<DOC>
[109 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:99875.wais]
S. Hrg. 109-255
MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES
APPROPRIATIONS FOR FISCAL YEAR 2006
=======================================================================
HEARINGS
before a
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
on
H.R. 2528
MAKING APPROPRIATIONS FOR MILITARY QUALITY OF LIFE FUNCTIONS OF THE
DEPARTMENT OF DEFENSE, MILITARY CONSTRUCTION, THE DEPARTMENT OF
VETERANS AFFAIRS, AND RELATED AGENCIES FOR THE FISCAL YEAR ENDING
SEPTEMBER 30, 2006, AND FOR OTHER PURPOSES
__________
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__________
COMMITTEE ON APPROPRIATIONS
THAD COCHRAN, Mississippi, Chairman
TED STEVENS, Alaska ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico PATRICK J. LEAHY, Vermont
CHRISTOPHER S. BOND, Missouri TOM HARKIN, Iowa
MITCH McCONNELL, Kentucky BARBARA A. MIKULSKI, Maryland
CONRAD BURNS, Montana HARRY REID, Nevada
RICHARD C. SHELBY, Alabama HERB KOHL, Wisconsin
JUDD GREGG, New Hampshire PATTY MURRAY, Washington
ROBERT F. BENNETT, Utah BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas MARY L. LANDRIEU, Louisiana
WAYNE ALLARD, Colorado
J. Keith Kennedy, Staff Director
Terrence E. Sauvain, Minority Staff Director
------
Subcommittee on Military Construction and Veterans Affairs, and Related
Agencies
KAY BAILEY HUTCHISON, Texas, Chairman
CONRAD BURNS, Montana DIANNE FEINSTEIN, California
LARRY CRAIG, Idaho DANIEL K. INOUYE, Hawaii
MIKE DeWINE, Ohio TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas MARY L. LANDRIEU, Louisiana
WAYNE ALLARD, Colorado ROBERT C. BYRD, West Virginia
MITCH McCONNELL, Kentucky PATTY MURRAY, Washington
THAD COCHRAN, Mississippi
(ex officio)
Professional Staff
Dennis Ward
Sean Knowles
Dennis Balkham
Christina Evans (Minority)
B.G. Wright (Minority)
Chad Schulken (Minority)
C O N T E N T S
----------
Tuesday, March 8, 2005
Page
Department of Defense............................................ 1
Department of the Navy....................................... 69
Tuesday, March 15, 2005
Department of Veterans Affairs: Office of the Secretary.......... 89
Wednesday, March 16, 2005
Department of Defense:
Department of the Army....................................... 139
Department of the Air Force.................................. 165
Tuesday, June 28, 2005
Overseas Basing Commission....................................... 183
Department of Defense............................................ 205
MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES
APPROPRIATIONS FOR FISCAL YEAR 2006
----------
TUESDAY, MARCH 8, 2005
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2:35 p.m., in room SD-138, Dirksen
Senate Office Building, Hon. Kay Bailey Hutchison (chairman)
presiding.
Present: Senators Hutchison, Allard, Feinstein, and
Landrieu.
DEPARTMENT OF DEFENSE
STATEMENT OF HON. TINA W. JONAS, UNDER SECRETARY OF
DEFENSE (COMPTROLLER)
ACCOMPANIED BY PHILIP W. GRONE, DEPUTY UNDER SECRETARY OF DEFENSE
(INSTALLATION AND ENVIRONMENT)
opening statement of senator kay bailey hutchison
Senator Hutchison. I will call the Military Construction
Subcommittee meeting to order and say that I am very pleased
this is our first hearing of the year. I am very happy that I
am able to chair this subcommittee once again. It is a
subcommittee I have really enjoyed, and I also very much enjoy
my partnership with my Democratic colleague. We have been
chairman and ranking member together in order, reverse order,
and order again, and we have always worked very well together.
And I am very happy that we have this team again. We have been
able to have the experience now to know some of the issues, and
I think it is going to be a very good year.
I will just say for the record too that I think Senator
Feinstein and I have had some major impact since we have been
chair and ranking member of this subcommittee in two areas.
Senator Feinstein particularly has been attuned to
environmental cleanup that has been so important for closed
bases and making sure that that is done correctly.
I think together our efforts on the Overseas Basing
Commission and really focusing on getting a timely assessment
of foreign bases and problems in foreign deployments before we
address our own BRAC, which we are now in the beginning stages
of addressing, are beginning to pay off.
I am pleased that the Department of Defense did start
looking at foreign bases and training constraints and
operational constraints and made the announcement last year
that they are, indeed, going to have a global realignment. I
think it is going in the right direction. I think the
Department of Defense did look at this and is making some very
wise decisions for the long term for not only the best training
and the best way to operate, but also better quality of life
for our military and its families. So I am very pleased with
that and glad that we are all here once again.
This year's military construction budget request is $12.1
billion, up 27 percent from last year's request. There is a
wedge of $1.9 billion intended to cover the initial costs of
the 2005 round of base realignment and closure, and I think
that is going to be something we are going to want to have some
specificity about as we go down the road.
I am pleased that for the third consecutive year the
administration's request for Reserve Component funding is up
significantly from last year's request. Reserve Component
facilities have long been underfunded through the years, and
this Department has made good on its commitment to improve that
situation. We all know the huge load the Guard and Reserve are
sharing in this war on terrorism, and I think bringing their
facilities up to a higher standard is not only the right thing
to do but well deserved.
I am also pleased to receive what I believe is a more
focused request for construction at overseas bases. In the past
few years, we have had a dialogue with the Department regarding
these overseas bases, and I think we are now coming to a very
good point where Congress is going to be able to evaluate the
overseas facilities through our own Overseas Basing Commission,
and I think we are going in the right direction.
Related to overseas construction is the NATO Security
Investment Program. The request for this program is up 25
percent over last year. I do support NSIP, but I am concerned
that the program is increasingly funding non-infrastructure
expenses in favor of high technology electronics and software
systems. NATO is now considering what could be a significant
expenditure for a battle management command and control system
for missile defense. I certainly support missile defense, but I
think we are getting farther away from the intent of the
Security Investment Program, which is to fund common
infrastructure projects, and we need to assure that the United
States gets more than a one-for-one return on the investments
it is making in the program. So I intend to look carefully at
this program and make sure that we are doing what we intended
to do.
A major initiative this year is the 2005 round of Base
Realignment and Closure. That commission is in the process of
being appointed. Sixteen percent of this budget request is for
beginning to implement that 2005 BRAC if Congress agrees with
the BRAC recommendations made later this year. While we all
know and hope that BRAC will save in the future, we also know
that it does not save in the short term, that you have the
costs of closing bases, and we are now looking at major
restructuring of the Army and the Marine Corps; bringing 70,000
troops home from bases abroad; and repositioning remaining
forces overseas into new facilities. So we know this is going
to cost money and we certainly want to have a close look at the
recommendations that will be coming from the Department to
prepare for this kind of a realignment.
I also want to comment on the housing privatization
program, for which the Department is requesting $216 million
this year. I am a strong supporter of the privatization
program. I have seen the results. They are terrific. But I also
think we need to make sure that we are making good decisions on
these privatization projects and that we are monitoring the way
the money is spent. In a few instances the privatization has
not gone the way it was intended, and we need to make sure that
where we do appropriate this money, it is being spent on
quality construction that is doing the job we are asking be
done.
I certainly will have a number of questions, but I would
like at this time to turn the microphone over to Senator
Feinstein, my able ranking member who has been a great partner
through the years on this subcommittee.
STATEMENT OF SENATOR DIANNE FEINSTEIN
Senator Feinstein. Thank you very much, Madam Chairman, and
I think you know that it has also been a pleasure for me to
work with you, and I look forward to the year. I also look
forward to the year because there is much more money to deal
with and some new challenges in this. So I am delighted.
I do not want to repeat what you said but there are a few
things that kind of come through to me. I just want to point
them out.
The fact that the Army is down 16.5 percent over the
requested amount, or 24.6 percent below the enacted amount of
last year's request, I would like to ask about that.
I am delighted to see that the BRAC environmental cleanup
is nearly $132 million, 33.5 percent up from last year's
request. I think that is very good news.
The Navy's request this year includes $143 million, plus an
estimated $133 million derived from land sales at El Toro and
Oakland, totaling $276 million. My understanding is the Navy
has planned to spend at least $172 million of that in
California. I am very grateful for that. We had 29 bases closed
in the last round, and just getting the environmental cleanup
done has been a huge problem.
It is also my understanding that the military family
housing request has increased by $70 million and that the
initiative of DOD to privatize over 75,000 housing units are
designed to reach its goal by 2007. I think that is good news
as well.
You and I have worked together on overseas basing. That
total is $782 million: $238 million for Germany, $28 million
for Italy, $215 million for Korea, $125 million to Guam, and
$109 million to the UK. So that is 25 percent over last year's
request, and I think we need to take a look at it as well.
Let me just forewarn the people. I have been very concerned
about, in your State and my State and about 26 other States,
the advent of perchlorate. Perchlorate comes from rocket fuel.
It is really all a military responsibility. This was their
subcontractors. It has leached into groundwater. It has
contaminated drinking water wells. And so my question will be
whether some of this environmental cleanup money can be used
for perchlorate cleanup, and we will get to that.
I do not want to take any more time. We will get on with it
and say welcome to the witnesses.
Senator Hutchison. I would like to now call on our newest
member of the subcommittee. We welcome him, and we are very
pleased that he is a new member of the full committee. I am
pleased that he is now on our subcommittee as well. Senator
Allard from Colorado.
STATEMENT OF SENATOR WAYNE ALLARD
Senator Allard. Well, thank you, Madam Chairman. I do not
have much of an opening statement. I look forward to working
with you and Senator Feinstein from California. I know that you
vacation from time to time in Colorado.
Senator Hutchison. We both do actually.
Senator Allard. I really appreciate that.
I just look forward to the opportunity to serve here.
You have seen me now in front of a number committees, Ms.
Jonas. You never know when I might pop up, but I have a
different set of questions for you this time around. So you
will perhaps appreciate that. So I look forward to hearing your
testimony.
Thank you, Madam Chairman.
SUMMARY STATEMENT OF TINA W. JONAS
Senator Hutchison. Now we welcome the Under Secretary of
Defense who is the Comptroller and Chief Financial Officer of
the Department of Defense, Secretary Tina Jonas. Welcome.
Ms. Jonas. Thank you, Madam Chairman.
I am going to just quickly summarize a few things. I have
got a written statement for the record and request that it be
placed in the record. I appreciate the opportunity to be here,
and Senator Feinstein, I appreciate the opportunity to work
with you and with the rest of the members of the committee.
I would specifically like to thank this committee for its
strong support of our men and women in uniform. We look forward
to continuing to work with you to ensure that our armed forces
have everything they need to carry out their difficult and
dangerous missions.
The President's budget request for the Department of
Defense for 2006 is $419.3 billion. This is a $19.2 billion
increase over the 2005 enacted level, and this will sustain the
President's pledges to defeat global terrorism, restructure
America's armed forces and global defense posture, as well as
take care of our forces and develop advanced warfighting
capabilities.
Of special importance to this committee, the President's
budget shows his clear commitment to our military people and
their families, with emphasis on quality facilities and family
housing and on restructuring our military basing. I will not go
over the specifics. As you have pointed out, Madam Chairman,
$12.1 billion is the request for military construction and
family housing requirements. I would like to reemphasize our
commitment to funding the elimination of all inadequate housing
in the continental United States by 2007 and the elimination of
all overseas inadequate housing by 2009.
PREPARED STATEMENT
I know that you will have plenty of questions. You are well
aware of the issues regarding the restructuring overseas in our
BRAC process, so I will not belabor that.
I would just like to say thank you for the opportunity to
be here and I look forward to addressing your questions.
[The statement follows:]
Prepared Statement of Tina W. Jonas
Madam Chairwoman, members of the committee, I am honored to be here
to discuss military construction and other quality of life components
of President Bush's fiscal year 2006 defense budget request.
First, I want to thank this committee for its strong support for
our men and women in uniform. We look forward to continuing to work
with you to ensure that our armed forces have everything they need to
carry out their difficult and dangerous missions.
The President's budget request for the Department of Defense (DOD)
for fiscal year 2006 is $419.3 billion in discretionary budget
authority, a $19.2 billion increase (4.8 percent) over the fiscal year
2005 enacted level. Combined with fiscal year 2005 supplemental
appropriations, this request includes sufficient funding to sustain the
President's pledges to defeat global terrorism, restructure America's
armed forces and global defense posture, develop and field advanced
warfighting capabilities, and take good care of our forces.
Of special importance to this committee, the President's budget
shows his clear commitment to our military's quality of life--with
emphasis on military compensation and health care, quality facilities
and family housing, and restructuring our military basing.
MILITARY COMPENSATION AND HEALTH CARE
The fiscal year 2006 budget maintains the President's commitment to
take good care of our military people and their families. It reflects
our conviction that people are the Nation's most important defense
asset. The budget includes a 3.1 percent increase in military base pay
and provides significant funding to ensure high quality health care for
our military families. The fiscal year 2006 budget provides about $20
billion for the Defense Health Program and $7 billion for the military
personnel who support the health care program. The budget sustains our
commitment to no out-of-pocket costs for military members living in
private housing.
FACILITIES AND FAMILY HOUSING
The President's request for Military Construction and Family
Housing appropriations totals $12.1 billion in discretionary budget
authority and funds the Department's most pressing military
construction and family housing requirements. The request will improve
our military's working and living conditions through strong sustainment
and modernization for existing facilities and replacement of facilities
that are no longer economical to repair.
Family Housing.--The fiscal year 2006 budget keeps the Department
on track to fund by fiscal year 2007 the elimination of all inadequate
military family housing units in the United States, and to fund by
fiscal year 2009 the elimination of all inadequate units worldwide. To
reach the fiscal year 2009 goal, the Army will complete funding the
elimination of inadequate housing at its overseas bases in 2008, and
the Air Force will complete funding its overseas eliminations by 2009.
The Department's privatization program is key to its progress in
eliminating inadequate housing. It enables the Department to leverage
its funding and get more military families into top quality
accommodations much sooner than would otherwise be possible.
RESTRUCTURING U.S. BASING
Two closely related initiatives will substantially affect our
military's quality of life in the years ahead: the 2005 Base
Realignment and Closure (BRAC) Commission and President Bush's
restructuring of America's global defense posture.
BRAC 2005.--The work of the 2005 BRAC Commission will be critical
to streamlining DOD facilities and saving billions of dollars that
would be better spent on our military people and capabilities, not
excess facilities. The President's budget includes funding for
implementation of BRAC 2005 decisions, beginning with $1.9 billion in
fiscal year 2006.
Global Posture.--Closely linked to the BRAC process is the
President's global posture restructuring, which will ensure that United
States forces and equipment are located where they can best respond to
likely requirements in today's security environment. It will return
70,000 military personnel and 100,000 family members to the United
States, and relocate forces and equipment that must remain overseas. As
the 2005 BRAC Commission considers how to streamline and restructure
the Department's installations, it will have the benefit of our global
posture restructuring plan.
Congressional support of both these initiatives is critical.
FISCAL YEAR 2005 SUPPLEMENTAL APPROPRIATIONS
Before closing, I want to thank this committee for beginning work
quickly on the President's fiscal year 2005 supplemental appropriations
request of $74.9 billion for the Department of Defense. Rapid and full
approval of the request is crucial to fulfilling our military's
requirements for the rest of this fiscal year.
Of critical importance, this supplemental provides significant
resources to address wear and tear on our military equipment, to create
a larger and more combat capable Army and Marine Corps, and to train
and equip Iraqi and Afghan security forces to empower them to take the
fight to the extremists and to help them take control of their future.
The President's supplemental request includes $5.3 billion for
restructuring the Army and Marine Corps because acceleration of this
effort is urgent and vital to the war on terror. In fiscal year 2005
and fiscal year 2006, the Department proposes to fund Army
restructuring through supplemental appropriations, which will
accelerate the restructuring of the ground forces moving into the
combat theater and reset those forces rotating out of theater. This
effort will expand the operating combat force of the Army--making our
forces more effective and reducing the demand and strain on our
military units and troops. About $.3 billion of the request is for
military construction to support this force restructuring, and again
that is an immediate and critical requirement for our forces in the war
on terror.
The supplemental also includes $1.0 billion for military
construction in the U.S. Central Command (CENTCOM) area of
responsibility. This will fund urgently needed facilities and improve
the living and working conditions for U.S. troops in the theater. The
request includes $303 million for force protection for key facilities;
$253 million to improve airfields and their operations and safety; $155
million to improve the movement, handling, and storage of munitions and
fuel; $146 million for temporary troop billeting; and $59 million for
troop medical facilities. The vast majority of these CENTCOM projects
are designed to temporary standards and do not reflect a United States
commitment to permanent basing in the area.
CLOSING
In closing, I thank you for this opportunity to describe the
President's commitment to military quality of life in his fiscal year
2006 budget. The request will enhance the well being of our service
members and their families, strongly support current requirements and
missions, and support the needed streamlining and recapitalization of
DOD facilities. I urge your support for the President's fiscal year
2006 budget and his fiscal year 2005 supplemental appropriations
request. Thank you.
Senator Hutchison. Well, thank you so much, Madam
Secretary.
Now we have Mr. Philip Grone, the Deputy Under Secretary of
Defense for Installations and Environment. Welcome to the
committee.
SUMMARY STATEMENT OF PHILIP W. GRONE
Mr. Grone. Thank you, Madam Chairman.
Madam Chairman, Senator Feinstein, and distinguished
members of the Subcommittee on Military Construction and
Veterans Affairs, I am pleased to appear before you this
afternoon to discuss the President's budget request for the
Department of Defense for fiscal year 2006.
Madam Chairman, I have prepared a written statement and,
with the committee, request that it be placed into the record.
Senator Hutchison. Without objection.
Mr. Grone. At the outset, I want to associate myself with
the statement made by my colleague the Under Secretary of
Defense (Comptroller). The President's budget request for the
Department of Defense continues the efforts of the
administration to place our military infrastructure on a sound
management foundation.
The business area comprising the Department's support of
military installation and the stewardship of natural resources
includes programs totaling over $46 million in the budget for
the coming year. The Department's management responsibilities
extend to an infrastructure with 510,000 buildings and
structures and a plant replacement value of $650 billion and
stewardship responsibilities for roughly 29 million acres, or
46,000 square miles of land, which is roughly the size of
Connecticut and my native Kentucky combined.
Military construction and military family housing and funds
necessary to support Base Realignment and Closure, which the
subcommittee will consider, are a portion, but a vitally
important portion, of our management approach. The President's
management agenda contains three key elements for which my
office has primary responsibility, including the privatization
of military housing and real property asset management, the
last of which is the focus of Presidential Executive Order
13327, issued on February 4th last year.
On those areas of focus for which the subcommittee is
concerned, we have made significant progress with the
assistance of Congress. The military housing privatization
initiative, as the chairman indicated, is achieving results. As
of the beginning of this month, leveraging the power of the
market and the expertise of industry, we have awarded 43
projects privatizing 87,000 units, contributing $767 million in
appropriated funds. To achieve the scope of these 43 projects,
the taxpayer would need to provide $11 billion in military
family housing construction, and over the life cycle, these
privatized projects will save the taxpayer 10 to 15 percent,
even when taking into account the allowances paid to our
military personnel. Ten of those projects have reached the end
of their initial development phase and tenant response is very
positive. By the end of fiscal year 2007, we expect 185,000
units of housing, 84 percent of the inventory, to be
privatized.
The Department's efforts to more properly sustain and
recapitalize our facilities inventory are also demonstrating
results. Four years ago, the recapitalization rate stood at 192
years. The President's budget request supports a
recapitalization rate of 110 years, and we remain committed to
our goal to achieve a 67-year recapitalization rate in fiscal
year 2008.
Facilities sustainment is budgeted this year at 92 percent
of the requirement. In both cases, we have built the program
around private sector best practices and commercial benchmarks
wherever they can be applied, and we continue to refine our
models and guidance to keep them current with those practices
and benchmarks.
We also continue our effort to strengthen the Nation's
defense through the Global Posture Review and BRAC. Abroad, we
will reconfigure our basing and presence abroad to meet the
challenges of the 21st century as opposed to the static defense
of the Cold War. At home, we will rationalize our
infrastructure to further transformation and to improve
military effectiveness and business efficiency.
PREPARED STATEMENT
Our most recent defense installations strategic plan issued
last year, entitled Combat Power Begins at Home, reflects our
focus on improving the management of our installation assets
and to ensure their ability to contribute to military
readiness. All of our efforts are designed to enhance the
military value of our installations and to provide a solid
foundation for the training, operation, deployment, and
employment of the armed forces, as well as to improve the
quality of life for military personnel and their families.
While much remains to be done, we have accomplished a great
deal. With the support of this subcommittee, we will continue
to do so.
Thank you, Madam Chairman.
[The statement follows:]
Prepared Statement of Philip W. Grone
Madam Chairwoman and distinguished members of this Subcommittee, I
appreciate the opportunity to appear before you today to address the
President's Budget request for fiscal year 2006 and the plan of the
Department of Defense to improve its infrastructure and facilities.
The Department of Defense recognizes the long-term challenges
associated with its infrastructure strategy. The Department has
developed a strategy and several tools to address these challenges. The
President's Management Agenda recently added the stewardship of Federal
real property as a new initiative. The Department is a full participant
in the Federal Real Property Council established by Executive Order
13327.
Working in full cooperation with the military services and other
Defense components, the Department set out in 1997 to build a
corporate-wide inventory of assets. The idea was and remains that the
Department's funding requirements for installations is a function of
the assets currently on hand and planned for the future. Hence, an
accurate inventory and a forecast of those assets are fundamental to
determining and assessing budget requirements. The Department is
continuing to improve its inventory process and is working extensively
in the interagency process to support a more useful Federal inventory
that can be used for management purposes.
In 1998, the Department set out on a 6-year program to eliminate 80
million square feet of obsolete and excess facilities. Six years later,
we concluded that effort by exceeding our target--removing a total of
86 million square feet. As part of a continuing effort to dispose of
unneeded facilities, the Department recently completed a new survey of
demolition requirements.
In 2001, the Department issued its first ever Defense Facilities
Strategic Plan. In September 2004, we issued a comprehensive,
capabilities-based, and performance-oriented Defense Installations
Strategic Plan. Our new plan begins to integrate more fully
environmental management systems, safety, and occupational health into
a comprehensive approach to asset management. The 2004 plan addressed
recommendations made by the Government Accountability Office (GAO) and
was approved by OMB as being consistent with the guiding principles of
the Federal Real Property Council in meeting the objectives of the
President's Management Agenda.
Global Posture Realignment
While the Department addresses better business practices, we also
are working to realign our infrastructure to deal effectively with
military transformation and 21st Century threats. The Defense posture
of the past 50 years reflects the Cold War strategy, with U.S. forces
forward deployed primarily to fight near where they were based. Today's
environment requires more agile, fast and lean forces able to project
power into theaters that may be distant from where they are based. This
agility requires not only a shift in military forces, capabilities and
equipment, but also a new basing strategy.
Last fall, the Department completed a 2-year comprehensive review
of its global posture and basing strategy, which will result in the
most profound restructuring of U.S. military forces overseas since the
end of the Korean War. This review was conducted with extensive
participation by the Combatant Commanders, the Joint Chiefs of Staff,
and our interagency partners. We provided the Congress with a copy of
the report in September 2004.
The new posture will enable the Department to respond more quickly
to worldwide commitments and make better use of our capabilities by
thinking of our forces globally. In terms of ``footprint'', we will
tailor our forces to suit local conditions while strategically pre-
positioning equipment and support. We anticipate realigning or closing
a number of large permanent bases in favor of small and scalable
installations better suited for deployments to trouble spots. This will
also reduce friction with host nations. For example, removal of the
U.S. Air Expeditionary Wing from Prince Sultan Air Base should help
improve our relations with Saudi Arabia, and relocating U.S. forces out
of densely-populated Seoul, Korea, to hubs further south will resolve
problems with the Korean public while bolstering our military
capabilities on the peninsula.
