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FY 2005 Defense Budget Testimony (Senate Armed Services Committee Transcript)
Remarks as Delivered by Secretary of Defense Donald H. Rumsfeld, Senate Armed Services Committee, Wednesday, February 04, 2004

SEN. WARNER: (Strikes gavel.) Good morning, everyone.

I am not sure what the precedents are for the Senate Armed Services Committee commandeering the other body's chamber, but nevertheless, sitting up here, I feel somewhat like a bishop! (Laughter.) Very impressive setting.

And I thank my distinguished friend the chairman of the House Armed Services Committee, Senator (sic) Hunter, and the ranking Democrat, another dear friend, Ike Skelton, and Robert Rangel, the staff director.

The committee meets today to receive annual testimony from the secretary of Defense and the Joint Chiefs of Staff, the Joint Chiefs this morning represented by the vice chairman, General Pace, in the absence of General Myers, who had the untimely and tragic loss of his brother, Chuck Myers.

With --

SEN./MR. : Mr. Chairman, I don't think we have order here, if you could --

SEN. WARNER: I think you've got a point in hand. I can't judge from the noise up here.

We'll ask the audience to refrain from conversation, please. Thank you.

We're to receive the posture of the United States armed forces and President Bush's Defense budget request for fiscal year 2005 and the future year Defense program.

Secretary Rumsfeld and Vice Chairman Pace, we welcome you again back before the committee and commend you once again for the outstanding leadership that you both continue, as a team, to provide our nation and to our men and women in uniform, and their families. There are few precedents for the challenges you face in this post-9/11 world, but in every way you have met the challenges.

I start today by recognizing the men and women of the armed forces of the United States, who, together with a coalition of nations, liberated Iraq, a country larger than Germany and Italy combined, in roughly three weeks. This combined force accomplished this with unprecedented precision, and casualties were far below the estimates.

Nevertheless, we grieve each and every one who was lost or wounded and express our compassion to their families.

Iraq, a nation that for decades had known only tyranny and oppression, is now moving forward to a future of freedom and opportunity for all of its people. While the mission of the U.S. and its coalition forces continues in Iraq, much has been accomplished since Operation Iraqi Freedom began last March. The world is a safer place and Iraq is a better place, because along with many nations, the U.S. confronted a brutal dictator who had defied the mandates of the international community for over a decade. Disagreements will continue about the process and the timing of the decision to use force. But on one thing there can be no disagreement: the professionalism, the performance and the sacrifices by the men and women in uniform was, is and always will be inspiring. Every American is justifiably proud of the U.S. Armed Forces. The security of the United States of America is in good hands today with its military.

As we meet this morning, hundreds of thousands of our service members are engaged around the world and here at home defending our nation in Operation Enduring Freedom, Operation Iraqi Freedom and other military operations in the ongoing global war on terrorism. These brave men and women and their families deserve our continued support and they will get it from this committee -- the equipment, the resources, the support they need to perform their missions today and tomorrow and into the future.

We must remember that defense of our homeland begins on the distant battlefields of the world, our forward-deployed forces are and will remain our first line of defense. This committee's responsibility will continue to be to ensure that these troops remain the best equipped, the best trained, the most capable forces in the world. I'm encouraged by my initial review of the president's defense budget for the fiscal year 2005. This request of $401.7 billion for the department represents a 5 percent increase over the FY 2004 authorized level and the fourth straight year of growth for the defense budget.

This sends a strong signal to the world of America's commitment to freedom. And the president and you, Mr. Secretary, deserve special recognition because we know the competitive forces in our budget today, but this was necessary to get this increase.

As Congress works its will on the budget request, we must be mindful of potential problems. We are putting increased demands on our forces around the world, increased demands on their families, and increased demands on our Reserve and National Guard. We are blessed with a military that has responded to these demands with extraordinary commitment, but even the best military has its limits.

As we proceed with the hearing today -- and I'm going to ask unanimous consent that the full balance of my statement be included in the record -- we are learning of the president's initiative to strengthen America's intelligence community. I commend the president for his leadership, and we await the greater details about the commission envisioned and its membership.

In testimony before this committee last week, Dr. David Kay, former special advisor to Director Tenet, told us that based on the findings of the Iraq Survey Group -- that's the military force in country conducting the survey -- their work to date, prewar estimates about large WMD stockpiles may have been incorrect. As Dr. Kay stated, "We were almost all wrong, and I certainly include myself there." End quote.

While that is one serious finding to date, he also told us of, I think, positive findings: that the ISG had discovered a quantum of evidence that includes evidence of Saddam Hussein's intent to pursue WMD program on a large scale; evidence of actual and ongoing chemical and biological research programs; evidence of an active program to use the deadly chemical ricin as a weapon -- a program that was only interrupted by the start of the war in March; and evidence of ballistic missile programs that clearly violated terms of the U.N. Security Council resolution. And there was much more. The work of the ISG group, under General Dayton and Mr. Duelfer continues. Final judgments should, in fairness, await the outcome of their work.

Dr. Kay also told us that he'd found absolutely no evidence of any intelligence analysts being pressured to change or exaggerate any intelligence conclusions. On the contrary, he reminded us all that the basic assessment of Iraq's WMD holdings had been consistent since 1998 when U.N. inspectors left Iraq. Dr. Kay, as well as many others, have reminded us that intelligence efforts often differ from what is actually found on the ground later. The important thing is when they differ, to understand why.

Based on the intelligence available to the president, not only U.S. intelligence, but that of the U.N. and other nations, Dr. Kay felt that the president could have reached no other conclusion.

Iraq had caches of chemical and biological weapons, had used them in the past and was likely to use them in the future. As Dr. Kay stated, "It was reasonable to conclude that Iraq posed an imminent threat. What we learned during the inspection made Iraq a more dangerous place potentially than in fact we thought it was even before the war." End quote. As I stated earlier, the world is a safer place and Iraq is a better place because a real and growing threat has been eliminated. We did the right thing at the right time to rid Iraq of this brutal regime.

There are currently six ongoing investigations -- the president's contemplated commission I believe would be the seventh -- concerning Iraqi WMD programs, including most importantly the Iraq Survey Group. As I mentioned, it is an ongoing operation fully funded by the Congress. It's under the direction of General Dayton and Mr. Charles Duelfer. It is important that the work of these investigations be completed, and I hope that we will receive from the secretary some estimates of the timetable in which that's likely to be done. An independent panel can build on the good work already begun and ultimately contribute to the recommendations on how to make our intelligence community stronger and more effective. The security of our troops in harm's way and of our nation will be improved by these reviews.

I wish to commend the distinguished chairman of the Senate Intelligence Committee. I am privileged to serve on that committee with him. And I believe that that committee has done notable work, and perhaps you will comment on that in the course of the hearing.

Mr. Secretary, I hope you can address your views on these issues related to the Iraqi WMD and the current situation in Iraq in your opening testimony. For example, the president's national security advisor, Condoleezza Rice, stated, and I quote, "There are differences between what we knew going in and what we found on the ground." End quote. The question to you is what steps are you taking to ensure that the ongoing intelligence activities of Defense intelligence agencies, particularly DIA and NSA, are as complete and analytically rigorous as possible? You must bear in mind that a lot of focus is on the Central Intelligence Agency and George Tenet, but our distinguished witness today has under his jurisdiction a very considerable component of the intelligence community.

Mr. Secretary, are you beginning to examine your pre-war planning and preparation in light of the findings we know today? There have been public accusations of manipulation or exaggeration of pre-war intelligence by policymakers. You're among the first of the administration witnesses to testify before the Congress on this subject. I say to you most respectfully, how do you respond? I've been privileged to have known you and worked with you for, I expect, over 30 years. And speaking for myself, I have absolutely 100 percent confidence in your integrity. But I think you should look us square in the eye and give us your own views on this subject.

Mr. Secretary, the plan, as laid down by Ambassador Bremer and approved by the Iraqi Governing Council, calls for a series of steps over the next few months, culminating in a transfer of sovereignty to Iraq authority on June 30th of this year. Are these milestones and final target dates achievable? What significant challenges remain? What accommodations are being made to ensure our troops can continue to operate and the ISG can continue its important work in a sovereign nation, presumably after the 30th, this transfer?

Again, gentlemen, we welcome you. General Pace, we'll have the opportunity to hear your testimony and your views, and I would certainly invite you to make any comments that you wish to make about the WMD program.

Senator Levin.

SEN. CARL LEVIN (D-MI): Thank you, Mr. Chairman.

Let me first join you in welcoming Secretary Rumsfeld, General Pace and Mr. Zakheim back to the Armed Services Committee for their annual posture hearing. Much has happened in the world since our last posture hearing. The rapid advance of our armed forces in Operation Iraqi Freedom and the total collapse of the Iraqi regime stand as a testament to the courage and to the dedication of our men and women in uniform, who remain by far the best-trained, best-equipped, most capable military force in the world today, the standard against which all other military forces are measured.

Unfortunately, military operations in Iraq did not come to an end with the president's announcement on May 1st. In early July, General Tommy Franks announced that continued violence and uncertainty in Iraq would make significant reductions in U.S. force levels unlikely for the foreseeable future. Six months later, we still have roughly 125,000 troops in Iraq, with almost 180,000 more serving in support roles outside of the country. And we are in the process of rotating in fresh units to ensure that we will be able to sustain this presence for years to come.

The current rotation of U.S forces into Iraq will result in a drawdown to 110,000 troops. The drawdown is based upon the belief that Iraqi police and the Iraqi Civil Defense Corps will be able to take the lead in providing security in Baghdad and other Iraqi cities.

I am concerned that this will set the Iraqi security forces up for failure as there is a real question as to whether they are ready to take on and defeat the insurgents who are targeting Iraqis as well as U.S. and other coalition forces.

The new Iraqi army, whose mission is limited to external defense, will not have a role in providing domestic security for their fellow citizens. I remain convinced, as I have written to Secretary Rumsfeld, the president and others in the administration, that the recall of units of the Iraqi army at the middle grade and below would have been a better way to help handle the insurgent threat.

Our troops in Iraq face extremely hazardous conditions, including improvised explosive devices, ambushes, car bombs, mortar attacks, and shoulder-fired anti-aircraft missiles. In addition, roughly 10,000 American troops continue to engage in military operations against hostile forces in Afghanistan and tens of thousands more soldiers, sailors, airmen and Marines, are deployed in Korea and other hot spots around the world, including numerous countries that had not seen an American in uniform before September 11th, 2001.

Congress and the American people will provide the support that is needed by our troops in the field. In less than a year we have enacted two emergency supplemental appropriation acts, for $62 billion and $87 billion, to cover the costs of our operations in Iraq and Afghanistan. It has been reported that an additional supplemental appropriation of 50 (billion dollars) to $55 billion will likely be required to fund continued operations over the next fiscal year. I have no doubt that if our troops need the money that Congress will provide it. However, that money should have been part of the budget before us, not left to a supplemental and therefore not part of the projected budget deficit. A fair deficit projection would have included those costs since we are planning on those costs.

The pace of operations has placed a great strain on our forces. We have seen the imposition of stop-loss requirements to prevent troops from leaving the force when their term of service is finished. Some have been deployed for extended periods and some have been deployed repeatedly. Some units have been told that they would be going home soon, only to have their tours of duty extended; others have been denied clear information about when their deployments would end.

In the last two and half years we've seen the largest sustained call-ups of National Guard and Reserve components since the establishment of an all-volunteer military force. A year ago as our nation was being prepared to go to war in Iraq, a number of us expressed the view that our cause would be strongest and our long-term success would be more certain if we actively solicited the support of the international community.

While America's armed forces have proven, and continue to prove every day, that they are ready to take on any military challenge anywhere in the world, I continue to believe that we are paying a steep price for the failure to obtain the political support of the international community which would make the occupation one of the world community, including Muslim nations, and not just an occupation by Western nations. And therefore, it would be less difficult and less dangerous.

The strains on our armed forces are very real. Concerns about morale and, potentially, about recruitment and retention are real. The risks posed to our Guard and Reserve system are real. These are issues that we must do everything in our power to help address.

Finally, in the wake of the testimony of chief weapon inspector Dr. David Kay, who concluded that the prewar intelligence on Iraqi weapons of mass destruction was fundamentally wrong, this committee has a particular responsibility to look into how intelligence failures affected planning for and the conduct of Operation Iraqi Freedom.

I am deeply concerned that my request to the Department of Defense for information concerning the impact that intelligence had on the planning for and the conduct of Operation Iraqi Freedom has, so far, been denied by the department. My specific request was for a briefing on the planning process generally, including how the intelligence affected that planning, and an overview of the final approved war plan for Operation Iraqi Freedom, to the extent that it can be shared with Congress.

I'm also concerned that it has taken so long for the department to respond to my request of November the 25th of last year for information relating to the Office of Special Plans, which was established by Undersecretary Feith, and which reportedly involved the review, analysis and promulgation of intelligence outside of the U.S. intelligence community. My specific request in the case of the Office of Special Plans was for documents relating to the establishment, functions, and responsibilities of that office and the Policy Counterterrorism Evaluation Group, and for documents produced by either of those entities; a list of personnel directly related to those two offices, and communications from those two offices to key agencies.

Finally, this morning, apparently some of the information was delivered to us. But we also, just at a quick perusal of that information, see that much of what we asked for is still being denied by the department, and that is simply indefensible. We have an obligation, a responsibility to oversee the operations of this department. I've been repeatedly promised that information by Mr. Feith, and there just was no justification for the long delay in forwarding what information came to us this morning.

And I do hope, Mr. Secretary, that you will straighten this out for us.

I look forward to the testimony of our witnesses, and I welcome them all back to this committee.

SEN. WARNER: Thank you, Senator Levin.

Mr. Secretary?

SEC. Rumsfeld: Thank you very much, Mr. Chairman and members of the committee. I appreciate this opportunity to testify on our Department of Defense budget and request that my full statement be included in the record.

I, too, regret that General Myers could not be with us today because of the loss of his brother. I have, in addition to General Pace and Dr. Zakheim, brought two individuals, two undersecretaries along in the event that there are questions on the intelligence side or on the force level side. Dr. David Chu is here and is available, and Dr. Steve Cambone. Dr. Chu, of course, is the undersecretary for personnel and readiness, and Dr. Cambone is the undersecretary for intelligence.

SEN. WARNER: Mr. Secretary, may I request that you bring that microphone up a little closer, please?

SEC. Rumsfeld: Okay. We will try it that way.

SEN. WARNER: Much improved.

SEC. Rumsfeld: I, too, want to commend the courageous men and women in uniform, and also the civilians in the Department of Defense that serve all over the globe as well. What they have accomplished since our country was attacked 28 months ago is truly impressive. They have helped to overthrow two terrorist regimes; to capture or kill 45 of the 55 most wanted in Iraq, including Saddam Hussein and his sons; capture or kill close to two-thirds of known senior al Qaeda operatives; and disrupt terror cells on several continents. We value their service and their sacrifice and the sacrifice of their families as well.

When this administration took office three years ago, the president charged us to change the status quo and prepare the department to meet the new threats of the 21st century. To meet that charge, we have fashioned a new defense strategy, a new force-sizing construct, a new approach to balancing risks. We have issued a new unified command plan, taken steps to attract and retain the needed talent in our armed forces, including targeted pay raises and quality of life improvements for the troops and their families. We have instituted what we believe to be more realistic budgeting, so the department now looks to budget supplementals for unknown war-fighting costs and not simply to sustain readiness. We have completed a nuclear posture review. We have transformed the way the department prepares its war plans. We have adopted a new lessons learned approach during Operation Iraqi Freedom and undertaken a comprehensive review of our global force posture. With your help, we're establishing the new National Security Personnel System that should give us a -- better enable us to manage our 746,000 civilian employees.

The scope and scale of what's been done and what's been accomplished and what's been initiated is substantial. Our challenge is to build on these efforts, even as we fight the global war on terror.

One effect of global war on terror has been a significant increase in operational tempo and an in increased demand on the force. To manage the demand on the force, we have to first be very clear about what the problem really is so that we can work together to fashion appropriate solutions. The increased demand on the force we're experiencing today is, we believe, very likely a spike driven by the deployment of 115,000 troops in Iraq. And for a moment the increased demand is real, and we have taken a number of immediate actions.

We're increasing international military participation in Iraq. We have accelerated the training of Iraqi security forces, now more than 200,000 strong. Our forces are hunting down those who threaten Iraq's stability and transitions to self reliance. Another way to deal with the increased demand on the force is to add more people.

Well, we've already done so.

We might want to put up a chart there.

A fact that many people seem not to understand: using the powers granted by the Congress, we've already increased active-duty force levels by nearly 33,000 above pre-emergency authorized end strength. We have done this over the past two years, as you can see. If the war on terror demands it, we will not hesitate to increase force levels even more, using those emergency authorities provided by Congress.

