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Air Force News Briefing on the FY 2014 Defense Budget Proposal from the Pentagon

Presenters: Major General Edward Bolton, Deputy Assistant Secretary of the Air Force for Budget, Office of the Assistant Secretary of the Air Force for Financial Management and Comptroller
April 10, 2013

Go to http://www.defense.gov/news/briefingslide.aspx?briefingslideid=367 to view briefing slides associated with this transcript. 

            MAJOR MATT HASSON:  Good afternoon.  I'm Major Matt Hasson, Air Force Public Affairs.  It's my pleasure today to introduce the Air Force's deputy assistant secretary for budget, Major General Ed Bolton.  General Bolton has a briefing for you, and followed by his briefing, he'll entertain your questions.

             So with that, Sir, the floor is yours.

             MAJOR GENERAL EDWARD BOLTON:  Thank you, Matt.

             Good afternoon.  How are you all doing?  Thank you for joining me today.  Welcome to the Air Force budget rollout presentation.  Next slide, please. 

             OK.  This slide shows the topics that we'll cover in today's presentation.  We'll first take a few minutes to reflect on our heritage.  It's important during times of uncertainty and challenge to really think about who you are and why you do what you're doing.  Then we'll talk about PB [President’s Budget] '13, what exactly happened in PB '13 with respect to sequestration, and then try to share our understanding as best we know it today how that impacts '14.  Then I'll do a review of PB '14 and then close with some closing comments, and then we'll take any questions after that point.  Next slide. 

             We are the world's greatest air force.  Our model, powered by airmen, fueled by innovation, speaks to our greatest asset, our people, and the spirit of innovation has been a key characteristic of our culture since our inception in 1947.  The Air Force provides the capability to rapidly respond and to fly, fight and win in aerospace and cyber. 

             Now, on the chart, you'll see a picture of Hap Arnold overlooking three historical examples of the application of our core missions.  And they're also shown on the slide.  During the Berlin airlift, from 1948 to 1948, the Air Force supplied 441 of the 689 military and civil aircraft that flew nearly 400,000 tons of foodstuff, coal, and supplies into Berlin.  That's global mobility.

             Starting in 1950 in Korea, Air Force pilots successfully flew the F-86 Sabre against Soviet-built MiGs in the first air-to-air jet combat sorties.  And these pilots achieved a greater than five-to-one kill ratio.  That's a great example of air control.

             Later in Desert Storm in 1991, the role of airpower and warfare was dramatically demonstrated.  Air attacks was made on -- on Iraqi command-and-control centers, communications facilities, supply depots, and reinforcement troops.  Air superiority over Iraq was gained before major ground operations were started.  I guess you could call that all of the above.

             Next slide, please. 

             So those contributions, those core missions, the things the Air Force brings have continued into the 21st century.  And today, each and every day, we provide those critical capabilities to the joint fight.  This slides shows three examples of that great work with the Army and Navy and Marine Corps, starting with the first, the CV-22 Osprey from the 8th Special Ops Squadron from Hurlburt, Florida, flies a water operation exercise with Navy SEALs.  In the middle, an MQ-9 Reaper, and that's assigned to the 451st Air Expeditionary Wing, providing close air support and ISR support to soldiers in Afghanistan near Kandahar Airfield.

             And then finally, see Marines from Heavy Helicopter Squadron 464 stationed in Djibouti, and they're unloading CH-53 Super Stallion helicopter, and that's from a C-5 that's assigned to the 439th Airlift Wing from Westover Air Reserve Base in Massachusetts.  This is in support of the Combined Joint Task Force for the Horn of Africa.

             But these are just snapshots.  In total, over 35,000 airmen are deployed to contingencies around the globe.  More than another additional 57,000 airmen are stationed overseas, and another 130,000, 132,000-plus are providing support to combatant commanders from right here in the United States, space, cyber, missiles, and others.

             Our high ops tempo over the past decade has taken a toll.  Let me give you just one example.  The 317th Airlift Group of Dyess, Texas, now this group was continuously deployed from December of 2003 until just last month.  That's 10 years of deployments.  And so even before we came to the challenges of 2013, we came to the realization that the deployments that we were doing, the high ops tempo was at the expense of other work and training that we would have to do to prepare for other contingencies if they kicked off.