Senior officials of this Department and the Department of State
have already begun the process of consulting with our friends and
allies around the world to incorporate their input into our plan. We
recognize that our allies are sensitive to changes in our overseas
posture, and we will continue to consult with them as we make final
decisions and begin executing the strategy. We will continue to consult
with Members of Congress on our plan and will seek your support as we
implement these far-reaching and enduring changes to strengthen
America's global defense posture.
Since some overseas personnel will return to the United States,
global posture changes will influence BRAC recommendations that will be
announced in May 2005. Even though global posture changes will be
executed over several years and will continue to be adjusted as
strategic circumstances change, the Department will incorporate
projected overseas posture changes into the BRAC process.
BRAC 2005
The domestic BRAC round and the global posture review are key
elements that support transformation. A well supported, capabilities-
based force structure should have infrastructure that is best sized and
placed to support emerging mission requirements and national security
needs. DOD must configure its infrastructure to maximize both
warfighting capability and efficiency. Through BRAC and the global
posture changes the Department will support the warfighter more
effectively and efficiently. The Secretary will provide his
recommendations for domestic closures and realignments to the
Commission and Congress by May 16th as required by the BRAC 2005
statute.
From a domestic perspective, the Department recognizes it has an
obligation to assist communities impacted by BRAC 2005. The Defense
Economic Adjustment Program will include assistance for communities to
plan for the civilian redevelopment of available real and personal
property; and implement local adjustment actions to assist impacted
workers, businesses, and other affected community interests. The
Department will work to partner with affected communities as we both
seek opportunities for quick civilian reuse of former military
installations. For communities engaged with installations that will
receive new missions, we also recognize the importance of cooperatively
planning to ensure our mission can effectively be stood up and
supported.
MANAGING INFRASTRUCTURE
The Department currently manages nearly 517,000 buildings and
structures with a plant replacement value of over $650 billion, and
over 46,000 square miles of real estate. We have developed models and
metrics to predict funding needs and have established goals and
performance measurements that place the management of Defense
infrastructure on a more objective, business-oriented basis.
Infrastructure Investment Strategy
Managing our facilities assets is an integral part of comprehensive
asset management. The quality of our infrastructure directly affects
training and readiness.
Facilities sustainment, using primarily operations and maintenance-
like \1\ appropriations, funds the maintenance and repair activities
necessary to keep an inventory in good working order. It includes
regularly scheduled maintenance and major repairs or replacement of
facility components that are expected to occur periodically throughout
the life cycle of facilities. Sustainment prevents deterioration and
preserves performance over the life of a facility.
---------------------------------------------------------------------------
\1\ Includes O&M as well as related military personnel, host
nation, and working capital funds.
---------------------------------------------------------------------------
To forecast funding requirements for sustainment, we developed the
Facilities Sustainment Model (FSM). FSM uses standard benchmarks drawn
from the private and public sectors for sustainment costs by facility
type and has been used to develop the Service budgets since fiscal year
2002 and for several Defense Agencies beginning in fiscal year 2004.
Full funding of sustainment is the foundation of our long-term
facilities strategy, and we have made significant progress in achieving
this goal. The Department increased funding for facilities sustainment
consistently from fiscal years 2002 through 2005, sustaining facilities
at an average of 93 percent of benchmarks. In the fiscal year 2006
budget request, the Department shows a slight decrease in the
department-wide rate to 92 percent. The budget request, however, is an
improvement upon the plan for the fiscal year 2006 contained in the
fiscal year 2005 FYDP, which funded facility sustainment at 90 percent.
Our priorities have not changed and with the support of the Congress
our goal remains to reach full sustainment by fiscal year 2008.
Restoration and modernization, collectively termed
recapitalization, provide resources for improving facilities and are
funded with either operations and maintenance or military construction
appropriations. Restoration includes repair and replacement work to
restore facilities damaged by inadequate sustainment, excessive age,
natural disaster, fire, accident or other causes. Modernization
includes alteration of facilities solely to implement new or higher
standards, to accommodate new functions, or to replace building
components that typically last more than 50 years.
Recapitalization is the second step in our strategy. Similar
private sector industries replace their facilities every 50 years, on
average. With the types of facilities in the Defense Department,
engineering experts estimate that our facilities should have a
replacement cycle of about 67 years on average. In fiscal year 2001,
the Department's recapitalization rate stood at 192 years. This budget
request supports a recapitalization rate of 110 years, and we remain
committed to achieving our 67 year recapitalization goal in fiscal year
2008.
SUSTAINMENT AND RECAPITALIZATION REQUEST
[President's Budget in Millions of Dollars]
------------------------------------------------------------------------
Fiscal year Fiscal year
2005 request 2006 request
------------------------------------------------------------------------
Sustainment (O&M-like \2\).............. 6,515 6,529
Restoration and Modernization (O&M-like) 1,321 1,008
Restoration and Modernization (MilCon).. 3,161 3474
-------------------------------
Total SRM......................... 10,997 11,011
------------------------------------------------------------------------
\2\ Includes O&M as well as related military personnel and host nation.
As a key component of our facility program, the Military
Construction appropriation is a significant contributor to the
Department's comprehensive approach to asset management practices. The
fiscal year 2006 Department of Defense Military Construction and Family
Housing appropriation request totals $12.05 billion. This budget
request will enable the Department to transform in response to
warfighter requirements, to enhance mission readiness, and to take care
of our people. We do this, in part, by restoring and modernizing our
enduring facilities, acquiring new facilities where needed, and
eliminating those that are excess or obsolete.
COMPARISON OF MILITARY CONSTRUCTION AND FAMILY HOUSING REQUESTS
[President's Budget in Millions of Dollars--Budget Authority]
------------------------------------------------------------------------
Fiscal year
2005 Fiscal year
appropriation 2006 request
------------------------------------------------------------------------
Military Construction................... 4,745 5,284
NATO Security Investment Program........ 166 207
Base Realignment and Closure............ 246 2,258
Family Housing Construction/Improvements 1,622 2,020
Family Housing Operations & Maintenance. 2,547 2,220
Chemical Demilitarization............... 81.9 ..............
Homeowners Assistance................... .............. ..............
Family Housing Improvement Fund......... 2.5 2.5
Energy Conservation Investment Program.. 50 60
-------------------------------
Total............................. 9,460 12,052
------------------------------------------------------------------------
Improving Quality of Life
At the outset of this Administration, the President and Secretary
Rumsfeld identified elimination of inadequate family housing as a
central priority for the Department and set an aggressive target of
2007 to meet that goal. Greatly expanded use of the privatization
authorities granted under the fiscal year 1996 Military Housing
Privatization Initiative has enabled achievement of that target at
United States based installations where those authorities apply.
Sustaining the quality of life for our military families is crucial to
recruitment, retention, readiness and morale. The fiscal year 2006
budget funds elimination of all inadequate domestic family housing by
2007, and eliminates remaining inadequate houses overseas by 2009.
DOD policy relies on the ``community first'' (private sector) to
provide quality housing. Only when the private market demonstrates that
it cannot supply sufficient levels of quality housing does the
Department provide housing to our military families using privatization
as its primary option followed by government-owned and leased housing.
For example, we address our housing needs overseas through military
construction and leasing in the absence of privatization authority.
To ensure the Department is making the best investment decisions in
determining the appropriate level of housing, the government provides a
single and consistent methodology for calculating the requirement which
was introduced in January 2003 and is being extensively utilized by the
Services. Currently, 73 percent of military families reside in
privately owned housing, including 11 percent in privatized military
housing and 27 percent in government-owned housing areas.
The Department has skillfully used privatization to more quickly
eliminate inadequate housing and to provide additional housing where
shortfalls existed. As of February 2005, the Department has awarded 43
projects. This includes over 87,000 military family housing units,
which is a 58 percent increase since January 2004. DOD policy requires
that privatization yield at least three times the amount of housing as
traditional military construction for the same amount of appropriated
dollars. The 43 awarded projects have permitted the Department, in
partnership with the private sector, to provide housing for about $767
million in military construction investment. The same level of
construction activity would otherwise have required over $11 billion if
the traditional military construction approach was utilized. This
reflects an average ratio of over 14 to 1, well exceeding program
expectations.
The Department's privatization plans in the fiscal year 2006 budget
will privatize 84 percent of its domestic family housing inventory, or
roughly 185,000 units privatized by the end of fiscal year 2007. By the
end of fiscal year 2006, we will have privatized 172,400 housing units.
For fiscal year 2006, the Department requests $4.243 billion in new
budget authority for family housing construction and operations and
maintenance:
--$1.9 billion to construct 3,447 new/replacement units and improve
3,584 existing units.
--$2.2 billion to operate and maintain approximately 123,452
government-owned family housing units, and lease another 26,281
units worldwide.
Funding to support the privatization of family housing is
programmed and budgeted in the family housing construction
appropriations and is transferred to the DOD Family Housing Improvement
Fund (FHIF) when the privatization projects are executed. The fiscal
year 2006 construction account requests a total of $281 million in
funding for privatization. Of this amount, approximately $182 million
is anticipated to be transferred to the Family Housing Improvement Fund
during fiscal year 2006 along with $428 million in previously
appropriated construction funds. This $610 million will be used to
finance the privatization of approximately 34,964 units.
Utilities Privatization and Energy Management
The Department seeks to reduce its energy consumption and
associated costs, while improving utility system reliability and
safety. The Department has developed a comprehensive energy strategy
and issued new policy guidance that will continue to optimize utility
management by conserving energy and water usage, improve energy
flexibility by taking advantage of restructured energy commodity
markets when opportunities present themselves, and modernize our
infrastructure by privatizing our deteriorated and outdated utilities
infrastructure where economically feasible. The comprehensive energy
strategy supports the use of meters to manage energy usage at locations
where the monitoring justifies the cost of installing, maintaining and
reading the meter. Metering in itself does not save energy, however,
use of meters can be beneficial to determine accurate billing, perform
diagnostic maintenance, and enhance energy management by establishing
baselines, developing demand profiles, ensuring accurate measurement
for reporting, and providing feedback to users.
DOD, as the largest single energy consumer in the Nation, consumes
over $2.8 billion of energy per year. Conserving energy and investing
in energy reduction measures makes good business sense and frees up
resources for sustaining our facilities and for higher DOD priority
readiness and modernization. Recent dramatic fluctuations in the costs
of energy significantly impact already constrained operating budgets,
providing even greater incentives to conserve and seek ways to lower
energy costs. These include investments in cost-effective renewable
energy sources or energy efficient construction designs, and
aggregating bargaining power among regions and Services to get better
energy deals.
Conserving energy in today's high-priced market will save the
Department money that can be better invested in readiness, facilities
sustainment, and quality of life. Our efforts to conserve energy are
paying off; in fiscal year 2004, military installations reduced
consumption by 1.1 percent despite an 8.8 percent increase in the cost
of energy commodities from fiscal year 2003. With a 26.8 percent
reduction in standard building energy consumption in fiscal year 2004
from a 1985 baseline, the Department has deviated slightly from the
track required to achieve the 2005 and 2010 facility energy reduction
goals stipulated by E.O. 13123. This is mostly attributable to the
lapse of Energy Savings Performance Contract (ESPC) authority which
typically accounts for more than half of all facility energy savings.
However, with ESPC authority reauthorized in the fiscal year 2005
National Defense Authorization Act, DOD has launched an aggressive
awareness campaign and plan to get back on track to meet fiscal year
2010 reduction goals.
DOD has significantly increased its focus on purchasing renewable
energy and developing resources on military installations. The
Department has increased the use of Energy Conservation Investment
Program (ECIP) funds for renewable energy projects from $5 million and
$11 million in fiscal year 2003 and fiscal year 2004, respectively, to
$13 million and $18 million in fiscal year 2005 and fiscal year 2006,
respectively.
The Department has a balanced program for energy conservation--
installing energy savings measures using appropriated funding and
private-sector investment--combined with using the principles of
sustainable design to reduce the resources used in our new
construction. Energy conservation projects make business sense,
historically obtaining about $4 in life-cycle savings for every dollar
invested. The fiscal year 2006 budget contains $60 million for the ECIP
program to implement energy saving measures in our existing facilities.
To improve utility systems, the Department has reaffirmed its
preference to modernize military utility systems through privatization.
The DOD Utilities Privatization Program has made solid progress over
the past 2 years. The Services have greatly simplified and standardized
the solicitation process for obtaining industry proposals. Request for
Proposal (RfP) templates were clarified to improve industry's ability
to obtain private sector financing and manage risks. Of 2,601 utility
systems serving the DOD, 463 systems have been privatized and 733 were
already owned by other entities. Over 950 systems are currently under
solicitation as each Service and the Defense Logistic Agency continue
aggressive efforts to reach privatization decisions on all systems.
Installations Support
The Installations Support function consists of two major programs:
Installation Services (formerly referred to as ``base operations
support'') and Facilities Operations (formerly referred to as ``real
property services''). The current budget request of $22.5 billion
includes $16.8 billion for Installations Services and $5.7 billion for
Facilities Operations in fiscal year 2006. The Defense Installations
Strategic Plan articulates the need to define common standards and
performance metrics for managing Installations Support. The Department
has initiated an effort to define and model each sub-function of
Facilities Operations (utilities, leases, custodial services, snow
plowing and the like) by fully utilizing commercial benchmarks. For the
more diverse tasks within Installation Services, the Department has
established a cross-Departmental working group to examine definitions
and budget structures.
Range Sustainment
In concert with the President's August 2004 Executive Order
``Facilitation of Cooperative Conservation'' the Department has
developed a program of Compatible Land Use Partnering that promotes the
twin imperatives of military test and training readiness and sound
conservation stewardship through collaboration with multiple
stakeholders. The Executive Order defines ``cooperative conservation''
as actions that relate to use, enhancement, and enjoyment of natural
resources, protection of the environment, or both, and that involve
collaborative activity among Federal, State, local, and Tribal
governments, private for-profit and nonprofit institutions and other
nongovernmental entities and individuals. The Department's Range
Sustainment Program is fully consistent with the President's goals in
this area. Section 2811 of the 2003 National Defense Authorization Act
authorizes the Services to take a proactive role in developing programs
to protect our installations and ranges from urban sprawl by working
with States and non-governmental organizations to promote compatible
land use through cooperative conservation efforts. This authority has
enabled DOD to initiate the Readiness and Environmental Protection
Initiative (REPI)--a multi-year program to sustain test and training
space for our troops while simultaneously assisting in the protection
of valuable habitat and open space. This program provides a lasting
solution and a long-term framework for developing new policies,
partnerships, and tools to assist communities and other interested
stakeholders in executing compatible land use partnerships around our
test and training ranges and installations, as well as work with our
other Federal landowners on cooperative conservation projects. In the
coming years, military readiness will still require substantial
resources, air, land and water areas where military forces can test and
train as they would fight. It is imperative that we be able to posture
our test and training infrastructure for transformational and
sustainable operations.
The Department appreciates greatly the $12.5 million in fiscal year
2005 funding provided by Congress to fund the REPI program, and the
military Services are already executing critical projects in many
States. A recent agreement to address encroachment at Fort Carson,
Colorado, and to enhance regional environmental conservation is one
example of this win-win approach. Other projects are under
consideration in Hawaii, at MCB Camp LeJuene, North Carolina, and in
California and Florida. In fiscal year 2004, the Services implemented
successful partnerships with State and Non-Governmental Organizations
(NGOs) at locations such as NAS Pensacola (Navy and Escambia County),
Camp Blanding (National Guard Bureau and State of Florida). These
multi-faceted conservation partnerships will ensure the long-term
sustainability of test and training centers supporting the military
mission. Thus, the Administration has requested $20 million for the
REPI program for fiscal year 2006 and we are in the process of refining
the Service priorities for those funds. I have requested that the
Services prepare and submit requirements associated with fiscal year
2007 and out-years to support a long-term funding strategy for the REPI
program. These compatible land use partnering efforts will become even
more critical to our ability to protect and preserve our test and
training missions as we enter our post-BRAC transformational
environment. We look forward to participation in the White House
Cooperative Conservation Conference later this year to find ever more
innovative ways to work with others to help secure critical test and
training ranges. I look forward to working with Congress to ensure our
ability to fulfill the important programming requirements for these new
efforts.
Safety and Occupational Health
The Department is aggressively supporting the SECDEF's priority to
reduce mishaps in DOD by implementing SOH management systems and by
making it a priority in our Defense Installations Strategic Plan. Our
programs focus on continuous incremental improvement in Safety and
Health, but we're also involved in implementing significant changes in
safety through our partnership with the Under Secretary of Defense for
Personnel and Readiness, who chartered the Defense Safety Oversight
Committee (DSOC). Together, we are leading DOD's efforts to cut mishaps
in half by the end of fiscal year 2005. The DSOC, composed of senior
leaders throughout the Department, is finding ways to decrease the
detrimental effect on our readiness caused by mishaps. We are focusing
on acquisition; base operating support; training; and deployment
operations. For acquisition and training, the Army and Marine Corps is
responding to deaths from HMMWV rollovers by acquiring improved seat
belt systems for tactical vehicles and by training deployed soldiers
and marines to improve their driving skills. For deployment health
protection, we began a program for the factory treatment of Army and
Marine Corps combat uniforms with permethrin. This will provide
protection against mosquitoes, and the diseases that they transmit, for
the life of the uniform. Factory treatment ensures that all uniforms
are treated and deployment-ready and that soldiers are not exposed to
concentrated pesticides.
ENVIRONMENTAL MANAGEMENT
The Department continues to be a leader in every aspect of
environmental management. We are proud of our environmental program at
our military installations and are committed to pursuing a
comprehensive environmental program.
Environmental Management Systems
To make our operations more efficient and sustainable across the
Department, we are continuing our aggressive efforts to implement
environmental management systems (EMS) based on the ``plan-do-check-
act'' framework of the international standard for EMS (ISO 14001). We
are embedding environmental management as a systematic process, fully
integrated with mission planning and sustainment. This transformation
is essential for the continued success of our operations at home and
abroad. Implementing EMS will help preserve range and operational
capabilities by:
--creating a long-term, comprehensive program to sustain training and
testing capability while maintaining healthy ecosystems;
--conducting environmental range assessments to ensure that we
protect human health and the environment; and,
--funding and implementing the INRMPs for our ranges.
In addition, EMS will help maintain and preserve our historic
properties, archaeological resources, Native American, and other
cultural assets for the benefit of future generations. Today, DOD has a
large inventory of historic properties: 75 National Historic Landmarks,
and nearly 600 places on the National Register of historic places,
encompassing more than 19,000 individual properties, including
buildings, structures, objects, and sites located at over 200
installations. Over the next two decades, tens of thousands more
buildings will reach an age requiring evaluation of their historical
significance.
ENVIRONMENTAL PROGRAM--SUMMARY OF REQUEST \3\
[President's Budget in Millions of Dollars--Budget Authority]
------------------------------------------------------------------------
Fiscal year
2005 as Fiscal year
appropriated 2006 request
------------------------------------------------------------------------
Environmental Restoration............... 1,352 1,370
BRAC Environmental \4\.................. 328 449
Compliance.............................. 1,666 1,561
Pollution Prevention.................... 142 143
Conservation............................ 175 205
Technology.............................. 274 206
International \5\....................... 3 3
-------------------------------
TOTAL............................. 3,937 3,934
------------------------------------------------------------------------
\3\ Includes operations and maintenance, procurement, RDT&E, and
military construction funding.
\4\ Funding levels reflect total requirement.
\5\ International is included in Pollution Prevention and Compliance.
In fiscal year 2006, the budget request includes $3.9 billion for
environmental programs. This includes $1.4 billion for cleanup, $0.4
billion for BRAC environmental, $1.6 billion for compliance; about $0.1
billion for pollution prevention, and about $0.2 billion each for
conservation and environmental technology.
Managing Cleanup
The Department is committed to the cleanup of property contaminated
by hazardous substances, pollutants, and military munitions. We have
achieved remedy in place or restoration complete at 15,950 out of
19,710 sites on active installations. At the end of fiscal year 2004,
4,046 out of the 4,832 BRAC sites requiring hazardous waste remediation
have a cleanup remedy constructed and in place, or have had all
necessary cleanup actions completed in accordance with Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA)
standards. Hazardous waste cleanup at Formerly Used Defense Sites
(FUDS) achieved remedy in place or response complete at 1,539 out of
the 2,647 sites.
Managing Compliance and Preventing Pollution
The Department is committed to going beyond mere compliance. But
compliance with existing laws and regulations is the base line for our
program and we continue to plan and fund for this requirement. Our
ability to meet these compliance driven goals continues to improve. In
a letter to the editor of USA today, acting EPA Assistant Administrator
Skinner publicly complemented the Department by stating, ``The
Department of Defense (DOD) has been a leader in pollution prevention
and implementing environmental-management systems that serve as models
for other facilities.'' Pollution prevention techniques continue to
save the Department needed funds as well as reduce pollution. The
Department continues to demonstrate pesticide use risk reduction on
installations and was recognized by the EPA as Pesticide Environmental
Steward Program Champion, for the third year in a row.
Emerging Contaminants
In January 2005 the National Academy of Sciences (NAS) released a
review of the science used to determine the public health risks from
perchlorate, a chemical with important national defense applications
due to its use in missile and rocket propellants, munitions,
pyrotechnics, and flares which was funded jointly by DOD, DOE, EPA, and
NASA. Even before the start of the NAS study, Federal agencies were
working hard to understand and address potential risks of perchlorate.
The NAS report yielded an independent assessment of the available
science. Now Federal agencies will be able to take actions based on
sound science to address the issue of perchlorate in our Nation's
drinking water supply.
We continue to develop more comprehensive strategies to enable us
to protect public health while sustaining our assets and better
managing our liabilities. In 2004, in advance of any legally
promulgated standard for perchlorate, the Department issued a policy to
sample for perchlorate that has enabled the Department to better
characterize the nature and extent of perchlorate plumes associated
with its facilities. Over the last year, a joint effort between the
Department and the State of California yielded a sampling
prioritization protocol to ensure that active and former DOD sites with
the greatest potential to cause a perchlorate-based health threat were
investigated first. All current and formerly used DOD sites have now
been jointly assigned a priority for sampling according to that
protocol.
The Department is moving ahead with efforts directed toward
removing perchlorate from the environment. In advance of any
requirement, DOD proactively initiated remediation demonstration
projects at several sites in California, Texas, and Massachusetts. We
have taken corrective measures to ensure proper disposal and added
additional wastewater treatment to manufacturing facilities using
perchlorate. We continue to fund remediation technology research and,
this year, we launched a $9.5 million wellhead treatment demonstration
effort with several Southern California communities. The Army's effort
to find substitutes for some of its training uses of perchlorate is
also yielding positive results.
We are using these comprehensive approaches as a model to more
proactively and cooperatively address other emerging contaminants such
as trichloroethylene (TCE) and Royal Demolition eXplosive (RDX). The
Department continues to engage with other agencies in a sustained
collaborative effort to address emerging contaminants by creating
mutually satisfactory sustainable solutions. Last fall, DOD began
working with the Environmental Council of States to define
opportunities for States, DOD, DOE, and EPA to address emerging
contaminants more effectively in the future.
BUSINESS TRANSFORMATION
Business Management Process Transformation
The Business Management Modernization Program (BMMP) was
established 3 years ago and has made significant progress in
establishing key foundational elements necessary to enable broad
business transformation across the Department. In April 2003, the DUSD
(I&E) was designated as the Domain Owner for the Installations and
Environment Domain of BMMP. Because the foundation is now laid, the
program is redefining itself to focus on facilitating rapid delivery of
DOD Enterprise capabilities.
The I&E Domain has achieved significant accomplishments over the
past year. We developed a real property unique identification concept
that will enable greater visibility of real property assets and
associated financial resources. Our efforts focused on reengineering
the business process for real property inventory, resulting in standard
data elements and data definitions for physical, legal and financial
attributes of real property. Our efforts also produced, for the first
time in DOD, an end-to-end process of real property management that
articulates the interfaces with real property asset accountability and
financial records. Our focus on data (data strategies, elements and
definitions) will facilitate rapid implementation of the real property
inventory capability upon deciding on our systems implementation
strategy. Additionally, we developed a process model for environmental
liabilities recognition, valuation, and reporting that contributes to
our overall auditability. During this past year, we also established
the Defense Installation Spatial Data Infrastructure project to
implement DOD-wide policies and resource oversight for geospatial
information resources that support the Installations and Environment
business mission area.