But it should give us pause that even a temporary increase in our force levels was and remains necessary. Think about it. At this moment, we have a pool of about 2.6 million men and women, active and Reserve, yet the deployment of 115,000 troops in Iraq has required that we temporarily increase the size of the force by 33,000. That suggests strongly that the real problem is not the size of the force, per se, but rather the way the force has been managed and the mix of capabilities at our disposal. And it suggests that our challenge is considerably more complex than simply adding more troops.

General Pete Schoomaker, the Army chief of staff, compares the problem to a barrel of -- a rain barrel in which the spigot is near the top, and when you turn the spigot on, it only draws off the water at the very top. And the task -- you have two choices. You can either increase the size of the barrel and leave the spigot where it is, or you can lower the spigot and start drawing on the contents of the entire barrel.

The answer, in my view, is most certainly not a bigger rain barrel. The answer is to move the spigot down, so that all of the water is accessible and can be used, and so that we can take full advantage of the skills and talents of the -- everyone who serves in the Guard and Reserve.

(To staff.) Another chart, please, Commander.

I don't know if you can see that up here, but I keep hearing people talk about the stress on the Guard and Reserve. The fact is that since September 11th, 2001, we've mobilized only 36 percent of the selected Reserve, a little over one-third of the available forces.

But while certain skills are in demand, as the chart shows, only a very small fraction of the Guard and Reserve, just 7.15 percent, have been involuntarily mobilized more than once since 1990. Thirteen years ago -- over 13 years, we've only mobilized 7.15 percent of the Guard and Reserve involuntarily more than once. That means that the same people are getting stressed, and they're getting used and used. But the vast majority of the Guard and Reserve are not being used. Over 60 percent have not been mobilized to fight the global war on terror. Indeed, I'm told that a full 58 percent of the current selected Reserve, or about 500,000 troops, have not been involuntarily mobilized in the past 10 years.

Now what does that tell us? First, it argues that we have too few Guard and Reserve forces with the skill sets that are in high demand. And we obviously, therefore, have too many Guard and Reserve forces with skill sets that are in little or no demand.

Second, it indicates that we need to re-balance the skill sets within the Reserve components and also between the active and the Reserve components, so that we have enough of the right kinds of forces available to accomplish the needed missions.

And third, it suggests that we need to focus on transforming the forces for the future, making sure we continue to increase the capability of the force and thus our ability to do more with the forces we have. And we're working to do just that.

In looking at our global force posture review, some observers had focused on the number of troops and tanks and ships that we might add or remove from a given part of the world -- Europe or Asia or somewhere else. I would submit that that may well not be the best measure. If you have 10 of something, say ships, and you reduce the number by five, you end up with half as many. But if you replace the remaining half that -- with ships that have double the capability, then you've really not reduced your capability, even though the numbers have been reduced. And that's true of troops. It's true of aircraft. It's true of going from dumb bombs to precision bombs.

Today the Navy is reducing force levels, yet because of the way they're arranging themselves, they will have more combat power available than they did when they had more people. In Operation Iraqi Freedom, the Navy surged more than half of the fleet to the Persian Gulf region for the fight. With the end of the major combat operations, instead of keeping two or three carrier strike groups forward, they quickly redeployed all their carrier strike groups to home base, and by doing so they reset the force in a way that will allow them to surge over 50 percent more combat power on short notice to deal with future contingencies.

The result? Today six aircraft carrier strike groups are available to respond immediately to any crisis that might confront us, all while the Navy is moderately reducing the size of its active force.

The Army, by contrast, has put forward a plan that by using emergency powers will increase force levels by about 6 percent. But because of the way he will do it, the Army estimates that they will be adding not 6 percent but up to 30 percent more combat power. Instead of adding more divisions, Pete Schoomaker and the acting secretary of the Army are focusing instead on creating a 21st century modular army, made up of self-contained, more self-sustaining brigades that are available to work for any division commander. As a result, the intention is that 75 percent of the Army's brigade structure would always be ready in the event of a crisis.

The Army plans will increase the number of active and reserve brigades significantly over the next four years. But because we will be using emergency powers, we will have the flexibility to reduce the number of active troops if, as and when the security situation permits. The point is this: the focus needs to be on more than just numbers. We should be focusing on finding ways to better manage the forces we have and by increasing the speed, agility, modularity, capability and usability of those forces.

Today DOD has several dozen initiatives under way to improve management of the force and to increase its capability. We are investing in new information-age technologies and less manpower intensive platforms and technologies. We are working to increase the "jointness" of our forces, taking civilian tasks currently done by uniform personnel and converting them into civilian jobs, freeing military personnel for military tasks. And we've begun consultations with allies and friends about way to transform our global force posture to further increase our capability. We're working to re-balance the active and reserve components, taking skills that are found almost exclusively in the Reserves and moving forces out of low-demand specialties, such as heavy artillery, and into higher-demand capabilities such as military police, civil affairs and special operations forces.

A number of the members of the committee have served in the Guard and Reserves. Each of us knew when we signed up that it was not simply to serve one weekend and two weeks active duty. We signed up so that if war was visited on our country we would be ready to become part of the active force. And on September 11th, war was visited on our country. And if we were not to call up the Guard and Reserves today, then why would we have them at all? This is the purpose of the Guard and Reserve; it's what they signed up for. And God bless them, the vast majority are eager to serve, a fact born out by the large number of those who stepped forward and volunteered to be mobilized for service in Afghanistan and in Iraq. Our responsibility is to do everything we can to see that they're treated respectfully, managed effectively and that we have the tools they need to win today's wars and to deter future conflicts.

Today, because DOD has the flexibility to adjust troop levels as the security situation may require, we believe that a statutory end- strength increase would take away our flexibility to manage the force.

First, if the current increase demand turns out to be a spike, the department would face a substantial cost of supporting a larger force when it may no longer be needed.

Second, if we permanently increase statutory end-strength, we'll have to take the cost out of the DOD top line.

That will require cuts in other parts of the defense budget, crowding out investments and the programs that will allow us to manage the force better and to make it more capable. So I urge Congress not to lock us into a force size and structure that may or may not be appropriate in the period ahead. During the period of the emergency, we have all the flexibility that's required, and we have been using it.

The 2005 budget before you was in a real sense a request for a second instalment on funding for the transformational priorities set out in the president's 2004 request. In 2005, we requested $29 billion for investments in transforming military capabilities. We've requested additional funds to strengthen intelligence, including critical funds to increase Department of Defense human intelligence capabilities, persistent surveillance, as well as technical analysis and information sharing. We've requested $11.1 billion to support procurement of nine ships in 2005. In all, the president has requested $75 billion for procurement in 2005 and $69 billion for research, development, testing and evaluation.

We also need your continuing support for two initiatives that are critical for the 21st century transformation, the Global Posture Review and the Base Realignment and Closure -- BRAC -- Commission scheduled for 2005. These are important initiatives. We need BRAC to rationalize our infrastructure and the new defense strategy and to eliminate unneeded bases and facilities that are costing the taxpayers billions of dollars to support. And we need the global posture changes to help us reposition our forces around the world so that they are stationed not where the wars of the 20th century happen to end, but rather arranged in a way that will allow them to deter and, as necessary, defeat potential adversaries who might threaten our security or that of our friends and allies in the 21st century. These two are inextricably linked.

Mr. Chairman, the president has asked Congress for $401.7 billion for fiscal year 2005. It's an enormous amount of taxpayers' hard- earned money. Such investments will likely be required for a number of years to come because our nation is engaged in a struggle that could well go on for a number of years.

Our objective is to ensure that our armed forces remain the best- trained, the best-equipped fighting force in the world and that we treat the volunteers who make up the force with a respect commensurate with their sacrifice and their dedication.

Before turning to questions, let me make some comments in response to your request on the subject of intelligence and weapons of mass destruction and the testimony that Dr. Kay presented to this committee.

During my confirmation hearing before this committee, I was asked what would keep me up at night. And I answered, "Intelligence." I said that because the challenge facing the intelligence community today is truly difficult. Their task is to penetrate closed societies -- (to staff) -- and you might want to put that picture of a closed society up -- and organizations and try and learn things our adversaries don't want them to know.

That's the Korean peninsula. The DMZ is the line in the middle. South Korea -- the same people as in North Korea -- South Korea has got light -- this is a satellite photo -- it has light and energy and opportunity and a vibrant democratic system. North Korea is a dark, dark country. The little dot of light to the left in the center of North Korea is Pyongyang.

So their task is to penetrate these closed societies and organizations to try and learn things that our adversaries don't want them to know, the intelligence community, often not knowing precisely what it is that we need to know, while our adversaries know precisely what it is that they don't want them to know. That is a tough assignment.

Intelligence agencies are operating in an era of surprise when new threats can emerge suddenly with little or no warning, as happened on September 11th. And it's their task to try to connect the dots before the fact, not after the fact. It's hard enough after the fact, but they're trying to connect the dots before the fact so action can be taken to protect the American people. And they have to do this in an age when the margin for error is modest; when terrorist networks and terrorist states are pursuing weapons of mass destruction and the consequences of underestimating a threat could be the loss of potentially tens of thousands of lives.

The men and women in the intelligence community have a tough and often thankless job. If they fail, the world knows it. And when they succeed, as they often do, to our country's great benefit, their accomplishments often have to remain secret. Though we cannot discuss those successes always in open session, it would be worth the committee's time to hear of them, and I hope and trust that the director of Central Intelligence, George Tenet, will be able to make some of those recent examples of successes -- and there have been many -- public so that the impression that has and is being created of broad intelligence failures can be dispelled.

I can say that the intelligence community's support in Afghanistan and Iraq, as well as the global war on terror overall, have contributed to the speed, the precision, the success of those operations, and saved countless lives. We're blessed that so many fine individuals have stepped forward to serve in the intelligence community and are willing to work under great pressure and, in more than a few cases, risk their lives.

They faced a difficult challenge in the case of Iraq. They knew the history of the Iraqi regime, its use of chemical weapons on its own people and its neighbors. They knew what had been discovered during the inspections after the Persian Gulf War, some of which was far more advanced, particularly the nuclear program, than the pre-Gulf War intelligence had indicated. They were keen observers of the reports of UNSCOM in the 1990s, and they and others did their best to penetrate the secrets of the regime of Saddam Hussein after the inspectors left in 1998. It was the consensus of the intelligence community, and of successive administrations of both political parties, and of the Congress, that reviewed the same intelligence, and much of the international community, I might add, that Saddam Hussein was pursuing weapons of mass destruction.

Saddam Hussein's behavior throughout that period reinforced that conclusion. He did not behave like someone who was disarming and wanted to prove he was doing so. He did not open up his country to the world, as did Kazakhstan, Ukraine, South Africa had previously done, and as Libya is doing today -- Libya. Instead, he continued to give up tens of billions of dollars in oil revenues under U.N. sanctions when he could have had the sanctions lifted and received those billions of dollars simply by demonstrating that he'd disarmed, if in fact he had. Why did he do this? His regime filed with the United Nations what almost everyone agreed was a fraudulent declaration, and ignored the final opportunity afforded him by U.N. Security Council Resolution 1441. Why?

The Congress, the national security teams of both the Clinton and the Bush administrations looked at essentially the same intelligence and they came to similar conclusions that the Iraqi regime posed a danger and should be changed. The Congress passed regime-change legislation in 1998.

In the end, the coalition of nations decided to enforce the U.N.'s resolutions. Dr. Kay served in Iraq for some six months directing the work of the Iraq Survey Group, the ISG, and reporting to Director Tenet.

He and the ISG have worked hard under difficult and dangerous conditions. They have brought forward important information. Dr. Kay is a scientist and an extremely well-experienced weapons inspector. He has outlined for this committee his hypothesis on the difference between prewar estimates of Iraq's WMD and what has been found thus far on the ground. While it's too early to come to final conclusions as he indicated, given the work that's still to be done, there are several alternative views that are currently being postulated.

First is the theory that WMD may not have existed at the start of the war. I suppose that's possible, but not likely. Second, is that it's possible that WMD did exist, but was transferred in whole or in part to one or more other countries. We see that theory put forward. Third, it's possible that the WMD existed, but was dispersed and hidden throughout Iraq. We see that possibility proposed by various people. Next, that it's possible that WMD existed, but was destroyed at some moment prior to the end of the -- beginning of the conflict, or that it's possible that Iraq had small quantities of biological or chemical agents and also a surge capability for a rapid buildup, and that we may eventually find it in the months ahead. Or finally there's the theory that some have put forward, that it could have been a charade by the Iraqis; that Saddam Hussein fooled his neighbors and fooled the world, or that Saddam Hussein fooled the members of his own regime, or that the idea that Saddam Hussein himself might have been fooled by his own people, who may have tricked him into believing he had capabilities that Iraq really didn't have. These are all theories that are being put forward today.

This much has been confirmed: The intelligence community got it essentially right on Iraq's missile programs. Iraq was exceeding the U.N.-imposed missile range limits, and documents found by the ISG show the evidence of high-level negotiations between Iraq and North Korea for the transfer of still longer-range missile technology. If we were to accept that Iraq had a surge capability for biological and chemical weapons, his missiles could have been armed with weapons of mass destruction and used to threaten neighboring countries.

It's the job of Dr. Kay's successor, as the chairman indicated, and the Iraq Survey Group to pursue these issues wherever the facts may take them. It's a difficult task. Think, it took us 10 months to find Saddam Hussein. The reality is that the hole he was found hiding in was large enough to hold enough biological weapons to kill thousands of human beings. Our people had gone past that farm several times, had no idea he was there. And unlike Saddam Hussein, such objects, once buried, can stay buried. In a country the size of California, the chances of inspectors finding something buried in the ground without their being led to it by people knowledgeable about where it was is minimal.

As Dr. Kay has testified, what we have learned thus far has not proven Saddam Hussein had what intelligence indicated and what we believed he had, but it also has not proven the opposite. The ISG's work is some distance from completion. There are some 1,300 people in the ISG in Iraq, working hard to find ground truth. When that work is complete, we will know more.

Whatever the final outcome, it's important that we seize the opportunity to derive lessons learned to inform future decisions. In the Department of Defense, the Joint Forces Command has done an extensive review of Operation Iraqi Freedom. The intelligence community is also looking at lessons learned.

It's doing it at the -- under the leadership of Director Tenet, with Dr. Kerr. It's being done in other elements of the community as well.

It's important also that we step back and take a look at the bigger picture and see the -- that U.S. intelligence capabilities are strengthened sufficiently to meet the threats and challenges of this century. The president has announced that he will be forming a bipartisan commission on strengthening U.S. intelligence capabilities. The commission will review the past successes of the intelligence community, as well as the cases that have not been successes, to examine whether the intelligence community has the right skills, the proper resources, and the appropriate authorities to meet the challenges and the threats of the 21st century.

Intelligence will never be perfect. We do not, will not and cannot know everything that's going on in this world of ours. If at this important moment we mistake intelligence for irrefutable evidence, analysts might become hesitant to inform policymakers of what they think they know and what they know that they don't know, and even what they think. And policymakers bereft of intelligence will find themselves much less able to make prudential judgments -- the judgments necessary to protect our country.

I'm convinced that the president of the United States did the right thing in Iraq; let there be no doubt. I came to my conclusions based on the intelligence we all saw, just as each of you made your judgments and cast your votes based on the same information.

The president has sworn to preserve, protect and defend the nation. With respect to Iraq, he took the available evidence into account; he took into account September 11th; he took into account Saddam Hussein's behavior of deception; he took into account Iraq's ongoing defiance of the U.N. and the fact that he was still shooting at U.S. and U.K. aircraft and the crews that were enforcing U.N. resolutions in northern and southern no-fly zones; and he took into account the fact that this was a vicious regime that had used weapons of mass destruction against its own people and its neighbors, and murdered and tortured the Iraqi people for decades.

The president went to the United Nations and the Security Council and passed a 17th resolution. And he came here to this Congress, and based on the same intelligence, you voted to support military action if the Iraqi regime failed to take that final opportunity to cooperate with the United Nations.

And when Saddam Hussein did pass up that final opportunity, the president nonetheless gave him a -- an ultimatum, a final final opportunity to leave the country. Only then, when all alternatives had been fully exhausted, did the coalition act to liberate Iraq. And ours is a safer world today, and the Iraqi people far better off, for that action.

Senator Warner asked in his opening statement if I know of any pressure or -- on intelligence people or manipulation of intelligence, and the answer is absolutely not. I believe that Senator Roberts has attested to that from the analysts and witnesses that he and his committee have interrogated over a period of many, many months. I believe that Dr. Kay answered exactly the same way, that he talked to analyst after analyst and knows no manipulation of the data and no indication of anyone expressing concern about pressure.

So I thank you, Mr. Chairman. And I would be happy to turn it over to General Pete Pace.

SEN. WARNER: Thank you, Mr. Secretary. That was a very strong and informative and forthright statement, and I commend you for it.

General Pace?