             Next slide, please.

             So let's reflect back to PB '13 and what the initial conditions were that set us up for PB '13.  And this slide is summary of the defense strategy and the fiscal challenges associated with '13.  And to reflect briefly, the defense strategy, it required us to continue our deployments in the Middle East but then also start the pivot of a transition to the Asia Pacific.

             It recognizes that we must honor our commitments to our traditional partners in Europe, but that posture that supported those commitments would have to evolve.  It eliminated the requirement to size our forces to participate in two simultaneous combined operational campaigns. 

             As the force structure, it instructed us to become smaller, but remain capable, and to protect both the improved capabilities we gain over 10 years of warfare, but then -- and then also the systems that we would need in the future.

             As to the physical environment, the Budget Control Act mandated a $259 billion decrement to the Defense Department.  That translated into a $50 billion decrement to the Air Force -- that's over FYDP [Future Years Defense Program]. And then for '13, that was a $9 billion decrement.  So before '13 started, we had a $9 billion decrement as a result of the Budget Control Act of 2011 -- '13.  Also, by the way, as we contemplated these changes, we were also aware of the fact that we have too much infrastructure for our current force size and inventory.

             Next slide, please.

             So what happened in '13, given that fiscal background, given the strategic environment?  This  histogram and the accompanying words on slide six describe how we built the 2013 budget and how we responded to sequestration.  The first column shows the Air Force Blue  funding we requested.  As to the actions we took, first -- first, in separate FY '13 and FY '12 actions, we took almost $40 billion in efficiency reductions. 

             Then, to make the force smaller but still capable, again, as required by the new defense strategy, we requested -- we sought to retire 227 aircraft and then cut the 9,900 authorizations associated with those systems.  We also sought to terminate some acquisition programs that provided capabilities that we could meet through other mechanisms, and so they were no longer cost affordable.

             Those reductions promised to save $1.8 billion in FY '13 and $8.7 billion across the FYDP. And we also gleaned an additional $669 million by trimming our F-35A productions from 24 to 19 in that fiscal year.

             At end, we did reach an agreement, and we got the majority of those savings.  We did get 119 aircraft.  We were able to reduce and we were able to reduce some of those systems, but the additional force structure that we did not ask for, that we were required to maintain, was not fully funded, so that was a challenge for us and initial condition for us in '13.

             The big challenge for us, though, was sequestration, and the second column in his  histogram shows that.  Excuse me.  First of all, as you recall, sequestration occurred well into the fiscal year, so a good portion of our funds had already been expended.  Then if you look from the bottom -- start from the bottom, with military pay exempt and then contractual obligations, must pay bills, the burden fell on flying hours, weapons system sustainment, and civilian personnel to absorb those reductions.

             Next slide, please.

             So how does that translate into '14?  What are those impacts and what does that mean for us as we start PB '14?  Well, in '13, we had to reduce our flying hours from nearly 1.1 million -- I think it's 1.165 million flying hours -- to less than 1 million flying hours.  So as a result, one week ago, several of our active-duty fighter squadrons cease flying operations.  And this is the first in our history, tiered readiness.  This is the first time in Air Force history that we've had tiered readiness.

             Now, obviously, if a fly -- pilot doesn't fly today, he's not incapable of flying tomorrow, but if this lasts more than a few weeks or months, it could take six months or more to bring the force back up to full proficiency.  So that's a significant impact.

             From a maintenance perspective, we reduced weapon system sustainment, and that's the dollars used to repair our aircraft and operate and maintain our space and missile systems, by 18 percent, and that's 1.135 -- $1.1385 billion.  As a result of this reduction, we had 60 aircraft that were planned for maintenance that were not inducted into the depot.  And so this is an unaccomplished work that will be a backlog that will -- that will carry over into '14. 

             We took a series of measures in the personnel -- in the personnel arena.  We did a hiring freeze on the 16th of January.  We released temporary and term employees, and then in the most difficult leadership position I've seen in 30 years as an officer, even put civilian furloughs on the table.  And this is going to negatively impact families, it's going to negatively impact our ability to recruit and retain.  So there's impacts there.

