be placed in the record.

[clerk's Note.—The Fiscal Year 2003 Joint Posture Statement of the Secretary of the Army and the Chief of Staff of the Army is printed at the end of this hearing. See page 140.]

Summary Statement Of Secretary White

Secretary White. Thank you, Mr. Chairman, Congressman Murtha, distinguished members of the Committee. I am grateful for this opportunity to talk to you today about the Army.

Our priorities remain the same as they were a year ago: Win the global war on terrorism and transform the Army, as you have talked about, to prepare it for future wars.

First and foremost, I wish to thank this Committee for your continued support of the Army. The 2003 budget has allowed us to make significant improvements in many key areas. We have structured our budget request for 2004 in exactly the same fashion as 2003, based upon our top priorities of People, Readiness and Transformation.

PERSONNEL INITIATIVES

The people front. Thanks to you and your support, we are making significant strides in the personnel area with initiatives including a fully funded general pay raise for all soldiers, targeted pay raises in selective cases, significantly reduced soldier out-of-pocket expenses for housing, and an accelerated Residential Communities Initiative to improve on-post quarters for our families.

This year, we are examining options under an initiative called personnel transformation to shift away from our individual replacement system to a unit manning approach that will enhance the cohesion and combat readiness of our formations while improving the predictability of assignment patterns for Army families. As you know, we have had over 30,000 National Guardsmen and Reservists on active duty consistently since the 11th of September of 2001; and, as of today, we have activated over 130,000 soldiers for current and potential future federal operations at the federal level. In addition, over 2,700 soldiers currently are activated for state service.

These Reserve Component soldiers are performing magnificently, and we appreciate the tremendous support they have received from their employers as well as the American public. We recognize the unique sacrifices made by these citizen soldiers as they step up to do their duty as citizens and patriots.

READINESS AND OPTEMPO

In readiness, the Army is ready for any additional operations that we are ordered to perform in the future; and our great soldiers are successfully meeting our many current obligations around the world.

With your help in 2003 and again in our 2004 budget request, we gave priorities to funding training requirements for the force, significantly improved our spare parts availability and accelerated fielding of soldier support systems and unit communications equipment to make our units as ready as possible.

Having said that, our operational tempo—I think the Chief would echo this—has never been higher in the 40 years of experience that I have with the Army. We are indeed an Army on the move.

While we are actually funded normal OPTEMPO training, including the full complement of pre-9/11 missions such as Bosnia and Kosovo and the Sinai and Korea, we have many other obligations as we pursue the global war on terrorism as part of the joint force. Post 9/11 missions in the past 18 months include Operation Noble Eagle here at home, Enduring Freedom in Afghanistan, as well as operations in the Philippines and elsewhere.

Finally, we have the significant flow, as you have seen personally, of Army forces into the Persian Gulf in support of the diplomatic effort to insure the disarmament of Iraq.

Given this level of activity, I don't think it is any surprise that supplemental funding will be required in 2003 as we progress during the year.

We are working hard to balance our readiness imperative for realistic training with our obligation to be good stewards of the environment. That balance is reflected in DoD's range preservation initiative that we ask your support for. It is essential for us to maintain the balance between the use of military lands for their uniquely military purposes and the need for environmental protection and species preservation. The readiness of our soldiers going into harm's way depends upon it, so we ask for your help with this important initiative.

TRANSFORMATION

Transformation. You have mentioned it, and you have fully supported it in the Committee for a long time; and for the Chief, almost four years now since he laid the marker down. We are transforming our Army even while we execute combat operations and prepare for future contingencies. This simultaneity is not only a necessity, it is an imperative.

We are transforming the business side of the Army as well as the operational forces, and we are transforming within the joint context not merely in a service centric manner. We have held steady to the azimuth established by the Chief, General Ric Shinseki back in 1999.

FUTURE COMBAT SYSTEM

In 2004, we request funding for the fourth of our six Stryker brigades to be fielded at Fort Polk, Louisiana, to the Second Armored Cavalry Regiment. We remain focused on the Objective Force with the restructured Comanche armed reconnaissance helicopter program. We are postured to successfully meet acquisition Milestone B in May for the Future Combat System or FCS. FCS includes the non-line of sight variant, the initial fielding increment which will meet the cannon requirements previously addressed by the Crusader program. We remain on glide path to field the first Objective Force unit in 2008 with an initial operational capability, IOC in 2010.

On the business side of the Army, we fully solicit your support for the DoD transformation package that would greatly streamline our operations and give us the flexibility to manage the Department in the most efficient manner. In the same vein, our business transformation initiatives are designed to achieve greater value for the taxpayer dollar.