GEN. PACE: Mr. Chairman and members of the committee, thank you very much for this opportunity. And thank you, Mr. Chairman, for your words of condolence to General Myers and his family. I know they deeply appreciate that.

General Myers did write a written statement for submission to this committee, and I'd ask that his statement be accepted as --

SEN. WARNER: Without objection, the statement of all witnesses today will be incorporated in entirety in the record.

GEN. PACE: Thank you, sir.

Sir, I'll keep my remarks short, but I'd be remiss if I did not say a couple of things. First, thank you to this committee and to Congress for your strong, sustained, bipartisan support of the military. I'd like to dwell on that for a second. This is not a pro forma statement. You said in your statement, Mr. Chairman, that we have the best trained, best equipped, most capable armed forces in the world. We have that because of the resources that Congress provides, and we deeply appreciate it.

Second, a thank you to the service men and women who serve our country. They are magnificent. They are doing everything we are asking them to do, and we are very proud of what they have done.

Next, their families, who serve at home; whose sacrifices at home are often as equal to or greater than the service men and women that they are providing support to overseas. And we owe a great debt of gratitude as a nation to their families.

We also should thank the employers of our National Guard and Reserve. We could not do what we are doing without the skills of our Guard and Reserve. They are quality people, and because they are quality people, there's no doubt in my mind that there are businesses around the United States that have gaps of quality in them because their reservist or their guardsman is away from home. We deeply appreciate the employers' support of those members so they can help protect our country.

We are a nation at war, but we are not alone. We have invaluable coalition partners. And together with those coalition partners, we will protect our homelands and we will defeat terrorism. This will be a long and difficult fight, but it is a fight worthy of the extraordinary efforts of your soldiers, sailors, airmen, Marines and Coast Guardsmen. When you visit them -- and many of you have, and we thank you for that -- when you visit them, you look them in the eye, you know they get it; they understand what's at stake. They are proud of what they are doing. They know that their good works don't always make the evening news, but they also know that the roads, hospitals, schools, electric grids, power plants, all the things that they are doing to help restore the basics of society in both Iraq and Afghanistan are in fact critical to success. Their extraordinary efforts have been and must continue to be matched here at home by our collective will, patience and commitment. Our nation, and those who defend her, deserve no less.

I am proud to sit here before you today representing all the men and women of our armed forces. I am proud to be a part of this process with you, and I look forward to your questions.

SEN. WARNER: Thank you very much, General.

Members of the committee, we have a quorum present. And it's the desire of the chair and the ranking member to address to the committee promotions of three flag officers and general officers who are in combat commands today.

I propose that we briefly go into executive session to consider and act upon several important nominations.

First, I move that the committee favorably report out the nomination of Dr. Francis Harvey to be assistant secretary of Defense for Networks and Information Integration.

Is there a second?

SEN. : Second.

SEN. WARNER: All in favor say "aye."

SENATORS: Aye.

SEN. WARNER: Opposed?

Ayes have it.

Next, I move that the committee favorably report out the nomination of Mr. Lawrence DiRita to be assistant secretary of Defense for Public Affairs.

Is there a second?

SEN. : Second.

SEN. WARNER: All in favor say "aye."

SENATORS: Aye.

SEN. WARNER: Opposed? Ayes --

SEN. : No.

SEN. WARNER: I note that one senator indicated his opposition.

The ayes have it.

Finally, I move the committee favorably report out 438 military nominations. These nominations have been in committee for the requisite period of time, involve no adverse information and are appropriate for consideration by the committee.

Is there a second?

SEN. : (Support ?)

SEN. WARNER: All in favor say "aye."

SENATORS: Aye.

SEN. WARNER: Those opposed?

Ayes have it.

I thank my colleagues.

Colleagues, the secretary will be addressing the House in a posture statement beginning at one o'clock. We will therefore have to conclude our work by the hour of 12. So we'll hold to five minute rounds for each member and I'll proceed at this point in time.

Mr. Secretary, I thought that your comprehensive statement on transformation is one that this committee will try and support in every way. Do you know of any special legislation that you will further require for the implementation of this package?

The legislative package is in the normal sequence of events to come to the committee here in a week or so, but perhaps you could tell us at this time -- example being the important institution of reform in the civil service that you proposed last year and which I think in large measure was adopted.

Any other legislative proposals you could alert us to at this time?

MR. Rumsfeld: Mr. Chairman, there's nothing the magnitude of the new national security personnel system that we will be proposing, but there will be a number of smaller items, lesser items, that we will be recommending for approval -- the consideration of the committee.

SEN. WARNER: Do you feel that the budget provides the needed dollars to implement the transformation that you have undertaken and continue to undertake?

MR. Rumsfeld: I do.

SEN. WARNER: And that involves not only pay and benefits for the military, but also the acquisition of new equipment.

MR. Rumsfeld: I do.

SEN. WARNER: The plan of the United States Army I think under the direction of a very able chief of staff and a very able acting secretary requires for sort of fracturing the existing force into another series of units. Are they going to be fully equipped?

MR. Rumsfeld: They will be. Pete Schoomaker and I briefed the president on the Army's proposal. The president approved it. He will be presenting it to this committee at the time of your choosing. I think it's important that it be considered carefully. It has multiple dimensions -- not only does he intend to go from 33 to 48 brigades over a period of four or five years -- five? Five years, I think.

GEN. PACE: Four years to 43, sir, and then an additional (40 at the 48 ?).

MR. Rumsfeld: So it's four years to the 43 brigades, and then an additional period for the remaining five with an off-ramp in the event they're not needed.

But in addition, he intends to more fully equip these brigades with division capabilities that currently are only at the division level, and to make them more modular so that they can be mixed and matched and deployed. And there's no doubt in my mind that, if this plan is completed in the time frame indicated, that we will have a much- improved tooth-to-tail ratio.

SEN. WARNER: Good. Thank you.

Returning to the question of the WMD, the ISG -- that's the military force augmented by a number of civilians from the agency and other departments of the government -- is one that's under the command of General Dayton, and now Mr. Duelfer will join. Is the funding adequate for them to continue and fulfill their mission, because you and I both stressed that this mission must be completed? You described in your statement a number of, as you call it, theories of things that could have happened. Now we wish to develop all the facts that we can possibly find to determine the answers to the various theories that you represented.

SEC. Rumsfeld: The Iraq Survey Group I believe has somewhere between 1,200 and 1,300 people currently assigned.

GEN. PACE: That's correct.

SEC. Rumsfeld: General Dayton is the individual who's responsible for those people. He reports to -- had reported to Dr. Kay. And Dr. Kay had the responsibility for the judgment calls as to the pace at which people should be interviewed and interrogated, the pace at which various documentation should be translated, and all of those judgement things that are more appropriate to the Central Intelligence Agency than the Department of Defense. General Dayton has done a superb job of managing that task.

There's a natural tension. You never have enough Arabic speakers or enough people to go over all the documentation that exists. We just -- they don't exist in our country or even through contractors. On the other hand, they have got a good cadre of these folks. As you said, they come from all departments and agencies. They are -- it is fully budgeted for in this budget, and they're doing a terrific job under very difficult circumstances.

The tension that exists is our people are not currently being killed by weapons of mass destruction; they're being killed by terrorists. And so the same individual that one might interrogate or the same document that one might translate could produce information, for example, on the location of Saddam Hussein, it could produce information on counterterrorism, it could produce information on the location of weapons of mass destruction, and you don't know that as you go through that process. So we are continuing to focus on weapons of mass destruction, but we're also focusing on counterterrorism.

SEN. WARNER: So the mission basically remains the same?

SEC. Rumsfeld: It does.

SEN. WARNER: And the structure of leadership remains the same?

SEC. Rumsfeld: It's identical.

SEN. WARNER: And you will keep this committee informed if at any time you feel those resources of a significant amount have to be diverted away from that mission?

SEC. Rumsfeld: Dr. Cambone, am I correct when I said that the mission has not been altered?

MR. STEVEN CAMBONE: Yes, you are.

SEC. Rumsfeld: It has not.

SEN. WARNER: All right. Thank you very much. I was pleased that you directly answered my question with regard to the WMD. You also added your personal dimension to it, which I think is important because you have served under a number of presidents for a very long time in many challenging tasks, and you understand government service and the importance of being honest and forthright, as you are.

General Pace, on the question of the transfer of sovereignty, you have looked at the various steps that have to be performed.

One of them General Abizaid addressed, and in our preliminary discussions in preparation for this hearing, you felt that he might have been misquoted with regard to the appropriate protections of the coalition forces and the ability of them to continue their work, not only the ISG, but the hunting down of the insurgents and the terrorists. Are you satisfied, one, that the schedule can be kept; and two, that the basic military missions can continue on of the coalition forces after the 30th?

GEN. PACE: Sir, your armed forces right now currently are protected by the provisions of U.N. Resolution 1511, which gives us the protections of a SOFA-like agreement as we do what we do right now in Iraq. Our State Department, working with the United Nations and working with the Iraqi Governing Council, know exactly the kinds of protections that our armed forces will continue to need after the turn-over of sovereignty, and they're working that. General Abizaid has had his input to that. We are watching that very carefully. We will ensure that our soldiers, sailors, airmen, Marines and Coast Guard may continue to have the requisite protection of their own individual rights as they do the mission that we've asked them to do.

SEN. WARNER: Lastly, Mr. Secretary, the forces under your supervision, the military, are dependent on intelligence daily. I mean today and tomorrow and in the future. And while there are six and possibly seven investigation of the questions associated with WMD, we cannot wait until the final outcome to make some corrective measures. Are you personally looking at the DIA, the NSA and other organizations and contributing also your views to the greater intelligence community about such corrections that have to be made today to see that the men and women of the armed forces and indeed others engaged in intelligence work, and they're on the front lines, are receiving accurate, to the best we can, intelligence?

SEC. Rumsfeld: Yes, sir. The things that are under way with respect to Department of Defense: Number one, we're participating with the DCI's -- the director of Central Intelligence -- review of lessons learned that's led by Mr. Kerr. The Defense Intelligence Agency has its own lessons-learned activity under way, as do the services. In addition, we have, needless to say, have been cooperating with the 9/11 commission. We have been cooperating and will be cooperating with the commission to be appointed. I should add, however, that the intensive lessons-learned activity that took place looking from the U.S. perspective after the Iraq war, and also from the Iraqi perspective, interrogating Iraqi military people, have provided information as well with respect to intelligence. And so there have been a whole series of things that the people have been proceeding on in an orderly way.

SEN. WARNER: So corrective measures are taken as you and others deem they are appropriate.

SEC. Rumsfeld: Absolutely.

SEN. WARNER: In a timely way to protect our people.

SEC. Rumsfeld: As the lessons are learned, they are implemented, and have been. That process has been under way and ongoing.

SEN. WARNER: All right. Thanks.

Senator Levin.

SEN. LEVIN: Thank you, Mr. Chairman. There was an article about a week ago in the press that said that in two rounds of talks at the United Nations, in Washington, the United States told U.N. representatives that everything is on the table except the June 30 deadline for handing over power to a new Iraqi government. Is that an accurate description of the president's position, that there will be no extension of that deadline regardless of the situation on the ground or regardless of whether or not that deadline has the support of the United Nations?

SEC. Rumsfeld: First let me -- let me come right back to that, but let me clarify some confusion. I've been reading things where critics and people have been saying that the Iraqi security situation is not sufficiently good that we could turn over sovereignty and then leave on July -- June 30th. There was never any intention to do that.

SEN. LEVIN: I just wonder, though, if you could answer my question --

SEC. Rumsfeld: I will.

SEN. LEVIN: -- because of the time problems.

SEC. Rumsfeld: Okay.

SEN. LEVIN: Just, is that the position of the administration, that there will be no extension, despite whatever happens on the ground, and even if the United Nations does not support the turn over of sovereignty on that date?

SEC. Rumsfeld: I think that a decision on changing the date, or changing whatever, are really decisions for the president and not for me. And these issues involving the governance pass over are things that are basically in the hands of the president and the National Security Council, not the Department of Defense.

SEN. LEVIN: Thank you.

On the WMD issue, in September of 2002, the Defense Intelligence Agency produced a classified study called, "Iraq Key WMD Facilities and Operational Support Study." Part of that study has now been declassified. It included the following statement: "There is no reliable information on whether Iraq is producing and stockpiling chemical weapons, or where Iraq has or will establish its chemical agent warfare agent-production facilities." That's September DIA, which was classified until recently.

Now, on September 19th of 2002, the same month of that classified DIA assessment, you publicly stated that Saddam has, quote, "amassed large clandestine stockpiles of chemical weapons," and that "we know he continues to hide biological and chemical weapons, moving them to different locations as often as every 12 to 24 hours, and placing them in residential neighborhoods."

How do you explain the contrast between the DIA reported intelligence that said there was no reliable information about production or stockpiling of chemical weapons, and your public statements that you knew that Saddam has such weapons? What explains the discrepancy there?

SEC. Rumsfeld: First, let me say that, on your prior question, I would never say never on the deadline, myself. Clearly, the goal is to pass sovereignty as soon as possible. But what judgments the president might or might not make depend on the way the world evolves, I would think.

The -- I don't -- needless to say, I'm sure I never saw that piece of intelligence. And whether or not it was the DIA's view overall or an analyst's view, I can't tell from the way you've presented it.

I have relied not on any one single intelligence entity, like the DIA or the CIA, I've relied on the intelligence community's assessments, and the intelligence community's assessments were what they were, and they were as I stated them.

SEN. LEVIN: Do you see a difference between saying with certainty that we know something and saying that there is some evidence of something?

SEC. Rumsfeld: I do.

SEN. LEVIN: That was not the way in which the public statements of the administration were made. It wasn't that there's evidence or that there is belief or -- it was statements of great certainty, that we know that there are amassed stockpiles of weapons; we know where they are. Everything was stated with certainty.

And what is not part of any of those investigations, those six that you've mentioned, is a review of the policymakers' certainty in their statements and what was the basis and intelligence for those statements of certainty.

So that's one of the issues here as to whether or not those statements made with certainty by many members of the administration should be reviewed in terms of what the intelligence was that did or did not back up such certain statements.

I'm not asking the question, I just want to let you know that that is not being looked at by any of the investigations that you, I think, refer to. The investigation or inquiry that I am attempting to make at the Armed Services Committee with my staff is attempting to look at that issue as well as all the other issues.

But here's my question for you. It relates to the operation of Undersecretary of Defense for Policy Doug Feith. He made an analysis of the links between al Qaeda and Iraq, and apparently presented a briefing to you on that analysis of the intelligence. Apparently, the briefing that he made to you was then made to the director of Central Intelligence, the intelligence community staff, the National Security Council, and then to the Office of the Vice President.

Was the Feith operation supposed to look at intelligence through a different prism from the rest of the intelligence community? Why was it formed, other than for that? And why did it bypass the usual channels with the product of his analysis?

It's kind of a two-part question.

SEC. Rumsfeld: There was something that the press has characterized as an "intelligence cell" in the Office of Policy, Mr. Feith's office. It had two people in it. At any given time, the people changed and there may be two more; maybe there were four or five at some point. And all they did was to try to -- as I understand it; and I talked to Mr. Feith about this. Their task was simply to read the intelligence, not to gather intelligence; to read the intelligence that existed and to assist him in developing policy recommendations in his role as undersecretary for policy.

At one moment, you're quite right, he -- two people who had been looking at this thought they had an interesting approach to it. He asked me to be briefed. I sat there and listened to them. I said, "Gee, that's interesting. Why don't you brief the people at CIA?" They did.

SEN. LEVIN: And the vice president.

SEC. Rumsfeld: I didn't say that; I said exactly what I said. I asked them to brief the people at the CIA and they did that. I do not know if they briefed anyone else besides that. But they did do what I asked.

And the implication that this two-person activity -- or four or five over time -- was gathering intelligence or doing something unusual is just not correct, as I understand it.

SEN. LEVIN: But my question, though, was, is it intended -- was it intended that they look at intelligence through a different prism?

SEC. Rumsfeld: No. As I understand it, just what I said; their task was to take the intelligence that existed and look at it and see what they could figure out about it, just as I do when I read it and you do when you read it. And in this case, Doug Feith asked a couple of people -- there's mountains of this stuff, and it is a big task to integrate it in your mind. And so he had this small group doing that. And they looked at terrorist networks, which seems to me to be a perfectly logical thing to do after September 11th.

SEN. LEVIN: Thank you. My time is up.

SEN. WARNER: Senator McCain.

SEN. JOHN MCCAIN (R-AZ): Thank you.

Mr. Secretary, I'm certainly glad to hear of the increase of 30,000 members in the United States Army, although it was done in rather bizarre fashion by the chief of staff of the Army. As I understand, that's usually an announcement made by the secretary of Defense, but it's not important.