During this fiscal year, we will conduct an analysis of system
alternatives and prepare a transition plan to determine the best
implementation strategy for the real property inventory reengineering
effort. We will continue to make improvements across the Department in
managing hazardous material by developing an enterprise-wide procedure
for hazardous materials management. We will define I&E geospatial
information needs and continue to minimize redundant acquisition of I&E
geodata resources. Lastly, we are aggressively working to put into
operation a DOD registry for physical locations. This registry will
identify all DOD sites with a unique identifier and will be associated
with firm boundary information. The registry will be available across
the DOD enterprise and to potential users include the warfighting
community and business mission areas. The site registry will allow for
personnel and weapons system information systems to be linked to DOD's
sites.
Competitive Sourcing
Competition is a driving force within the American economy, causing
organizations to improve quality, reduce cost, and provide rapid
delivery of better products and services. The President's Management
Agenda identifies Competitive Sourcing as one of the five primary
Federal initiatives. The Department of Defense has long been the
Federal leader in using public-private competition under the process
defined by OMB Circular A-76 to decide the least costly and most
efficient source for commercial functions. It is essential that we
continue to utilize the process, where it makes good military and
business sense, to improve support to the warfighter and increase
readiness. Many important base support functions fall into this
category. The fiscal year 2006 budget supports continued use of the
improved process described in the recent revision to OMB Circular A-76
competitions for functions involving approximately 100,000 full time
equivalents (FTE). This will allow achievement of the Department's
targets in the President's Management Agenda.
CONCLUSION
The Department is transforming its installations and business
practices through an asset management strategy, and we are now seeing
the results of that transformation. We are achieving the President's
goal to provide quality housing for our service members and their
families, and we have made positive progress toward our goal to prevent
deterioration and obsolescence and to restore the lost readiness of our
facilities. We also are transforming our environmental management to
become outcome oriented, focusing on results. We are responding
vigorously to existing encroachment concerns and are putting a long-
term installation and range sustainment strategy into effect.
The Base Realignment and Closure effort leading to the delivery of
the Secretary's recommendations to the independent Base Closure
Commission in May 2005 is a key means to transform our infrastructure
to be more flexible to quickly and efficiently respond the challenges
of the future. Together with the Global Defense Posture Review, BRAC
2005 will make a profound contribution to transforming the Department
by rationalizing our infrastructure with Defense strategy.
In short, we have achieved significant accomplishments over the
past few years, and we are well on our way to achieving our goals
across the Installations and Environment Community. In closing, Madam
Chairwoman, I sincerely thank you for this opportunity to highlight our
successes and outline our plans for the future. I appreciate your
continued support of our installations and environment portfolio, and I
look forward to working with you as we transform our plans into
actions.
Senator Hutchison. Thank you, Mr. Secretary.
I will start with a few questions. I am going to try to
give everyone a chance to do round one, and then I will likely
come back with round two.
MORE SPECIFICITY FOR BRAC FUNDING
First of all, Mr. Grone, the budget request includes $1.9
billion for the 2005 BRAC round. There are $392 million for
costs associated with the Global Presence and Basing Strategy,
but the rest is not earmarked at all. I wondered if you would
tell us how the Department intends to determine the uses for
this money. What do you plan for this, and will we have a
mechanism by which you will come to Congress with more
specificity for almost $2 billion?
Mr. Grone. Madam Chairman, that is an excellent and quite
appropriate question. As we were budgeting for base realignment
and closure activities at the Department for the coming fiscal
year, of course, the first year of implementation is always a
bit of a challenge. We do not know at the time we build the
budget what the recommendations of the Secretary will be, nor
do we know, obviously, what the recommendations of the
commission and the disposition of those recommendations by
Congress will be.
We took a good, hard look at lessons learned from the past,
as we were building the budget. In 1993, the Department had
requested funds which, if inflated appropriately, would amount
to approximately $1.5 billion. We took a look at the 1995
round, applied the appropriate inflators to that, and the
request was about $1 billion.
Having said that, the General Accounting Office on numerous
occasions, in commenting on the 1995 round, indicated to the
Secretary and to the Congress that the Department's
recommendations in that year were smaller than it had projected
at the start and that their analysis, the GAO's analysis, at
the time found that the services' concerns over closing costs
played a role in limiting the number of options that were
actually recommended to the commission and ultimately enacted
into law.
So when we took a look at the lessons of the past, as well
as considering the costs associated with the initial phase of
realigning forces to the United States from abroad, we came to
the conclusion that that level of funding, approximately $1.9
billion, was an appropriate level for the first year.
As to the process, in 1995, as with prior rounds of BRAC,
the Department's budget justification included simply a
reference that we had requested a certain level of funding.
Once the Congress disposes of the commission's recommendations,
we will provide a report to the Congress that details the first
year implementation funding associated with the amount
appropriated by Congress, and subsequently for fiscal year 2007
and beyond, we will include a complete breakdown of how we
expect to expend those funds, as we would with any other budget
justification. So we certainly will not begin to expend funds
until we provide such a report for the committee's review, but
we believe that that initial tranche of funds is an appropriate
level to get us started.
We do not have a target for the number of bases we expect
to close, nor do we have a target for the expected amount of
savings. But we have taken a good, hard look at lessons learned
from the past, and we want to put ourselves in the position to
begin to expeditiously implement BRAC recommendations and we do
not, obviously, want to be short of the resources necessary to
make that happen.
Senator Hutchison. Thank you. We will look forward to
having something that assures that we will have some
specificity as you get to the point. I understand, obviously,
we do not know what bases are being closed and what the needs
are at this time.
PROCEEDS FROM SALES OF CLOSED FACILITIES
Speaking of lessons of the past, after nearly a decade of
debate over the future of the former El Toro Marine Corps Air
Station property, which was closed in the 1993 BRAC, the Navy
has sold the property to a developer for a reported almost $650
million. We are told that the Navy probably will sell much of
the property at the now-closed Roosevelt Roads Naval Air
Station in Puerto Rico.
Is this something you expect the Navy and other services to
do following the 2005 BRAC round? If so, will it offset some of
the costs of base closing? How will that money be allocated?
And is this sort of a new mode of operation that is different
from trying to work with community redevelopment corporations
and giving property back to the community to the best extent
possible? Just in general, the overview of is this a harbinger
of the future.
Mr. Grone. It is an indicator of, in many ways, where we
would like to be after the 2005 round. And at the outset I want
to emphasize that in both the case of El Toro and in the case
of Roosevelt Roads, should the Navy proceed with sale--and Mr.
Penn who will follow us in the next panel can elaborate on this
point. But in both cases, those decisions and those
redevelopment packages are reflective of what we have taken to
refer to as the mixed tool kit. In both instances, there are
public purpose conveyances. There are economic development
conveyances, as well as parcels for public sale. Both resulted
from extensive consultation with local governments concerned,
and that is the way in which we see a good deal of the future.
Our approach, taking good lessons learned from the past, we
probably significantly as a Department over-estimated our
ability to sell in the early stages of the first BRAC rounds.
Later on, given a whole history, which I will not belabor, we
probably took that pendulum too far over to the right. Where we
want to be--and we have had extensive conversation with
redevelopment authorities, local governments, State
governments, the National Association of Installation
Developers, and others, and we expect we will continue to have
dialogue with the Hill on these points as well.
Where we would like to be is to put ourselves in the
position where we proceed from a series of four or five key
principles. One is if we choose to close a base, we need to
look at ways to accelerate the movement of that mission. Doing
so will enable the second principle, which is to put the
property into effective economic reuse as expeditiously as we
can. As we do that, our approach will be a highly tailored,
locally tailored effort, working with State and local
governments and redevelopment authorities, to put that mixed
tool kit parcel into place and, where it is appropriate, to
sell.
As we sell property and we take revenue in, of course, that
will offset some of the cost, particularly over the long term,
of our environmental remediation and caretaker cost activities.
So it is not insignificant in that regard. But we recognize
that our ability to do that is entirely dependent upon our
ability to work in cooperation and in partnership with local
government. We cannot sell and maximize value on our own. We
must work together, and that is a foundation of our policy as
we are developing it in the middle of our policy review going
forward.
Senator Hutchison. Thank you very much.
I will now turn to my ranking member, Senator Feinstein,
and I do have a couple of other questions, but I would like to
spread the opportunity.
CHEMICAL WEAPONS DEMILITARIZATION
Senator Feinstein. Well, thank you very much, Madam
Chairman. I will try and be brief.
Let me ask my first question because Senator Allard is here
hailing from Colorado, and that is about chemical weapons
demilitarization. There is no funding for the chem demil
construction in your 2006 MILCON request, and I think there has
been a great deal of discussion of how Defense intends to
proceed with the destruction of munitions stockpiled at the
Blue Grass, Kentucky and the Pueblo, Colorado facilities. In
2005, we appropriated a total of $81.8 million for construction
of the Kentucky and Colorado facilities. In 2004, $104 million
was appropriated for construction. And this is all on top of
nearly $100 million that was appropriated for these facilities
in prior years. So that is almost $300 million that has already
been appropriated.
You are not requesting any chemical demil funds. I would
like to know why not. I would like, if I might, to know whether
the Department intends to proceed with construction of the
Kentucky and Colorado facilities, and if these facilities are
delayed or ultimately canceled, how will that affect DOD's
ability to comply with the deadlines for chemical stockpile
destruction imposed by the Chemical Weapons Convention?
And are you considering the feasibility of shipping these
weapons from these facilities across State lines, and what is
the status of the funding? How much has been spent and how much
of it remains unobligated? I have got them written down. So if
you forget one, I will get you on another.
Ms. Jonas. Senator, let me start out and then I will let
Mr. Grone talk to some of the specifics on the MILCON piece.
Senator Allard was present at a Senate Budget Committee
where the Deputy Secretary of Defense committed to working with
the Congress on the issue. We understand that there are
concerns here and working some alternatives to deal with the
situation as it is. Mike Wynne, who is the acting Under
Secretary for AT&L, of course, is the principal in charge of
this program. I would be happy to make sure that we get for you
for the record all the answers to those questions. I am not
sure I have them all.
[The information follows:]
The Department has released funding previously withheld in fiscal
year 2005 to commence the redesign and construction of the destruction
facilities managed by the Assembled Chemical Weapons Alternatives
(ACWA) program. The ACWA program has completed sufficient analysis of
methods that balance cost, schedule and performance objectives to make
a determination as to which is the most prudent design approach to
maximize the opportunity to meet the extended 100 percent Chemical
Weapons Convention destruction deadline of April 29, 2012. The fiscal
year 2005 funds and those funds requested for fiscal year 2006 should
be sufficient to manage the ACWA program through the end of fiscal year
2006.
Ms. Jonas. My understanding is that--and I do not have the
specific numbers on the obligations, but on the prior year
obligations, a good portion of those funds have been obligated.
There are some that have not been, and Mike Wynne is looking at
a spend plan on that to try to deal with the situation.
But I would say that the Deputy Secretary of Defense
committed to working with the Congress on potential
alternatives regarding those two sites.
Senator Feinstein. Well, you really have not answered the
questions. But what you are saying is we are working on it.
$285.5 million has been appropriated by this committee.
Ms. Jonas. Right.
Senator Feinstein. What I am asking for, I guess, if you
are not going to use it at these sites, tell us now. Tell us
what you are going to do with the money.
Ms. Jonas. Certainly.
Senator Feinstein. This has been going on for what? This is
the third year now.
Ms. Jonas. Senator, I would be happy to get with Mike Wynne
and get back with you and your staff to give you the exact
information that you are requesting. My understanding is there
is some money that Mike has got on a withhold because he is
concerned about a spend plan and some cost overruns on that.
But I would be happy to work with you on that.
Senator Feinstein. Can you tell us if you are going to go
ahead with these two sites? Yes or no?
Mr. Grone. Senator, where I think are now--and I would like
to elaborate on a couple of the points that my colleague has
made.
So far through the program, we have met all our required
milestones to date, to speak to the point on demilitarization.
We have destroyed 35 percent of the stockpile. The next
milestone requires destruction of 45 percent of the stockpile
by December 2007, and as we sit here today, that deadline is
achievable.
As the subcommittee is aware, we have seen significant cost
growth in the chemical demilitarization program overall.
Senator Feinstein. I do not want to take up your time. I am
asking about two sites: Pueblo, Colorado and Kentucky.
Mr. Grone. The acting Under Secretary has asked for a
number of alternatives to be looked at. Once that spend plan
and those alternatives are assessed, we would be in a better
position to answer the question. All options are on the table.
None are off the table. And in order to fulfill our
responsibilities as a Department to ensure that we have a cost
effective, safe, treaty-compliant program, we need to look at
all the options given the cost growth that we have had in the
program, and that is what we are trying to do.
Senator Feinstein. Well, let me just ask this. You
basically have not answered the question. You may not be able
to. I appreciate that. But for 3 years we have appropriated
money. It seems to me we ought to know whether this money is
going to be used for that. It is a lot of money. And if it is
not, whether it is unobligated and it can be used for other
things.
Ms. Jonas. Senator, I would be happy to get with you in the
next couple of days. I will work with Mike Wynne to make sure
that we get an answer to that question. But my understanding
was that he was looking at a spend plan on it and that is why
the withhold took place.
[The information follows:]
Yes, we are going to go ahead with these two sites. The Department
has now released all prior years and fiscal year 2005 appropriated
funds for Blue Grass and Pueblo.
Senator Feinstein. Okay, but the bottom line is you are
uncertain whether you are going to go ahead or not go ahead.
Right?
Ms. Jonas. I need to talk with Mike Wynne about where they
are with respect to his spend plan. I will not make any
assumptions right now, but I will be glad to get back to you in
short order.
Senator Feinstein. When you get back to us, if you could
bring the information, exactly how much has been spent and for
what it has been spent, and also what the alternatives are that
you are considering.
Ms. Jonas. Absolutely.
Senator Feinstein. I appreciate that.
I will reserve my questions so others have a chance.
Senator Hutchison. We will have a second round.
Senator Allard.
Senator Allard. Madam Chairman, thank you very much, and I
want to thank Senator Feinstein for pursuing that line of
questioning. It is exactly the same line of questioning that I
put before you, Ms. Jonas, in previous hearings. I have asked
the same line of questions at the Subcommittee on Defense,
asked the same line of questions at the Budget Committee when
we had our hearing there, and we have the same line of
questions here. I think they are very important questions that
we are asking.
We are not going to be in compliance with the Chemical
Convention Treaty which has been ratified by the Senate. We had
testimony from the Secretary of State, Condoleezza Rice, saying
that if we do not comply with the treaty, it just makes her job
that much more difficult. So this is an important issue to the
country, not just Kentucky and Colorado.
Mr. Grone--did I pronounce your name right? Grone?
Senator Hutchison. Grone.
Senator Allard. I am sorry.
Mr. Grone. That is quite all right.
Senator Allard. Mr. Grone, I apologize.
But the point I want to make is that you say all options
are on the table and the study that you are making includes all
options. Now, we have in Federal law a provision that says that
you will not ship interstate chemical weapons or material from
these chemical weapons stockpiles without permission from the
Governor or a declared emergency by the President. And none of
those conditions exist in either Kentucky or Colorado or the
neighboring States.
We have already had three studies in Colorado at the Pueblo
site. Now, why in the world, after we have had three studies,
are we having another study? We are spending $150,000 on that,
which could easily be used to begin to put in some of the
infrastructure ahead of time. To me it seems like an absolute
waste of taxpayer dollars.
Now, if you have problems with cost overruns, then I think
we ought to address that issue. But I do not see why you are
spending taxpayer dollars on a study on an activity that is
illegal. You are not going to ignore the law, are you?
Mr. Grone. No, sir.
Senator Allard. So I do think this does require serious
consideration. The Pentagon has simply just not treated this as
seriously I think as they should, and I hope they do.
Ms. Jonas. Senator, I would just add that it was the Deputy
Secretary that committed to work with you and other Senators on
this very matter.
Senator Allard. That is correct.
Ms. Jonas. And I know he is hard at work at that. It is
very much on his plate, and I know he has held several meetings
on it already. So we would be happy to get back to this
committee on plans for the future.
Senator Allard. I for one would be very interested in
getting the information that was requested by Senator
Feinstein, and she would probably be interested in getting the
information that you might provide to my office too.
BUFFER AREA AROUND FORT CARSON, COLORADO
I am going to go on to something that is probably a little
easier subject. One of the things that we are looking at Fort
Carson--we have introduced legislation for this--is a buffer
area around the base. National bases all around the country are
having urban encroachment occurring on them. I think we have
probably all experienced this in our States. As a result of
that, it is difficult for them to carry out their mission.
We have a unique situation in the State of Colorado in that
we have a large amount of open space around Fort Carson that is
owned by very few landowners. This provision, which was just
passed by Congress last year, has not been applied to any base.
So Fort Carson I think is going to be our first test as far as
this is concerned.
I would like to get some of your views on this. We are in
the process now of negotiating with the local property owners
and it is strongly supported by the local community, strongly
supported by the commanders at the base. From what I can tell,
everybody in the Pentagon is enthusiastic about it. I would
just like to have maybe some comments that you might have on
this approach and what concerns you may have, if any.
Mr. Grone. Well, Senator, I appreciate the opportunity to
comment on it because the general initiative is managed by my
office.
We had requested funds last year. Several years ago we had
sought authority from the Congress to begin this type of
important buffer initiative which Congress graciously enacted.
We would have the ability with this to improve the long-term
stewardship and management of encroachment around many of our
installations.
We had requested $20 million in funds last year from the
Congress, and through the budget process, we ended up with
$12.5 million for fiscal year 2005. We followed up that request
with an additional request which will be pending in the Defense
Subcommittee for $20 million in fiscal year 2006.
The issues at Fort Carson are a high priority issue. For us
it is a priority for the Army. We are working now on how to
begin to implement a good deal of the program there. We do have
some initial experience with these kind of initiatives. A lot
of what we are doing now was rooted in some local initiatives
in and around Fort Bragg, North Carolina, and pursuant to the
authority provided by Congress 3 years ago, we have conducted
two agreements in the State of Florida, one around Camp
Blanding to benefit the Florida National Guard, and the other
around NAS Pensacola, Eglin Air Force Base, between the Navy
and Escambia County.
So we are looking at locations all across the country not
just to use the defense-wide fund, the $20 million we have
requested this year, but also the services have the ability to
tap their own O&M funds for this if they have a willing seller
and if it is something that needs to be critically executed in
that fiscal year. So we are looking very hard at it.
It is a very, very positive initiative. It rests on a
serious of cooperations and cooperative relationships between
us, the State, and nongovernmental entities. It holds out the
long-term prospect of being a very key part of our ability to
guard against encroachment at our installations. We certainly
support those efforts.
Senator Allard. I thank you for your response and look
forward to working with you on that.
Thank you, Madam Chairman.
Senator Hutchison. Thank you.
Senator Landrieu has joined us. Welcome.
STATEMENT OF SENATOR MARY L. LANDRIEU
Senator Landrieu. Thank you, Madam Chair. I just want to
say how glad I am to be again joining you on this committee.
There was some question as to our organization. I am happy that
our committee not only survived but picked up the oversight of
veterans and look forward to working with all of you in that
regard.
I also have a statement for the record, and I apologize for
being late. So I will just submit it. But I would like to just
refer to part of that opening statement and then get to my
questions.
I wanted to mention in the opening the success that we have
had--and to thank our panel--in Louisiana for our public/
private venture program, as we refer to it, PPV. Many of our
States have experienced similar successes. But, Madam Chair,
that success that was experienced at our naval air station, now
the joint reserve base in Belle Chasse, is very worth noting.
Because of the basic radical transformation in an extremely
positive way of the housing there and the establishment of a
brand new school, which was done, as I understand, because I
helped to do it, in quite a unique way, a new partnership
between the State, the local school board, and the Federal
Government, at minimal expense to the Federal Government,
frankly at minimal additional expense, based on the way that it
was done, we now have just an excellent school operating right
here next to this base with 600 children and plans for a
second, brand new housing, morale lifted, families together.
It leads me, as we begin this cycle, to really think about
the quality of life and retention related to keeping families
together and happy. We might recruit a soldier, but we retain
families. And part of our committee structure is underlining
and supporting the notion that whether you are the soldier or
the spouse or the child, the whole family is really serving,
and the obligation that we have to that entire family for their
housing, their security on base and off of base.
So I wanted to cite that in my opening and submit the rest
of my statement.
[The statement follows:]
Prepared Statement of Senator Mary L. Landrieu
Madame Chairman: Thank you for calling this hearing to review the
President's budget for Defense-Wide and Navy and Marine Corps Military
Construction. We use very clinical terms in the present setting like
``BAH'' (Basic Allowance for Housing), and ``BEQ's'' (Basic Enlisted
Quarters) of MHA's (Military Housing Areas). While every field needs
its acronyms, I wonder if we don't sterilize the items we are
referencing. One of the core missions of this portion of our defense
budget is to provide homes for our soldiers. Not housing but homes.
When you think of it in those terms, questions about quality of
life flow more naturally. If this base is a home for our sailors
returning from a year or more at sea, or leaving their families behind
as they deploy to the far corners of the earth, what kind of place is
it? Do these homes give comfort to our troops when they are deployed or
do they generate more worry? Has the government helped create a
community, or have we simply ``housed'' our military families like we
do equipment.
These are the questions that we must ask ourselves as we give
closer scrutiny to the President's request for Defense-wide, Navy and
Marine Corps military construction. Madame. Chairman, I'd like to
mention one area that has been a notable success, and that is the
execution of the Public, Private Venture program, or PPV, by the
Department of the Navy. I know, because our former Naval Air Station,
and now Joint Reserve Base, in Belle Chasse, Louisiana has been through
this process. At minimal cost to the government, dilapidated housing
stock was completely replaced with new on-base accommodations. They are
clean, comfortable and worthy of the commitment that our men and women
make to their government. It has also had a notable impact on the
number of geographic bachelors serving at Belle Chasse. So-called
geographic bachelors are servicemen and women who leave their families
behind at their previous service station because they do not want to
move them to new locations.
There are a variety of reasons for geographic bachelors lack of
base housing, poor public schools, and lack of economic opportunity for
non-military spouses. What we do know is that the proliferation of
geographic bachelors contributes to high military divorce rates.
Compound that fact with the current operations tempo for all the
branches of service, and you begin to understand why military families
are under stress. In light of this strain, we must make every effort to
eliminate geographic bachelors in order to support our troops and
military families. The PPV program has been a valuable tool in this
mission.
The other excellent aspect of PPV for our State is that the project
request was made in such a way that local Louisiana companies could
compete for the work. To me, that is a win, win, win situation. Our
servicemen and women get homes much faster than they would have under
the status quo, the Navy and the DOD get high quality homes at a
fraction of the cost of building it themselves, and the local economy
benefits as jobs are created in the surrounding community. What is
more, unlike other projects, you actually have an accountable developer
who is tied to the local community, and therefore, whose reputation
will suffer if the work is not up to par.
In too many construction projects undertaken by the DOD, the RFP's
are designed so that only the usual suspects can participate. They are
so enormous in scope, and carry such high requirements for previous
experience that only a handful of companies in the country can compete,
much less local firms. I do not believe that this approach is good for
the bases, good for the contracts, or good for the taxpayer's dollar.
When it comes to craftsmanship, schedules and oversight, bigger is not
always better.
Finally, let me say a word about Base Realignment and Closure.
There are two items that concern me about this process. The first is
that I am unconvinced that there has been sufficient communication
between the DOD and its sister agencies about the BRAC process. In
particular, I am concerned about a lack of consultation with the
Department of Homeland Security. Many military facilities and certainly
some in my State, have a dual function. Belle Chasse is not just an
airfield for the Navy, Marine Corps and Air Force. It also plays host
to aviation assets of the Customs Service. It does not appear that
there has been any systematic attempt to consider the needs of other
Federal agencies in the BRAC process. Nor does there appear to be any
coherent way for the full Federal Government to participate in
realignment. Are there Federal agencies that would benefit from
integrating functions and facilities with a defense installation?
Absolutely. Would the Department benefit from tenants, and shared
overhead? Certainly. Yet, there is no way in this BRAC process to
identify and quantify these prospects or savings.