             We reduced facility sustainment, restoration and modernization, and that's the dollars it takes to maintain the buildings, build and repair roads, and keep the heating and cooling systems functions.  We reduced that by 50 percent.  And so going forward, we're only going to do emergency fixes in those areas.

             And so, again, this is the same as what you take to maintain your home.  If you don't fix your driveway prior to a snowy season, the next time you try to fix it, it's going to cost more money, and it's the same for us. 

             Our reductions in the investment programs have impacts, as well.  We had already decremented the F-35A program from 24 to 19 [aircraft] to get underneath the reductions of the Budget Control Act.  As a result of sequestration, we're going to have to reduce it even further.  Now, we're still working out the details on exactly what the reductions will be, but it could be in the order of three to five aircraft, so we've already reduced it from 24 to 19.  It could go down to another 14 -- 14, 15 or 16.  And so this delays an important capability that we need if we go into anti-access aerial denial environment.  So there's significant impacts as a result of sequestration that permeate into '14 that this budget does not fix. 

             Next slide, please.

             OK, so this is a quick look, bottom line upfront of the PB '14.  I'll walk through that and walk through each of -- walk through each of the appropriations, but let me give you some initial conditions right upfront for '14.

             First of all, there's no major muscle movements in '14 compared to '13.  '13 was a real sea change for us.  '14 continues that work.

             Secondly, this budget assumes that the requests we get in will be enacted.  And so this does not include a (inaudible) for sequestration.

             And then, finally, this doesn't include our OCO [Overseas Contingency Operations] submission, our receipts contingency operation submission.  As Mr. Hale said, we hope to get that in, in about a month. 

             To the slide, first, military personnel, which funds housing, subsistence and allowances for our military personnel, that's $29.2 billion.  Then, O&M [operations and maintenance], the money it takes to operate and maintain our service, that's $46.6 billion.  It does support a slight increase in flying hours from 1.165 million to 1.20 million flying hours, but, again, as a reminder, that would have been a 40,000 flying hour increase, but if we're going to start the year with a deficit of 200,000 flying hours, and that's going to be significant.

             It does resource weapon system sustainment of 69 percent.  That's over $10 billion for 52.2 thousand aircraft.  And as we've done in the past, we'll use the overseas contingency operations funding to bring that up.  I don't how much, because I don't have my OCO numbers yet.  I'm anticipating it'll be in the high 70s, perhaps 80 percent.  And for a sustainment, restoration and modernization, it's funded at 80 percent.

             Military construction, $1.8 billion.  Again, that is a significant uptick from what we provided last year.  Last year, there was a decrement after the previous year.  And this money is focused on COCOM requirements and then also some bed-downs for the next-generation weapon systems.    

            For research, development, tests and evaluation, it continues our big three, our three major acquisition programs, our next-generation bomber, our next-generation fighter, and then the next-generation air refueler, the KC-46, F-35, and the LRSB [Long Range Strike Bomber].

             Procurement.  The biggest thing, the biggest change we're doing in procurement is that we're recapitalizing the C-30 fleet at the tune of $1.9 billion.  Last year, we purchased seven C-130s.  This year, we purchased -- we purchased 16.  We go from four to five EELVs, Evolved Expendable Launch Vehicles, and then we also restore some depleted munitions as a result of systems that we've used in the war. 

             Next slide.

             I'll now walk through the appropriations.  I have one slide per appropriation.  Then we'll wrap up and I'll take questions.

             I will point out a couple of the pictures here.  We're proud of these two.  The two pictures on either side of this chart show some of the world's finest airmen.  On the right, New York's 107th Air National Guard Airlift Wing marked the 11th anniversary of 9/11 by enlisting seven new airmen in front of a C-130 that had just returned from Afghanistan.  Now, on the left you see 11 of the 12 outstanding airmen -- outstanding airmen of the year.

             In this budget request, we seek $29.2 billion to provide pay and allowances for airmen like these, our 503,000 airmen.  This request does increase base pay and allowances, and you see that on the chart.  Our total force end strength decreased by about 2,000 authorizations from '13 enacted to PB '14 and appropriately balances between active-duty, Guard and Reserve.