But a year and a half ago, a number of us on this committee recognized the need for additional Marine and Army troops, and I'm sorry it took you so long to reach that conclusion. And the reason I say that is because 40 percent of the troops in Iraq now will be Guard and National -- National Guard and reservists. And despite your testimony, from my conversations with Guard and reservists around the country, you are going to see a very large exodus of members of the Guard and Reserve because of the incredible deployment burden that has been laid upon them. I hope that I'm wrong, but that's what I'm hearing from national guardsmen and reservists throughout the nation.

Mr. Secretary, is it your intention still not to provide this committee with the communications concerning the Boeing decision, despite the fact that there is an inspector general investigation, Department of Justice investigation, an issue of very serious consequence? And I only have five minutes, Mr. Secretary.

SEC. Rumsfeld: Well, let me comment. First of all, it seems to me that your suggestion that it took us a long time to increase the size of the Army is not correct. The Army has been being increased over a two-year period under the emergency authorities authorized by Congress. General Schoomaker has only been in for a short period of months, and he has fashioned a plan, presented it, and it seems to me a perfectly -- a proper approach for the chief of staff for the Army to be the one discussing the way the Army is going to be organized and arranged, so I don't consider it strange or unusual.

In terms of the exodus issue from the Army, we certainly hope not. At the moment, Pete Pace, do you want to comment on the retention and recruiting in the Army?

GEN. PACE: Sure, I can, sir, and it's a snapshot in time, and we all need to be attentive to how we use our folks and what the downstream effects are.

But currently, all our retention goals, all of our recruiting goals are being met. In fact, those Army and Guard units that are notified of going overseas, they have had an increase -- in those whose window is coming up for retention or getting out, they have increased that number by about 130 percent across the board. So the immediate snapshot is one of heroes, not victims; heroes stepping forward to support their country. But you are correct, Senator: we do need to a keep an eye on this, that we have them doing missions that are viable missions that they should be conducting; that we treat them with respect; that they know ahead of time when they're going to be called up; that they know how long they're going to be called up for; and they know when they're going to be demobilized; all the things we need to do better.

SEC. Rumsfeld: We'd like to answer --

SEN. JOHN MCCAIN (R-AZ): With respect -- we'll see. I hope I'm wrong. Go ahead.

SEC. Rumsfeld: Well --

SEN. MCCAIN: That's not what I'm hearing from the people that actually are being deployed and are returning, including in my own state. But please answer the question about whether you still intend not to turn -- whether you intend to turn over the documents to this committee or not, particularly in light of actual criminal investigations that are going on.

SEC. Rumsfeld: The first thing I would say is that it is -- you have not received a definitive answer in a long period, and for that -- I regret that. The complexity of it -- as I understand it, it is not a Department of Defense issue in total. It is a matter of a long- standing practice of the Department of Defense and other executive branch departments of not turning over internal documents that reflect advice and opinions of employees as they advise senior decision- makers.

You're aware of this. E-mails are considered of that type.

With respect to the tanker issue, because of the concerns that a great many people have raised and the criminal investigation that -- or the investigation, I should say, that you mentioned --

SEN. MCCAIN: You answered my question, Mr. Secretary. I'd like the -- your long answer to be made part of the record. Okay?

SEC. Rumsfeld: Fair enough.

SEN. MCCAIN: Does it bother you when there are e-mails that have already been disclosed that say things like, for example, from Boeing, "they are" -- Boeing -- "doing good stuff; Rudy, Andy met with Bill Schneider; Bill Schneider very supportive, will work issue in OSD"? I understand Mr. Schneider is chairman of the Defense Science Board, which will be, according to what you are about to tell me, reexamining the requirements. So you've got the chicken -- the fox guarding the hen house.

Does it bother you we've ghost-written several op-eds, including former CINCPAC Archie Clemins will have one in Navy Times, and maybe in Air Force Times, and both get early -- an early bird when published?

Does it bother you when the secretary of the Air Force calls in -- these are according to the e-mails that we got from Boeing, and why we need your e-mails, Mr. Secretary -- does it bother you when the secretary of the Air Force calls in the Boeing lobbyist and says, "You've got to put pressure on Mike Wynne," chastises them for not putting -- the Boeing lobbyist for not putting pressure on Mike Wynne?

Does it bother you when -- even after you had put a pause on the Boeing tanker deal, that Mr. Samper sends out an e-mail, says that the lease should be published today, because all concerns concerning Ms. Drurian (sp) have been resolved?

Does it bother you when there are -- many members of the Defense Policy and Science Board were lobbying DOD and Air Force officials to approve the lease of a hundred Boeing 767? Some of them are mentioned in the Boeing e-mails: Richard Perle, Bill Schneider, General Fogleman, Admiral Jeremiah and Admiral Clemins.

Doesn't all of this bother you, Mr. Secretary, that this incestuous relationship that went on between Boeing and the United States Air Force and the secretary of the Air Force in particular, and Mr. Samper, and none of these people have been called to account for this kind of behavior?

SEC. Rumsfeld: Senator McCain, we -- I personally and we, the department, take seriously any and every allegation of wrongdoing.

SEN. MCCAIN: These are facts, Mr. Secretary. These are facts on paper, of e-mails that were sent within the Department of Defense and by Boeing.

SEC. Rumsfeld: We -- as you are well aware, there's a Department of Defense inspector general's investigation of the entire aspect of this. And we are proceeding in an orderly and systematic way to try to come to the truth as to what took place. I assure you that if there has been wrongdoing, as there appears to have been, we will take appropriate action.

I would say one other thing. When I left the Department of Defense in 1977, I made it a point not to be connected with anything related to the Defense Department that was for profit. I did it so that I could always feel I could say whatever I wanted on a defense issue and not have someone do what you just did and suggest that simply because I was connected to a defense company, therefore what I said might --

SEN. MCCAIN: I'm not suggesting, Mr. --

SEC. Rumsfeld: Just a minute. Just a minute.

SEN. MCCAIN: I'm not suggesting, Mr. Secretary. I'm telling you that --

SEC. Rumsfeld: I understand.

SEN. MCCAIN: -- Mr. Clemins, who is on your board, had ghost- written, by Boeing, an article praising the tanker lease.

SEC. Rumsfeld: I understand what you said. And I say we are looking into those things.

But I do not think that simply reading off all of those names of people who happen to serve the government in a nonpaying profit -- nonprofit way, on the Defense Science Board or the Defense Policy Board or some other advisory board of the Department of Defense, that they are suddenly supposed to be in a cellophane package and not have any other thoughts or any other role in light. We understand --

SEN. MCCAIN: I'm talking about their actions. I'm talking about their actions, not their position, Mr. Secretary.

SEC. Rumsfeld: Well, we are looking into it. If we find any wrongdoing, I can assure you we will take appropriate action, as we have in the past.

SEN. MCCAIN: Well, the Senate Armed Services Committee has the responsibility of oversight of the activities of your department. And I don't see how we're going to be informed as to exactly what happened unless we see the communications and what went on in this decision- making process.

I thank you, Mr. Chairman.

SEN. WARNER: And you indicated, Mr. Secretary, to Senator McCain and the committee -- you apologized for some of the tardiness in replying to his --

SEC. Rumsfeld: I'm sorry, I can't hear you. There's --

SEN. WARNER: I listened to you in your response to Senator McCain, and you acknowledged that your department was tardy in the response to some of the material which can be forthcoming. Because as the senator said, this committee has oversight responsibilities and we must continue to perform those and not just await IG reports and the like.

I thank you.

SEC. Rumsfeld: The IG reports are -- well, I won't get into the details, but the reason for the delay is because it is not totally a Department of Defense decision.

SEN. WARNER: Understood.

SEC. Rumsfeld: It is a decision for the executive branch, and we have to coordinate with the White House and the Office of Management and Budget.

SEN. WARNER: Thank you, Mr. Secretary

Senator Kennedy.

SEN. EDWARD KENNEDY (D-MA): Thank you very much, Mr. Chairman. Mr. Secretary, General Pace. And thank you for representing the servicemen and speaking about their continued service to the country, which all of us are grateful for.

Mr. Secretary, the U.S. Iraqi weapons inspector, David Kay, made it clear in the recent days that his exhaustive postwar inspections leave little doubt that Saddam Hussein had no weapons of mass destruction at the time the war began. And his conclusion is a devastating refutation of the Bush administrain's case for war in Iraq and, I think, seriously undermines our credibility in the world.

Until now, the administration has resisted the independent investigation of the issue, but now is proposing investigation by a committee hand-picked by the administration, with findings to be made only after the 2004 election. So I think the White House agenda is clear, is to blame the failure of the administration's case for war on the intelligence community rather than the administration's manipulations and misrepresentations on the available intelligence.

So the debacle cannot all be blamed on the intelligence community. Key policymakers made crystal clear the results they wanted from the intelligence community. Mr. Kay said, "We were all wrong." He's wrong. Many in the intelligence community were right. So there are clear warnings from the intelligence community that the sense within the intelligence community that many of the positions taken by the administration were not noted or glossed over.

As Senator Levin pointed out, your own Defense Intelligence Agency, in September of 2002, said, "There's no reliable information, Mr. Secretary, whether Iraq is producing, stockpiling chemical weapons, or where Iraq has or will establish its chemical warfare agent production facilities." The State Department Bureau of Intelligence concluded, "The activities we have detected do not add up to a compelling case that Iraq is currently pursuing what INR would consider to be an integrated, comprehensive approach to acquire nuclear weapons.

INR considers the available evidence inadequate to support such a judgement."

Department of Energy intelligence disagreed that the famous tubes were a nuclear program. The State Department Intelligence Bureau also concluded that the tubes were not intended for use in Iraq's nuclear weapons.

Greg Thielmann, a retired career State Department official, had served as the director of the Office of Strategic Proliferation and Military Affairs in the Bureau of Intelligence, said it all last July: "Some of the fault lies with the performance of the intelligence community. Most of it lies with the way senior officials misused the information they were provided."

He said: "They surveyed the data, picked out what they liked. The whole thing was bizarre. The secretary of Defense had this huge defense intelligence agency and he went around it."

Lieutenant Colonel Karen Kwiatkowski, a recently retired Air Force intelligence officer who served in the Pentagon during the build-up to the war, said: "It wasn't intelligence. It was propaganda. They take a little bit of intelligence, cherry-pick it, make it sound much more exciting, usually by taking it out of context, usually by juxtaposition of two pieces of information that don't belong together."

We've seen in the examples that were mentioned this morning, for example, just on the issues of stockpiling, the -- on chemical weapons, as mentioned by Senator Levin, 2002, DIA said no reliable information on whether producing and stockpiled. You said in 2002 before this committee, "We do know that."

"We do know that." I understand the intelligence community never says "We know." But you said in September, "We do know that." In October, the NIE said, "We have 100 metric tons -- 500 metric tons of chemical weapons." We found that out in the last year.

Secretary Powell says in February, "That's a conservative estimate" -- the stockpile of 100 to 500 tons. "That's a conservative estimate."

And then you say in March '03, "We know where they are."

"We know where they are" -- that is an extraordinary leap, and that extraordinary leap was wrong. Don't you think that that independent commission ought to be really reflective of men and women that can look hard and fast at not just what the intelligence was, but how it was manipulated, and interrogate career individuals in the intelligence community that believed that to be the case?

MR. Rumsfeld: Senator Kennedy, you might not have been here for my opening statement on the intelligence piece, but there was not a single thing in there that blamed the intelligence community or put any cast on it even slightly like you suggested.

Second, I never have gone "around" the intelligence community. The intelligence community doesn't always agree and you have hundreds of people and they have footnotes and they have different opinions and you develop a consensus. I have stuck with the consensus --

SEN. KENNEDY: Don't we have -- aren't we entitled to hear what the dissent was as well?

MR. Rumsfeld: Absolutely.

SEN. KENNEDY: Did we ever? Was that provided to the Congress?

MR. Rumsfeld: Absolutely. Within the --

SEN. KENNEDY: Will you provide that where these dissent positions were provided us prior to the time that we voted in the --

MR. Rumsfeld: I'm not in the intelligence community. I don't deal with the intelligence committees in the Congress. I am saying that within the executive branch when intelligence is circulated it includes footnotes, it includes differing opinions as it always has for the last 30 years to my certain knowledge.

Next, you've twice or thrice mentioned manipulation. I haven't heard of it, I haven't seen any of it, except in the comments you've made.

Third, I am told by Dr. Cambone, sitting behind me, that the document you read from and possibly the same document that Senator Levin read from also has a paragraph in it that says the following, and I quote: "Although we lack any direct information, Iraq probably possesses chemical -- CW agent in chemical munitions, possibly including artillery rockets, artillery shells, aerial bombs, ballistic missile warheads. Baghdad also probably possesses bulk chemical stockpiles, primarily containing precursors, but that also could consist of some mustard agent and stabilized VX." That's in the same document, I'm told.

Last, you said --

SEN. KENNEDY: Well, the -- you said "probable" and "possible," "probable" and "possible," rather than "we know." That's a big difference.

SEC. Rumsfeld: I'm coming to "we know." I could be wrong. I'm asked a lot of questions. I use a lot of words, and I'm sure, from time to time, I say something that, in retrospect, I wish I hadn't.

However, I remember -- I think I remember the moment I said we know something, and it was this. The forces had gone in, out of Kuwait, into Iraq, and they were moving up, and they gotten in a day or two, possibly. And they were a long way from Baghdad. And as everyone on this committee will remember, the suspect sites for -- which is what they generally call them, for WMD, that the intelligence community produced -- the suspect sites tended to be north, and they tended to be in the Baghdad and north area.

We were a -- our troops were a long way from even Baghdad. And I was asked, "Where's the weapons of mass destruction?" And I may have said -- I think I said -- "We know where they are. They're up north. They're not down here." And I was referring to the suspect sites.

And you're quite right; shorthand, "We know where they are," probably turned out not to be exactly what one would have preferred in retrospect.

But let me say one other thing. General Pace, would you please describe what the United States forces did every day by putting on chemical weapons -- they believed, we believed, everyone believed they had chemical weapons. These people didn't get in these -- (to General Pace) -- MOPPs?

GEN. PACE: Yes, sir. What we did, sir, is, as you would expect, prepared for the potential capabilities of the enemy. And even if you disregard all of the intelligence that was current at that time, if you simply looked at the fact that he had used chemicals against his own people, had used chemicals against Iran, it was prudent for military planners to believe that he might use chemicals against us when we attacked.

So as we went across the line of departure, as we crossed from Kuwait into Iraq, all of our troops were in mission protective chemical gear. And they stayed in that, either just the suits themselves, sometimes the boots and the gloves, and on occasion the mask as well, as the tactical intelligence changed. They put that gear on and stayed in that well past the line at which we thought -- which was about 60 miles south of Baghdad -- well north of that line, they stayed in chemical protective gear.

It was reinforced by discoveries on the battlefield, like 3,000 brand-new sets of chemical protective suits and atropine injectors that were found on the Iraqi side when they uncovered them in a school. Those kinds of discoveries led us to believe that if the Iraqis themselves had that kind of equipment and we knew we did not have chemical weapons, that they were preparing to use it.

So that's the kind of environment inside of which we wore the chemical protective gear. And it was not only for the troops who were on the ground, but everyone in theater. The Navy guys at sea, the Air Force folks at -- where they were, all had the chemical equipment right there with them and practiced daily getting into it, in case they were attacked.

SEN. KENNEDY: Thank you, Mr. Secretary.

I'd just say that in your September 19th, 2002 testimony to the committee, you said five times that Iraq has -- or we know they have weapons of mass destruction.

Thank you, Chairman.

SEC. Rumsfeld: The -- I'm not going to go back and quote the comments from the previous administration and President Clinton and Vice President Gore and Secretary Cohen and all of that the way you have.

I can just say that the stream of intelligence over a period of a long time in both administrations led the same people in similar jobs to the same conclusions.

SEN. WARNER: Mr. Secretary, that's an important point. And I will take it upon myself to insert in the record at the appropriate place such information. You must recognize we're slightly handicapped that our offices are locked. We can't get to a lot of the information we had intended to bring with us this morning. And I will see that our record, which will remain open for an indefinite period of time until our offices are once again opened and material available to members to put in the record, and ask such further questions as may be appropriate.

SEN. LEVIN: Mr. Chairman?

SEN. WARNER: But you're quite correct on that, Mr. Secretary. And there is a continuity between the manner in which these facts were brought to the attention of the American public by the succession of the Clinton and the Bush administration. And I think in time we will get the answers to it.

But I'd like to note one thing. In the mystery of where these weapons may be, perhaps it will be solved, but we should thank God that they weren't there to be used against our troops. Bottom line.

Yes, Senator?

SEN. LEVIN: Mr. Chairman, I just want to make it clear that the record will be kept open, and not just for whatever submission you refer to, but for other submissions --

SEN. WARNER: Other submissions.

SEN. LEVIN: -- and for additional questions, given the short period of time that we hvae to question the secretary. I wonder just how long would that record be kept open? A couple of days or --

SEN. PAT ROBERTS (R-KS): A hundred years.