Secondarily, and this returns to the issue of quality of life, as
we consider relocating our troops in Europe to locations that may be
closer to perceived fault lines, it is important that we again consider
the impact of our global footprint on military families. It may be
possible to save some transportation costs by forward deploying our
troops into countries where they will not bring their spouses and
families. But contributing to the unaccompanied spouse phenomenon is
not in the long-term interests of the military. As my friend Max
Cleland was fond of saying, we recruit a soldier, but we retain a
family. So if we expect to dig ourselves out of the recruitment and
retention holes in which we currently find ourselves, it is vitally
important that we keep an eye on the future. If we force our soldiers
to choose between their families and their uniform, we must expect that
they are going to leave their uniforms behind in many instances.
Madame Chairman, Senator Feinstein, thank you both for your
leadership on these issues. I look forward to the testimony of our
witnesses.
TAKING INTO ACCOUNT OTHER FEDERAL AGENCIES IN BRAC ANALYSIS
Senator Landrieu. These are my two questions, again getting
back to this separation, Mr. Secretary. As you know, one of
them is about separation. This is about BRAC.
As you know, we are going through the BRAC process. We are
all engaged in that. Because of the conversations I have had
with folks in my State, my question is, is there a process,
formal or informal, that you engage in with other non-military
but Federal tenants related to decisions related to BRAC? In
other words, is that taken into consideration, other Federal
tenants in or around military bases? And if that is taken into
consideration, how do you? And if not, why are we not taking
that into consideration?
Mr. Grone. Senator, the way I can answer the question best,
maybe not completely, but the best way I can answer it at the
present time is that the statutory authority for a 2005 round
of base closure and realignment requires us to take into
account the effect of our actions on other Federal agencies.
Senator Landrieu. Requires you to do so.
Mr. Grone. Requires us to take into account our actions on
other Federal agencies, and we are doing that. I would prefer
not to detail how that is being done, as it is part of the
internal deliberations over the BRAC process, but we do have a
statutory mandate to take into account the effect of the
Secretary's recommendations on other Federal agencies, and we
will certainly comply with the statutory requirement.
Senator Landrieu. I appreciate that, and I will discuss
that with you further because there is some concern about that
process basically related to the Belle Chasse area because
there are other Federal agencies that have plans for the future
already firmly in place. That would have some bearing on the
outcome of that. But I will follow up.
KEEPING MILITARY FAMILIES TOGETHER
The other is on the issue of families. Secretary Rumsfeld
announced he wants to reshape our military global footprint.
This committee is in the process of working with him to do
that. As you know, we had a lot of bachelors basically based in
Okinawa and Korea. Whether they were real or military
bachelors, it is because their families could not join them.
Now, as we reshape that base, what is our philosophy or
plan for keeping families together, given the rise of divorce
rates sometimes with our military families, our values to keep
families together, keep families happy, keep them encouraged,
keep the morale up because deployments are high? Could you just
give us a comment about your views about reshaping this
footprint relative to keeping spouses and children serving
together where possible?
Ms. Jonas. I will let Phil talk to the bachelors quarters.
I will say I am the wife of a retired marine, and I am
quite familiar with the separation and understand the
importance to families of support.
There are some initiatives in our overall budget and in the
supplemental also for recruiting and retention bonuses. We do
have a family support center that we have begun. I would be
glad to provide for you all those types of things for the
record that we are doing to make sure that the families get the
support they need. This Military One Source is a center that is
available 24/7 to military families to answer a plethora of
questions apparently from where can I find a plumber to can you
help me with my health care. So there are many initiatives like
that.
[The information follows:]
The following bonuses, authorized in Chapter 5 of title 37, United
States Code, were included in the Department of Defense fiscal year
2006 budget request.
(NOTE: Programs marked with an asterisk (*) are for members on
active duty; all others are for Reserve Component personnel on other
than active duty.)
Enlistment/Accession
--*Enlistment Bonus
--*Accession Bonuses for Nuclear Officers, Dental Officers, Pharmacy
Officers, and Registered Nurses
--Selected Reserves Non-Prior Service Enlistment Bonus
--Prior Service Enlistment Bonus
--Accession or Affiliation Bonus for New Reserve Component Officers
Retention
--*Selective Reenlistment Bonus
--*Critical Skills Retention Bonus
--*Special pay for retention of Aviators, Nuclear Officers, Special
Warfare Officers, Surface Warfare Officers, Officers in the
Health Professions (Medical and Dental Officers, Optometrists,
Certified Registered Nurse Anesthetists), and Pharmacy Officers
--Reenlistment Bonus for Selected Reserves
--Special pay for retention of Critically Short Wartime Health
Specialists in Selected Reserves
Other
--*Incentive Bonus for Conversion of Military Occupational Specialty
to Ease Personnel Shortages
--Affiliation Bonus for Service in Selected Reserves
--IRR Enlistment, Reenlistment or Extension Bonus
Senator Landrieu. Well, I am generally familiar with those.
I guess I was not specific. If I could, Madam Chair, have just
a minute.
I am generally familiar with the variety of services that
are offered, but specifically when it comes to the part of our
budget, which is partly housing and building housing and a new
footprint, are we building the family housing units, whether
renovating the current ones that we are in like one of the
examples I just gave, or as we develop this new footprint, is
our goal to build them in such a way that families can
basically not deploy, of course, to the front line together,
but if they are building in the Mideast or Europe or back here
where they can be housed at least together and serve from a
base together? Is that part of our philosophy or are we doing
something different?
Mr. Grone. Senator, let me attempt to answer the question
in this way. Currently roughly two-thirds of our military
families live in the private economy. As we develop our on-base
housing for privatization options, those are being renovated
and new construction constructed to appropriate commercial
private sector standards. So they provide and will provide our
families with more housing options, better quality housing
options, whether they choose to live off base, on base in a
concentrated military community, or elsewhere.
We are also looking at barracks privatization as one of our
options to continue to advance this program forward to be able
to begin to deal with quality of life concerns of the
unaccompanied.
The senior enlisted recently testified before your
colleagues in the House. Ms. Jonas and I were before Chairman
Walsh not too long ago, and the question arose with regard to
child care specifically as an example where the senior enlisted
have expressed concern. The Congress and the leadership of the
Department have always responded, and I think responded
appropriately and well, when the senior enlisted have raised
issues and we have begun a process, internal to the Department,
to look at ways in which we can improve child care options for
our people. We do not have a program yet to bring forward with
a revised set of priorities or policies, but we are taking a
hard look at it.
So whether it is the family support centers that my
colleague referenced or housing privatization, child care, we
are doing the things that we think we can to improve the
ability of the military community to be supported and supported
appropriately.
ARMY MILITARY CONSTRUCTION
Senator Landrieu. Thank you so much.
Senator Hutchison. Secretary Jonas, I notice that--and
Senator Feinstein mentioned this--the Army MILCON request is
down 16 percent from last year. Air Force is up 61 percent. I
realize that every service has its own spending plans and you
cannot tie them together necessarily.
However, it seems that the Army is facing the most severe
facility demands. They are bearing the biggest brunt of the war
on terror, and they are also going to be the primary forces
moving back from overseas. Yet, the restationing of the Global
Posture Review is going to come out of the Army's own MILCON,
meaning that you are going to be asking them to take $2.5
billion out of their own FYDP. This is a concern to me, and I
wonder if it is a concern to you and if the Department has
really looked at this carefully.
Ms. Jonas. Well, let me begin. I certainly understand your
concerns.
With all services, as you know, they build their budgets
and we work very carefully and closely with them. The Army made
a choice--and Mr. Grone may want to discuss this a little bit--
to realign some of their resources. As you may know, there are
many things going on within the Army. I will mention the Army's
modularity program and restructuring of their forces. If you
are not familiar with it, let me just explain.
General Schoomaker is trying to increase the operational
size of his Army and adjusting his brigades so that where you
might have had for a division with three brigade combat teams,
you now would have four. So our supplemental request is asking
for funds to outfit that fourth unit. The importance of that,
of course, is to take the strain off the force. If you have
four units instead of three, you do not have to call up the
Guard or Reserve units to go. So that is an important part of
this mix there.
I am not intimately familiar with the BRAC process. I have
been outside of that process. But that is consistent with the
global posture things that they are doing. This was the Army's
best judgment as to how to realign its resources.
I understand your concerns. Maybe Phil can further speak to
their specific judgments there, but I understand your concerns,
Senator.
Mr. Grone. Senator, I would just add one point to that.
While the Army did accept a little bit more risk with this
budget request, in terms of comparing one budget request to the
other, comparing it to the appropriate level, the Army's
recapitalization rate, for example, is just about right on the
corporate profile at 111 years. So they are not, with this
budget request, too far out of phase with the overall general
direction of the Department.
And certainly within the context of BRAC, as we rebase
forces from abroad, as we realign missions domestically, a good
deal of construction activity will accompany that through the
BRAC account. Historically roughly one-third, or 30 percent, of
the $22 billion we spent in prior BRAC activity was for
military construction and military family housing purposes. We
do not know precisely how much yet and we do not know what the
phasing of it will be and how much of it would be Army in the
first year of implementation, but there will be money that will
be coming back to the Army in terms of the Army's ability to
reset the force through basing as a result of BRAC.
So certainly there are things we would like to continue to
accelerate for the Army, but the Army's program, given all the
other demands on the Army, is reasonably well balanced.
Senator Hutchison. Let me just say I am familiar with what
General Schoomaker is doing, but I think the Department has a
responsibility to look at the allocations that it is giving to
each of its services. I believe the Army is doing the most
restructuring. It is bearing the greatest part of the war that
we are fighting now. The Marines are as well, but that is a
smaller unit. And to say that they are going through this
upheaval with four brigades instead of three means, it seems to
me, that they are going to need more, not less.
I have visited every kind of base. I have visited Air
Force, Navy, Army, and Marine. I think basically the Army is
behind and getting further behind. I do not think that is the
right trend when we are asking them to do so much. I have never
talked to General Schoomaker about this. He has never raised it
with me, but when I step back and look at all the other things
he is doing and then look at this program, it does not seem
balanced to me.
So I would just ask you to look at that again very
carefully. I know that you probably give each of the services a
top line and this is what they have to spend, and he has chosen
wisely on his first priority to spend it on the
reconfiguration. But I do not think that means he does not also
very much need more in this area.
I have been out to Fort Bliss and Fort Hood, and we are
putting more troops particularly into Fort Bliss where they are
going to have to do a lot of temporary housing for the troops
that are going in. They have plenty of space at Fort Bliss. It
is a great place to add, and it can take another 5 or 10
brigades. But I just think we need to be planning for all of
that and making sure we are looking at what this influx back
from Europe is doing, plus the reconfiguration, plus the added
troops they are putting in combat to relieve guard and reserve.
All the things that are being done are very efficient from
an operational standpoint when it is done, but it just seems to
me that you also are going to need to take care of the housing
and schools and the things that are going to be necessary to
augment those changes. This does not, on its face, show that.
Any comments?
Ms. Jonas. We appreciate your comments. We will certainly
work with the Army on that. I would just note the supplemental
request does ask for some funds associated with the restructure
in the MILCON area.
Senator Hutchison. Yes. It may be that we have to do some
things in a supplemental, which I am prepared to do.
MARINE CORPS RESTRUCTURING
Just one last point and then I will go to the others. On
that same point, the Marine Corps is, in the supplemental,
asking for $77 million for restructuring from its force
structure review, but that does not look like it is enough. You
are probably going to have to have some temporary housing for
the marines from everything that we can tell. So is $77 million
enough to do what you are going to need to do with the marines
arriving this summer at their new locations? I think they are
coming in this summer.
Ms. Jonas. Of course, we are working with them. At the time
we put the supplemental together, the $75 million was where we
were. Of course, requirements always change and I understand
that they had some additional requirements for explosive
ordnance disposal and other things. We will continue to work
with the Marine Corps. We do a lot also during the year and the
year of execution to understand where people are at and where
the services are at with respect to their requirements.
Senator Hutchison. Be sure you do this before we pass the
supplemental. If there need to be adjustments, we certainly
want to do it now and not to have to have another supplemental.
As you know, it is very difficult to get these and to manage
them.
Ms. Jonas. Absolutely. But we will have a mid-year
execution review here shortly, so we should have a good idea of
where we are.
Senator Hutchison. Thank you.
Senator Feinstein.
Senator Feinstein. Yes. Thank you very much.
FISCAL YEAR 2006 BRAC FUNDING
Mr. Grone, the MILCON budget request includes a $1.88
billion wedge to implement the 2005 BRAC round, of which $314
million is earmarked for the Pentagon's global basing plan.
Now, that is a large amount of money to be obligated within 1
year, particularly given the long budgetary lead times that the
Department so often cites in justifying decisions to fund such
Army modularity through the supplemental.
What types of activities will be funded in 2006 with the
BRAC wedge? And how did the Department come up with the figure
of $1.88 billion? What metrics were used?
Mr. Grone. Senator Feinstein, the purposes of the account
support all of the activities associated with the closure and
realignment decisions. So military construction, operations and
maintenance, PCS costs, family housing, environmental
remediation----
Senator Feinstein. It is $1.5 billion.
Mr. Grone. Yes, ma'am.
From the perspective of how we put it together, again what
we did was we took a lesson from our prior BRAC activity. In
the 1993 round, we asked for an amount of funds in the first
year that was roughly equivalent in today's dollars to $1.5
billion. In 1995, we asked for a request that would be in
today's dollars approximately $1 billion. Knowing that we are
not able to know precisely today, given the state of the
recommendations, what we are able to sort of work through, we
took a good, hard look at those lessons. The GAO's criticisms
of the Department from the 1995 round suggested that we hold
back on recommendations we might otherwise have brought forward
out of cost considerations. So when looking at the experience
of history, when looking at the needs for global posture
realignment that would be executed through BRAC, $1.9 billion
seemed an eminently reasonable figure, and I would fully expect
that we would expend those funds.
As I indicated to Senator Hutchison earlier during a
question, we will provide a full report upon the disposition of
the BRAC recommendations that will detail at great length how
we will expend those funds in fiscal year 2006, and then in all
subsequent fiscal years, it would become part of the normal
budget justification process where we will detail all of that
expenditure.
Senator Feinstein. Could we also get an analysis of how
these funds were spent in the past round?
Mr. Grone. Yes, ma'am. But I can give you a very broad
overview at this point, and we can certainly provide more
detail for the record.
[The information follows:]
DOD Base Realignment and Closure (BRAC) Justification Data for
previous BRAC rounds was provided to Congress in February 2005. A copy
of that report is attached.
DOD Base Realignment & Closure
BASE REALIGNMENT AND CLOSURE OVERVIEW
Background
The Defense Secretary's Commission on Base Realignment and Closures
was chartered on May 3, 1988 to recommend military installations within
the United States, its commonwealths, territories, and possessions for
realignment and closure. The Congress and the President subsequently
endorsed this approach through legislation that removed some of the
previous impediments to successful base closure actions. The Defense
Authorization Amendments and Base Closure and Realignment Act, Public
Law 100-526, as enacted October 24, 1988, provides the basis for
implementing the recommendations of the 1988 Commission. Under this
Act, all closures and realignments were to be completed no later than
September 30, 1995. Funding for these actions was included in the Base
Realignment and Closure Account--Part I (BRAC I) which covered fiscal
years 1990 through 1995.
The National Defense Authorization Act for fiscal year 1990 and
1991, Section 2831, allowed for the one-time transfer of $31 million
from BRAC I into the fiscal year 1990 Homeowners Assistance Fund (HAP).
The HAP funds are used to assist employees who are forced to move as a
consequence of base closures and who find that they must sell their
homes in real estate markets which have been adversely affected by the
closure decision.
In the Committee Reports accompanying the fiscal year 1990 Military
Construction Appropriations Act, the Congress began applying some
restrictions on the use of BRAC I funds. Concerned that the one-time
implementation costs had increased by $1 billion when compared to the
1988 Commission's estimate, the House Appropriations Committee (HAC)
adopted a spending cap for military construction and family housing of
$2.4 billion. This cap was reflected in the fiscal year 1990 act
itself. The fiscal year 1992 Military Construction Appropriations Act
lowered the cap to $1.8 billion commensurate with the budget request.
On November 5, 1990, The President signed Public Law 101-510, Title
XXIX, Defense Base Closure and Realignment Act of 1990, establishing an
independent commission known as the Defense Base Closure and
Realignment Commission which met only during calendar years 1991, 1993,
and 1995. The purpose of the Commission was to ensure a timely,
independent, and fair process for closing and realigning U.S. military
installations. The actions to implement the recommendations of the
1991, 1993, and 1995 Commissions are underwritten from the Base
Realignment and Closure Account 1990 (BRAC II). By statute, action must
be initiated no later than 2 years after the date on which the
President transmits a report to Congress and all closures and
realignments must be completed no later than the end of the 6 year
period beginning on the same date. The implementation period for the
1995 authorized round of base closure was complete as of 13 July 2001.
Public Law 101-510 included a number of other provisions affecting
base closure, one of which, section 2923, designated the Base Closure
Account (BRAC I) to be the exclusive source of funds for environmental
restoration projects at round one closure sites. The National Defense
Authorization Act for fiscal year 1992, Section 2827, designated Base
Closure Account 1990 as the exclusive source of funds for environmental
restoration projects at closure sites approved by the 1991, 1993, and
1995 Commissions.
The intent of this section was to preclude the cleanup actions at
bases slated for closure from competing with other sources of funding
for environmental cleanup such as the Defense Environmental Restoration
Account (DERA). A total of $9,007.1 million has been made available for
cleanup for the four rounds of base closures through fiscal year 2005.
The fiscal year 2006 budget program includes $449.1 million for
environmental restoration at BRAC bases.
The fiscal year 2002 National Defense Authorization Act, authorized
an additional round of base realignment and closure in 2005 by amending
the Defense Base Closure and Realignment Act of 1990 (Public Law 101-
510). The Secretary of Defense's BRAC 2005 recommendations for base
closure and realignment must be provided to the BRAC 2005 Commission
not later March 16, 2005. The Department of Defense Base Closure
Account 2005 (Treasury code 0512) has been established as a single
account on the books of the Treasury to execute actions to implement
BRAC 2005 approved closures and realignments.
Budget Justification Requirements
The Defense Authorization Amendments and Base Closure and
Realignment Act, Public Law 100-526, is specific in the types of
information required as to budget justification. The Act states, ``As
part of each annual budget request for the Department of Defense, the
Secretary shall transmit to the appropriate committees of Congress:
--A schedule of the closure and realignment actions to be carried out
under this title in the fiscal year for which the request is
made and an estimate of the total expenditures required and
cost savings to be achieved by each such closure and
realignment and of the time period in which these savings are
to be achieved in each case, together with the Secretary's
assessment of the environmental effects of such actions; and
--A description of the military installations, including those under
construction and those planned for construction, to which
functions are to be transferred as a result of such closures
and realignments, together with the Secretary's assessment of
the environmental effects of such transfers.''
The fiscal year 2006 budget justification material has been
developed to comply with the above requirements. The BRAC Executive
Summary Book provides an overview of the BRAC costs and savings for
each DOD Component through the 6 year implementation period. The DOD
Components have prepared separate justification books providing
detailed information by realignment and closure package, broken out by
one-time implementation costs, anticipated revenues from land sales,
and expected savings. This comprehensive approach addresses the total
financial impact of realignment and closure actions and provides
justification for the funds requested in the Base Closure Accounts.
DOD Base Closure Account Capitalization and Funding
The Department has complied with the guidance contained in the
House of Representatives Report 101-76, Military Construction
Appropriations Bill, 1990, July 26, 1989, to determine the proper
method of capitalizing the DOD Base Closure Accounts. In denying
general transfer authority to the Secretary of Defense, the Committee
expressed the belief that the necessary one-time costs to implement
base realignments and closures be requested as new appropriated amounts
to facilitate improved accounting of the funds appropriated.
Additionally, the Committee indicated that any savings or cost
avoidance due to base realignment or closure should be reflected
through reduced requirements in the annual budget requests for the
affected appropriations.
The manner in which the impacts of base realignments and closures
are reflected in BRAC appropriations accounts is consistent with this
language. The new BRAC appropriations requested represent the costs of
environmental restoration and caretaker functions at bases closed under
the prior rounds of base closure authority. Also included in the
appropriation request are funds to be transferred to the Homeowner's
Assistance Program for the purpose outlined in Section III. Since the
fiscal year 1991 budget request, parcels of land have been transferred,
without compensation to the Department, thereby reducing projected
offsetting receipts. Section IV provides examples of anticipated
revenue from the sale of land and facilities and the anticipated
revenue loss from land transfers.
The implementation of base realignment and closures requires the
relocation of units and activities from one site to another. Recurring
savings (reduced base operations costs) are realized through the
increased efficiencies inherent in the consolidation of functions on
fewer bases. The net savings are reflected as savings in the specific
appropriations, primarily operation and maintenance, and are not
incorporated in the DOD Base Closure Accounts.
Estimates for savings or cost avoidance have been incorporated into
the DOD Component appropriation account where they are to accrue,
resulting in corresponding reduced budget requests for those
appropriations. The annual recurring saving from the four prior rounds
of base closure and realignment are projected to be about $7 billion
after the implementation period ending in fiscal year 2001.
Financial Management Procedures
The Defense Authorization Amendments and Base Closure and
Realignment Act, Public Law 100-526, established the Defense Base
Closure Account (BRAC I) as a mechanism to provide the required funding
to implement the approved recommendations of the Base Closure and
Realignment Commissions. Public Law 101-510, Title XXIX, Defense Base
Closure and Realignment Act of 1990, established Base Closure Account
1990 (BRAC II) as a mechanism to provide the required funding to
implement the approved recommendations of the BRAC 1991, 1993, and 1995
Commissions. From aspects of management, budgeting and accounting, both
Accounts are treated in the same fashion. Funding approved by Congress
in both Accounts is appropriated and authorized in a lump sum amount
and may be spent for construction, planning and design, civilian
severance pay, civilian permanent change in station, transportation of
things, and other costs related to the realignment or closure of the
subject bases. The management structure of the program is described
below.
The Deputy Under Secretary of Defense (Installations & Environment)
is responsible for issuing policy for management of the BRAC program
and overseeing the DOD Components' execution of the program.
To properly account for and manage appropriated fund resources, the
DOD Base Closure Accounts were established on the books of the Treasury
to aid the DOD Components in the closure and realignment of certain
military installations. Treasury has assigned account symbol 97-0103 to
identify the DOD Base Closure Account--Part I, 97-0510 to identify DOD
Base Closure Account 1990--Part II, Part III, and Part IV, and 97-0512
to identify DOD Base Closure Account 2005.
Funds made available to the DOD Components are subdivided and
distribute to the activities responsible for base closure actions.
Separate allocations are made for each of the accounts by program year.
Each DOD Component distributes the base closure funds in accordance
with its normal fund distribution procedures. The applicable reporting
requirements include:
Military Construction:
--Construction
--Planning and Design
Family Housing:
--Construction
--Operations
Environmental
Operation and Maintenance (O&M):
--Civilian Severance Pay
--Civilian Permanent Change of Station (PCS) costs
--Transportation of things
--Real Property Maintenance
--Program Management (civilian work years, TDY travel, and related
support dedicated to implementation efforts)
Military Personnel (limited to PCS expenses dedicated to
implementation efforts)
Other (including procurement-type items)
The Under Secretary of Defense (Comptroller) makes funds available
to the DOD Components based on their official financial plans.
Financial plans are prepared by the DOD Components in cooperation with
and at the direction of the program manager, the Deputy Under Secretary
of Defense (Installations & Environment). The DOD Components' financial
plans and the subsequent allocation of funds are supported by detailed,
line-item military and family housing construction justification.
Separate narrative explanations for other planned expenditures are also
submitted to the Under Secretary of Defense (Comptroller) in sufficient
detail to support the DOD Component's Financial plan. The DOD
Components are allowed to revise planned execution as the situation
dictates but must notify the Deputy Under Secretary of Defense
(Installations & Environment) and the Under Secretary of Defense
(Comptroller) of all changes. To keep the Under Secretary of Defense
(Comptroller) apprised of these changes, the DOD Components are
required to submit a revised current year financial plan and supporting
documentation on a quarterly basis to reflect the status of the current
plan being executed. When a military construction or family housing
construction project is to be executed, but does not appear on the
approved construction project list, the prior approval of the Under
Secretary of Defense (Comptroller), and Congress is required. This will
ensure that the Department has complied with the notification
requirements of the House of Representatives Report 101-176, Military
Construction Appropriation Bill, July 26, 1989, prior to the
expenditure of DOD Base Closure Account funds. Each DOD Component is
allocated funds based upon its official budget justification and
financial plan.