RESIDENTIAL COMMUNITIES INITIATIVE

Our Residential Communities Initiative or RCI, which really has been championed by many of you over the years in this Committee, to privatize family housing continues to be, I think, an enormous success. By 2007, the Army will have established partnerships to bring every set of family quarters up to standard. We are able to do this because, with an investment of roughly $600 million, we have attracted over $7 billion in private capital. This is a tremendous value for the taxpayer and the soldier and we believe the model of how better business practice can help us with non-core functions such as housing.

We are seeking to apply the same manner and model of publicprivate partnership on a challenge of on-base utilities in our installations, consolidating all installation management under one command, centralizing Army-wide, contracting over $500,000 per contract in our Army Contracting Agency. We are seeking to regionalize utilities contracting and achieve economies of scale that were not possible with our previous business management structure. Private capital would be required to fix the utilities infrastructure on our bases, and we are setting the conditions to attract it just as we did with RCI.

Finally, we are conducting what we call our Third Wave initiative, which seeks to eliminate all non-core functions currently consuming Army people and dollars.

Rest assured we will pursue these business initiatives in full consultation with you and the Congress.

From a risk perspective, balancing the risk associated with nearterm modernization and mid-term transformation has required us to make some very tough choices. We have had to terminate or restructure numerous current force modernization programs to generate the capital to fund transformation. In a nutshell, our 2004 budget submission funds people, readiness and transformation at the expense of some of our infrastructure accounts in current force modernization. We have made judgments only after careful balancing of both the operational risk and the risk of not transforming to provide the capabilities the Army needs to meet the obligations of the mid- and long-term joint operational concepts that we are a part of.

SUMMARY

In conclusion, I wish to return to those who I mentioned first in these remarks, our soldiers. Their performance in Afghanistan speaks volumes: Dead of winter, landlocked country, toughest terrain imaginable, collapsed the Taliban regime, put al Qaeda on the run. It has been my privilege as it has been your privilege to visit them in Afghanistan and Kuwait, in Bosnia and Kosovo, all around our country. You couldn't meet a finer group of young Americans. They are flat out in my 40 years the best soldiers I have ever seen; and we all ought to be very, very proud of them. Rest assured they stand ready, along with our sister services, to accomplish any tasks ordered by our Commander-in-Chief.

Thank you for this opportunity, Mr. Chairman, to discuss the 2004 budget submission of the Army. I look forward to your questions.

Mr. LEWIS. Thank you, Mr. Secretary.

General Shinseki.

Summary Statement Of General Shinseki

General SHINSEKI. Mr. Chairman, Congressman Murtha, first let me begin, Mr. Chairman and Congressman Murtha, by expressing my thanks to both of you and the other members of this Committee for the very generous opening remarks.

I have been a soldier every day for about 37 and a half years, and I have enjoyed every one of those days. I have done a few things in that period of time. I think the last four years will always be very special. But part of that privilege has been the high point of working with great patriots here in the Congress and, uniquely, with those members of this Committee who have taken a little bit of risk, listened to a description of what the future could be, and then gave us the support and the resources to generate enough momentum to come back to you and suggest that we had something going here. Then to again demonstrate your confidence in us and Secretary White's leadership has been phenomenal in helping us maintain that momentum. So, to the members of this Committee, thank you for your great support.

Mr. Chairman, Congressman Murtha, I am honored to join the Secretary today, as I have indicated, whose leadership and guidance has produced tremendous momentum for what we have been about in this thing called the Army Vision, my privilege in joining him to report out to all of you on the posture of the Army and its readiness today.

Today, soldiers, as the Secretary has indicated, are serving magnificently as part of a joint team with all of our other members, other uniformed services, tremendous young Americans doing terrific work defending our freedom in this war against terrorism and then preparing for any other contingency they may be called upon to do. In the Army alone, over 242,000 soldiers are deployed forward, stationed overseas someplace. Almost 133,000 of our Reserve Component soldiers have been mobilized at this point in the past 6 months.

All of you, the Secretary, and I have visited a good many of them. I have stood with them where they worked and trained, spoken with them as well, those who arrived back here at Walter Reed Army Medical Center. I have spoken to them candidly, had frank discussions with them about their sense of the Army's readiness to respond to the calls of this Nation.

The Army is ready. We have the best army in the world. It is not the largest, but it is the best. It is the best trained, the best equipped, and the best led.

But, as you all know, it is more than just about equipment. We have the best soldiers. Their determination and commitment are as firm as I can recall in all my years of service. They are immensely proud to serve this Nation. They will take any objective. They will accomplish any mission we give to them. I am proud of what I have seen. Soldiers are standing by in a hundred camps and stations

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