SEN. WARNER: Well, you and I will consult on it. We got to know when our offices are opened, and that's an undetermined period of time.

SEN. ROBERTS: A hundred years.

SEN. WARNER: We'll now proceed to Senator Roberts.

SEN. ROBERTS: Thank you, Mr. Chairman.

Senator Kennedy has indicated that we need somebody to take a hard look at the intelligence that's hard and fast.

Senator Kennedy, if I could have your attention --

SEN. KENNEDY: Excuse me.

SEN. ROBERTS: -- I am hard, I am fast, I'm from Dodge City -- (laughter) -- and I am chairman of the Select Committee on Intelligence. We have, under Senate Resolution 400, marching orders to investigate or to make an inquiry in regards to the timeliness and the credibility of the prewar intelligence in reference to WMD, and any terrorist activity, the atrocities that were committed in Iraq, which are obvious, and also regional stability.

I want people to know that in this committee, with this hard and fast and tough chairman from Dodge City, that we have had a seven- month, 24/7, 10 staff member -- just tremendous overtime effort. We have a working draft over 300 pages long that will be presented to the members of the Intelligence Committee as of tomorrow.

We have interviewed over 200 analysts, including critics, including people mentioned by Senator Kennedy. I must say that after repeated interviews by our staff, that to date we still have yet to find any coercion or intimidation on the part of any analyst to change their analytical product. It is the most comprehensive inquiry in intelligence in at least a decade.

After this Thursday, we will meet again, after a week, after members of the Intelligence Committee are able to digest and educate themselves to what's in this report.

We hope to agree on a report. That may be a little tough, but we're going to get that job done. We'll be making some recommendations, as opposed to simply pointing fingers of blame. We will redact the classified material. We will work with the agency to get that done. We will have deadlines. We will make a public report, and I hope we can do it in March. If there are any egregious policy decisions that we find in this report, we will look into it. Assistant Secretary Feith will again appear before the Intelligence Committee, along with his subordinates. CIA Director Tenet will also appear, and I can't emphasize enough how aggressive, how strongly I feel that we will let the chips simply fall where they may.

Over the course of the inquiry that we hope to complete soon in the Intelligence Committee, we have found a large and consistent body of analysis, as you have indicated, Mr. Secretary, over 10 years in regards to Saddam Hussein in reference to his WMD capability. This intelligence was used -- the famous word "used" -- by the executive -- by President Clinton, by President Bush and also by those of us in the Congress. It was used on the no-fly zones, on sanctions, on the targeted bombing attacks, and finally in regards to military action.

I would just like to quote the president when he indicated that we simply cannot allow our adversaries to build arsenals of nuclear, chemical and biological weapons and missiles to deliver them. There is no more clear example of this threat than Saddam Hussein. The UNSCOM inspectors believe that Iraq still has stockpiles of chemical and biological munitions, a small force of Scud-type missiles, and the capacity to restart quickly its production program and build many, many more weapons. Let me be clear: A military operation cannot destroy all the weapons of mass destruction, but it can and will leave him significantly worse off than he is now in terms of the ability to threaten the world with these weapons or to attack his neighbors. And he will know that the international community continues to have the will to act when he threatens again. That statement was made by President Clinton.

And I'm not trying to point out President Clinton or President Bush. I think the key question is, did you find this intelligence to be true and consistent prior to the military action, and I think your answer is going to be yes. I think that's going to be stressed all the way through this hearing in your answer, and so I will leave that to you to answer that question.

SEC. Rumsfeld: The -- when --

SEN. PAT ROBERTS (R-KS): After I've answered it for you.

SEC. Rumsfeld: I agree. It has been -- it has become developed and adjusted as one goes along, but it has been -- the threads have been consistent.

SEN. ROBERTS: All right. Now, as everybody knows, there has been a global intelligence community failure, on the other hand, in regard to whether or not they had WMD stockpiles, and a challenge really to recommend systemic reform. And you have gone over some action steps that the military is taking. If I can find my list, I think you said, what, the DCI is having a review with the Kerr Report. The DIA is conducting their review. All the services are conducting their review. The 9/11 Commission, you're working with them. We have the House Intelligence Committee investigation, the Senate Intelligence Committee investigation and now this outside Warren Commission-type of investigation. There are at least six or seven panels now doing investigation on the systemic reform that must take place because of the mistake in regards to the stockpiles. I hope to hell there's somebody left down at the CIA to actually conduct the global war on terrorism with all of these -- you know, all of these activities.

But I guess my question to you is -- we will have Tenet up again, we will have Secretary Feith up again, we will get our work done.

I trust that you are committed to really trying to find out how we can do this better, because as the senator has indicated -- and I'm talking about Senator Kennedy now -- many strong statements were made. I believed that we'd find the weapons of mass destruction. Dr. Kay believed that. Dr. Duelfer even still believes that. And still, there was a failure in regards to intelligence.

Would you have any comment?

SEC. Rumsfeld: Well, I think Dr. Kay is probably correct when he said that we're not completed. We're 85 percent down the road, and there's more to be looked at. And we'll know ground truth before it's over. And the Iraqi Survey Group and Dr. Duelfer have a big task to finish it up.

I agree completely; the country, the president of the United States is determined to get to the bottom of this question. Your committee is determined. The Congress is determined. And I am sure we will, as a country, get the answers as to what took place.

I personally believe that the independent commission that the president has proposed is a good thing to do. I agree with you that there are a great many people looking at this, but I think it's a big subject, it's an important subject. And as we go into the 21st century and look at the challenges and threats we face, we've got to have a high degree of confidence that we understand them and we understand what we know about them and what we don't know about them.

SEN. WARNER: Thank you, Senator Roberts.

SEN. ROBERTS: As we say, as individual senators -- I know my time is expired, but I do want to quote Dr. Kay in regards to the world is far safer with the disappearance and removal of Saddam Hussein. I think when we have the complete record, you're going to discover that after 1998, it became a regime that was totally corrupt. Individuals were out for their own protection. And in a world where we know others are seeking the WMD, the likelihood at some point in the future of a seller and a buyer meeting up would have made that a far more dangerous country than even we anticipated with what may turn out to be not fully accurate estimating.

And I think the chairman for his leniency.

SEN. WARNER: Thank you very much.

Senator Reed?

SEN. JACK REED (D-RI): Thank you very much, Mr. Chairman.

Mr. Secretary, I don't think I'm the only one who's alarmed at the significant costs associated with Afghanistan and Iraq that are not included in this budget, and that these off-book transactions are potentially dangerous and misleading. And the response that --

SEC. Rumsfeld: Pardon me. I'm having trouble. What was misleading?

SEN. REED: Well, I think there's a number of costs that we assume that --

SEC. Rumsfeld: A number of what?

SEN. REED: Costs.

SEC. Rumsfeld: Costs.

SEN. REED: Costs associated with Iraq and Afghanistan, the ongoing commitment of over 100,000 troops, the recapitalization of equipment, the bonuses that I think we'll have to use to maintain troop strength -- all these costs don't seem to be properly included within the budget going forward; that there seems to be a prospective reliance upon a supplemental sometime down the road. And --

SEC. Rumsfeld: Well, Senator --

SEN. REED: May I complete my --

SEC. Rumsfeld: Sure.

SEN. REED: And it seems that the operative logic here is that if it cannot be properly or accurately estimated, then it's assumed to be zero or it's excluded from the budget. And in fact, what I find alarming is that seemed to be the logic that applied to post-combat operations in Iraq last year. When many people on this committee asked for estimates about the cost of ongoing operations, the cost of occupation, and we were told, essentially, "Well, we can't estimate them, so we won't include them in our specific budget request." And that led, I think, to a $79 billion -- a huge, huge supplemental last year. And I feel we could be on the same track.

I just want your view, Mr. Secretary.

SEC. Rumsfeld: Well, Senator, I'm confused by your comment.

Last year we came before the Congress and had a plug number to propose -- or two years ago, I guess it was, for Afghanistan. We were told by the Congress, "Don't do that. Supplementals are for wartime operations. We will not consider your -- any proposals for the wartime operation in Afghanistan or Iraq." The reason the budget is cast the way it is cast is because the Congress insisted that it be cast the way it is currently cast.

SEN. REED: Well, Mr. Secretary, I don't believe I insisted on that. Did I?

SEC. Rumsfeld: I -- you're a member of the Congress.

SEN. REED: Well, I know, but I'm not going to accept an argument saying that we forced you to disregard cost, not to include proper estimates, not to include in your proposal to Congress what you think you need. But that --

SEC. Rumsfeld: Senator, we were zeroed out. We proposed it, and it was zeroed out, and we were told, "Don't do it this way."

SEN. REED: But do you think that's the right approach, Mr. Secretary?

SEC. Rumsfeld: No. Obviously, we want to --

SEN. REED: Then why don't you propose a budget that reflects accurately all the costs that you anticipate over the next year for Afghanistan and Iraq?

SEC. Rumsfeld: The decision was made, after the Congress rejected that approach, that the executive branch would try to use supplementals for the purpose of wartime operations, but not for various things that just weren't included in the budget.

SEN. REED: Mr. Secretary, as I recall the debate about the $10 billion, it was not the fact that we were telling you, "Don't put the money in." We wanted to know what you were going to spend it for. You wanted $10 billion, unconditional, to be spent any way you wanted. That, I think, is a usurpation of our responsibility to appropriate money for specific items.

You have, I believe, the obligation to come before us with a detailed estimate of the cost and what you propose to do in a way of covering those costs. And I can't understand how you can argue that we're forcing you to disregard costs --

SEC. Rumsfeld: We -- I didn't suggest that at all. That was your statement, not mine, Senator. What we are doing is, we will come before the Congress with the proposal for what should be spent in a supplemental. There will be the details, there will be the justification, just as there would have been in the budget, but we're going to do it --

SEN. REED: Mr. Secretary, why can't you include those costs today in your budget, so that we can make appropriate decisions about offsets, about priorities? This is, to me, extraordinarily ineffective and misleading budgeting.

And it's not because Congress has ordered you. I would suspect that you're -- the law requires you to send up a budget here that covers all your anticipated cost.

SEC. Rumsfeld: Well, Senator, if you go back over the years, I think you'll find that every war has been funded by supplementals. That's what's been done throughout my adult lifetime. I don't know a single situation where there's been a war that's been funded by a budget that's developed --

SEN. REED: Mr. Secretary --

SEC. Rumsfeld: -- that's developed a year and a half before and then submitted to the Congress for a war that's ongoing.

SEC. Rumsfeld: Mr. Secretary, I think we both understand that supplementals are used to cover unanticipated costs that arrive after the budget documents are presented and because of other exigencies that take place.

You know fully well, as we all do, that we will be committing over 100,000 troops to Iraq, other troops to Afghanistan. These troops have costs. Their costs are numerous, myriad costs. And yet you're telling us now that because we've told you you have to operate with a supplemental, you're not putting those costs in the budget?

SEN. WARNER: Senator, your time is up. I'd like to observe that the --

SEN. REED: I guess --

SEN. WARNER: -- the Appropriations Committee has a lot to do with the supplementals and the policy governing those supplementals. And I believe if you'll consult with Senator Inouye and Senator Stevens, that this is their domain, and they made that decision. If I'm incorrect, Mr. Secretary --

SEN. REED: Mr. Chairman, I believe the secretary's basically said that he has not included all the costs that he anticipates this year for operations in Afghanistan, Iraq in this budget, and therefore we are not getting a full picture in the budget of the anticipated, the known, the most likely military operations of this government for the next year.

SEC. Rumsfeld: I think I phrased it quite close to that, but not exactly; that it is not possible to predict costs a year in advance in a war. Wars are uncertain things. It is possible to say you're correct, Senator, that the funds for the ongoing conflict in the global war on terror and Afghanistan and Iraq are not in the budget. That was specified in the budget when it was presented, and that is the pattern that has developed during the three years I have been back in this post, as I understand it, as a result of an interaction between the executive and president -- and the legislative branches at a level far above me.

SEN. WARNER: Thank you.

Senator Chambliss?

SEN. SAXBY CHAMBLISS (R-GA): Thank you, Mr. Chairman.

Mr. Secretary and General Pace, let me make sure that we remind you as you do at every opportunity you have and every opportunity we have to convey to our men and women in uniform how much we appreciate the great job they're doing. And as we go through this budget process, we want to make sure that we pass a budget that's reflective of the great work that they are doing and the great appreciation that all Americans have for that terrific work that all of our men and women are doing.

I want to talk about a couple of specific issues, Mr. Secretary, relative to the budget, and the two issues are first of all tac air, and secondly air mobility. I know this is probably General Myers' specialty, but again, you and I have talked about each of these in enough detail that I know you're prepared on this.

First of all, with respect to tac air, we have been talking about this train wreck that may be forthcoming down the road relative to Joint Strike Fighter, FA-18, F-15 and the F-22. I note with very much of an approval attitude that you have 24 F-22s funded in this authorization proposal. Last year during the Senate deliberations on the budget, we had an issue relative to F-22 and we worked through it, and I'm assuming because of your proposal that you're satisfied the procurement of F-22 is on time, on schedule and continues to be on budget.

And secondly, with respect to the tac air issue, I note that we're having some problems with the Joint Strike Fighter. It's the same kind of problems we always have with every aircraft, I don't care what it is. We experienced it with the F-22, and our critics were quick to jump on us with respect to the F-22. But I want to make sure that you're satisfied that this weight issue on the Joint Strike Fighter is not something that is going to delay that, and that both of these programs are on schedule, and that this train wreck that have all feared may be forthcoming is going to be able to be avoided.

SEC. Rumsfeld: Well, I certainly hope you're right. The F-22, as you know, has a cost cap on it. It had some troubles, as I recall, with software and the costs have gone up. The Joint Strike Fighter, as I recall, has a weight problem, and that's being worked on. And as you properly indicate, that's not unusual in programs of this type. It's in its very early stages, and our -- if one talks to the experts in the Air Force, they seem reasonably confident that they have noted the problems, addressed them, and they have people proceeding on them in an orderly way.

Do you want to add anything to that, Dov?

MR. ZAKHEIM: Yes. Senator, as you well know, this is not a problem that's unique to the United States. This is an issue that always arises when you go from computer-aided design to actual engineering. It affects every country that builds an airplane. And the decision that was taken, which I think was very prudent, was instead of taking some systems out and then having to reintegrate them later on at a much higher cost to the taxpayer, to deal with the issue now and to have cost control and essentially to get your arms around the problem now. And as you know, of course, the Joint Strike Fighter is an international program and all our partners have agreed to this approach.

SEN. CHAMBLISS: So I'm taking the response from both of you that you're very comfortable with the schedule of both of those programs at this point?

SEC. Rumsfeld: (Laughs.) I'm never comfortable. They're always complicated and they're always difficult and they always seem to take a little longer than you wish, and they always seem to cost a little more than you hoped. But the folks that are working on them believe they have their arms around the problems, and they're working on them hard.

SEN. CHAMBLISS: Mr. Chairman, I note my time is expired.

SEN. SESSIONS (?): I believe Senator Warner asked that Senator Akaka be recognized. Senator Akaka, you're next.

SEN. DANIEL AKAKA (D-HI): Thank you very much, Mr. Chairman.

I'd like to begin by permitting Senator Levin 30 seconds.

SEN. LEVIN: Thank you very much, Senator Akaka.

The issue of whether or not an intelligence investigation by an outside commission should be a truly outside commission or one just appointed by the president we can save for another place. If it's going to be independent, it's got to be independent of the president. And that means Congress has got to be involved in the selection of that commission and the rules. That's number one.

Another issue, which we're not going to resolve here, is that we believe on the Democratic side that the Intelligence Committee should look at the use of intelligence by the policymakers, not just at the production of creation by the Intelligence Committee. That's another issue for another place and another day.

What you've said here, however, I want to put in the record something relative to the alleged continuity of intelligence between the Clinton administration and the Bush administration. I'm going to put in the record three tables that were produced by the Carnegie Endowment.

Table 3 compares pre-2002 intelligence assessments with October NIE assessment in 2002. So I'm going to go down the list and put these tables in the record comparing pre-October intelligence with post-October 2002 intelligence.

Iraq reconstituted its nuclear program after 1998: pre-2002, probably not; October 2002, yes. Iraq attempted to enrich uranium for use in nuclear weapons: pre-2002, maybe; October 2002, yes. Iraq attempted to purchase uranium from abroad: pre-2002, no; October 2002 NIE assessment, yes.

Now on the chemical weapons program. Iraq had large stockpiles of chemical weapons: maybe, maybe; October 2002 NIE, yes. Iraq had covert chemical weapon production facilities: before 2002, not sure; October 2002, yes.

On and on, the differences, significant differences in the intelligence between before and after October 2002 laid out in this Carnegie Endowment study. I would ask that these be made part of the record.