Decision Rule for Determining the Validity of Charging Cost to the
DOD Base Closure Accounts.--In addition to being supported by the
detailed budget justification, the general criterion to be applied when
deciding whether to charge specific costs to the DOD Base Closure
Account is that the cost in question is a one-time implementation cost
directly associated with the overall base closure effort. For example,
the one-time operation and maintenance-type costs at R&D-funded
installations are charged to the appropriate sub-account of ``Operation
and Maintenance.'' Low-dollar value construction projects budgeted as
lump sum under the real property maintenance category are charged to
that sub-account and not the construction subaccount of military
construction, which is reserved for projects listed individually on the
financial plan accompanying the fund allocation document. Recurring
costs driven by the transfer of workload from one location to another
is budgeted for and charged to the non-base closure accounts.
BUDGET SUMMARY
The tables on the following pages provide information on one-time
implementation costs, expected savings, and revenues from land sales by
DOD Component and approved BRAC closure round. BRAC I closures and
realignments have been projected to cost $2.8 billion and will generate
total savings of $2.4 billion and land sale revenue of $65.7 million
during the fiscal year 1990-1995 implementation period. BRAC II
closures and realignments have been projected to cost $5.2 billion and
will generate total savings of about $8.1 billion and land sale revenue
of $25.7 million during the fiscal year 1992-1998 implementation
period. BRAC III closures and realignments have been projected to cost
$7.6 billion and will generate total savings of $8.3 billion and land
sale revenue of $3.4 million during the fiscal year 1994-1999
implementation period. BRAC IV closures and realignments are projected
to cost $6.8 billion and will generate total savings of $6.2 billion
and land sale revenue of $230.2 million during the fiscal year 1996-
2001 implementation period.
FISCAL YEAR 2006--BUDGET ESTIMATES BASE REALIGNMENT AND CLOSURE ACCOUNT PARTS I-IV
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year
---------------------------------------------------------------
2003 2004 2005 2006
----------------------------------------------------------------------------------------------------------------
BRAC Parts I-IV Continuing Environmental and
Caretaker Costs
Army:
Environmental............................... 162.821 61.851 92.050 89.380
Operations & Maintenance.................... 18.557 10.145 8.255 4.473
Navy:
Environmental............................... 462.166 96.509 101.700 236.581
Operations & Maintenance.................... 12.268 13.402 13.350 39.392
Air Force:
Environmental............................... 125.569 193.141 127.749 117.167
Operations & Maintenance.................... 22.975 4.796 18.062 17.560
Defense Logistics Agency:
Environmental............................... 10.168 9.811 6.652 5.974
Operations & Maintenance.................... .............. 1.000 300 300
---------------------------------------------------------------
Total Environmental and Caretaker Costs... 814.524 390.655 368.118 510.827
---------------------------------------------------------------
Homeowner's Assistance Program.................. .............. .............. .............. ..............
Prior Year Financing............................ 27.216 18.228 6.952 ..............
Estimated Land Sale Revenue..................... 211.738 2.000 115.000 133.000
BRAC IV Budget Request.......................... 575.570 370.427 246.116 377.827
----------------------------------------------------------------------------------------------------------------
The fiscal year 2006 budget requests $377.8 million of new budget
authority for environmental restoration and caretaker cost for
facilities closed under the previous four rounds of base closure
authority. This funding will ensure bases are continuing to be cleaned
efficiently to speed the transfer of property to redevelopment
authorities.
Anticipated land sale revenue of $133 million will be used to
offset a portion of the department's fiscal year 2006 BRAC requirements
of $510.8 million.
Annual recurring savings from the four rounds of base closure and
realignment are projected to be about $7 billion after the
implementation period ending in fiscal year 2001.
BRAC 2005
BRAC 2005 will make a profound contribution to transforming the
Department by eliminating excess capacity and reconfiguring
infrastructure. The fiscal year 2006 budget request includes $1,881.0
million to implement the anticipated approved recommendations from the
BRAC 2005 Commission.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
HOMEOWNERS ASSISTANCE PROGRAM
The Homeowners Assistance Program (HAP) provides assistance to
eligible service members and civilian employee homeowners who have
suffered losses through the depression of the real estate market
resulting from actual or pending base closures. Pursuant to section
2832 of Title 10, United States Code, as amended by section 2831 of
Public Law 101-89, the National Defense Authorization Act for fiscal
year 1990 and fiscal year 1991, the Secretary of Defense was granted
authority to transfer $31 million of funds appropriated in BRAC I to
HAP. Accordingly, the Department of Defense transferred $31 million in
fiscal year 1990 to accommodate valid homeowner assistance requirements
arising from implementation of the 1988 Commission's recommendations.
From fiscal year 1992 through fiscal year 1999 the required homeowners
assistance funding associated with base realignments and closures was
budgeted in the Homeowners Assistance Program administered by the
Department of the Army as executive agent for the program. Beginning in
fiscal year 2000, funds were appropriated in the BRAC program for
transfer to the Homeowners Assistance Program during budget execution
to allow more effective and efficient use of these funds in support of
BRAC implementation. No funds are budgeted within the BRAC program for
transfer to the Homeowners Assistance Program in fiscal year 2006.
REVENUE FROM THE SALE OF LAND AND FACILITIES
In capitalizing the base closure accounts, the additional
appropriations to pay for the onetime costs of implementation have been
offset by the amount of revenues that are anticipated due to the
authorized sale of land no longer required by the Department. Since the
fiscal year 1991 budget request, parcels of land have been transferred,
without compensation to the Department, thereby reducing projected
offsetting receipts. The tables on the following pages show the
anticipated land sale revenue and examples of projected land sales no
longer anticipated due to loss revenue resulting from transfers of
property outside of the Department. Land sale receipts from base
closures have amounted to $595.1 million through September 2004. These
receipts are used to offset anticipated BRAC costs. Anticipated land
sale revenue of $133.0 million will be used to offset a portion of the
department's fiscal year 2006 BRAC requirements of $510.8 million.
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART I
ANTICIPATED/REALIZED LAND REVENUE--ARMY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Kapalama Military Reservation, HI....................... 38,529
Pontiac Storage Facility................................ 3,100
Fort Holabird, MD....................................... 100
USA Reserve Center Gaithersburg, MD..................... 785
Stand-Alone Housing, Various Locations.................. 23,199
---------------
Total............................................. 65,713
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET EXTIMATES--BASE REALIGNMENT AND CLOSURES--PART I
LOSS OF LAND REVENUE--ARMY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Lexington............................................... 7,379
Army Material Tech Lab.................................. 3,124
Jefferson............................................... 28,925
AMC Other............................................... 8,030
Presidio................................................ 42,986
Hamilton................................................ 49,550
Sheridan................................................ 59,092
Fort Douglas, UT........................................ 7,379
Fort Meade, MD.......................................... 447,770
Cameron Station, VA..................................... 212,624
Stand Alone............................................. 62,053
---------------
Total............................................. 928,912
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART I
ANTICIPATED/REALIZED LAND REVENUE--NAVY AND PART I LOSS OF LAND REVENUE--
NAVY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
NRC Coconut Grove, FL................................... 7,134
NH Philadelphia, PA..................................... 25
NTB Salton Sea, CA...................................... 14
---------------
Total............................................. 7,173
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART I
LOSS OF LAND REVENUE--NAVY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Naval Station New York (Brooklyn, NY)................... 57,000
Naval Station Puget Sound (Sand Point), WA.............. 60,000
---------------
Total............................................. 117,000
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART I
ANTICIPATED/REALIZED LAND REVENUE--AIR FORCE
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Chanute Air Force Base, IL.............................. 13,000
George Air Force Base, CA............................... 90,000
Mather Air Force Base, CA............................... 305,000
Norton Air Force Base, CA............................... 100,000
Pease Air Force Base, NH................................ 120,000
---------------
Total \1\......................................... 26,582
------------------------------------------------------------------------
\1\ All anticipated/realized land revenues are accounted for in BRAC IV.
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART I
LOSS OF LAND REVENUE--AIR FORCE
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
George Air Force Base, CA............................... 90,000
Mather Air Force Base, CA............................... 305,000
Norton Air Force Base, CA............................... 100,000
Chanute Air Force Base, IL.............................. 13,000
Pease Air Force Base, NH................................ 120,000
---------------
Total............................................. 628,000
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART II
ANTICIPATED/REALIZED LAND REVENUE--ARMY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Cameron Station, VA..................................... 15,661
Fort Ben Harrison, IN................................... 4,634
Sacramento Army Depot, CA............................... 299
Fort Devens, MA......................................... 1,998
---------------
Total............................................. 22,592
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART II
LOSS OF LAND REVENUE--ARMY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Fort Devens, MA......................................... 112,000
Fort Dix, NJ \1\........................................ 83,000
Fort Ord, CA............................................ 399,750
Harry Diamond Lab, VA................................... 30,000
Fort Benjamin Harrison, IN.............................. 102,227
Sacramento Depot, CA.................................... 24,879
---------------
Total............................................. 751,856
------------------------------------------------------------------------
\1\ Note: The anticipated revenues from Fort Dix were reduced from $83.0
million to zero. The basis of the reduction is the proposed
utilization of Fort Dix by other Federal and State agencies which
precludes disposal of the anticipated excess land.
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART II
ANTICIPATED/REALIZED LAND REVENUE--NAVY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
MCAS Tustin, CA......................................... 203,500
NAS Chase Field, TX..................................... 791
NCBC Davisville, RI..................................... 63
NAS Moffett Field, CA................................... 6,250
NH Long Beach, CA....................................... 14,075
NS Philadelphia, PA..................................... 2,000
---------------
Total............................................. 226,679
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART II
LOSS OF LAND REVENUE--NAVY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
NAS Chase Field, TX..................................... 2,000
NCBC Davisville, RI..................................... 22,000
NH Long Beach, CA....................................... 1,400
NS Long Beach, CA....................................... 21,250
NS Philadelphia, PA..................................... 18,000
NS Puget Sound (Sand Point), WA......................... 12,800
NCCOSC San Diego, CA.................................... 3,000
MCAS Tustin, CA......................................... 468,500
---------------
Total............................................. 548,950
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART II
ANTICIPATED/REALIZED LAND REVENUE--AIR FORCE
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Carswell Air Force Base, TX............................. 178
Castle Air Force Base, CA............................... 4,136
England Air Force Base, LA.............................. 783
Grissom Air Force Base, IN.............................. 5,981
Loring Air Force Base, ME............................... 335
Lowry Air Force Base, CO................................ 9,461
Myrtle Beach Air Force Base, SC......................... 10,455
Richards-Gebaur Air Force Reserve Station, MO........... 300
Rickenbacker Air Guard Base, OH......................... 600
Williams Air Force Base, AZ............................. 4,431
Wurtsmith Air Force Base, MI............................ 49
---------------
Total \1\......................................... 36,709
------------------------------------------------------------------------
\1\ All anticipated/realized land revenues are accounted for in BRAC IV.
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART II
LOSS OF LAND REVENUE--AIR FORCE
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Williams Air Force Base, AZ............................. 8,000
Eaker Air Force Base, AR................................ 8,000
Castle Air Force Base, CA............................... 27,000
Lowry Air Force Base, CO................................ 100,000
MacDill Air Force Base, FL.............................. 50,000
Grissom Air Force Base, IN.............................. 8,000
Loring Air Force Base, ME............................... 8,000
Wurtsmith Air Force Base, MI............................ 8,000
Richards Gebaur Air ForceReserve Station, MO............ 8,000
Rickenbacker Air National Guard Base, OH................ 8,000
Myrtle Beach Air Force Base, SC......................... 8,000
Bergstrom Air Force Base, TX............................ 8,000
Carswell Force Base, TX................................. 8,000
---------------
Total............................................. 257,000
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART
III ANTICIPATED/REALIZED LAND REVENUE--ARMY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Various Locations....................................... 798
---------------
Total............................................. 798
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART
III ANTICIPATED/REALIZED LAND REVENUE--NAVY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
DOD Family Housing Niagara Falls, NY.................... 1,125
MCAS El Toro, CA........................................ 525,000
NAWC Trenton, NJ........................................ 1,812
NTC Orlando, FL......................................... 11,126
NAS Cecil Field, CA..................................... 48
NTC San Diego, CA....................................... 80
NH Oakland, CA (Oak Knoll).............................. 15,000
PWC San Francisco, CA................................... 10,330
NS Staten Island, NY.................................... 602
NSY Charleston, SC...................................... 1,100
Various Locations....................................... 1,107
---------------
Total............................................. 567,330
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART
III LOSS OF LAND REVENUE--NAVY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
NS Mobile, AL........................................... 28,000
Various Locations....................................... 309,263
---------------
Total............................................. 337,263
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART
III ANTICIPATED/REALIZED LAND REVENUE--AIR FORCE
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Gentile Air Force Station, OH........................... 54
Griffiss Air Force Base, NY............................. 82
Homestead Air Force Base, FL............................ 488
March Air Force Base, CA................................ 995
O'Hare IAP ARS, IL...................................... 65
Plattsburg Air Force Base, NY........................... 1,288
---------------
Total \1\......................................... 2,972
------------------------------------------------------------------------
\1\ All anticipated/realized land revenues are accounted for in BRAC IV.
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART IV
ANTICIPATED/REALIZED LAND REVENUE--ARMY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
Fort Devens, MA......................................... 2,500
Fort Ben Harrison, IN................................... 938
Cameron Station, VA..................................... 14,861
Stratford AAP, CT....................................... 6,590
Army Material Technology Lab, MA........................ 6,284
Bayonne MOT, NJ......................................... 278
Hamilton AAF, CA........................................ 944
Jefferson Proving Ground, IN............................ 55
Detroit, ATP, MI........................................ 5,924
Fort Sheridan, IL....................................... 5,150
Stand Alone Housing..................................... 110
Savanna AD.............................................. 8
Fort Ritchie............................................ 54
Fitzsimons AMC.......................................... 172
City of Chicago......................................... 15,980
Fort McClellan.......................................... 460
Fort Ord................................................ 7,250
New Orleans MOT......................................... 275
Defense Depot Ogden..................................... 680
VHFS.................................................... 992
---------------
Total............................................. 69,505
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART IV
ANTICIPATED/REALIZED LAND REVENUE--NAVY
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
San Pedro (Housing) Long Beach, CA...................... 66,000
NAWC Warminster, PA..................................... 63
NAF Key West, FL (Housing).............................. 15,100
NAS Key West, FL........................................ 600
Various Locations....................................... 700
---------------
Total............................................. 82,463
------------------------------------------------------------------------
FISCAL YEAR 2006 BUDGET ESTIMATES--BASE REALIGNMENT AND CLOSURE--PART IV
ANTICIPATED/REALIZED LAND REVENUE--AIR FORCE
[In thousands of dollars]
------------------------------------------------------------------------
Location Total
------------------------------------------------------------------------
City of Chicago, Illinois--O'Hare International Airport 94,602
\1\....................................................
Kelly Air Force Base, TX................................ 478
McClellan............................................... 1,218
Reese Air Force Base, TX................................ 53
Roslyn Air Guard Station, NY............................ 3,031
---------------
Total............................................. 99,382
------------------------------------------------------------------------
\1\ Revenue from the City of Chicago for the movement of the Air
National Guard facilities to Scott Air Force Base, Illinois.
Mr. Grone. Of the $22 billion that was expended for prior
BRAC activity, 30 percent of that went to construction and
construction activity.
Senator Feinstein. No. I mean tell us for what.
Mr. Grone. Oh, yes, ma'am. But 30 percent of it went to
environmental remediation and 40 percent went to PCS, O&M, and
caretaker costs. But we will certainly try to break that down
for you for the record.
Senator Feinstein. I think the time has come, as we go
through these BRAC rounds, to really know dollar for dollar
where this money goes, and I would sure like to know.
Mr. Grone. The justification material for the current
fiscal years' request for prior BRAC, the $377 million, should,
I believe, provide a comprehensive breakdown of the accounts
from prior years. And we certainly would include that in the
record here so that it is comprehensive.
SELLING EXCESS PROPERTIES AND APPLYING THE PROCEEDS
Senator Feinstein. Thank you.
Now, the Navy has done a good job selling its excess
properties and applying those proceeds to BRAC environmental
restoration. I think this year the Navy has requested a $143
million appropriation and expects to apply another $133 million
from property sales. Could we have your assurance that, if
appropriated, the sum of these funds will be applied to Navy
environmental remediation?
Mr. Grone. I believe I can give that assurance, yes, ma'am.
Senator Feinstein. Thank you. And that further land sales
will be treated the same?
Mr. Grone. Treated the same in which sense?
Senator Feinstein. In that the money is then applied for
environmental cleanup.
Mr. Grone. For prior BRAC, almost all of our costs at this
point for prior BRAC is environmental remediation and a very,
very small, modest amount for property caretaker costs. So to
the extent we have any additional land sales from BRAC rounds
one through four, that is certainly how they would be applied.
Senator Feinstein. Thank you. That is very helpful.
STATUS OF GLOBAL REBASING
Mr. Grone, through global rebasing in the coming years we
can expect to see the largest reduction of troops permanently
based overseas since the end of the Cold War. A series of
global rebasing decisions will be subject to BRAC 2005. What is
the status of the global rebasing plan? In particular, are
there negotiations with foreign countries? Is there a green
light? Are we moving ahead? Are we not moving ahead?
There are $314 million set aside in the BRAC wedge, as you
mentioned, for global rebasing. Is any of that funding intended
to be spent overseas on closed bases in Germany or elsewhere?
Mr. Grone. Senator, to the latter part of your question,
BRAC funds are not an eligible source of funds for closure
costs for closure and realignment activity installations
abroad.
Senator Feinstein. So the answer is no.
Mr. Grone. The answer is no.
The scope of our BRAC authority, with regard to global
posture. We intend to use the BRAC round to facilitate the
return of U.S. forces in the following way. Without BRAC, we
would largely be asked to address the question of where could
we fit them, in terms of our present basing configuration. BRAC
gives us the ability, because the entire domestic chessboard
will be open, to ask ourselves a different question, which is
where are they best positioned. Through their realignment
activities of domestic bases, we will have an ability to put
those returning forces where the services and the Secretary
believe they are most effective for the future. We will,
through BRAC, execute construction activity to support those
forces through the BRAC appropriation, but other costs
associated with cost overseas would be paid for other accounts
that the services have under their financial control.
Senator Feinstein. Thank you. That is helpful.
RENEWABLE ENERGY ASSESSMENT OF DOD BASES
Some time ago, Senator Hutchison and I asked your
Department to give us a renewable energy assessment of the
bases. We have not received it. Could you give us a sense of
the major findings?
Mr. Grone. I can give you a very direct sense of where the
report is because it just hit my desk yesterday.
Senator Feinstein. Good.
Mr. Grone. I am aware and certainly apologize for the
initial part of the report being late. It was due in December.
That part of the report was to basically do the assessment.
What the committee also asked us for was an implementation plan
based on our assessment. When you see the report in a matter of
days, if not this week, it will contain both the assessment
that we have done, as well as the implementation plan. So it
will contain both elements.
We think that there is a lot of benefit that we have gained
through this assessment and the study that the subcommittee had
requested. In fiscal year 2003, about $5 million of our energy
conservation investment funds went to renewable projects. This
year it is going to be $18 million principally in geothermal
and in solar.
We also think, as a result of the study that we have gone
through, that there are opportunities on the purchase side of
it for us to begin to engage on a supplier basis with certain
suppliers who specialize in renewable energy sources.
So we are learning a great deal through the assessment. We
would welcome a continuing dialogue over the implementation
plan certainly and would look for any views that you may have
on it because we do think it has been a very valuable exercise
as we have gone through it.
Senator Feinstein. Thank you very much. We look forward to
receiving that.
PERCHLORATE CONTAMINATION
Now my perchlorate question. I will admit I am reaching
here. Is there a way to use some of these environmental cleanup
monies to take some of the most contaminated sites where they
most have affected drinking water and get a commitment to
participate in cleanup efforts?
Mr. Grone. Senator, that question is not a difficult--it is
a difficult one but one that sort of, I think, bears a little
bit of a sense of sort of where we are now. I am not trying to
avoid the question, but I do think this, as you well know, is a
very, very complicated issue.
There has been a lot of uncertainty, scientific
uncertainty, associated with perchlorate. The National Academy
of Sciences recently conducted a review of the toxicity of
perchlorate, and that review was completed in January and the
administration, including the Department, supported the
conclusions reached by the NAS. In fact, EPA has used the
conclusions reached by the NAS to develop a reference dose
which commonly would be referred to as a 24.5 parts per billion
reference dose. We will use that reference dose as a factor in
our risk-based assessments.
And I would say also with regard to the work that we are
going with the State of California in the prioritization
protocol, that work is proceeding very well with a high degree
of cooperation between the State and the Department. Certainly
as we proceed, we understand that the State of California may
well consider a regulatory standard for perchlorate. Once the
State establishes, if they should choose to do so, a State
standard, as well as once a Federal standard, if one should be
promulgated, we certainly will comply with that standard.
Where we are in terms of remediation today is that it
becomes part of the risk prioritization as we go through it.
Senator Feinstein. Let me stop you because I need to
understand this. Are you saying that you are waiting for the
State to declare a standard? Because the State does have a
standard.
Mr. Grone. No. I am not suggesting that. A standard for
regulatory purposes. If any State or the Federal EPA declares a
standard for regulatory purposes, not a draft, but for
regulatory purposes, we certainly will comply with that. But
even today we are putting the 24.5 parts per billion reference
dose that EPA has promulgated and including that as part of our
risk-based prioritization standard. And in those instances
certainly where there is a level of significance, we will
remediate based on the prioritization of remediation as we
develop it.
Senator Feinstein. I want to make this point, though. DOD,
as you know, tried to get liability protection on perchlorate
and we were able to stop that. Perchlorate is now turning up in
mother's milk. In one person tested, it was like 91 parts per
billion. It is turning up all over in the food chain. The
bottom line fact is DOD has a responsibility to help with the
cleanup. We have got towns where the drinking water is really
severely compromised, small areas, Rialto, for example. In
California their wells are compromised. They have to get
cleaned up.
The process we know is expensive. It is about $2 million a
well with reverse osmosis.
I have been trying for years now to move EPA to come up
with a standard. EPA is not about to be moved to come up with a
standard. In the meantime, you are finding it in milk products,
you are finding it in lettuce products, and now you are finding
it in nursing women's breast milk at three times the level that
you just mentioned of 24 parts per billion.
So my view is we have to get cracking and get it cleaned
up. It seems to me that this might be a place to start.
Mr. Grone. Well, Senator, all I can tell you right at the
present time, so far we have expended $50 million in
toxicological and analytical research. We are continuing to
work with the scientific community----
Senator Feinstein. $50 million on research on perchlorate?
It cannot be.
Mr. Grone. Groundwater treatment technologies for
perchlorate and possible substitutes for perchlorate in
military applications.
Senator Feinstein. $50 million on studies?
Mr. Grone. In research.
Senator Feinstein. Okay. Do you have a product for the $50
million?
[The information follows:]
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
Mr. Grone. We can supply for the record what we have been
doing on the analytical agenda on both the toxicological side,
the science-based side of perchlorate, as well as looking for
alternatives for the use of perchlorate, both of which we have
as active parts of the agenda.
Senator Feinstein. Well, I do not want to take up the
chairman's time, although the chairman has a problem in her
State as well. But if we could talk with you about it, we need
to come to some agreement of what DOD is willing to do. I have
been trying now for 3 or 4 years, and at some point one runs
out of patience. That is all I want to say.
Mr. Grone. Senator, I am prepared to have whatever
discussions you deem necessary. I am prepared to meet with you
whenever you feel it appropriate----
Senator Feinstein. Okay, that would be great.
Mr. Grone [continuing.] To have the continuing discussion.
Senator Feinstein. Thank you.