             Now, one of the things that we did want you to know about is that the secretary has chartered a task force, has three two-stars, one from the Guard, one from the active-duty, and one from the Reserve.  And they're conducting an assessment to determine what the appropriate balance is between Guard, Reserve and active-duty components, particularly as we contemplate a reduced top line in the out-years.  I expect that to be  out briefed in the summer timeframe.

             Next slide, please.

             Operations and maintenance.  Between pictures of a successful Atlas V Evolved Expendable Launch Vehicle, launched by my alma mater, the 45th Space Wing at Cape Canaveral Air Force Station, an F-22 Raptor, this slide shows a request of $46.6 billion to operate and maintain our aircraft, missiles and space systems. 

             This slide also shows that -- that this appropriation provides the pay for 184,000 civilians and funds the day-to-day operations and maintenance of our 79 major and 81 minor installations.  As I said before, we requested 1.1 million flying hours.  That's about 40,000 more than last year.  This mission includes an additional $274 million to enhance combat training.  Again, we've deployed so much that the training that it takes to do the high-end type of battles that you might have to do in an anti-access, air denial environment have been compromised, we haven't done a sufficient amount of training in those areas, and so we want to push money towards that -- towards that training.

             This year, we also provide $810 million to core family services, such as childcare, youth programs, morale, welfare and recreation and family services.  We support the commissaries with $395 million.  We also provide $2.355 billion for facility sustainment, restoration and modernization, and that's about an 80 percent, and then with efficiencies, we know we took a 10 percent decrement because of efficiencies, so that's equivalent to 90 percent rating.  And we also stay on track to reach -- reach 65 CAPs [Combat Air Patrols] this year and fund our ranges at about 74 percent, which is a significant increase.

             Weapon systems sustainment, we find it at 69 percent, again, relying on overseas contingency operations dollars to bring that up to a higher level.  And the impact in this area, unlike military personnel, was with -- which is exempt from sequestration is significant.  There is over a $4 billion bow wave of work that was not accomplished, flying hours that were not flown, training that did not happen as a result of sequestration.  And this budget does not fix that.  And so we start off '14 in the hole.  And there's a readiness impact associated with that.

             Next slide, please.

             This Air Force military construction appropriation, it funds construction products and supports combatant commander priorities, operational needs, infrastructure modernization, and quality of life initiatives.  And so this fund, it restores us to traditional levels after a one-year strategic pause.

             Among our priorities this year are the combatant commander requirements to include Strategic Command headquarters and the Cyber Command Joint Operations Center for the United States Cyber Command.  As we strive to modernize our forces, we request funding to support the bed-down of new missions, such as the KC-46, the F-35, and the F-22. 

             As for housing, we improve over 1,400 housing units in Japan and provide just under $400 million to oversee and maintain our over 74,000 owned, leased and privatized housing units.  We also have BRAC money in here -- last year, we had $125 million.  This year, it was $126 million, but that's for environmental remediation.  And again, we also want to foot  stomp that we're very much in favor of BRAC.  That last time we did a BRAC study, the assessment was that we were about 24 percent overcapacity, and that was in 2005.  The Air Force has been reduced significantly since that timeframe, and we still have the same infrastructure, so if we had less infrastructure, we would significantly save dollars.

             Next slide, please.  We request $17.6 billion in research, development and test funds to continue the modernization required to meet current and future threats.  Along these things, we continued development of the KC-46, the F-35A, and the Long Range Strike Bomber.  We fund a space fence  that will improve our ability to track objects in space, and we sustain our funding to protect our technological advantage.  As to the result and impact from sequestration, there's a  bow wave in this area, as well.  And we think it's upon the area of about $1.5 billion or $1.6 billion. 

             Next slide, please.

             Procurement.  In this appropriation, we procure the aircraft space and missiles in other systems we use to execute our mission.  We keep the F-35A program on track, and the goal is to ramp that up eventually to 60 per year, and we do that within the FYDP.  By a multiyear procurement strategy, we save $500 million by the purchase of 16 of a total 72 C-130s.  And we replenished our depleted munitions inventories.

             We are also continued efficient procurement of the latest communications and early warning satellites.  There is a bow wavehere.  We think that is on the order of $1.3 billion, $1.3 billion.