SEN. WARNER: Without objection.

And I think the secretary should be given the opportunity to put in the record a rebuttal of that report.

SEN. LEVIN: That was on Senator Akaka's time, so I would appreciate --

SEN. WARNER: I understand that.

SEC. Rumsfeld: I'd be happy to.

I will say this, that George Tenet was the director of Central Intelligence in the last administration and this administration. And he has indicated repeatedly that there are, as I said, threads of the intelligence that are consistent and provide continuity over a sustained period of time, and he's the DCI.

SEN. LEVIN: Thank you, Senator Akaka.

SEN. WARNER: Thank you very much.

Senator Cornyn?

SEN. LEVIN: Oh no, no. Senator Akaka's got the rest of the time.

SEN. JOHN CORNYN (R-TX): Thank you, Mr. Chairman.

General Pace --

SEN. WARNER: Oh, for God's sake. What's going on?

SEN. LEVIN: He yielded me a minute.

SEN. WARNER: Oh, just a minute?

SEN. LEVIN: Right.

SEN. AKAKA: Various lessons-learned --

SEN. WARNER: That was the longest minute I've seen in some time.

SEN. AKAKA: -- reports have highlighted the problems associated with theater logistics during the Operation Iraqi Freedom. My understanding of the problem is that there were two major drivers.

First, shipments. Shipments were not well-configured for in- theater distribution when they left the United States, which shifted a major burden onto deployed units there.

And second, this problem was exacerbated by the lack -- the lack of timely deployment of distribution units and equipment.

My first question to you is what is your assessment of these problems? And has DOD taken steps to ensure that these problems won't arise again as new units are deployed into Iraq?

GEN. PACE: Thank you, Senator.

As I think you know, Senator, we had as part of our pre-war workup with the team that was going to be leading it in central command folks who were focused on lessons learned; they went down to Tampa, they worked with the leadership in Tampa. They went with the forces overseas and they have worked with the forces since they've come back to collect just the kind of data you are talking about.

When we looked at deploying the force we knew that we did not need to repeat what we did last time to move so much gear to theater that would literally -- last time, I'm told, although I don't know the exact figures, that about 90 percent of the logistics that were taken into theater in Desert Shield-Desert Storm had to be put back aboard ships and brought home. So we wanted to avoid that problem.

We wanted to make sure that we had the two forward and a tail sufficient but coming up behind to support. And in the process of doing that the numbers of ships that were available, the numbers of planes that were available, were allocated by the transportation commander in support of the troops on the ground.

In doing so, there were certainly lessons about how to load ships and the kinds of things that had they been there a little sooner would have helped. But we have absorbed those lessons and we are taking those and redesigning our logistics system to make a joint logistics system.

What we were able to do in this last one was coordinate and de- conflict each service's logistics push forward. What we need -- as we had with the joint fighting force, we need a joint logistics system that allows us to better coordinate and get the right gear to the battle at the right time.

Were there problems? Certainly, sir. We think we've identified those and we're working on them.

SEN. WARNER: Thank you very much, General.

Senator Cornyn?

SEN. CORNYN: Mr. Secretary, the London Financial Times reports February 4, 2004 that U.S. is preparing to cut its troop levels in Europe by up to a third.

And my question is, with the ongoing global defense posture review and the likely decision to bring home troops from overseas bases, whatever that number may be -- and perhaps you could comment on that -- not to mention the decision to temporarily increase Army end strength levels, how will these be factored in to the BRAC process?

SEC. Rumsfeld: The BRAC process is just getting under way. And, of course, one would hope that the answer to your question would be that the BRAC commission would do it skillfully. But at the moment, we don't have a good, solid number as to the number of forces that would be coming out of Europe, although there certainly will be forces coming out of Europe, and also some out of Asia, as well as elsewhere.

The BRAC process task will be to look at that and see that if the theory is right that there's something like 20 percent base capacity, facility capacity excess at the present time. If that's true, and then one brings forces home from overseas, one would think that the excess capacity here at home would be somewhat less than that, and we would -- the BRAC commission would have to take those things into account.

SEN. CORNYN: My next question has to do with the last -- the FY '03 creation of the assistant secretary of Defense for homeland defense, the purpose of which was to better coordinate and provide policy oversight for DOD homeland defense activities. Could you please explain how you see DOD's role in homeland defense evolving, and how that will be factored into the BRAC process as well?

SEC. Rumsfeld: Well, I don't know that it will have a relationship to the BRAC process. The forces we have, of course, around the world are available for homeland defense -- the ones that are here are closest; the ones that are elsewhere are available. And the principal responsibility for homeland defense, as we know, is the first responders, depending on the nature of the problem. But very quickly, the Department of Defense gets engaged. For example, at the Olympics last year in Salt Lake City,we had a lot of forces there; in fact, we had more forces there than we did in Afghanistan at that time. And when there's a difficulty, like at the Senate office building today, we've got a chem-bio unit that's coming up to assist in that.

But the assistant secretary's for homeland defense task is to keep us in the department sensitive to the responsibilities of the department with respect to supporting the first responders here in the United States, and to working closely with the Homeland Security Department, and in the interagency process to see that there is a -- the kinds of exercises and testing of systems to see that we're prepared and able to respond and coordinate properly with the people who have the principal responsibility.

SEN. CORNYN: Well, I know, for example, in my state the military bases frequently have memoranda of understanding with local communities so that if there's an emergency of some nature on base, that the fire department, the first responders from off base can augment the resources available on base and vice versa. And that's the thrust of my question.

But to that extent, do you deem that -- is that relevant to the process? I mean, is that going to be factored in somehow or another?

SEC. Rumsfeld: Well, certainly the statute lists a whole series of things that need to be taken into consideration. And I would think that those kinds of considerations would be included.

SEN. CORNYN: Thank you.

SEN. WARNER: And in the instance of the last question and other questions, you might amplify for the record your responses so that we can move along here a bit expeditiously. I thank the witnesses and the questioners.

Senator Ben Nelson?

SEN. BEN NELSON (D-NE): Thank you, Mr. Chairman.

Mr. Secretary, General, it's a pleasure to be able to recognize the men and women in the military and the wonderful job that they do. It's also a sobering experience for my colleagues and I to call the parents, the spouses of those who have been lost in Iraq or anywhere around the world. My question today is going to be a basic question.

General Pace, last November I asked acting Secretary of the Army Brownlee when every soldier in Iraq would be equipped with the most advanced body armor. I asked this question after a constituent called my office to complain that his son was conducting house-to-house searches in Iraq and still wearing kevlar. Secretary Brownlee said that all troops in Iraq would have the advanced body armor by December. My question, of course, is do you know if this is now the case?

GEN. PACE: Sir, it is the case. In fact, it was January, last month, that 100 percent of DOD military and civilians in Iraq had been issued to them individually the advanced body armor. And, as we rotate the force, before they go into Iraq, the new troops will have issued to them the new body armor. And thanks to the funding of Congress, we have been able to take the initial capacity of industry -- when this war began it was still in the technology environment -- we were able to take that 1,600 set per month capacity and we have built it up now, thanks to your funding, to 25,000 sets per month. So we have met the objective, and we will be able to ensure that everyone continues to have it as they enter this country.

SEN. BEN NELSON: Well, I now hear that the 157th -- the 1057th Transportation Company, part of the 37th Theater Company, isn't outfitted with advanced body armor. They have some newer vests, but not the insert of the body armor. And their mission, as you may know, is the transportation of supplies and personnel into southern Iraq, which then also takes them into harm's way on a very regular basis. Do you know whether they have -- or can you look into that, if you don't know whether they have it by now?

GEN. PACE: Sure. I will find out specifically whether or not every soldier in that unit has currently that. I can tell you for a fact that there are sufficient sets in Kuwait and in Iraq to have every single servicemember and DOD civilian have their own personal set. And it is the plan to, as they rotate, to ensure that each gets a set before they go in. But I will find out on that unit.

SEN. BEN NELSON: I thank you. And I know that all of you are committed to the best protection for our men and women in uniform. And so you could appreciate the fact that when a call comes in from a parent concerned about the safety of his son or daughter, that that's a matter of critical interest, and as well it should be. So I'll communicate that information back to that very concerned parent.

GEN. PACE: Thank you, sir.

SEN. BEN NELSON: I thank you very much.

Thank you, Mr. Chairman.

SEN. WARNER: Thank you, Senator. That's a very important series of questions that you --

SEN. BEN NELSON: And my time is up.

SEN. WARNER: Thank you very much.

Senator Collins.

SEC. Rumsfeld: Mr. Chairman?

SEN. WARNER: Yes, sir.

SEC. Rumsfeld: Could I just make a quick comment?

On reflection, Senator Levin mentioned a Carnegie report. I don't know, and I've never seen it, but I suspect it's unclassified. And if it came from open sources, one ought not to be surprised that there might be a difference between an open source document and what the director of Central Intelligence has told me.

SEN. WARNER: Note that for the record. Thank you.

Senator Collins.

SEN. SUSAN COLLINS (R-ME): Thank you, Mr. Chairman.

Mr. Secretary, in your testimony today you have a whole section entitled "Mass versus Capability". And you state, and I quote, that, "critical to success in military conflict in the 21st century is not necessarily mass as much as it is capability.

But the fact is, whether we're talking about troops or weapons systems or body armor or ships, numbers still matter. And for that reason, I want to talk to you about the shipbuilding budget.

Our naval fleet now consists of only 294 ships, and there are some projections that say that as cruisers and destroyers are decommissioned, that the number may drop to as low as 180 ships. The chief of naval operations has testified many times that a more appropriate fleet size would be approximately 375 ships. And I realize that these ships of the future are going to be far more capable ships, but nevertheless the chief of naval operations is still saying that our fleet size is considerably too small.

There are also reports that the Navy is slipping construction of a second DDX destroyer by one year, from fiscal year 2006 to 2007. If that occurs, it will be the first year in more than 20 years that our military will not be procuring a major surface combatant. That threatens to exacerbate what is already a shortfall in the number of ships that would ideally be maintained in our fleet, but it also raises serious questions about the impact on our industrial base.

I'd like you to discuss the shipbuilding budget in light of the chief of naval operations' belief that we are significantly underfunding shipbuilding, and also with regard to the possibility of the DDX destroyer construction slipping.

SEC. Rumsfeld: Yes, Senator Collins, this is the chief of naval operation and the secretary of Navy's proposed budget for shipbuilding. This is their recommended budget. You're right; the ships at the end of fiscal year '03 have dropped below 300 to 296. You're also correct that in the case of ships, capability is important to be sure, but numbers do also matter because of presence, and I agree completely with that.

The DDX situation. As I understand it, they delayed a gap year -- they provided a gap year, a delay of a year, to allow lessons learned from the first ship to be applied to the following ships. That was the judgment that was made in the Department of the Navy.

With respect to the total shipbuilding program over the forward year defense plan, the numbers go from seven to nine to six to eight to eight to 17, the 17 being because the ships in the latter year of the FYDP are ships that are of a smaller nature, the littoral ships that you can do more of them. But we agree that with the program that the Department of the Navy has put forward, it is a less manpower- intensive Navy, it is a -- important that what they have arranged is a surge capability so that they're going to be able to provide greater sea power in more places at more times than had been the case in the past.

General Pace, do you want to comment on it?

GEN. PACE: I can. Let me just take, for example, ma'am, aircraft carriers, which in the past had been one-third on deployment, about four on deployment; one-third coming back and reconstituting and changing out ships' crews; and one-third getting ready for the next deployment.

So you've had, generically, about four that you could get to a battle right away.

What Admiral Clark has done is, in his transformation of the Navy, has made it so the he is going to be able to provide to any combatant commander anywhere in the world six of these carrier battle groups on demand. He's doing that by things like integrating Marine and Navy aviation, so he has the wings that fly off the carriers working together as a unit and trained up.

And I won't take more of your time, but --

SEN. WARNER: Thank you very much, Senator.

SEN. COLLINS: We're going to have to have further discussions on that.

In closing, let me just say, very quickly, that I'm also very concerned about reports that I'm hearing from federal employees' representatives and from OPM on the progress with the new personnel system. I will be following up in writing with some of those concerns.

SEN. WARNER: Senator, you keep a very watchful eye on this man's Navy. Thank you very much.

Senator Pryor.

SEN. MARK PRYOR (D-AR): Thank you, Mr. Chairman.

Mr. Secretary, thank you again for being here and doing what you do.

Let me commend you on one thing in your budget, if I may, and that is your treatment of housing for our men and women in uniform. And basically, the way you have it structured now, the housing is basically a tax-free benefit that they receive, and I think that's a very positive thing. It's good for morale and good for their quality of life.

There is one thing that I would love to work with you on this year, though, Mr. Secretary. And that is that given the structure of the Earned Income Tax Credit and also the child tax credit, our men and women in uniform, even in the combat zone, could be penalized under the federal tax system for, you know, serving in the military, and they could lose up to $4,000 a year. So I do want to work with you on that this year. And I was not aware if you were aware of that problem and if it's something that you perceive as a problem that we can solve in your budget.

SEC. Rumsfeld: I'm not aware of what you're referring to but would be happy to look into it and work with you.

SEN. PRYOR: Great. Great. Well, I look forward to working with you on that.

I also want to look at Halliburton. I know there's been a recent spate of news stories about Halliburton. I think one said it overbilled about $28 million for food service over in the region, in and around Iraq. I believe that was five different facilities, if I have my facts straight. And then there was the story that we've all read and see about the overbilling for gasoline. And then I believe there's another story about $6.3 million in overbilling for sort of unspecified services. I'm not quite sure what that is, but I was reading some of the press clips on that.

And as I see these stories, I'm sensing a pattern with Halliburton's billing practices. Mr. Secretary, I was wondering if you had that same concern that I do about Halliburton's billing practices.

SEC. Rumsfeld: I'll just make a brief comment, and then Dov can comment on it -- Dr. Zakheim.

The -- there are -- a prime contractor ends up with subcontractors. The subcontractor ends up then billing the prime, and the prime bills the person letting the contract.

There -- we've got hundreds and thousands, not hundreds of thousands, but hundreds and probably thousands of auditors. They are constantly looking at all of these things. In these things, they frequently come up with differences of opinion. Those are all making the press, and that's fair enough.

Those are all also things that we're concerned about, and the auditors are crawling all over them.

Dov?

MR. ZAKHEIM: Yes, Mr. Secretary.

Senator, let me first tell you that in April of this year, with the secretary's approval, I sent out a team of auditors to Iraq. And with the exception of the one story about the $6.3 million -- and I'll get back to that -- every single story, in fact, every single revelation came from our auditors and our department. And those auditors are also working with our inspector general and with the General Accounting Office because they're on top of not just the issues you just raised, but every single contract out there, every single contractor.

Now, you're right about the $28 million. That reflects things that our auditors found relative to five of 58 facilities, and they're still working their way through the other 53. And Kellogg Brown & Root has agreed that there will be a withhold on that charge simply because there is a disagreement over how you estimate the number of people being served.

With respect to the gasoline, again, $61 million was identified, but that's gone to the inspector general, so I really can't say very much more about that.

And with respect to the $6.3 million, that was something that KBR found themselves and they reported it. And I think that gives you an indication -- and it goes back to what the secretary said -- the prime contractor is doing their best to do the right thing when they've got literally billions of dollars, not that they've necessarily already received and spent, but in terms of the size of the undertaking. And a good part of that, the logistics, the LOGCAP, as it's called, was something they were awarded several years before the Iraq war and was worldwide. The basic issue that our auditors are finding is this issue of relationships with subcontractors, and we're working our way through that.

SEN. WARNER: Thank you very much.

SEN. PRYOR: Mr. Chairman, I'm out of time. Thank you.

SEN. WARNER: Thank you.

Senator Ensign?

SEN. JOHN ENSIGN (R-NV): Thank you, Mr. Chairman.

Mr. Secretary, I want to try to protect you for something you said today that hopefully nobody will hold against you in the future. You said that "we'll know before it's over." In other words, we'll know -- and I just want to make sure that you have a chance to correct that.

SEC. Rumsfeld: Thank you. Thank you. I'll correct it right now.

SEN. ENSIGN: Okay.

SEC. Rumsfeld: We will know what we know, but we may not know all we would like to know when it's over.

SEN. ENSIGN: (Laughs.)

SEC. Rumsfeld: And I thank you very much for that. You've saved me a tough question from Senator Levin a year from now. (Laughter.)

SEN. LEVIN: No he hasn't! (More laughter.)

SEN. ENSIGN: I actually do want to go along that line of questioning, though, simply because I want to point out something that everybody is saying, and that is that we basically know we have an intelligence failure. We think we know we have an intelligence failure, but yet members of the panel are saying it like it's fact. And the reason that I'm bringing that out is because to their best guess, they're saying it like it's fact, just like when you were before this committee, just like you said today, we know because in all probability that's -- we should know whether or not there were weapons of mass destruction and things like that.