PERMANENT CONSTRUCTION AT GUANTANAMO BAY
And the last question. It is a question I asked Chairman of
the Joint Chiefs Myers at the supplemental hearing of approps,
and that is the justification for siting the facility in
Guantanamo.
Now my understanding was the original justification was to
avoid review by United States courts. Now, putting aside the
question of whether that is good policy or not, the United
States Supreme Court has made clear that much, if not all, of
the legal argument which was based for that justification was
unfounded. Simply put, the original justification is no longer
compelling.
Now, Senator Hutchison and I with the Secretary had a
chance to go to Guantanamo 3 or 4 years ago, and so we saw
pretty much the temporary facilities. I think an argument can
certainly be made for improvement. But the question is to build
a permanent facility, $42 million I guess in this MILCON
budget, when the rationale for putting people at Guantanamo may
no longer exist.
My question is, with that rationale gone, do you still want
to go ahead and build a permanent facility?
Ms. Jonas. Senator, let me just take a few minutes on this.
My understanding is that the upgrades were for the humanitarian
and operational concerns that they have down there. These are
some of the things that were identified by the ICRC. So the
security fence and then making the facility a little bit more
compliant there on humanitarian purposes not on any permanent
basis.
Senator Feinstein. I just said perhaps we should go back
and take a look before we do this. You are saying the $42
million is just an upgrade for humanitarian purposes. It is not
a permanent facility?
Ms. Jonas. Well, I understand the upgrades are to deal with
the humanitarian concerns, some of the things that were
identified by the ICRC and force protection or security, I
should say, the security fence around the area. The security
fence that they are going to develop there, if funds are
provided, would reduce the military personnel there by 350. So
I guess that is one of the pieces, but we would sure be glad to
have you make a visit and would be glad to provide additional--
--
Senator Feinstein. Perhaps we can get the detail on that
request.
Ms. Jonas. Absolutely.
[The information follows:]
GUANTANAMO NAVAL STATION, CUBA--CAMP 6 DETENTION FACILITY
----------------------------------------------------------------------------------------------------------------
Item U/M QTY Cost Cost
----------------------------------------------------------------------------------------------------------------
Primary Facility: $26,848
Confinement Facility............. SF...................... 43,111 $501.58 (21,624)
Medical Station.................. SF...................... 7,889 537.29 (4,239)
Sound proofing cell interior wall SF...................... 20,000 12.26 (245)
Sound proofing cell ventilation.. EA...................... 200 90.30 (18)
Prison design recessed sprinkler EA...................... 280 122.55 (34)
heads.
Security Lighting................ EA...................... 40 4,644 (186)
Information Systems.............. LS...................... .............. .............. (300)
Building Information Systems..... LS...................... .............. .............. (202)
Supporting Facilities: ........................ .............. .............. 5,345
Electric Service................. LS...................... .............. .............. (2,556)
Water, Sewer, Gas................ LS...................... .............. .............. (2,194)
Paving, Walks, Curbs And Gutters. LS...................... .............. .............. (80)
Storm Drainage................... LS...................... .............. .............. (129)
Site Imp (67) Demo ( ).......... LS...................... .............. .............. (67)
Information Systems.............. LS...................... .............. .............. (319)
----------------
Estimated Contract Cost.............. ........................ .............. .............. 32,193
Contingency Percent (5 percent)...... ........................ .............. .............. 1,610
----------------
Subtotal....................... ........................ .............. .............. 33,803
Supervision, Inspection & Overhead ........................ .............. .............. 2,197
(6.50 percent).
----------------
Total Request.................. ........................ .............. .............. 36,000
Total Request (Rounded)........ ........................ .............. .............. 36,000
Installed EQT-Other Appropriations... ........................ .............. .............. (99)
----------------------------------------------------------------------------------------------------------------
Description of Proposed Construction.--Construct a maximum security
facility at Camp 6 to detain 220 personnel. Primary facilities include
pre-engineered concrete modular building units on concrete foundations,
isolation cells, showers, restrooms, indoor and outdoor exercise areas,
security operations, administrative spaces, interview spaces, security
and perimeter fence, lighting, associated pedestrian and vehicular
gates, and a Level II detainee medical station which includes a medical
ward with 5 total beds; 2 general treatment rooms, a single dental
treatment room and a medical administration area. Supporting facilities
include communication/security systems, electrical substation and site
utilities. Air conditioning is estimated at 120 tons. Project also
includes the demolition of existing, substandard, water distribution
line to the area.
REQ: 1 Each; ADQT: None; SUBSTD: 1 Each
Project.--Construct a durable maximum security detention facility
to support the JTF Detainee Operations.
Requirement.--Provide an adequate maximum security detainee
facility to house 220 detainees to support the Global War on Terrorism
(GWOT). The facility will use Federal Bureau of Prison Standards and
provide a more humane housing for long-term detainees. Provide facility
standards meeting provisions highlighted in the Geneva Convention.
These include providing housing units and core functions that are
contiguous and allow for communal conditions where practical. Address
facility and operational concerns of GWOT Allies. Upgrading facility
standards will decrease the personnel required to operate the facility
safely. Provide necessary utility infrastructure to support all
facilities.
Current Situation.--Current facilities are temporary and no longer
meet the mission requirement. The facilities are labor intensive for
both security and maintenance resources. Current operations require 150
more personnel than will be required for the requested facility. The
new facility will free up this significant number of personnel for
combat operations in support of GWOT. The inefficiencies experienced in
proper separation, seclusion, and control of occupants forces JTF to
maintain a much larger workforce to conduct the mission. Existing
temporary facilities at Camps 1, 2, and 3 do not provide the communal
living conditions. These facilities are also close to exceeding the
utility systems capacity.
Impact if not Provided.--Existing Camps 1, 2, and 3 were designed
as temporary facilities and are at the end of their useful life.
Maintenance and operation of these facilities will continue to be a
significant draw of manpower, materials, and money due to their
deteriorating conditions. Mission operations in these antiquated cell
blocks will continue to be strained and require an increased number of
security and medical personnel due to the weaknesses in the design and
materials of the existing facilities. Existing facilities will not meet
the Geneva Convention requirements, and there will be continued
scrutiny by the International Committee of the Red Cross (ICRC) and the
international community until facility standards are raised. The
waterline security will remain compromised and the water quality will
remain degraded if this project is not provided. The electrical
distribution system will become overloaded, unreliable, and a potential
safety hazard. Outages will result due to circuit overloading creating
additional equipment maintenance and repairs.
Additional.--This project has been coordinated with the
installation physical security plan and all physical security measures
are included. All required antiterrorism/force protection measures are
included. Alternative methods of meeting this requirement have been
explored during project development. This project is the only feasible
option to meet the requirement. Sustainable principles will be
integrated into the design, development, and construction of the
project in accordance with Executive Order 13123 and other applicable
laws and Executive Orders.
Mr. Grone. Senator, the only thing that I would add to my
colleague's comments is I believe the Chairman indicated that
what we are doing, and the Secretary as well, but I know the
Chairman had indicated what we are doing is we are
transitioning to a long-term detention mission which in the
context of both the humanitarian end of this, as well as the
reduction--and to be able to operate the facility in a way that
provides for a safer and more efficient operation, it will,
(a), reduce the manpower but, (b), provide a safer environment
for our own military personnel to manage the facility.
The most cost effective construction method for the
structure is as it has been detailed to the subcommittee. It
will be much easier to sustain than the metal structures we
have there now. As the Comptroller indicated, we have a number
of important reasons for seeking the funds at this time.
Senator Feinstein. Well, I just was handed the request, and
it says, under description of proposed construction, construct
a maximum security facility at Camp 6 to detain 220 personnel.
Primary facilities include pre-engineered concrete modular
building units on concrete foundations, isolation cells,
showers, rest rooms, indoor and outdoor exercise areas,
security operations, administrative spaces, interview spaces,
security and perimeter fence, lighting, and associated
pedestrian and vehicular gates. So from what I gather from
this, I mean, this is a whole new permanent facility. The word
``permanent'' is used and ``maximum security.''
Now, I would just like to know. It may well be that despite
the fact that the United States is not going to be able to deny
people basic due process rights, you still want to have the
facility. But one of the things I think we do not want to do is
authorize the money and then find out you change your mind,
which has happened.
Mr. Grone. Certainly, Senator--I am sorry, Madam Chairman.
Senator Hutchison. I think there is another factor here
which is where is the safest place to house prisoners. I think
there has always been a concern about having them in America
and within the 48 States because of actions that might be taken
to get them released. I do not think it is necessarily a
treatment issue so much as where do you put potential terrorist
prisoners where you do not endanger the lives of the people
around and where is it harder to get to.
Senator Feinstein. Except, Madam Chairman, we do house
known terrorists who have committed terrorist acts here in the
United States.
Senator Hutchison. Well, but we also have a number of them
that are not in the United States. They are in Guantanamo Bay.
I think having a prison that is pretty hard to get to is a
factor to be considered.
Senator Feinstein. I thought they were detainees. I mean,
we have people convicted doing time, the 1993 World Trade
Center bombing, et cetera. We have a place in Colorado where a
number of them are incarcerated.
I just feel I want to be told the truth about this
facility, why it is being built, instead of building it
somewhere on ex-surplus military land here, why you are
building it in Guantanamo. Because none of these people have
been convicted of anything. They are all detainees.
Mr. Grone. Senator Feinstein, what I can best tell you is
that the location represents the best military judgment that we
have in terms of the location. Neither of us have policy
cognizance for this. The Under Secretary of Defense (Policy)
and the Deputy Assistant Secretary of Defense for Detainee
Affairs are the responsible policy officials, and certainly the
combatant commander of Southern Command also has very
significant responsibilities in this area. I believe we can
work to arrange whatever briefings are necessary for you and
the chairman and any other member or staff that may be required
to address the question.
But the Secretary and the Chairman I believe addressed the
immediate requirement pretty directly. And the type of
construction involved that you cited is the most cost effective
construction at that location to build the kind of facility
that will allow our military personnel to operate in a safe and
efficient manner and also provide, consistent with our
standards, a more humane environment with a little bit more
room for detainees to live in the facility. But certainly we
can arrange for whatever briefings may be necessary in that
regard.
Senator Feinstein. I appreciate that. Thank you.
Thanks, Madam Chairman.
Senator Hutchison. Thank you. I think that is the end for
this panel. We very much appreciate your time in coming.
Department of the Navy
STATEMENT OF HON. B.J. PENN, ASSISTANT SECRETARY OF THE
NAVY (INSTALLATIONS AND ENVIRONMENT)
ACCOMPANIED BY:
REAR ADMIRAL WAYNE ``GREG'' SHEAR, JR., DEPUTY DIRECTOR, ASHORE
READINESS DIVISION, UNITED STATES NAVY
BRIGADIER GENERAL WILLIE WILLIAMS, ASSISTANT DEPUTY COMMANDANT,
INSTALLATIONS AND LOGISTICS (FACILITIES), U.S. MARINE CORPS
Senator Hutchison. I want to now ask our second panel to
come forward. Making his first appearance before our
subcommittee is the Honorable B.J. Penn, Assistant Secretary of
the Navy for Installations and Environment. Joining him are
Rear Admiral Wayne Shear, United States Navy Deputy Director
for the Ashore Readiness Division; and Brigadier General Willie
Williams, U.S. Marine Corps, Assistant Deputy Commandant for
Facilities.
Secretary Penn, if you would give us a summary of your
statement, we would be happy to hear it, and then we will ask
questions.
Mr. Penn. Madam Chairman, my pleasure. Madam Chairman,
members of the subcommittee, being in this job for about a
week, I assure you I have no trouble in being brief.
I am accompanied by Brigadier General, soon to be Major
General, Willie Williams for Marine Corps Installations, and
Rear Admiral Greg Shear from Commander Naval Installations.
I have spent most of my initial days getting acquainted
with my staff and senior leadership of the Navy and Marine
Corps. I am quite impressed with their skills and dedication.
I remember when I was on active duty as a naval aviator,
serving as commanding officer of Naval Air Station North Island
in California in the late 1980s thinking what new policy
approaches from Washington might improve installation
management. Be careful what you dream of.
Things have obviously changed since that time. I will soon
begin visiting bases and stations so that I can listen
firsthand to the needs and concerns from installations
commanders, sailors, marines, their families, along with the
civilian employees and contractor personnel who live or work at
our shore installations and surrounding communities. I hope
during my tenure to meld their views with those inside the
beltway, of Congress, the Secretary of Defense, the service
Secretaries, chiefs of staff, to shape a future for naval
installations that provides cost effective support for the
needs of our warfighters. Clearly implementation of BRAC 2005
decisions will be a major focus of my efforts.
I have submitted a rather detailed statement for the record
on our fiscal year 2006 budget request. From a macro
perspective, funding levels are strong, although I am
admittedly on the front end of the learning curve on the
details. General Williams and Admiral Shear helped shape this
budget, so I will rely heavily on them.
I would, however, like to talk about one specific aspect of
our fiscal year 2006 budget request--the financing of our prior
BRAC cleanup and caretaker needs with the mix of $143 million
in appropriated funds and an estimated $133 million in land
sales revenue.
It is important to view the fiscal year 2006 prior BRAC
request in the context of the 2005 request. The Department
expected to finance the entire fiscal year 2005 BRAC program
from the sale of the former Marine Corps Air Station El Toro,
California and did not request nor receive any appropriations
in fiscal year 2005. That sale was delayed by unforseen
circumstances. Fortunately, the sale of the former Marine Corps
Air Station Tustin, California in 2003 gave the Department the
financial flexibility to slow 2004 program executions to
conserve cash to cover its fiscal year 2005 environmental
commitments, most of which are in the State of California.
With fiscal year 2005 execution depleting prior year BRAC
funds and the public auction of the El Toro property still a
future event, the Department last fall opted to include
appropriated funds in fiscal year 2006 to finance its minimum
cleanup and caretaker status, along with a conservative
estimate for land sale revenue to accelerate environmental
cleanup. Although the auction of the El Toro property has now
been completed, with a winning bid of nearly $650 million, I
must caution the members of this committee that there is still
some measure of risk ahead until the buyer and Navy complete
the sales transaction at settlement.
I want to emphasize that we cannot be absolutely sure of
having land sales revenue until settlement occurs, which is
planned for July. The buyer of previous property in 2003
defaulted at settlement. Even after settlement, our past
experience is that it often takes well over 4 months for the
sale proceeds to be processed through DOD accounting systems
before the funds are available to the Navy for program
execution.
We still have a substantial cost to complete environmental
cleanup, primarily at closed bases in California, and we are
developing plans to responsibly accelerate cleanup. That would
be our first priority for use of the land sales revenue.
Even with successful settlement of the El Toro property in
July, we may still need some measure of fiscal year 2006
appropriated funds to finance first quarter program
commitments.
I look forward to working with the Congress on resolving
this situation, along with more challenging installations and
facilities issues.
[The statement follows:]
Prepared Statement of B.J. Penn
Madam Chairman and members of the Committee, I am pleased to appear
before you today, accompanied by Brigadier General Willie Williams,
Assistant Deputy Commandant of the Marine Corps for Installations and
Logistics, and Rear Admiral Wayne Shear, Deputy Director of the Navy's
Ashore Readiness Division. We will provide an overview of the Navy and
Marine Corps team's shore infrastructure programs and base closure
efforts.
FISCAL YEAR 2006 BUDGET OVERVIEW
Our bases and stations provide the essential services and functions
that help us train and maintain our Naval forces, and enhance the
quality of life for our Sailors, Marines and their families. Winning
the Global War on Terrorism (GWOT) is our number one priority while we
transform our force structure and business processes to meet the
readiness needs of today and tomorrow. The Department of the Navy (DoN)
has a considerable investment in shore infrastructure: 104
installations in the continental United States and 18 overseas
locations with a combined plant replacement value of about $181
billion.
The DoN fiscal year 2006 budget request for installations and
environmental programs totals $9.8 billion \1\ and provides the funds
to operate, recapitalize and transform our shore installations. In this
budget, we have focused our efforts on balancing the risks across the
operational, institutional, force management and future challenges
identified by the Department and the Department of Defense (DOD).
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\1\ To avoid double counting in the graph, environmental is shown
separately from BOS, and MILCON is shown separately from SRM funds.
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The Base Operations Support (BOS) request of $4.8 billion,
excluding environmental which is shown separately, provides fundamental
services such as utilities, fire and security, air operations, port
operations, and custodial care that enable the daily operations of our
bases. The increase of $471 million to the fiscal year 2005 enacted
level is primarily due to functional transfers to properly align Navy
Marine Corps Internet with Base Operating Support and program growth to
accomplish utilities privatization preparation, improve overseas
Morale, Welfare and Recreation Programs supporting our forward deployed
forces, and to restore funding required to execute shore mission
support without degrading quantity or quality of support. We believe we
have properly priced BOS to avoid execution year adjustments as we have
experienced in the past. We are also working with the Office of the
Secretary of Defense and the other Components to define common
standards and performance metrics for managing installations support.
Our Military Construction Navy and Naval Reserve request is a very
robust $1,074 million, about the same as the enacted fiscal year 2005
level of $1,114 million after excluding the $139 million the DoN
received in the Emergency Hurricane Supplemental Appropriations Act,
2005. This level of funding keeps us on track to eliminate inadequate
bachelor housing, and provides critical operational, training, and
mission enhancement projects.
The Family Housing request of $813 million is about the same as the
enacted fiscal 2005 level of $835 million after excluding the $9
million the DoN received in the Emergency Hurricane Supplemental. It
provides $219 million in family housing construction and improvements
funds, 80 million above the enacted fiscal 2005 level of $139 million.
Funds to operate, maintain and revitalize the worldwide inventory of
about 33,000 units total $594 million, $103 million less than the
enacted fiscal 2005 level (excluding the $9 million in the Emergency
Hurricane Supplemental), due to a decline of over 18,000 homes from the
fiscal 2005 level from our housing privatization efforts. The DoN
continues to fund Basic Allowance for Housing (BAH) at a level that
eliminates average out-of-pocket housing expenses for service member.
BAH makes finding affordable housing in the community more likely for
our service members, and it helps our housing privatization efforts
succeed.
Sustainment, Restoration and Modernization (SRM) includes military
construction and Operation and Maintenance funds. Our fiscal year 2006
request is $71 million above the enacted fiscal year 2005 level without
the Hurricane Supplemental. Sustainment funds the necessary maintenance
and repairs needed to keep a facility in good working order over its
expected service life. Facilities sustainment requirements are based on
a DOD model. The fiscal year 2006 budget maintains 95 percent of the
model requirement for Navy and Marine Corps bases. Restoration and
Modernization funds regenerate the physical plant either through
reconstruction or major renovation to keep the facility modern and
relevant.
Our environmental program of $1,149 million, comprised of a variety
of operating and investment appropriations, climbs $123 million above
the fiscal year 2005 enacted level. Within this broad category,
compliance accounts decline as a result of fewer one-time projects;
conservation and pollution prevention funds remain steady; research and
technology development decline by $15 million as fiscal year 2005
congressional increases are not continued in fiscal year 2006; cleanup
of active bases increases by $39 million, primarily to support cleanup
of the former Vieques training range in Puerto Rico. Of particular
interest to this Subcommittee, we have included $143 million in fiscal
year 2006 appropriations to cover minimum required environmental
cleanup and caretaker costs. In preparing the budget, we also included
$133 million in estimated land sales revenue that would be used to
accelerate cleanup efforts.
Here are some of the highlights of these programs.
HOUSING
Our fiscal year 2006 budget request reflects the DoN's continued
commitment to improve living conditions for Sailors, Marines, and their
families. We have programmed the necessary resources and expect to have
contracts in place by the end of fiscal year 2007 to eliminate our
inadequate family and bachelor housing.
Family Housing
Our family housing strategy consists of a prioritized triad:
--Reliance on the Private Sector.--In accordance with longstanding
DOD and DoN policy, we rely first on the local community to
provide housing for our Sailors, Marines, and their families.
Approximately three out of four Navy and Marine Corps families
receive a BAH and own or rent homes in the community.
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--Public/Private Ventures (PPVs).--With the strong support from this
Committee and others, we have successfully used statutory PPV
authorities enacted in 1996 to partner with the private sector
to help meet our housing needs through the use of private
sector capital. These authorities allow us to leverage our own
resources and provide better housing faster to our families.
--Military Construction.--Military construction will continue to be
used where PPV authorities don't apply (such as overseas), or
where a business case analysis shows that a PPV project is not
financially sound.
We will be able to eliminate 77 percent of our inadequate inventory
through the use of public/private ventures. As of 1 March, we have
awarded 15 projects totaling over 26,000 units. As a result of these
projects, almost 17,500 homes will be replaced or renovated. An
additional 2,700 homes will be constructed for Navy and Marine Corps
families. Through the use of these authorities we have secured almost
$3.0 billion in private sector investment from $300 million of DoN
funds for these 15 projects. This represents a leverage ratio of ten to
one. During fiscal year 2005 and 2006, we plan to award projects
totaling 29,000 homes at ten Navy and Marine Corps locations. This will
allow us to improve our housing stock and provide more homes to
Sailors, Marines and their families much faster than if we relied
solely on traditional military construction. By the end of fiscal year
2007, the Navy and Marine Corps will have privatized 78 percent and 95
percent, respectively, of their worldwide housing stock.
Our fiscal year 2006 family housing budget includes $219 million
for family housing construction and improvements. This amount includes
$112 million as a Government investment in family housing privatization
projects. It also includes $594 million for the operation, maintenance,
and leasing of DoN family housing.
PLANNED PRIVATIZATION PROJECTS
------------------------------------------------------------------------
Number of
Fiscal year Location homes
------------------------------------------------------------------------
USN
2005.............................. Mid Atlantic........ 5,930
2006.............................. Midwest Regional.... 1,879
2006.............................. Southeast Regional I 4,437
2006.............................. San Diego Phase III. 4,268
2006.............................. Oahu II............. 2,336
---------------
Subtotal.................... .................... 18,850
===============
USMC
2005.............................. Camp Lejeune/Cherry 3,426
Pt.
2005.............................. 29 Palms/Kansas City 1,510
2006.............................. MCB Hawaii.......... 1,136
2006.............................. Camp Lejeune/Cherry 959
Pt II.
2006.............................. Camp Pendleton IV... 3,359
---------------
Subtotal.................... .................... 29,240
------------------------------------------------------------------------
Bachelor Housing
Our budget request of $184 million for bachelor quarters
construction projects continues the emphasis on improving living
conditions for our unaccompanied Sailors and Marines. There are three
challenges:
--Provide Homes Ashore for our Shipboard Sailors.--There are
approximately 18,400 junior enlisted unaccompanied Sailors
worldwide who live aboard ship even while in homeport. The Navy
has programmed funding through fiscal year 2008 to achieve its
``homeport ashore'' initiative by providing ashore living
accommodations for these Sailors. We will achieve this goal
through a mix of military construction, privatization
authorities, and, for the interim, more intensive use of our
barracks capacity by housing two members per room. Our fiscal
year 2006 budget includes three ``homeport ashore'' projects:
$7.8 million at Naval Station Mayport, FL (216 spaces); $50
million at Naval Station, Everett, WA (818 spaces); and $13.7
million at Naval Amphibious Base Coronado, CA (800 spaces),
which is planned for privatization. The funds would be used as
a Government cash contribution to a public/private entity.
--Ensure our Barracks Meet Today's Standards for Privacy.--We are
building new and modernizing existing barracks to increase
privacy for our single Sailors and Marines. The Navy uses the
``1+1'' standard for permanent party barracks. Under this
standard, each single junior Sailor has his or her own sleeping
area and shares a bathroom and common area with another member.
To promote unit cohesion and team building, the Marine Corps
was granted a waiver to adopt a ``2+0'' configuration where two
junior Marines share a room with a bath. The Navy will achieve
these barracks construction standards by fiscal year 2016; the
Marine Corps by fiscal year 2012. We are pursuing a waiver of
the ``1+1'' standard to allow us to build an enlisted barracks
project in Norfolk to private sector standards. We believe this
will reduce construction costs, improve amenities, and
facilitate opportunities to privatize barracks in the future.
--Eliminate Gang Heads.--The Navy and Marine Corps remain on track to
eliminate inadequate barracks with gang heads \2\ for permanent
party personnel. The Navy achieves this goal by fiscal year
2007, the Marines by fiscal year 2005.