             As is our practice, we offer a summary of the aircraft, space systems, and weapons that we intend to procure this fiscal year.  I'd like to point out several things for your information, as you consider the slide.  First, this request does not include our overseas contingency operations funding.  This slide compares what we're requesting in '14 to what we requested in '13.  And we're still determining the specific numbers as to what the impact of sequestration is on our procurement request, and so we'll get those numbers to you when we have them.

             As previously stated, we increased C-130 purchases from seven to 16.  We keep our space program on track.  And we also replenish our weapons inventories, particularly the Joint Direct Attack Munition.  There was a significant increase there.

             Next slide, please.

             As I close, I have several key points or takeaways that I hope you'll keep in mind as you reflect on this presentation.  First and foremost, we remain the world's greatest airpower, and our legacy of global vigilance, reach and power continues.  However, these sequestration reductions we're currently experiencing will result in an impact to our ability to be ready.

             And this budget request does not include the funding it would take to repair that damage.  Further, if sequestration continues in '14, there will be additional impacts.  Regardless, we will continue to make the tough choices necessary to protect our core capabilities, and we will deliver on our commitments to national strategy.

             Thank you for your time and attention.  This concludes my presentation.  I'll take your questions at this time. 

             Yes, sir?  Then you.  Yes, sir?

             Q:  Just a question on the flying hours, specifically for the remainder of '13.  I understand that you're cutting about 45,000 flight training hours spread over 12 bomber and fighter squadrons.  Is that correct?

             MAJ. GEN. BOLTON:  Yes, it's -- that was -- 40,000, that's in the combat Air Force.  The actual -- the actual reduction is from 1.16 million -- it's the reduction of 203,000 flying hours.

             Q:  (OFF-MIKE)

             MAJ. GEN. BOLTON:  It's about -- it's in that area.

             Q:  (OFF-MIKE) 40,000 range (OFF-MIKE) how much do you save by doing that, is my first question?  And, secondly and more importantly, why are you cutting those hours?  Is there no place else that you can cut besides combat readiness?

             MAJ. GEN. BOLTON:  Well, if you go through our budget and you look at the five appropriations, and you start with military personnel, you can't take anything out of military personnel.  And then go to O&M.  O&M is -- use on the order of $44 billion, $11 billion of that is civilian personnel.  Even if you furlough civilian personnel, you're still going to pay $10 billion of that.

             Then you have to go -- then you go to your investment programs, right?  And you take out things that are contractual obligations, because it's multiyear dollars.  The KC-46, for example, we had about -- $880 million in (inaudible) in '12, and then the plan for '13 was about 1.8.  And that is -- KC-46 contract is a very good situation for the United States Air Force.  If we break that contractual obligation, we have to renegotiate under a sole-source environment, so we have to meet contractual obligations.

             You have to turn the lights on.  You have to turn the power on.  So it really comes down to three things that you can really deal with, or four.  It comes down to flying hours, weapon system sustainment, the facilities dollars, and civilian personnel.  That's the only place to go, only place you have to go.

             The reductions that we had in plan for flying hours across the board is about $1.3 billion.  It's about $1.7 billion in the weapons systems sustainment.  But, again, we really have no place else to go for those sellers.

             Q:  And what is the cost saving (OFF-MIKE) combat Air Forces by -- by cutting those 40,000-some flight hours?

             MAJ. GEN. BOLTON:  Well, I would -- cutting -- I think it'd be a ratio.  I'd cut -- I save 1.3 by cutting 200, so it'd be about a fifth of that.  And that might not be exactly correct, because you have -- because flying hours vary slightly for aircraft, but that would be an approximate number.  So the -- is that 260, 260-ish?

             I think I promised -- I promised you two first, ma'am, then I'll come to you, then you, sir.

             Q:  (OFF-MIKE) wondering if you could walk us through what's in the requirement for Global Hawk?

             MAJ. GEN. BOLTON:  Pardon?

             Q:  Global Hawk, in the request, it wasn't on any of the slides.  Curious what the -- what the final decisions on that were.