We should be a little more careful. But it certainly was not the intent of anybody on this committee to mislead the American public -- hopefully it wasn't -- just like I don't believe it was your intent on the "we know" comments.

SEC. Rumsfeld: No indeed.

SEN. ENSIGN: And so I think that that's really important.

But when we're doing these intelligence investigations, I think the most important part for all of us to keep in mind, this should not be a witch hunt to find somebody -- to find a scapegoat. It's important, if people did something wrong or if they purposely did something that misled people, then they should be held accountable.

But the purpose, it seems to me, for the investigation -- just like we did an intelligence investigation after the missiles of October -- the purpose was so that we could improve our intelligence- gathering capabilities. We know right now that we have some problems. We've known that actually maybe for quite some time and some people have been arguing that we need to improve the human intelligence instead of relying so much on our high-tech stuff.

And I guess I would just like maybe your comment on the focus -- where the focus should be into the future. You've put up that picture, that satellite photo of North Korea. You know, how -- okay, we identify, but how do we get into the future? How do we really improve our intelligence capabilities into the future?

MR. Rumsfeld: Well, my impression is that secretary -- that Director Tenet has done a lot to improve intelligence over these past years. The funding has been increased. Improving human intelligence, there's been a good deal of effort on that. It takes a long time -- years -- four, five, six, seven years to actually strengthen that aspect of it. And I am hopeful that the Senate Intelligence and House Intelligence committees, when they complete their report, will have thoughts on this subject, and certainly the commission will have thoughts on this subject.

SEN. ENSIGN: I guess one of the other comments that I want to make of us going forward is that because of the media attention that has been focused on intelligence and possible intelligence failures, is that it will stop us from doing the right thing in the future, because some people might use this as a "Oh, we don't -- we can't trust our intelligence community."

I mean, I think what Dr. Kay said has to be emphasized more than we can possibly emphasize it in that yes, there were some -- probably some intelligence failures, but it does not take away from the fact that it may have been more dangerous than we thought. And this idea of protecting America in this very volatile world, I'm hoping that it doesn't change the administration's policy on forward-leaning, the idea of preemption, the idea of, you know, if we could have prevented September 11th wouldn't we have done everything that we possibly could?

Well, I think what we did in Iraq was preventing more September 11ths and I'm hoping that this recent revelation does not change administration policy.

MR. Rumsfeld: Senator, I think you're on a very important point. We have to know that there are always going to be intelligence failures, and there also are going to be intelligence successes. And there have been a lot of successes, and they've saved peoples' lives.

Second, there is a risk that policymakers would hesitate to make decisions or that analysts would hesitate to explain what they thought. But one thing that's important that worries me about the discussion here this morning -- it's critically important that there be interaction between users of intelligence and suppliers of intelligence. Each informs the other. And the implication that if there is an interaction between a policymaker and a supplier of intelligence, that somehow or other that's pressure, or that's manipulation, or that's not right or fair to them is wrong, because we each learn from each other.

And I think that inattentive users of intelligence have a responsibility to interact with suppliers, and the suppliers learn from that -- of intelligence -- and the user of intelligence learns, because they end up talking to each other in a very open way.

And I think that's a healthy thing, not a worrisome thing.

SEN. ENSIGN: Mr. Chairman, my time's expired. And for the record I'd like to ask the secretary and your people to -- if you could give us an idea of when you'll have a plan on transforming the Guard and the Reserve -- you know, the idea of that spigot, when -- approximate time table that you'll have a plan for us to be able to --

SEC. Rumsfeld: We have the plan, and we can brief you at your desire, whenever, particularly the Army. General Schoomaker is well along in it, and the Navy and the Air Force have some Reserve forces, and they have some plans also.

SEN. ENSIGN: Thank you.

SEN. WARNER: Thank you.

Senator Dayton.

SEN. MARK DAYTON (D-MN): (Off mike.)

Mr. Secretary, I conferred with Senator Reed about the fact that there's nobody in the -- thank you -- the fact that there's no money in the budget you submitted for fighting the ongoing wars in Afghanistan and Iraq. And in your testimony you referred to the unknown costs of fighting wars. I guess I'm incredulous that that's not something that DOD and the service branches can quantify fairly accurately. I mean, that's -- that's what you do. And I just -- with all your experience and success in the private sector as well as the public sector, I just can't believe that that's, you know, an unknowable figure for FY'05. So can we, just given that it's not in there, try to identify what is -- we, for the purposes of our discussion and our decision making, where it's already a factor in the transportation bill that we're considering now. I've seen numbers that said $4 billion a month is the cost of the current operation in Iraq, and -- these are published reports -- and $800 million in Afghanistan. Is it -- is it for estimation purposes reasonable to extrapolate that for FY'05?

SEC. Rumsfeld: Senator, fiscal year '05 starts October first of '04. That's, what nine -- 10 months from now. The budget for '05 that was submitted by the president this week was prepared starting in January of '03 and completed in November of '03. And given to the OMB, sent up to the Congress in January of '04 for the year that starts in October of '05 and goes to September of '06.

SEN. DAYTON: We agree -- we agree --

SEC. Rumsfeld: Now, if one thinks about it, that's anywhere from, at the minimum 12, and at the maximum 24 months in advance. We do not have -- we do not know, we can't know, how many troops we're going to want in Iraq in the period -

SEN. DAYTON: Mr. Secretary, you must for planning purposes be making some assumptions. Can -- can we -- I'm just asking, can we reasonably assume on an estimated basis that the numbers I just read, $4 billion a month for the current operation in Iraq, $800 million a month for the current operation in Afghanistan, multiplied by 12, is that an approximation for what it's -- under "best guess" will cost?

SEC. Rumsfeld: You -- you know, you get into "best guesses" and you misinform people.

SEN. DAYTON: Well, you -- well, I consulted last night an oracle. I said, who is best qualified to shed some light on this --

SEC. Rumsfeld: (Laughs.)

SEN. DAYTON: -- and I went looking for Rumsfeld's rules --

SEC. Rumsfeld: (Laughs.)

SEN. DAYTON: -- discovered it's not that easy to find them now. They're off the website. I think -- because you're probably one of the few in the administration who practices them, because it -- especially as it relates to budget matters.

But a couple of them that come to mind are be precise -- lack of precision is dangerous when the margin of error is small. And I mean, this is Steven Friedman. I don't know if he's quoting you precisely, but he references a couple of them. If you can't measure it, you can't manage it. That which you require to be reported on, you will improve if you are selective. So I mean, it seems to me if we're going to manage -- our role is to manage, and we're making decisions, first now in the next couple weeks about overall federal budget, and then as an authorizing committee about the levels for the -- I mean, this is the lineup we have and the timetable we're on.

SEC. Rumsfeld: Senator, there must --

SEN. MARK DAYTON (D-MN): If you won't give us numbers, how can we manage and focus on all our responsibilities?

SEC. Rumsfeld: Well, my first choice would have been to do it, and I tried to do it two years ago, and I was told by the Congress don't do it. Now, that's a fact, and --

SEN. DAYTON: But Congress covers a multitude of sins. I mean, I'm not -- I'm only one.

SEC. Rumsfeld: You said that, I didn't. (Laughs.)

SEN. DAYTON: I didn't have a role in that.

SEC. Rumsfeld: (Laughs.)

SEN. DAYTON: I don't agree with the Congress all the time, but I guess I'm trying just to go back in --

SEC. Rumsfeld: Yeah.

SEN. DAYTON: -- because we're going to have to deal with this. Is this a -- I mean, is this a state secret, what this estimate is for '05?

SEC. Rumsfeld: Of course not. What one can do and what we tried to do -- in fact, what we proposed and were rejected on two years ago -- was to say look, you have alternative futures. You could end up with 115,000 troops in Iraq or it could go up because the security situation could deteriorate and you might have to do something else. Or it could go down because the Iraqi security forces exceed 200,000 and are capable of taking over a number of those responsibilities. It could be any one of those. So we came in with a budget that said that, and said here's a midpoint; we do not know whether it will have to go up or stay the same or go down. And we were told listen, wars are funded with supplementals, do it that way.

SEN. DAYTON: My time is up.

SEN. WARNER: Yes.

Senator Sessions?

SEN. DAYTON: Thank you, Mr. Chairman.

SEN. WARNER: Thank you.

SEN. JEFF SESSIONS (R-AL): It may be in terms of spending money in Congress, Congress means Senator Ted Stevens. I don't know, but if I recall it was his belief that we should do it by supplemental. It certainly gives those few in the Congress who opposed the war a readily available number to claim how much we're spending as justification for their opposition from the beginning.

You know, the intel issue will roll along. I do know that the truth always generally comes out. It was interesting that Dr. Kay, in his testimony the other day before us, indicated that the Republican Guard commanders in Iraq thought they had weapons of mass destruction, only they would say no, I didn't have it, but my fellow commander had it. And they would interview him and he would say I don't have it, but commander such-and-such has it. And they all thought they had it, but apparently it hasn't been found yet.

Mr. Secretary, I commend you on continuing a steady train of transformation of the defense of America. I remember at one of the first hearings, I think I asked Mr. Wolfowitz that he hadn't broken enough glass and not enough people were hollering about the changes, and maybe you weren't making enough changes. And he said we have a plan and a thought to move steadily forward to make our Defense Department more relevant to the threats facing America, and I think you will see us accomplish that. Do you feel like, even with this war that fell upon us, that you're on track to make us, I think Coach Eddie Robinson said, more hostile, agile and -- what was it -- agile, hostile and mobile?

SEC. Rumsfeld: (Laughs.) Indeed I do. There was a lot of discussion after September 11th as to whether the global war on terror should take precedence and we should try to forget transforming and not try to do two things at once. But in reality, the transformation supports the global war on terror and it's critically important. And it not only supports it, but it is almost -- it informs it. It gives us the impetus to achieve the kinds of transformation and changes that are so necessary.

SEN. SESSIONS: I thank you for having a historical vision of where we are today and where we need to go and moving steadily and effectively in that direction.

I am so proud of our Guard and Reserve. I visited a number of their ceremonies where they were activated and left their home communities, like Foley Alabama, and Mobile, and the crowds were enthusiastic. They feel a sense of service. They don't feel, General Pace, they are victims. They feel like they are serving America. They want to be used well. They want to be used wisely.

I've had personal interviews, Mr. Secretary, with the head of Guard and Reserve forces, the commanders, and they tell me you are pushing them -- that you not only support them but you are encouraging them to study how we activate people to make it less burdensome families. Would you share your personal view of how we can do better about handling Guard and Reserve?

SEC. Rumsfeld: I will indeed. We have all three services working to rebalance the active and reserve components so that we do not have to overuse those Guard and Reserve units that have special skills that are in short supply in the active force. And that rebalance is going forward and it's going forward apace.

Second, we have looked at the deployment and redeployment process, and we recognize the importance of certainty on the part of people. And we're taking steps to improve the tools, the planning tools that will enable us to do a vastly more nuanced job. I am impressed with the effort that the transformation command -- Transportation Command's engaged in. I'm impressed with the effort the Joint Forces and the Joint Staff are engaged in. And we've simply go to do a better job to make sure it's respectful of them and their families and their employers.

SEN. WARNER: Thank you, Senator, for discussion that Guard issue.

SEC. Rumsfeld: Mr. Chairman, could I make one comment?

SEN. WARNER: One other thing. When you and I talked, you told me a very important fact about the quantum of the Guard and Reserve which you felt, although they would serve, would serve willingly, simply their skills didn't match to the needs. Do you remember that discussion we had?

SEC. Rumsfeld: I couldn't hear you, I'm afraid.

SEN. WARNER: Well, I was going to say, remember we talked about the Guard and Reserve and how a considerable portion of it you now determine, while they'd be willing to serve, their skills don't match to the needs and how you're going to change that.

SEC. Rumsfeld: Exactly. And that is what General Schoomaker, particularly, in the Army is in the process of working very hard to do. He knows what to do. He's got it calculated, and he knows the units he's -- I believe he knows the units. And he's well along in that task.

Could I make a quick comment?

SEN. WARNER: Yes.

SEC. Rumsfeld: I hate to have the meeting end without making a statement that should have been made at the time Senator McCain was asking the question. I am advised that in selecting the Defense Science Board for the tanker recapitalization evaluation, the Department of Defense took significant measures to ensure that individuals on the task force leading the evaluation, Admiral Don Pilling, USN Retired, and Dr. Ted Gold, as co-chairmen, had no relation with Boeing or the tanker lease program. And the committee can be assured that no member of the task force will have any association with Boeing or the tanker lease program.

I can further assure the committee that the chairman of the Defense Science Board, Dr. Bill Schneider, will recuse himself from any association with the evaluation or the task force efforts.

Furthermore, the process and results will be entirely open since the evaluation task force will be operated in accordance with the provisions of P.L. 92-463, the Federal Advisory Committee Act, and DOD Directive 105.4, the DOD Federal Advisory Committee Management Program.

SEN. WARNER: Thank you, Mr. Secretary. Could we get a copy of that document, such that we can give it to Senator McCain?

Now we'll turn to Senator Clinton.

SEN. HILLARY RODHAM CLINTON (D-NY): Thank you, Mr. Chairman.

Mr. Secretary, when Senator Reed and I were in Afghanistan over Thanksgiving, we learned that NATO had not yet met its obligations or its commitment to provide additional troops for the provisional reconstruction teams and other purposes. So far as I am aware, they still have not done so. Could you please advise us as to what, if any, progress is being made to persuade NATO countries to contribute additional troops, as they had obligated to do so?

SEC. Rumsfeld: I know that Lord Robertson, before he left at the end of December, had worked very hard on it. And the U.S. had been involved in assisting, and the new secretary-general has been working on it as well.

The last time I looked, there were still -- out of the totality of the requirements, there were a few pieces that had not been filled. And I suspect that what's happening is that the United States, which has been with a -- under a memorandum of understanding with -- first with ISAF and now with NATO ISAF, has worked together with them to fill in gaps as they occur, from time to time. But to my knowledge, they have not fully completed everything, although they're -- they must be in the high 90 percent.

(To the comptroller.) Do you know?

MR. ZAKHEIM: Well, there is that. And also, with respect to the provincial reconstruction teams that you mentioned, the British are in fact in Mazar-e Sharif. The Germans have one up and running as well.

One of the issues has been where they go. We have eight of those now up and running, and the idea is to have new ones stood up. We are talking, to my knowledge, to at least five different NATO countries right now that have given preliminary indications that they do want to go in and set up PRTs. And the question is, how do you do that in an organized fashion?

SEN. CLINTON: And you'll keep this committee informed as it goes forward?

MR. ZAKHEIM: Absolutely, Senator.

SEN. CLINTON: And is Turkey one of those five countries?

MR. ZAKHEIM: They are one of them. But there are several others, as I say.

SEN. CLINTON: With respect to the budget, it's my understanding that at least during the Vietnam War the costs of the war were in the budget. Supplementals were used for additional costs.

In September of this past year, I asked Ambassador Bremer, when he appeared before our committee, whether the administration would request an additional supplemental for Iraq and Afghanistan. He replied -- and I quote -- "If there is any further need, I would anticipate any further requests will be done through the normal appropriations process." In other words, it will come forward as part of the regular appropriations process, the 2005 budget, presumably early next year.

With respect to the comments that the Congress instructed --

SEC. Rumsfeld: Were you referring to Iraq or Afghanistan in that last comment?

SEN. CLINTON: Iraq and Afghanistan.

SEC. Rumsfeld: Both.

MR. ZAKHEIM: Both.

SEN. CLINTON: Both.

With respect to the comments that you have made, Mr. Secretary, that Congress essentially told you not to do it a certain way, would you provide this committee with the names of those members of Congress or the staff, and with whom they communicated that demand in the secretary's office at some very early date, please?

SEC. Rumsfeld: Well, it was the Congress overall. They just simply took it all out.

SEN. CLINTON: Well, Mr. --

SEC. Rumsfeld: They said -- they zeroed out the $10 billion we had requested.

SEN. CLINTON: But Mr. Secretary, that was for a discretionary pool of $10 billion, to be used as, presumably, you saw fit.

MORE

We're talking about a budget that connects costs to missions and functions. In as late as September of '03, Ambassador Bremer, who I believe reports to you, assured this committee that there would be requests done through the normal appropriations process. Now, if there is someone in the Congress -- not just the Congress as a large, undifferentiated mass -- that is saying don't do that, we'd like to know it.

But I think what the response from Congress was, we're not about to give you a blank check of $10 billion to be used with no oversight. So I think we need to clarify that because it goes right to the heart of the authority of this body and the kind of oversight that we're expected to provide. And indeed, it raises some -- you know, some questions, because at least the press reports that there will be a supplemental after the election, which seems to me to be inappropriate. And I would hope that we could get to a meeting of the minds as to exactly what's expected from the budget to these ongoing expenses in both Iraq and Afghanistan.