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\2\ Gang heads remain acceptable for recruits and trainees.
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BQ Privatization
We are applying authority provided to us by Congress to proceed
with three pilot unaccompanied housing privatization projects. We
issued a solicitation for our first project at San Diego in September
2004 and received very positive responses from industry. We will soon
take the next step to narrow the field and invite up to four highly
qualified offerors to submit detailed technical and financial
proposals. We plan to select a single proposal by late Spring 2005 and
make an award in January 2006 after notifying Congress.
We intend to notify Congress of our intent to issue a solicitation
for our second pilot project--at Hampton Roads, Virginia--in the very
near future. We have also initiated a concept development for our third
pilot project to provide unaccompanied housing in the Pacific
Northwest.
MILITARY CONSTRUCTION
Military Construction Projects
The DoN fiscal year 2006 Military Construction program requests
appropriations of $1,029 million, consisting of $830 million for Navy,
$169 million for Marine Corps, and $30 million for planning and design.
The authorization request totals $1,078 million. Our fiscal year 2006
budget uses $92 million in prior year savings identified during budget
formulation to finance additional military construction needs above the
fiscal year 2006 appropriation request. Fiscal year 2006 projects were
properly priced consistent with the analysis that identified the prior
year savings. The Naval and Marine Corps Reserve Military Construction
appropriation and authorization request is $45 million.
The active Navy program consists of:
--$218 million for eight Chief of Naval Operations projects for
Homeport Ashore, Great Lake Recruit Training Command
recapitalization and the Naval Academy.
--$215 million for seven waterfront and airfield projects.
--$92 million for three special weapons protection projects.
--$239 million for 12 projects supporting new weapons systems such as
F/A 18 E/F, V-22, H60R/S, and VXX.
--$58 million for four mission enhancement projects such as the
Pacific War fighting Center at Naval Station Pearl Harbor, HI;
and
--$9 million for one environmental compliance project at Naval Air
Station Pensacola, FL.
The active Marine Corps program consists of:
--$58 million for two barracks, one mess hall and one fire safety
quality of life project.
--$25 million in a continuing effort to correct wastewater
environmental compliance violations at Camp Pendleton, CA.
--$54 million for three airfield recapitalization projects at Marine
Corps Air Station Quantico, VA, including the second increment
of funding to replace 1930's vintage HMX maintenance hangars
and a parking apron.
--$18 million for four projects to provide maintenance facilities,
including the new Assault Breacher Vehicle at Camp Pendleton,
CA and Camp Lejeune, NC; hot refueling for rotary wing aircraft
at MCAS Yuma, AZ; and critical training for Marines with a
Multi-Purpose Machine Gun Range at Camp Lejeune, NC.
--$14 million for five projects that cover a broad range of facility
improvements, e.g., main gate access and inspection;
encroachment remedies; missile storage.
The Naval and Marine Corps Reserve program consists of two joint
reserve centers, a Marine Corps reserve centers, a Marine reserve-
training center, and a hanger modification.
Fourteen Navy and two Marine Corps \3\ projects have construction
schedules exceeding 1 year and cost more than $50 million, thus meeting
the DOD criteria for incremental funding in the fiscal year 2006
budget. Seven Navy and one Marine Corps projects received full
authorization in fiscal year 2004 or fiscal year 2005 and are being
continued or completed in fiscal year 2006. The budget request new
authorization to start seven Navy and two Marine Corps incrementally
funded projects in fiscal year 2006.
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\3\ The budget also incrementally funds a $14 million Marine Corps
project.
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Outlying Landing Field, Washington County, North Carolina
The new F/A-18E/F Super Hornet is replacing F-14 and older F/A-18C
aircraft. A Navy Environmental Impact Statement (EIS) examined
alternatives for homebasing these new aircraft on the East Coast,
opting to base eight tactical squadrons and a fleet replacement
squadron at Naval Air Station Oceana, VA, and two tactical squadrons at
Marine Corps Air Station, Cherry Point, NC.
This homebasing decision requires a new Outlying Landing Field
(OLF) to support fleet carrier landing practice training. The current
site near Virginia Beach, VA is not as effective for night-time
training due to ambient light sources, and it lacks the capacity to
handle a training surge such as experienced for the war on terrorism
and Operation Iraqi Freedom. The Navy selected a site in Washington
County, North Carolina, about halfway between NAS Oceana and MCAS
Cherry Point, as the best alternative from an operational perspective.
A Federal District Court ruled last month that Navy did not fulfill
its obligations under the National Environmental Policy Act (NEPA)
before making the decision to construct the OLF, and has enjoined the
Navy from taking further actions to plan, develop, or construct the OLF
until it completes additional NEPA analysis. The Navy continues to
believe that the EIS that it prepared was based on sound science and
rigorous analysis, and met all requirements of NEPA. Nonetheless, the
Navy is carefully examining the court's ruling and examining available
alternatives. The fiscal year 2006 budget includes $23 million in
available prior year funds to complete land acquisition in the OLF core
area and commence horizontal construction. We continue to believe that
these funds will be required for these purposes and will be executable
in fiscal year 2006.
VXX
We are pleased to report significant progress on VXX, the next
generation helicopter transportation for the President, Vice President
and heads of State. Marine Helicopter Squadron One (HMX-1), located at
the Marine Corps Air Facility, Quantico, VA, performs these helicopter
transportation mission using the VH-3D introduced in 1974 and the VH-
60N fielded in 1989. These aircraft are approaching the end of their
service lives, and do not have the growth margin to incorporate the
improved capabilities required to meet evolving mission needs in the
post 9/11 environment.
The Navy awarded a System Development and Demonstration acquisition
contract to Lockheed Martin in January 2005 to build and deliver eight
VXX aircraft for test and evaluation and pilot production. The new
aircraft will provide increased performance; improved mission,
communication, navigation, and maintainability; and expanded potential
for future growth. Developmental flight-testing will begin mid fiscal
year 2005, with delivery of the first test article by April 2007.
Initial operating capacity is set for the fourth quarter fiscal year
2009.
The Navy also awarded a construction contract in January 2005 to
build an eight-bay test and evaluation hanger with laboratory,
maintenance, and office space for a combined Lockheed Martin--Navy
program management team at Naval Air Station Patuxent River, MD. The
Navy commissioned an independent study to consider alternate methods of
providing in-service support for the aircraft. The study concluded that
a government owned contractor operated facility at Patuxent River
provided significant life cycle cost savings to the Navy. The $96
million, incrementally funded design/build facility will also include
an in-service support capacity for the aircraft once operational. The
current working estimate for construction is $10 million below the
authorization request in the fiscal year 2005 budget.
FACILITIES
Facilities Sustainment, Restoration and Modernization (SRM)
Sustainment.--The DOD uses models to calculate life cycle facility
maintenance and repair costs. These models use industry-wide standard
costs for various types of buildings and geographic areas and are
updated annually. Sustainment funds in the Operation and Maintenance
accounts maintain shore facilities and infrastructure in good working
order and avoid premature degradation. The Navy and Marine Corps
achieve 95 percent funding of the sustainment model requirements in
fiscal year 2005 and fiscal year 2006, consistent with the DOD goal.
The DoN funding increases by 1.4 percent from fiscal year 2005 to
fiscal year 2006.
Recapitalization.--Restoration and modernization provides for the
major recapitalization of our facilities using Military Construction,
Operation and Maintenance, Navy Working Capital Fund, and Military
Personnel Navy funds. The ``recap'' metric is calculated by dividing
the plant replacement value by the annual investment of funds and it is
expressed as numbers of years. The DOD goal is to attain an annual 67-
year rate by fiscal year 2008. Neither the Navy nor the Marine Corps
attains the 67-year goal in the current FYDP due to affordability.
SRM
------------------------------------------------------------------------
Fiscal Year
--------------------------------
2004 2005 2006
------------------------------------------------------------------------
Navy
Sustainment (percent).................. 75 95 95
Recap rate (years)..................... 103 104 98
Marine Corps
Sustainment (percent).................. 96 95 95
Recap rate (years)..................... 109 82 103
------------------------------------------------------------------------
The fiscal year 2006 recapitalization rate has improved
substantially from that reported last year as a result of a recent DOD
policy change that allows the military departments to take credit for
centrally managed Service demolition programs. The Navy has $51 million
and the Marine Corps $5 million for their fiscal year 2006 central
demolition programs, which combined is expected to demolish over 2.5
million square feet of outdated facilities. The new policy allows us to
consider the construction of new facilities as part of the recap metric
calculation as long as an equivalent square footage of old facilities
are demolished anywhere else. We believe that this corporate view is a
more accurate reflection of the age of our while inventory and the need
for recapitalization.
EFFICIENCIES
Naval Safety
We remain committed to achieving Secretary Rumsfeld's 2-year
challenge to reduce fiscal year 2002 baseline mishap rates and
accidents by 50 percent by the end of fiscal year 2005. At the end of
calendar year 2004, 15 months into the 2-year challenge, the Department
was on track to meet the SECDEF goal in over 70 percent of the targeted
areas.
The Secretary of the Navy has embraced improving safety as one of
his top objectives for this fiscal year. Last year Secretary England
convened the first semi-annual Navy and Marine Corps Safety Council,
comprised of Senior Flag and General Officers, to review ongoing mishap
reduction efforts. The DoN is pursuing Occupational Safety and Health
Administration OSHA (OSHA) Voluntary Protection Program (VPP) status at
our shipyards and other industrial activities; over the last 16 months,
we have achieved an average 31 percent reduction in civilian lost
workdays due to injuries at our three installations with the highest
injury rates. Increased command emphasis for safety in Operation Iraqi
Freedom has played a major role in reducing the percentage of Marine
Corps non-combat fatalities to combat fatalities from 42 percent in
fiscal year 2003 to less than 9 percent in fiscal year 2004.
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Our fiscal year 2006 budget includes $4.5 million to continue
development of the Military Flight Operations Quality Assurance
program. We want to adapt a successful commercial aviation program to
analyze performance data (i.e., ``black box'' data) after every flight
and allow aircrew and aircraft maintenance personnel to replay a high
fidelity animation of the flight and associated aircraft performance
parameters. That will allow them to recognize and avoid situations
where flight safety tolerances are exceeded. In addition to the safety
benefit, we expect significant future savings in reduced maintenance
costs.
Commander, Navy Installations
Commander, Navy Installations Command (CNI) had a productive first
year in its effort to transform the Navy shore establishment into
centralized shore services and support structure. The Navy is now
aligned to permit mission commanders to focus on their core mission to
deliver combat power, while CNI focuses on shore infrastructure
support.
A key CNI accomplishment was to implement a Capabilities Based
Budgeting (CBB) process. This annual, zero-based analysis links the
delivery of specific shore functions to their resources, and allows
managers to predict how varying resource inputs alter the performance
capability of that shore function. Identifying the risks in delivering
service at varying output levels allows Navy leadership to select the
desired level of output and associated resourcing based on an
evaluation of these risks. This process allows us to better align shore
support services with mission customers' requirements. CNI is now
expanding this effort to derive common base support models with the
other military services.
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Strategic Sourcing
The DoN continues to seek efficiencies in its business processes.
We want to focus on finding the most cost efficient means to support
our war fighters. There are a number of approaches to achieve this
goal, e.g., eliminating an unnecessary function or one with marginal
benefit; re-aligning a function to improve efficiency; or competing a
function to see if it can be provided more effectively or at a lower
cost by private industry. We have committed to review over 30,000 \4\
positions for competition using the OMB Circular A-76 process by fiscal
year 2008, although execution plans have temporarily slowed that pace
as we adopt new OMB and Congressional direction on competition
policies. We are focusing competitions on those functions that are not
critical or core to our military operations, are readily available and
can potentially be performed more effectively by the private sector.
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\4\ Represents about 5 percent of the DoN's military and civilian
workforce.
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We recognize the difficulty these competitions have on employee
morale. However, the gains in clearly defining the Government's
requirement with resulting savings warrant the continued use of
competition to determine the most cost-effective service provider.
Competition between the in-house and contractor work force benefits the
DoN and taxpayer in the long run. OMB Circular A-76 competitions
generate on average 36 percent cost avoidance. Our workforce is among
the best in the world and has responded to the challenge by winning
over 80 percent of the A-76 competitions.
Utility Privatization
We are proceeding with efforts to privatize when economical our
electricity, water, wastewater, and natural gas utility systems. Ten
USC 2688 provides the legislative authority to convey utility systems
where economical. Privatization allows installations to focus on core
missions, relieving them of activities that can be done more
efficiently and effectively by others. Privatization can help us reap
private sector efficiency while upgrading aged systems to industry
standards without compromising safe and reliable services.
As of February 1, 2005, DoN has privatized 15 of its 645 utility
systems while exempting 73 utility systems. Approximately half of the
Source Selections Authority (SSA) decisions have been achieved during
the past year, with the rest expected by September 30, 2005. When the
current round of utilities privatization concludes in September 2005,
DoN intends to pursue other alternatives to enlist industry capability.
In the end, we need safe reliable utility systems that are operated in
the most economical manner, and that rely on private industry wherever
practicable.
PRIOR BRAC CLEANUP AND PROPERTY DISPOSAL
The BRAC rounds of 1988, 1991, 1993, and 1995 were a major tool in
reducing our domestic base structure and generating savings. The DoN
has achieved a steady State savings of approximately $2.7 billion per
year since fiscal year 2002. All that remains is to complete the
environmental cleanup and property disposal on portions of 17 of the
original 91 bases. We have had significant successes on all fronts.
Last year DoN relinquished over 71,000 acres at the former Naval
Air Facility Adak, Alaska, to the Department of the Interior, which
enabled Interior to exchange portions of the property with The Aleut
Corporation for other lands. Additionally, the Navy achieved a
significant milestone at the former Hunters Point Naval Shipyard in San
Francisco by conveying the first parcel of 75 acres to the San
Francisco Redevelopment Agency. Of the original 161,000 acres planned
for disposal from all four prior BRAC rounds, we expect to have less
than 5 percent (about 8,000 acres) left to dispose by the end of this
fiscal year.
Property Sales
We have been very successful using property sales to assist in
environmental cleanup and property disposal as well as recover value
for taxpayers. We have used various methods to conduct these sales,
including General Services Administration (GSA) on-site auctions, GSA
Internet auctions, and Internet auctions using commercial real estate
brokers. We used the GSA Internet web site in 2003 to sell 235 acres at
the former Marine Corps Air Station Tustin, CA, for a net $204 million.
We also sold 22 acres at the former Naval Air Facility Key West, FL, in
January 2004 for a net $15 million. The City of Long Beach, CA, opted
to pre-pay its remaining balance plus interest of $11.3 million from a
promissory note for the 1997 economic development conveyance of the
former Naval Hospital Long Beach. We applied these funds to accelerate
cleanup at the remaining prior BRAC locations.
Last month the DoN completed its largest public sale via Internet
auction consisting of four large parcels that total 3,720 acres at the
former Marine Corps Air Station, El Toro in Irvine, CA, with bids
totaling $649.5 million. The Internet auction public sale of 62 acres
at the former San Pedro housing site in Los Angeles, CA, is still in
process with a top bid of $87 million as this statement was being
prepared for printing. We expect to close these sales later this year.
We will also soon close escrow on the public sale of approximately 20
acres in Orlando, FL, which is noteworthy as the first deed conveyance
of property prior to completion of all environmental cleanup using the
public sale process.
Public sales of smaller parcels were completed in Charleston, SC,
and Novato, CA, and we expect to proceed soon with the sale of property
at the former Oak Knoll Naval Hospital upon resolution of legal issues
stemming from a lawsuit by the local redevelopment authority.
Land Sales Revenue Caution
A word of caution is necessary regarding land sales revenue.
Although the auction for El Toro has ended and the auction for San
Pedro should end soon, it will be several months before these sales
close escrow, and several additional months until the DoN receives the
sale proceeds in the DoN prior BRAC account. Until then, litigation or
default by the winning bidder can delay or cancel the sale, as happened
with the sale of the former Oak Knoll Naval Hospital in 2003. The El
Toro sale, planned to occur last year, was delayed for 1 year due to
litigation and the need to resolve redevelopment issues with the City
of Irvine. That required us to conserve cash for fiscal year 2005
execution.
Because of our experience with the risks associated with predicting
future receipt of land sales revenue, our fiscal year 2006 budget
includes an appropriation request of $143 million to cover minimum
required environmental cleanup actions under enforceable schedules and
ongoing program costs for properties not yet disposed. Notwithstanding
these risks, we are optimistic that the El Toro and San Pedro sales
will close and the funds will become available.
Prior BRAC Environmental Cleanup
The DON has spent over $2.5 billion on environmental cleanup at
prior BRAC locations through fiscal year 2004. We estimate the
remaining cost to complete cleanup at about $559 million for fiscal
year 2007 and beyond, most of which is concentrated at fewer than
twenty remaining locations and includes long-term maintenance and
monitoring obligations for remedies already installed and operating at
many locations. As we have done previously, the DoN will use any
additional land sale revenue beyond that projected in our fiscal year
2006 budget to further accelerate cleanup at these remaining prior BRAC
locations, which are primarily former industrial facilities that tend
to have the most persistent environmental cleanup challenges.
Closure of Naval Station Roosevelt Roads, Puerto Rico
In addition to completing property disposals from the four prior
BRAC rounds, the Navy closed Naval Station Roosevelt Roads on March 31,
2004, as directed by section 8132 of the fiscal year 2004 Defense
Appropriations Act. All military mission activities have been
relocated. The DOD schools remained open through the completion of the
2003-2004 school year, as encouraged by the conference report
accompanying the Act. Naval Activity Puerto Rico has been established
to protect and maintain the property and preserve its value until
disposal.
As directed in the Act, the closure and disposal is being carried
out in accordance with the procedures contained in the Defense Base
Closure and Realignment Act (BRAC) of 1990, as amended. Pursuant to
these procedures, the Navy has approved property transfers to the
Department of the Army for use by reserve components, and the
Department of Homeland Security. The Commonwealth of Puerto Rico formed
a Local Redevelopment Authority (LRA). Using grant funding from the DOD
Office of Economic Adjustment, the LRA prepared a redevelopment plan
for the property that envisions a mix of commercial, residential, and
public uses, as well as conservation of large areas of mangrove forest
and wetlands. As required by BRAC procedures, we are analyzing the
potential environmental impacts of property disposal in accordance with
that redevelopment plan. We expect that property disposal process will
begin in 2006 and that substantial portions of the property will be
disposed through competitive public sale. We do not expect this process
to be completed until fiscal year 2007, and have requested $27 million
in fiscal year 2006 to cover caretaker costs and maintain the property
in preparation for sale. The Government Accountability Office (GAO)
recently reviewed Navy plans and progress in disposing of the former
Naval Station Roosevelt Roads. GAO found that Navy was following
prescribed procedures and completed their review with no
recommendations.
BRAC 2005
BRAC 2005 Decision Process
A successful BRAC 2005 is most important to the DoN, the DOD, and
the Nation. It may be our last opportunity in the foreseeable future to
reduce excess infrastructure, move scarce dollars to areas that result
in increasingly improved readiness, and transform our infrastructure
consistent with our defense strategy.
BRAC 2005 provides a fair process that will result in the timely
closure and realignment of military installations in the United States.
All military installations inside the United States must be considered
equally without regard to whether the installation has been previously
considered or proposed for closure or realignment. All closure and
realignment recommendations must be based on certified data, the 20-
year force structure plan, and the published selection criteria that
make military value the primary consideration.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
For BRAC 2005, the Secretary of Defense directed that the analysis
be divided into two categories of functions. Joint Cross Service Groups
(JCSGs) are analyzing common business-oriented support functions while
the Military Departments are focusing on analysis of service unique
functions. The following seven JCSGs were established: Education and
Training; Headquarters and Support; Industrial; Medical; Supply and
Storage, Technical; and Intelligence. The JCSGs and the Military
Departments will make their BRAC recommendations to the Infrastructure
Executive Council (IEC), the DOD policy making and oversight body for
the entire BRAC 2005 process. JCSGs were also utilized in BRAC 1995 but
in a substantially different manner. In BRAC 1995, JCSG analysis and
recommendations were provided to the Military Departments for
consideration in developing their BRAC recommendations. The creation of
the IEC ensures that DOD senior leadership is directly engaged in
making these important decisions. Analysis and evaluation by all of the
BRAC groups are on-going, with a goal of supporting the Secretary of
Defense's delivery of a comprehensive set of base closure and
realignment recommendations by May 16th.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
Despite what some may have read in the newspapers, seen on the
Internet, or heard through the rumor mill, the DOD does not have a list
of closures or realignments at this time. The number and location of
such closures or realignments will only be determined after a
comprehensive and rigorous analytical process that is now underway in
the Military Departments and Joint Cross Service Groups.
BRAC 2005 Implementation Funding
DOD has programmed funds through the Future Years Defense Plan for
implementing BRAC 2005 decisions. Discussions are underway as to how
these funds may be allocated to the Military Departments for
implementing BRAC 2005 decisions. Expectations are that BRAC 2005
implementation costs will be financed by a mix of (1) allocation of the
DOD funds, realignment of funds from military construction projects and
SRM funds no longer needed at closing locations, transfers from
environmental restoration accounts, and if necessary, additional
military service funds to implement BRAC 2005 decisions.
Preparing to Implement BRAC 2005
The DoN is building upon its experience in completing cleanup and
disposal of property from prior BRAC rounds to prepare to implement
BRAC 2005 decisions. Recently, the Secretary of the Navy approved
formation of a BRAC Program Management Office (PMO) that reports to the
Assistant Secretary of the Navy for Installations and Environment. BRAC
PMO has assumed responsibility for completing cleanup and disposal of
the remaining property from prior BRAC rounds, and it will become
responsible for cleanup and disposal of property at installations
closed or realigned in BRAC 2005.
The DoN has examined lessons learned from cleanup and disposal of
property at prior BRAC bases, especially recent successes using
competitive public sales. Much has changed since the last BRAC round in
1995. Environmental contamination at remaining bases has largely been
characterized, and cleanup has been completed or is now well underway.
A close examination of existing statutory authority and Federal
regulations for property disposal showed there were ample opportunities
to improve the disposal process without the need for new legislation.
Private sector capabilities have emerged and matured for ``brownfield''
redevelopment and insurance industry products to address environmental
liabilities when there is a CERCLA early transfer of contaminated
property. The DoN expects to take increased advantage of these private
sector capabilities.
We will continue to use all of the property disposal authorities in
the right circumstances, as we have in the case of the disposal of
Naval Station Roosevelt Roads. Like Roosevelt Roads, however, we
believe there will be more opportunities to quickly dispose, in
cooperation with the local community, BRAC 2005 property requiring
environmental cleanup in its existing condition. The Navy will dispose
of property using public sale and will include the cleanup of that
property with it, as is done in ``brownfield'' disposals nationwide.
This will allow developers with the experience and expertise to
complete the cleanup as they redevelop the property. That benefits
communities by getting the property onto local tax rolls and
redeveloped more quickly, with the local community controlling that
development through traditional land use planning and zoning. It
benefits DOD and the Federal taxpayer by divesting unneeded property
sooner and reducing the environmental cleanup time and expense incurred
by DOD. The DON goal for implementing BRAC 2005 is that the last Sailor
or Marine leaving the closed base hand the deed to the property to the
new owner. We are convinced that this goal is achievable is we start
preparations for property disposal as soon as closure decisions are
final.
CONCLUSION
In conclusion, we believe we have put forward a very strong fiscal
2006 budget request for our facilities and environmental efforts, while
still recognizing the compelling needs of the Global War On Terror. We
have funded x percent of Navy and y percent of Marine Corps expected
base operating costs, funded 95 percent of predicted sustainment
requirements, while the Navy makes progress on its facility recap
metric.
We are funding environmental programs to maintain compliance with
all environmental standards while accelerating cleanup of past
contamination and investing in research and development efforts to
solve emerging environmental concerns.
We are proceeding with the analysis and scenario development that
will lead to the Secretary of Defense announcement of BRAC 2005
recommendations. We have carefully reviewed our implementation
practices from the previous four BRAC rounds and are establishing, in
cooperation with DOD, the necessary organizational structures and
business policies and practices to accelerate closure, environmental
cleanup, and property disposal.