             MAJ. GEN. BOLTON:  Well, we have been directed to -- to operate and maintain a Global Hawk.  You're talking to Block 30.  Block 30, we have a fleet of 18.  There is funds put in to purchase the additional -- the additional three.  We've got contractual obligations to operate it through '14.

             You know, our long-range plan in the Air Force is that we would get out of operating the Global Hawk Block 30.  That's our long-range plan.  I remember you asked the question on that last year.  You sat there last year. (Laughter.)

             But that's our plan to get out of it.  We have law that we have to follow, and we're working through Congress to try to work through that.  I mean, it's our view -- I mean, can I give a view?

             Q:  Sure.

             MAJ. GEN. BOLTON:  You know, it's our view that, in a time of declining dollars, it doesn't make sense to go buy additional systems that wouldn't deliver until '17 of a weapons system that we do not intend to operate and -- so we would like to find a way to work through this and not use the money -- some of it's prior year money, some of it's money that was added this year, to buy new systems and then to -- then to divest the ones that we have.

             Q:  And what about the Block 40s?  Are you going to continue the plans for those?

             MAJ. GEN. BOLTON:  The plan is to continue to operate the Block 40s.

             Then I think Jeff had a question.  Then I think we go right here.  You had a question (OFF-MIKE)

             Q:  The -- the budget talks about personnel cuts to the active-duty Guard and Reserve.  Can you talk about what those cuts would be if sequestration lasts into fiscal '14?

             MAJ. GEN. BOLTON:  Well, it'd be difficult to speculate what'll happen if sequestration goes into '14.  The first thing, though, I would offer, having said I won't -- it's difficult to speculate, I'll speculate anyway.  We do have a study going on with the three two-stars, and they're going to determine an appropriate mix.

             I will tell you, though, that we're not going to get out of this problem by reducing a few slots here or a few slots there.  It's going to have to take some significant change.  And so a slight trimming is not going to be the answer.

             Q:  (OFF-MIKE) goes into '14, you should expect significant cuts in end strength?

             MAJ. GEN. BOLTON:  I wouldn't say that.  I don't know what to expect.  I would have predicted we wouldn't be here.  You know, I'd have bet $1,000 this wouldn't have happened.  So -- so I'm the wrong person to speculate.

             Q:  And when would the Air Force start cutting back on F-35 procurements from 19 to, say, 15?

             MAJ. GEN. BOLTON:  Well, from 19 to 15, that's an impact of sequestration for '12.  You're talking for '13.  You're talking about for '14?

             Q:  Right.

             MAJ. GEN. BOLTON:  Sequestration -- it depends on what form it takes.  The first thing that'll happen is that -- here's something that I'm fairly sure of.  The first thing that'll happen is you'll have a continuing resolution, right, which will say no increases, no decreases, no new starts.  It'll cap you at some previous level and, you know, Mr. Hale gave you kind of two scenarios, and, you know, I'm not sure I understand each one of the two.  I just know they're both bad.  All right.  You, either.  I just know they're both bad and it would be a cap.

             The Air Force in some ways would be worse off if we were -- if we started off with a C.R. [Continuing Resolution] next year, because this year, we weren't as bad off as the other services because we had more money in '12 than in '13, and we were capped at '12.  The money was just in the wrong slots.

             If we go sequestration '13 to '14, where we had an increase in funds and we're -- and we're capped at '13 levels, or we're capped at a sequester '13 level, that would be very difficult.  And then since -- and then it's by program project or account, you'd be handed the answer.  It'd be -- it'd be just a look-up table.

             Q:  (OFF-MIKE) mentioned that sequestration may force you to buy four or five fewer F-35s per year.  I was just wondering if...

             MAJ. GEN. BOLTON:  Yeah, for '13.  Yes, yes, for '13.  Yeah, and for '14 -- and that's based upon just a reduction.  And for '14, the bottom line, we'd apply the same approach, but I'd have to -- I'd have to actually be sequestered and make those calculations to see what -- see what the -- see what I was required to do.

             But you've been patient. 

             Q:  Could you walk us through a little bit in more detail about how the tiered readiness applies going forward and how it kind of differs from what you've done in the past?

             MAJ. GEN. BOLTON:  Sure.

