Mr. Chairman, members of the committee.
Thank you for the opportunity to appear before you to discuss the president’s budget requests for fiscal year 2011. I first want to thank you for your support of the men and women of the United States military these many years. These troops are a part of an extraordinary generation of young Americans who have answered their country’s call. They have fought our wars, protected our interests and allies around the globe, and, as we have seen recently in Haiti, they have also demonstrated compassion and decency in the face of incomprehensible loss.
I have a brief opening statement to provide an overview of the budget requests. My submitted statement includes many more details that I know are of interest to the committee.
The requests being presented today include $549 billion for the base budget – a 3.4 percent increase over last year, or a 1.8 percent real increase after adjusting for inflation, reflecting the administration’s commitment to modest, steady, and sustainable real growth in defense spending.
We are also requesting $159 billion in 2011 to support Overseas Contingency Operations, primarily in Afghanistan and Iraq, plus $33 billion for the remainder of this fiscal year to support the added financial costs of the president’s new approach in Afghanistan.
The base budget request reflects the following institutional priorities:
· First, reaffirming and strengthening the nation’s commitment to care for the all-volunteer force, our greatest strategic asset;
· Second, rebalancing America’s defense posture by emphasizing capabilities needed to prevail in current conflicts, while enhancing capabilities that may be needed in the future; and
· Third, continuing the department’s commitment to reforming how DoD does business, especially in the area of acquisitions.
Finally, the commitments made and the programs funded in the OCO and supplemental requests demonstrate the administration’s determination to support our troops and commanders in combat so they can accomplish their critical missions and come home safely.
The budget continues the department’s policy of shifting money to the base budget for enduring programs that directly support our warfighters and their families – whether on the battlefield, recovering from wounds, or on the home front – to ensure that they have steady, long-term funding and institutional support.
The base budget request was accompanied and informed by the 2010 Quadrennial Defense Review, which establishes strategic priorities and identifies key areas for needed investment. The 2010 QDR and FY 2011 budget build upon the substantial changes the president made in the FY 2010 budget request to allocate defense dollars more wisely and reform the department’s processes.
The FY10 budget proposals cut, curtailed, or ended a number of programs that were either performing poorly or in excess of real-world needs. Conversely, future-oriented programs where the U.S. was relatively underinvested were accelerated or received more funding.
The FY11 budget submissions and QDR are suffused with two major themes. The first is continued reform – fundamentally changing the way this department does business: the priorities we set, the programs we fund, the weapons we buy – and how we buy them.
Building on the reforms of last year’s budget, the FY11 request takes additional steps aimed at programs that were excess or performing poorly. They include:
· Terminating the Navy EP(X) intelligence aircraft;
· Ending the Third Generation Infrared Surveillance program;
· Canceling the next generation cruiser;
· Terminating the Net Enabled Command and Control program;
· Ending the Defense Integrated Military Human Resources System due to cost overruns and performance concerns;
· Completing the C-17 program and closing the production line, as multiple studies in recent years show the Air Force already has more of these aircraft than it needs; and
· Ending the alternate engine for the F-35 Joint Strike Fighter, as whatever benefits might accrue are more than offset by excess costs, complexity, and associated risks.
I am fully aware of the political pressure to continue building C-17s and proceed with an alternate engine for the F-35. So let me be very clear: I will strongly recommend that the president veto any legislation that sustains the unnecessary continuation of these two programs.
Before closing, I would like to provide an update on the F-35 fighter program, which I know is of great interest and concern to this committee. In response to what I consider to be unacceptable delays and cost overruns over the past year, this department has taken a number of steps to fundamentally restructure this program.
First, the JSF program is now based on numbers – cost and schedule estimates – from Joint Estimating Team an independent body known for its rigorous and skeptical assessments.
Based on the new JET estimates, we reduced the number of aircraft being purchased concurrent with testing and development. While delaying full-scale production was not a welcome development – to put it mildly – it was important to avoid a situation where a problem discovered in testing would lead to expensive retrofits of aircraft, the most common reason for delays and cost overruns in these kinds of programs. Correspondingly, we have added more aircraft to the testing program, which we believe will reduce the projected delay from 30 months to 13. These changes amount to a brutally realistic assessment of cost and schedule – one that I believe should stand the test of time and the legitimate scrutiny of the Congress and the taxpayer.
Furthermore, with regard to accountability, I have replaced the JSF program manager and elevated that position to a three-star billet while withholding more than $600 million in performance fees from the lead contractor. It is important to remember that the F-35s cost- and schedule-related issues – and I regard them as serious, to be sure – are problems primarily related to program administration and management, not the technology or capabilities of the aircraft. The Joint Strike Fighter will do everything the military services need it to do, and it will become the backbone of U.S. air combat for the next generation.
In closing, I would like to offer two thoughts to consider when assessing the U.S. investment in national defense:
First, the requests submitted this week total more than $700 billion – a massive number, to be sure. But, at 4.7 percent of gross domestic product, it represents a significantly smaller portion of national wealth going to defense than was spent during most of America’s previous wars. And the base budget represents about 3 ½ percent of GDP.
Second, as you recently read, the president has exempted the defense budget from spending freezes being applied to other parts of the government. It is important to remember, however, that as I mentioned earlier, this department undertook a painstaking review of our priorities last year, and as a result cut or curtailed a number of major programs. These programs, had they been pursued to completion, would have cost the American taxpayer about $330 billion.
In closing, Mr. Chairman, my thanks to you and members of this committee again for all that you have done to support our troops and their families, especially in light of unprecedented demands that have been placed upon them. I believe the choices made and priorities set in these budget requests reflect America’s commitment to see that our forces have the tools they need to prevail in the wars we are in while making the investments necessary to prepare for threats on or beyond the horizon.