SEC. Rumsfeld: Senator Clinton, I'm told that you're right, that there have been some portions of wars that have been funded through the normal process. It appears in that in '67 to '70, in the Vietnam War, they included some estimates. After '70, I'm told they stopped putting cost estimates in because they didn't prove to be very accurate, and thereafter, the Vietnam War was not, nor have, I believe, subsequent wars.

Second, I suppose you could say $10 billion -- it wouldn't be fair to say what you said: $10 billion to be spent any way you want without any oversight. No department of government does that; they always report, they always say what they're doing. They have to get it cleared if it's major changes at all from eight different committees. So there's plenty of oversight.

The answer to your question about what Bremer said I think is also correct, and that is that if you take the supplemental, a portion of it was for the Coalition Provisional Authority -- $18.6 billion, as I recall. And he said -- and I believe Mitch Daniels and later Josh Bolten said that that was for that period and that funds for that purpose, non-military purposes -- the 18.6 (billion dollars) -- would in fact be put into normal appropriation process, and that's what's planned to be done.

SEN. CLINTON: Planned to be done. It's not in the '05 budget?

SEC. Rumsfeld: There is -- anything -- as I understand it -- (To Mr. Zakheim) Maybe you ought to say it in OMB language, Dov.

MR. ZAKHEIM: I try to speak English, Mr. Secretary.

But essentially, the money was for reconstruction. And as you recall, Senator, when that money was asked for, it was meant to extend beyond just one year. And then the idea was -- and I believe Director Bolten has reiterated that -- that once we get past that amount of money laid out, then everything that is requested will become part of the normal budget, and that's normally outside the Defense Department budget. So I don't think there's an inconsistency there.

SEN. CLINTON: Thank you, Mr. Chairman.

SEN. WARNER: Thank you very much, Senator.

Senator Graham?

SEN. LINDSEY GRAHAM (R-SC): Thank you, Mr. Chairman.

Mr. Secretary, I appreciate your generosity of time. And I'm just going to throw out some concepts to follow up with you later.

Number one, my big fear after listening to this debate, discussion is that we're going to rush to get out of Iraq before the job's done. I know you won't do that. So I wanted to let you understand that there are some of us up here know that predicting the future is a very hard thing to do. What it costs is what it cost. And what good have we done if we leave before the job's done?

I'm very hopeful that in the long term Iraq will become more stable. There's one less dictator to give money to suicide bombers in the Mideast. I think we are better off. And if we want to have that discussion politically, as Senator Kerry says, bring it on.

But, bottom line, that's not a political statement. Here's something that I think a lot of us agree on, and it may be I find myself on the outs with the Pentagon: the Guard and Reserve.

I think you have tunnel vision about the role of the Guard and Reserve. The Guard and Reserve doesn't just answer the nation's call, it also answers its state's call. There's 500,000 people you say that's being underutilized: I would like some information about how many times those citizen soldiers are called up to deal with the disasters in Alabama, South Carolina, Virginia, California, wherever.

Secondly, I believe our homeland security needs are not being adequately met, that the Guard and Reserve has an additional role there that could supplement our homeland security needs.

So when you look at restructuring your force to meet the needs of the 21st century, war model Iraq and other places like Iraq, let's don't forget that the Guard has more missions than just that one mission. And I want to leave with you a couple thoughts.

Number one, I believe that 40 percent of the force in Iraq will be Guard and Reserve in the immediate future. I believe that it's going to get worse before it gets better. And I think it's time to start upgrading the benefits of those who are doing a good job for this country. Specifically, would you support reducing the retirement age from 60 to 55 for those who served 30 years as a member of the Guard or Reserves?

SEC. Rumsfeld: First, Senator, I agree completely. The president has said that we should stay in Iraq as long as is necessary and not a day longer. And there's no suggestion of a premature departure.

Second, I'm not sure I agree completely with what you said about the Guard and the Reserve. The implication of what you said was that they necessarily were the only forces available for U.S. needs: home needs, domestic needs. And I don't agree with that. I think the active force also does a lot, and -- with respect to fighting fires or hurricanes or various other things that may happen. And we look at it as a total force concept.

SEN. L. GRAHAM: Right. But the primary mission of the Guard in its day-to-day training is Title 32, not Title 10.

SEC. Rumsfeld: Oh, I understand. But -- but I don't think -- I would not want to leave the impression that the active force is disinterested in homeland defense or in the domestic needs that they get called up to assist on frequently.

SEN. L. GRAHAM: No, sir. And I don't want to give you the impression that I think the active duty forces are somehow not doing everything -- they're doing everything and then some. So I've got some problems with you on end strength, too. But I don't want to get tunnel vision about the role of the Guard. Unlike the active duty forces, which have done a marvelous job, that are stretched too thin, are being asked to do too much, in my opinion, and you can't rearrange the pie till you grow the pie -- that's just my opinion about this -- the Guard has a specific function, unlike the active forces, under Title 32.

SEC. Rumsfeld: With respect to --

SEN. WARNER: Gentlemen, we've got to move right along.

SEN. L. GRAHAM: Okay. Thank you.

SEN. WARNER: I think that's an important question, and I would hope you'd provide your response for the record, because this distinguished member of our committee is an active member of the National Guard.

SEN. L. GRAHAM: And I'm not part of the solution, I'm probably part of the problem. So I'm not up here tooting my own horn. But I admire what you've done, I --

SEN. WARNER: If you don't stop he's going to call you to active duty and send you overseas.

SEC. Rumsfeld: (Laughs.)

SEN. L. GRAHAM: (Laughs.) If that happens, you know we're really in trouble. (Laughter.)

But I do want to work with you, Mr. Secretary, to address the Guard and Reserve role in its entirety, to look at end strength, not just from an army like Iraq, but maybe an army like North Korea, and see if this makes sense.

But stay the course. The investigation will be done by an independent group. You've done a great job. You helped bring people out that were hurt during 9/11. You're the right guy at the right time, so hang in there. And any differences I have with you will be honest differences, openly displayed, and I'm proud of what you've done for our country. So hang in there.

SEC. Rumsfeld: Thank you very much.

SEN. WARNER: Well stated. Thank you very much.

Now, gentlemen, the two of you wrap up. Senator Bayh, you lead off.

SEN. EVAN BAYH (D-IN): Thank you, Mr. Chairman, and --

SEN. WARNER: Because we are obligated to yield these chambers back to the other body here.

SEN. BAYH: I'll -- I'll move quickly. Thank you, Mr. Chairman.

I'd like to touch upon just a couple of things I hear frequently from the public. First, dealing with the quality -- the adequacy and the quality of intelligence we receive. And I'm interested in your opinion as a consumer of intelligence. I agree with all the things you said at the beginning; it's a tough and thankless assignment. We have a lot of good men and women trying to deal with circumstantial evidence, gaps in the evidence, contradictory evidence, denial and deception, et cetera, et cetera, et cetera.

And it's possible that good people get a lot of things right, but occasionally make some mistakes.

So with that as a preface, I think many Americans would be interested in your opinion as a consumer of intelligence, on a scale of one to 100 -- 100 being omniscience, one being clueless -- (laughter) -- how would you characterize the quality and the adequacy of the intelligence?

MR. Rumsfeld: It's in between. (Laughter.)

SEN. BAYH: Can you try and quantify it a little bit? I just -- many Americans, I think, right now they look at perhaps the failure that we've experienced in Iraq; they look at the fact that we maybe under-assessed Libya and Iran. And they wonder, "Gee, just -- we're having to make decisions of great import; just how adequate and reliable is this information?"

MR. Rumsfeld: You want to put that chart back up?

This is the problem. We're dealing with closed societies, dictatorial regimes. There's North Korea -- not a light there. It's enormously difficult. So the reality is we have had some wonderful successes, and some of them are not public. I hope George Tenet will make some of them public this week or next week, because I think he ought to. The failures are very visible and that's always the case.

SEN. BAYH: I'm not trying to --

MR. Rumsfeld: I can't give it a grade. It would vary depending on the collection, it would vary depending on the target. One has to live with that in this world of ours. So you end up making the best policy judgements you can off of that.

SEN. BAYH: Perhaps this is a job for this commission, because I think many Americans -- when we make decisions about going to war or other things based upon understandably imperfect information, many people wonder, well, just how imperfect is it? Is this an aberration or this more the normal course of events?

My second question, just very briefly, has to do with priorities, Mr. Secretary. And I hear from a number of people -- not the man or woman on the street, but from, you know, people who follow these things more regularly. They look at the situation in North Korea, with their capabilities, their experimentations with long-range missiles, the belligerent and erratic nature of that regime. They look at Iran with their well-known connections to terrorists and the fact that their program is further advanced than we thought. And they now look at what we do know about Iraq. And they say that perhaps Iran and North Korea constitute even greater threats.

And yet we're spending over $100 billion to address Iraq. We obviously have used force to liberate that country in trying to introduce democracy in that part of the world, and they wonder, is this an appropriate ordering of priorities? Should we not be devoting more to trying to address the problems of Iran and North Korea, given now what we know?

MR. Rumsfeld: Well, they're each being addressed in a different way. North Korea is being addressed in a diplomatic way in the relatively early stages since they made the announcements of their capabilities. Iraq had been addressed in a diplomatic manner through 17 resolutions of the United Nations over a period of a decade and a half. Iran has just been revealed to have an advanced -- more advanced nuclear activities than they had indicated.

On the other hand, if you look at North Korea they've lowered the height requirement to go in the army to under 5 feet, to 4-feet-10, because so many people were starved. There's abuse of the food distribution system at the present time. So it's hard to know what's actually going on in there. We do know there are concentration camps. We do know that there are a lot of people that are trying to flee the country.

We have imperfect knowledge in this world of ours, and we do today and we will into the future.

I think that -- personally believe that the president made the right decision with respect to Iraq. I think he's making the right decision to try diplomacy with respect to North Korea and to work those problems with the neighbors in China, in Russia, and South Korea and Japan. And with respect to Iran, there's obviously ferment and turmoil going on with the young people and the women and the people who want reform in that country, going on as we meet today. And each is going to play out in a way that, I suppose, is different.

SEN. WARNER: Thank you, Mr. Secretary. They're very clear responses to an important question.

Senator Bill Nelson?

SEN. BILL NELSON (D-FL): Good afternoon, Mr. Secretary.

SEC. Rumsfeld: It is suddenly afternoon, I see there.

SEN. BILL NELSON: Mr. Secretary, I spoke to you about my meeting with President Assad in Syria, of which, when I confronted him with why he didn't stop the jihadists from going from Syria into Iraq, where they are killing our men and women, he answered without an answer, saying, well, I can't control my borders, you can't control your borders. Then he talked of the historical smuggling that goes on across that border, but then said I would like to cooperate with the Americans. I have reported that conversation to many people in our government, including you, and you seemed to dismiss that that was worth following up. Can you tell me why?

SEC. Rumsfeld: Senator, my portfolio is not Syria and foreign policy. I don't believe I dismissed it, and I try not to be dismissive of anything. On the other hand, we know he had been notably unhelpful on his border. We know that he is working with Iran in funding Hezbollah and bringing them down through Damascus into Lebanon, into Israel.

SEN. BILL NELSON: And I confronted him with all of those, and he was not cooperative.

SEC. Rumsfeld: And we know he's testing chemical weapons.

SEN. BILL NELSON: And I confronted him with that.

SEC. Rumsfeld: And we know he has taken the Iraqi funds that are in Syria and refused to give us access to those funds, and they belong to the Iraqi people. And he is a -- that is a regime that has been almost consistently unhelpful.

SEN. BILL NELSON: And I confronted him with that, about the withholding of those funds. But if he were sincere, I don't see that there's any downside for us to explore that --

SEC. Rumsfeld: I don't either.

SEN. BILL NELSON: -- because it would lessen the people going in, trying to harm Americans.

SEC. Rumsfeld: Senator, we explored it with Libya and Libya said here it is, let's come in and take it out. And we sent airplanes in and took it out, and it's in the United States being examined, and the documentation, and the materials, and he's opening up his country to inspectors, and that is a very good thing. There's a model there. Saddam Hussein didn't follow it. Qadhafi is following it. Assad is not.

SEN. BILL NELSON: Well, General Myers was interested in that, but General Myers works for you. And I think it might be something worth exploring, and I would respectfully suggest that that's in the interests of the United States. So --

SEN. WARNER: Senator, I think your --

SEC. Rumsfeld: I agree.

SEN. WARNER: -- question is well taken. We --

SEN. BILL NELSON: Mr. Chairman, I have been waiting this whole time.

SEN. WARNER: I understand.

SEN. BILL NELSON: I have got one more thing.

SEN. WARNER: I wasn't going to cut you off. Go ahead.

SEN. BILL NELSON: Good.

SEN. WARNER: Take one more minute.

SEN. BILL NELSON: Good. Thank you.

SEN. WARNER: Just so you know, I just commented I thought your question was well taken.

SEN. BILL NELSON: Oh, well, you are very kind. I thought you were asking me to stop.

SEN. WARNER: I'm kind. It's factual. (Laughter.)

SEN. BILL NELSON: And you know I have reported to you and Senator Levin on this very same thing.

Now, the other thing that --

SEC. Rumsfeld: I'm going to have to ask it to end quite soon. I've got the health hearing at one.

SEN. WARNER: We're going to end in about a minute.

SEC. Rumsfeld: And I have got to make a phone call in between and get prepared for that. But --

SEN. WARNER: Right.

SEN. BILL NELSON: Respectfully, Mr. Secretary, I was told not only the weapons of mass destruction prior to the vote in the Senate, but I was specifically told what has now been made public by the president and the secretary of State, that there were unmanned aerial vehicles that could be put on ships off the Eastern Seaboard and flown over Eastern Seaboard cities with the weapons of mass destruction.

And you can understand that I thought that was an imminent threat to the interests of the United States.

However, what I was not told was that there was a dispute in the intelligence community over the veracity of that information, specifically as reported by The Washington Post that it was Air Force intelligence that specifically discounted that, that it was not true.

My question to you is, why was I not told that there was this disagreement in the intelligence community instead of being told that it was gospel truth that those UAVs could be flown over Eastern Seaboard cities?

SEC. Rumsfeld: I don't know who told you that. And I would not use the word "veracity," I would use the word "accuracy." There was a discussion in the internal -- in the intelligence community, and I've forgotten exactly where -- how it worked, but one agency believed that the -- I'm trying to -- (aside) -- Is this unclassified or classified now?

SEN. WARNER: Mr. Secretary, I suggest you answer that for the record. It's an important question, and it will give you adequate time to --

SEC. Rumsfeld: It is. And I think there's a classified answer and an unclassified answer. And I can give you an unclassified answer here, and we'd be happy to -- Dr. Cambone can give you a classified answer in one minute.

SEN. BILL NELSON: Mr. Secretary, everything that I've said has been unclassified.

SEC. Rumsfeld: Right. I'm talking about my answer, not your question. (Chuckles.) Your question clearly is unclassified.

My understanding is there was a discussion, and some people, as is usual in intelligence, some people believed that the equipment associated with the Iraqi UAVs, which we saw and watched tested -- and they flew considerable distances. They were not big, but they did have the ability to carry something. And that they had some vehicles in close proximity to them during some tests, and there was a debate as to whether those vehicles had a role in connection with the UAVs or whether the vehicles had a role in connection with hydrogen balloons or weather balloons or something else.

MR. CAMBONE: Well, that's two different --

SEC. Rumsfeld: (To Mr. Cambone) Is that two different things? Steve Cambone, come up and answer it for me. Thank you.

SEN. BILL NELSON: Mr. Chairman, if you want to receive a classified answer, I would be happy.

SEN. WARNER: Fine. I think at this point, Mr. Secretary, time is expired for everybody, and you've been most patient.

I want to thank you, Senator.

And thank you, General. We've had an excellent hearing.

SEC. Rumsfeld: Steve can give --

SEN. WARNER: All right, if you wish. If you wish.

SEC. Rumsfeld: -- a two-minute unclassified answer.

SEN. WARNER: Then we'll proceed as you desire.

MR. CAMBONE: Yes, sir. There was, Senator, a dispute on the role of the UAVs. The Air Force had a different view than others in the community. And I think that you have two parts of the story combined that I would like to separate for you, if I may, in a closed session. But there was a dispute by the Air Force. It was resolved as part of the ordinary process of building the NIEs and the estimates that are done. The Air Force maintained its dissent.

What you are reporting on is an after-the-fact report of the Air Force's dissent.

But let me clean up the parts for you in a different setting.

SEN. LEVIN: His question is why he wasn't informed of the dissent.

MR. CAMBONE: That I can't answer, sir.

SEN. WARNER: Anyway, gentlemen, we thank --

SEN. BILL NELSON: That's the question.

SEN. WARNER: We thank you very much, Mr. Secretary, General. We've had an excellent hearing.

GEN. PACE: Thank you, sir.
 
 
END.