             Q:  And in addition, if I could just ask you to also talk about what your get-well plan is for that, is there a certain dollar figure that if you got that in a certain timeframe, you could work your way out of the readiness (OFF-MIKE)

             MAJ. GEN. BOLTON:  Right, right.  OK, so let's -- I'll try to put it in a more -- more simple terms.  If you were to take the third of the aircraft, combat aircraft that are fighting the war today, and then in that amount, you have people who are fighting the war, people who are doing nuclear operations, people who are doing presidential support, and people who are doing named missions, and people that are prepared to fight tonight, they're flying the mission requirements that they -- that they need to fly.

             Then the next third would be people that are preparing to deploy or people who are in initial pilot training.  They're flying the hours that they need.  The remaining third will be standing down.

             As to the get well plan, it depends upon when this scenario ends, which I don't know.  I mean, the biggest -- one of the biggest challenges we have here is that there's a tremendous amount of uncertainty.  If you could tell me how long it was going to last or what was going to happen next year, I could do a better job of telling it.

             And then also, as I kind of said briefly, is that you don't become uncertified the first day you don't fly.  Certifications start dropping off after about 45 days.  So am I going to go 40 days or am I going to go 50 days? 

             For a lot of it, it's a confidence measure.  You know, I was talking to Lieutenant General Allardice, who's the vice commander of Air Mobility Command, and he talked about -- you know, they do refueling, and that's a fairly complex operation.  You try to have a person do a physical refueling, do the actual connection every 45 days.

             Now, a lot of things you can do in simulators.  Again, if you -- if you ask them -- which I think you might -- what are the pilots doing?  There's a lot of things they can do with simulators.  There's a lot of things they can do with bookwork.  But there's no substitute for actually doing the plug and play it takes to do a refueling.  And he's told me -- and I did not validate the exact amount of time that -- there is a correlation between the time it takes between the last time you were trained, how frequently that is, and the accident rate.  They say that if people do not do an actual plug-in, right, and do an actual refueling, and it comes -- and you haven't had one in several months, then their accident ratio goes up.

             I said, well, how long does it take to bring a guy back?  He goes, well, it might take, you know, an afternoon for some people, and it might take a few days for others.  And so a lot of it's just the confidence, you know.  So it gets pretty complicated.

             As far as for a get well plan, there's no additional dollars in '14 to pay for this, so what'll happen is that, when we get money in '14, the people who are not mission-ready or combat mission-ready or basic mission-ready, then that will be their job until they're mission-ready. 

             We've asked the question, it's still a working operational community of exactly what the ratio is.  But the best estimate I would give you now is that it's going to take a minimum of six months to come back up to speed. 

             And I think, ma'am, you were pretty patient back there.

             Q:  Oh, yes.  I wondered if you could speak to how energy costs are being factored into the budget, the budget request.

             MAJ. GEN. BOLTON:  Could you be more specific with your question?

             Q:  Well, since the Air Force uses the most energy of all...


             MAJ. GEN. BOLTON:  Yes, we are.  We're the biggest consumer of gas.

             Q:  Right, so how -- how is that being -- is that begin considered when it comes to...

             MAJ. GEN. BOLTON:  It is.  I mean, our biggest energy requirement is fuel.  We're the biggest consumer of fuel in DOD.  DOD is the biggest consumer of fuel in the government.  And we get prices from DLA [Defense Logistics Agency], and we factor that into our budget.  And so we've got a price increase factored into the '14 budget.

             Q:  Are you making any changes as a result of that projected increase?

             MAJ. GEN. BOLTON:  Well, we've got a lot of efficiency work that we can get you some details on that's been going on.  We've been transitioning, testing out alternative fuels.  We've got a series of efficiency stuff in the fuel area, and I can get you some details on that, if you like.

             Who was next?  I -- you haven't...

             Q:  (OFF-MIKE)

             MAJ. GEN. BOLTON:  Please.

             Q:  Just summarize on sequestration.  How much of the -- of the $41 billion in '13 did the Air Force take the hit on?  I might have missed that.

             MAJ. GEN. BOLTON:  It's about -- our cut is about $10 billion.

             Q:  (OFF-MIKE) can you give a couple examples of the rebalance to Asia in this budget?  I think there were some munitions that were laid out (OFF-MIKE)

             MAJ. GEN. BOLTON:  Yeah, if you -- if you go back -- if you go to the munitions slide, which is, I think, slide 15, and if you look at the -- I think it's the second and third or the third and fourth item, there are some air superiority assets, air-to-air assets, which is a big difference, air-to-air assets, so that's a big thing.

             The other big thing you'd say is that anything you're doing with stealth would be -- would be very important in that region, so the F-35 would be big.  The software upgrades on an F-22 would be big.  The LRSB would be big.  Mr. Hale mentioned the stationing of F-22s overseas.  Also, I think you'd talk about some of the exercises that are being done.  You know, of course we just canceled -- we just canceled a number of exercises, but the type of red flags and those type of things that are -- that are involved and engagement with other -- with our corporate partners and out there, that that would be another example.

             Q:  (OFF-MIKE)

             MAJ. GEN. BOLTON:  Oh, one more example would be the air (inaudible) would be -- would be another example.

             Q:  Did you have in your -- your book there the FYDP funding for the long-range strike program?

             MAJ. GEN. BOLTON:  I do.  I do.

             Q:  Can you rattle it off?

             MAJ. GEN. BOLTON:  Rattle it off?  Can I give it to you -- can I just give it to you later?

             Q:  Others would probably be interested in that, too, if you got it there.

             MAJ. GEN. BOLTON:  You guys have it handy, rather than me trying to dig through and find it.

             Q:  Yeah, OK (OFF-MIKE)

             MAJ. GEN. BOLTON:  I mean, I'm sure -- I'm sure it's in this stack, but -- you know, but I'm not sure I could find enough time to match my level of patience.

             Q:  (OFF-MIKE) question (OFF-MIKE)

             MAJ. GEN. BOLTON:  Can I come to someone else and come back to you?

             Q:  (OFF-MIKE)

             MAJ. GEN. BOLTON:  All right.  Now, you haven't had one, sir.

             Q:  (OFF-MIKE) Air Force.

             MAJ. GEN. BOLTON:  Yes.

             Q:  Sir, I was actually going to ask a Long-Range Strike question.  Some of the more detailed budget documents released earlier in the day show that the Air Force is requesting less money in '14 for LRSB than they had planned to at this time last year.  Can you describe why?

             MAJ. GEN. BOLTON:  (inaudible) I can't.  I can't.  But I can get that to you.  All right.

             Q:  And I could ask a quick one about...

             MAJ. GEN. BOLTON:  Sir, please.

             Q:  You mentioned that this year you're underfunded for -- to keep operating some of the inventory -- some of the inventory the Air Force had wanted to retire.  Is this -- does this budget fully fund operations of those airplanes through '14?

             MAJ. GEN. BOLTON:  It does not.  It does not.  Let me do -- this is my hook.  I'll take your question.

             Q:  (OFF-MIKE) I'm confused on the UAV [unmanned aerial vehicle] strategy.  The number of MQ-9s that you're buying has gone down.  You projected 24 last year.  Now you're buying 12.  You're no longer buying MQ-1s.  You're no longer going to buy RQ-4 Block 40s.  And you're (inaudible).  How is that going to work if you don't have enough ISR assets in the field?  What's the plan there?

             MAJ. GEN. BOLTON:  If you're looking for a comprehensive UAV [Unmanned Aerial Vehicle] strategy, this probably isn't the right presentation.  But let me kind of go through some of those a piece at a time.

             I mean, what you're seeing with the Global Hawk Block 30 is, you know, the U-2 is a better mechanism to meet that requirement.  The U-2 has better operational capability, and the money it would take the bring Global Hawk Block 30 up to that level of operational capability is in the hundreds of millions of dollars.  And that duplicative capability became unaffordable in a constrained cost environment.

             And so what I would say is that what we're doing is not part of a strategy of UAVs.  It's part of an overall national security strategy just to meet the needs that we need to meet. 

             Let me thank you all for your time and attention.  If you'll stay back, I'll give you -- I'll give it to you before you go.  I just didn't want to fish through it in real time.

             Thank you for your time and attention.  I know if you have follow-up questions, you'll get them to me.  And have a great evening.

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