FAMILY HOUSING
Senator Hutchison. Thank you very much. I want to start the
questioning with family housing projects that we have funded
over the past few years, some of which have been canceled
without notification in order to use the funds for
privatization purposes. Now, we all support privatization, but
I wanted to ask if there are any construction projects in the
request that you are making that you anticipate might be
diverted to privatized housing, and if you do decide to pursue
any different programs after we do appropriate for
construction, will you inform the committee of your decision to
cancel a project?
Mr. Penn. Madam Chairman, we had that discussion just this
morning with some of your staffers, and we have agreed we are
going to work very closely with the members of your staff on
this issue.
Admiral, would you like to----
Admiral Shear. Ma'am, I would just say that family housing
improvement and construction projects we have in the 2006
proposal are in Guam and Japan. So I think the concern that
they might be diverted is probably not going to be due to
privatization, since we do not have plans to privatize in those
areas.
But as the Secretary said, we also recognize we have a duty
to keep the committee informed about how we are handling the
money that goes to privatization, and we have some work to do
in that regard. So we recognize there is an issue there.
JOINT RESERVE CENTER
Senator Hutchison. Secretary Penn, the Naval Reserve is a
participant in the real property exchange that will result in
moving a unit to Ellington Field in Houston, Texas, from
another location closer to the city itself. I am very
supportive of this process and the potential for joint
opportunities that exist at Ellington between the services and
also components of a homeland security unit of the Coast Guard.
I wanted to ask if the Navy is satisfied with the progress on
this move to Ellington and are you looking for other joint
opportunities, particularly with the Coast Guard, that might be
beneficial for both the Navy and Homeland Security.
Mr. Penn. Madam Chairman, yes, ma'am, we are. The
Department is very pleased to cooperate with the proposal to
relocate the existing Reserve center, which will include Army,
Navy, and Marine Corps. We are looking for opportunities to
work with the Coast Guard. They are at several locations with
us at this time, and we are looking for ways to enhance this
opportunity.
Senator Hutchison. I appreciate that very much because I
think that with the Air Guard unit that is there, it really
does provide an opportunity for a truly joint use, and I hope
that everyone is going to be working together toward that goal.
The issue of the sale of the land that you addressed we
think is a very good way to go, and I think you have addressed
the questions there about using the money for the environmental
cleanup. Assuming that that final sale goes forward, that would
be what we would expect, that the money would go toward
environmental cleanup of both that and the previous BRAC
requirements.
Thank you very much, Mr. Penn. Now I will turn to my
colleague, Senator Feinstein.
Senator Feinstein. Thank you very much, Madam Chairman.
Mr. Secretary, welcome.
Mr. Penn. Thank you.
EL TORO LAND AUCTION
Senator Feinstein. I want to ask about the El Toro land
auction. It was recently closed. The final bid was $649.5
million. Now, this is just half of the $1.2 billion that was
forecast earlier in the process. My question really is why did
the bids fall so short of the projections, and what does that
portend, if anything, for other Navy BRAC land sales?
Admiral Shear. Ma'am, the only comment is that my
understanding is that the auction price of the land was in line
with our assessments of earlier. We hired an independent agency
to assess the value of the property. Some of the auction price
had to be sent to fees for the local municipality. So the
actual cost of the developer is higher than $649 million. My
information is that it is in line with what we were estimating.
Senator Feinstein. It is my understanding it is not, that
you said that it could bring as much as $1.2 billion. That was
the forecast. Now, it may be in line with the assessments, but
it also may well be that you made judgments that simply were
not correct. To come 50 percent in a booming land market is,
Admiral, kind of a sobering judgment.
Mr. Penn. Senator, if I may, we found in order to develop
the property, the City of Irvine will require the purchaser to
enter into development agreements that require the purchaser to
spend an additional $400 million in developer fees and dedicate
a substantial percentage of the property for public purposes.
So an additional $400 million will come off that $1 billion
figure.
Senator Feinstein. All I am saying is that you estimated--
not you but the Department estimated--that this would bring in
double what it does bring in. And now you are saying it is
going to bring even less because you are going to have to pay a
number of fees. So the entire $649.5 million is not available
to the Navy. Is that correct? It is correct.
Admiral Shear. My understanding is that the price was more
on the order of $1 billion, of which $649 will be available to
the Navy. We are not familiar with--or I am not--we will have
to report back to you on----
Senator Feinstein. Could you take a look at that?
Admiral Shear. Yes, ma'am.
Mr. Penn. Yes, ma'am.
Senator Feinstein. Could you let our staff know?
Admiral Shear. Yes, ma'am, we will do that.
Senator Feinstein. I would very much appreciate that.
MARINE CORPS FORCE RESTRUCTURING
I would like to ask a question about the $75 million for
Marine Corps force restructuring. The House in its draft report
on the supplemental roundly criticizes the Pentagon for
including this funding in a supplemental instead of in the
regular budget process. However, the House proposes funding all
but two of the projects requested in the supplemental to
support this initiative. The two projects that were not funded
were proposed for Camp Pendleton, California. The reasons cited
in the committee report is that the final basing decision for
the second new infantry battalion to be created by the force
restructuring is still uncertain.
General Williams. I might ask you this question. And
welcome. Although the Marine Corps force restructuring plan was
approved in 2004, this is the first time this committee has
heard of any military construction requirements associated with
it. So why was this sprung in a supplemental instead of being
presented in the regular budget process?
General Williams. First of all, Madam Chairman, Senator
Feinstein, on behalf of the marines and sailors and all of
their families, I really would like to just thank you for all
that you have done in supporting them in their current effort.
As you know, at the Marine Corps we are committed to ensuring
that we have a well-trained, well-cared-for, and a ready force
to go out and fight our Nation's wars. And the Marine Corps is
committed to ensure that we have the installations, that we
appropriately invest in our installations that would ensure
that they are capable of accomplishing such tasks.
On the questions of the MILCON projects in the 2005
supplemental, when the Commandant of the Marine Corps directed
a study of his force structure to ensure he had the capability
that he needed in order to continue to support the global war
on terrorism, he in fact directed this force restructuring
study group. When the group completed its work and the
recommendations of the group were approved, it was after the
opportunity to include those support requirements in the
baseline budget.
In addition, at the direction of the----
Senator Feinstein. Did you say that it was going to be in
the baseline budget?
General Williams. No, ma'am. I said it was after the
opportunity to include them in the baseline budget passed.
In addition, with the 2005 authorization, we got the
strength increased. It authorized an increase to 178,000,
allowing then the opportunity to begin to bring forces on line
during the summer of 2005. Of course, now, what we were faced
with is having units come on line without facilities and things
to support them. The facilities and this entire restructuring
was in support of the Global War on Terrorism.
Senator Feinstein. I got that. I got your answer.
General Williams. So at the direction of the administration
and in accordance with the precedent that had been set by
Congress in the past, the Department requested that those
incremental funds, those incremental costs of war funds then
would be included in the supplemental appropriation. So we,
thus, included those in the submission.
Senator Feinstein. Okay, I understand. Thank you.
What is the status of the site selection for the second
infantry battalion, and if it is not at Pendleton, where is it
going to go?
SECOND INFANTRY BATTALION
General Williams. Yes, ma'am. The siting of the second
infantry battalion--that decision is being discussed and
debated by senior leadership of our Commandant, as well as our
Marine Forces Command, Atlantic and Marine Forces Pacific. As I
understand it, the decision is, of course, based upon a number
of things. Some of it is the installations' ability to accept
the additional sites as well as having all the support
structure required to support the increased manning of those
facilities.
So as far as the actual location, we are looking at Camp
Lejeune, North Carolina. I would say that that decision has
been made that we would certainly look at them first in order
to get that----
Senator Feinstein. It is awful humid in the summer there.
General Williams. Yes, ma'am.
Senator Feinstein. Thank you very much and thank you for
your service to our country.
OUTLYING LANDING FIELD
Let me ask a question about the outlying landing field for
Washington County, North Carolina. Mr. Secretary, Congress has
provided a total of $57.6 million for land acquisition and
construction of facilities for the proposed F-18 outlying
landing field for North Carolina.
You referenced in your prepared testimony last month's
Federal court ruling which has barred the Navy from continuing
to acquire land for this project. Given this most recent legal
setback for the Navy on this, as well as the extent of local
opposition to the project, is the Navy reconsidering its
decision to locate the OLF in Washington County? Are you
looking at any other sites?
Mr. Penn. The Navy continues to believe that the EIS it
prepared was based on sound science and rigorous analysis and
met the requirements of NEPA. Nonetheless, the Navy is
carefully examining the court's ruling and examining available
alternatives.
Senator Feinstein. In your testimony, you note that the
2006 budget includes $26 million in available prior year funds
for this project. As I mentioned, we have appropriated a total
of $57.6 million. Are you saying that the Navy has already
obligated $31.6 million for this project, or are you holding
some of the previously appropriated funds in reserve for future
activities beyond 2006?
Mr. Penn. No, ma'am. Thus far, the Navy has obligated $8.1
million total, leaving $25.5 million unobligated before the
district court halted further expenditures. The 2006 budget
includes $23 million in prior year savings not related to OLF
unobligated balances. We believe that the Navy will be
successful in resolving the litigation and that these funds
will be needed for execution in fiscal year 2006.
Senator Feinstein. So you have spent $8 million. Is that
what you are saying?
Mr. Penn. Yes, ma'am, thus far.
Senator Feinstein. Is that of the $30 million that we
appropriated in 2005, or is it of earlier money?
Mr. Penn. Fiscal year 2004 and 2005, $33.6 million in
fiscal year 2004, 2005.
Senator Feinstein. I have that we appropriated $30 million
in 2005, is that correct, for this project?
Admiral Shear. Yes, ma'am.
Senator Feinstein. So that money is still there. Is that
correct?
Mr. Penn. Yes, ma'am. That is correct.
Senator Feinstein. And that money is not obligated. Is that
right?
Mr. Penn. To the best of my knowledge, yes, ma'am.
Senator Feinstein. So is there more than $30 million in
unobligated funds for this project?
Mr. Penn. No, ma'am, there is not.
Senator Feinstein. Okay, just $30 million. Well, I was just
told it is $27.6 million in 2004 that is unobligated. It is
appropriated but not used.
Mr. Penn. As I mentioned, ma'am, Congress appropriated a
total of $33.6 million fiscal year 2004 and fiscal year 2005
for OLF acquisition and horizontal construction. The Navy has
obligated $8.1 million total, leaving $25.5 million unobligated
before the district court halted our further expenditures.
Senator Feinstein. See, we have different figures. Our
total appropriation already done is $57.6 million, of which the
Navy has obligated $31.6 million. And you are telling me that
the $30 million which was appropriated in 2005, is still there.
It has not been spent. I think we need to get together and go
over this and see exactly where that is.
Mr. Penn. Yes, ma'am. I agree. I was told that fiscal year
2005 rescinded $24 million of the fiscal year 2004 funds. So we
will get together and coordinate those numbers.
Senator Feinstein. Yes. So that would be appreciated. Thank
you all very much. I appreciate it.
Thank you, Madam Chairman.
SUBCOMMITTEE RECESS
Senator Hutchison. Thank you. That ends the hearing. We
thank you very much. Welcome aboard. After 1 week, you have
just passed your first test, your rite of passage, and we very
much appreciate the information we have gotten today.
Mr. Penn. Well, thank you very much and thank you for all
you are doing for our great country.
Senator Hutchison. Thank you.
[Whereupon, at 4:23 p.m., Tuesday, March 8, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES
APPROPRIATIONS FOR FISCAL YEAR 2006
----------
TUESDAY, MARCH 15, 2005
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2:32 p.m., in room SD-138, Dirksen
Senate Office Building, Hon. Kay Bailey Hutchison (chairman)
presiding.
Present: Senators Hutchison, Craig, Feinstein, Byrd, and
Murray.
DEPARTMENT OF VETERANS AFFAIRS
Office of the Secretary
STATEMENT OF HON. R. JAMES NICHOLSON, SECRETARY
ACCOMPANIED BY:
JONATHAN B. PERLIN, M.D., Ph.D., MSHA, FACP, ACTING UNDER
SECRETARY FOR HEALTH, VETERANS HEALTH ADMINISTRATION
HON. VICE ADMIRAL DANIEL L. COOPER (USN RET.), UNDER SECRETARY
FOR BENEFITS, VETERANS BENEFITS ADMINISTRATION
RICHARD A. WANNEMACHER, ACTING UNDER SECRETARY FOR MEMORIAL
AFFAIRS, NATIONAL CEMETERY ADMINISTRATION
HON. TIM McCLAIN, GENERAL COUNSEL
RITA A. REED, DEPUTY ASSISTANT SECRETARY FOR BUDGET
OPENING STATEMENT OF SENATOR KAY BAILEY HUTCHISON
Senator Hutchison. Our meeting will come to order. I will
say that this is our first hearing for the Veterans Affairs
Department for our new subcommittee. I am very pleased to be
able to work with the Department of Veterans Affairs. Of
course, I have known the Secretary for a long time and have
worked with the previous Secretary for this important
Department. We are delighted that we now have this
jurisdiction.
I want to first tell you that we have votes starting at 3
o'clock, five votes. So I am going to dispense with my opening
statement because I want to hear from you, and then I want to
have time for questions. I think what we will do is get as far
as we can until the vote starts, and then we will see where we
are and perhaps have to take a small recess and come back. But
I will dispense with my opening statement and put it in the
record.
Welcome to you.
Let me call on my distinguished ranking member with whom I
work very closely. It is a great relationship. I think it is
safe to say we are both very happy to have the Veterans Affairs
Department in this subcommittee. With that, Senator Feinstein.
STATEMENT OF SENATOR DIANNE FEINSTEIN
Senator Feinstein. Thank you very much, Madam Chairman. I
echo your comments. I am delighted to work with you. It has
been many years, and I do not think we have had a problem yet.
So that is the good news.
Additionally, I would ask that you allow me to join you in
welcoming the lady and gentlemen assembled before us. I
particularly want to welcome Secretary Nicholson. We look
forward to working with you in this appropriation effort.
This is a new chapter for the Military Construction
Committee because we will be taking on the Veterans Affairs
matters, and I think between the chairman and me, we represent
two of the three States with the largest population of veterans
in America. So we have a very unique opportunity to work on
these challenges and opportunities.
That said, I do want to let you know where I am coming
from. I am very disappointed in the President's fiscal year
2006 budget request for the Department of Veterans Affairs.
This budget assumes savings of over $1 billion by doubling
prescription drug co-payments and imposing a $250 enrollment
fee on middle income veterans, many of whom are struggling to
make ends meet as it is on incomes as low as $26,000 a year.
More than 200,000 veterans would be adversely affected by these
proposals. I think they are unrealistic assumptions. Congress
has rejected them in the past and I hope we will continue to
reject them.
We are a Nation at war. The military has discharged more
than 244,000 veterans from Iraq and Afghanistan, and the VA has
already treated nearly 49,000 of those returning troops. Yet,
this budget turns a blind eye to the increasing demands on the
VA health care system caused by the influx of new veterans, as
well as the aging population of veterans from earlier wars.
Instead of reaching out to veterans, this budget proposes to
shut more veterans out of the health care system by charging
enrollment fees, by hiking co-pays on prescription drug
benefits, and by limiting long-term nursing home care.
This is not how we should be treating America's veterans. I
know that money is tight, but the administration should not try
to balance the books by forcing veterans to shoulder a greater
share of the burden of health care costs.
I know these are tough times, Mr. Secretary, but they must
be addressed. My goal as the ranking member of this
subcommittee is to do everything in my power to see that we
keep the promises we made to our veterans and, in so doing,
make the highest and best use of taxpayer dollars.
Now, Madam Chairman, I look forward to working with you on
this aspect of the budget. I also very much look forward to our
taking over the mantel of the VA/HUD Subcommittee which I think
did an excellent job in terms of appropriating for veterans and
veterans affairs. Thank you very much.
Senator Hutchison. Thank you.
Senator Murray.
STATEMENT OF SENATOR PATTY MURRAY
Senator Murray. Madam Chairman, thank you. It is a delight
to join you on this committee.
Mr. Secretary, it is an honor to be in front of you again.
We have seen each other I believe on three occasions now. I
serve on the Veterans Committee, Budget, and Appropriations. I
appreciate and understand the difficult task that is before
you.
Madam Chair, I know that you are short on time because of
the votes, and I will submit my statement for the record.
But let me just say this. I share the concerns of Senator
Feinstein. I do not believe that we have budgeted for the care
of our soldiers who are returning from war, nor for the ones
that are already in long waiting lines. You have heard me
before. You know that I am deeply concerned of the thousands of
members who are coming home who will be discharged but will not
have access to health care, particularly our Guard and Reserve
members. We know that you are talking about community outreach
clinics, but they are already turning poor patients away in our
States. So they cannot take up the burden of this.
Increasing co-pays, enrollment fees, closing our long-term
care facilities is the wrong thing to be doing at a time when
we have so many men and women who are serving us overseas.
So I will submit my statement for the record, but I feel
very strongly about this and will continue in any way I can to
help us increase the budget for our veterans because I believe
it is a promise that we have not kept and we need to follow up
on.
Senator Hutchison. Senator Byrd.
STATEMENT OF SENATOR ROBERT C. BYRD
Senator Byrd. Thank you, Madam Chairman, and I thank those
Senators who have preceded me. I wish to associate myself with
their remarks.
Mr. Secretary, during this time of war, few matters could
be more important than the care that our Nation gives to our
veterans. West Virginians are extremely proud of our veterans.
Those men and women who have chosen to serve our Nation are
owed an enormous debt. It is a moral responsibility that the
United States carries, as President Lincoln said, ``to care for
him who shall have borne the battle and for his widow and his
orphan.''
But the funding priorities outlined by President Bush in
his budget undermine our country's commitment to America's
veterans. The President proposes to double the co-payment for
prescription drugs, impose a new $250 annual user fee for
certain veterans, and continue a policy of turning away
hundreds of thousands of veterans from VA hospitals because
they are classified as low priority. According to the
Congressional Research Service, continuing this policy on low-
priority veterans will deny a staggering 522,000 veterans care
from VA hospitals by the end of this year.
The American people must be told how many veterans will
suffer under the President's budget proposal. The more than
190,000 veterans in West Virginia receiving health care from VA
medical centers in the Mountain State are threatened by these
significant hikes in fees and co-payments. The expected wave of
combat veterans from the Iraq and the Afghanistan wars will add
to the stress on our VA facilities.
Yet, instead of strengthening the VA medical system, the
Bush administration weakens it. The Nation's three largest
veterans organizations, the American Legion, the Veterans of
Foreign Wars, and the Disabled American Veterans, have called
the President's proposals the most tight-fisted, miserly budget
for veterans programs. And they are right.
I note that the President's $81.9 billion emergency
supplemental does not include a single dime for veterans health
care. Tax cuts and corporate giveaways are helping the super-
rich to get further ahead, but the President's budget leaves
veterans health care far behind. For this Senator, ``support
the troops'' means taking care of veterans after they come
home. Our brave fighting men and women deserve much more from
the White House than sloganeering and health care on the cheap.
Thank you, Mr. Secretary. Thank you, Madam Chairman.
Senator Hutchison. Thank you, Senator Byrd.
Senator Craig, who is the distinguished chairman of the
Veterans Affairs Committee and a member of our subcommittee.
STATEMENT OF SENATOR LARRY CRAIG
Senator Craig. Well, thank you, Madam Chairman, and again,
congratulations on chairing this newly structured committee and
the authority within. Also, let me congratulate Senator
Feinstein on her new position as ranking on this structure.
To all of you from the Veterans Administration, Mr.
Secretary, welcome before this most important committee. I have
had the privilege, Madam Chairman, of being in each one of
these lady's and gentleman's departments. I will go back better
understanding the operations of the Veterans Administration. It
is critically important for all of us to understand what it
does and the role it plays as we work with this very difficult
budget.
Just this past week--I have held hearings now with all the
veterans service organizations. The traditional joint hearings
between the House and the Senate were obviously well attended
and we heard from all of these marvelous organizations of their
concern for veterans and the urgency of much of the service
provided.
I think it is also noteworthy that over the last 4 years,
we have done more to improve veterans services than ever in the
history of our country, tremendous commitments of resources, a
9.4 percent average increase on an annualized basis. For that,
we can all be proud.
We are now debating a budget that is different than what
the President proposed by a substantial amount. We have a
budget before us that does not have any of the co-pays in it,
does not have any of the new fees in it. In fact, it is a
straight plus-up of nearly $1 billion without any
reconciliation instructions in it, Madam Chairman. That is a
significant improvement that serves the veterans of our country
the way we would want them to be served.
Does it serve every veteran who once bore the uniform of a
service of this country? It does not. Nor can we be expected as
a country to serve those who are not service-connected, who are
the 7's and 8's, who may well have their own health care
insurance, but now, because of the phenomenal work that the
Veterans Administration has done to improve the quality of
health care delivery within the system, we have created a
system that is now sought after by all, in large part because
if they can gain access through the front door, they gain free
health care, even though they may be among the most wealthy in
our country, but they have simply borne the uniform.
That is a question that we have to ask ourselves in a
fundamentally and fiscally responsible way, and that is the
question that is now before us on the floor of the Senate. I do
believe, Madam Chairman, we are going to be given a budget by
the Budget Committee and instructions to this subcommittee that
we can work with, that we can hand them to these administrators
who sit before us in a way that does meet most, if not all, of
the challenges, that addresses the concerns of Senator Murray,
as I have, that we have a lot of new, incoming veterans with
extraordinary needs because of the character of warfare today
and because of the character of health on the front lines and
medicine on the front lines of this war.
So there are a lot of challenges out there that I trust,
Madam Chairman, you and the ranking member can work with and
work with those of us in the authorizing committees to make
happen in defense of America's veterans. That is our charge. It
is our responsibility.
Thank you.
Senator Hutchison. Thank you, Mr. Chairman.
And now, Mr. Secretary, we would be pleased to hear from
you.
STATEMENT OF THE HONORABLE R. JAMES NICHOLSON
Secretary Nicholson. Thank you, Madam Chairman and members
of the committee. Good afternoon.
Allow me, if you would, to start by introducing those
experts that I have here and people who are far more
experienced at the Veterans Affairs Department than I at this
point. I would like to start on my far left with Tim McClain,
who is the General Counsel. My immediate left is Dr. Jonathan
Perlin, who is the Acting Under Secretary for Health. My far
right is the Acting Under Secretary for Memorial Affairs, Dick
Wannemacher. In the middle here on this side is Admiral Dan
Cooper, who is the Under Secretary for Benefits, and my
immediate right is Ms. Rita Reed, who is the Deputy Assistant
Secretary for Budget.
I would ask, Madam Chairman, if I could have my complete,
comprehensive written statement be submitted for the record,
but that I would be allowed to offer some highlights here of
the President's proposal before we take your questions.
Senator Hutchison. Without objection.
Secretary Nicholson. Madam Chairman, President Bush is
requesting a record $70.8 billion for the Department of
Veterans Affairs in fiscal year 2006: $37.4 billion for
entitlement programs and $33.4 billion for discretionary
programs. This total represents a 2.2 percent increase over the
fiscal year 2005 enacted level. The discretionary funding level
would represent an increase of $880 million, or 2.7 percent,
over the enacted level for 2005. The proposed mandatory
spending level represents a $639 million, or 1.7 percent,
increase over 2005. This budget represents a total increase of
47 percent with a 44 percent increase in discretionary funding
since the beginning of the Bush administration.
The President's 2006 proposal will allow us to meet the
health care and benefit needs of all newly separated veterans
of the conflicts in Iraq and Afghanistan to maintain the high
standards of health care quality, for which VA is now
nationally recognized while treating 5.2 million patients. It
will allow us to follow through on an historic realignment of
our health care infrastructure through the CARES process, to
reduce the backlog of disability compensation and pension
claims, and to continue the largest expansion of the national
cemetery system since the Civil War.
In the area of health care, in recent years the
Department's successes in delivering top-notch health care have
been stunning. I can brag about this because I had nothing to
do with it. But this is really a magnificent organization of
dedicated, competent, compassionate people. The VA exceeds the
performance of private sector and Medicare providers for key
health care quality indicators for which comparable data are
available. A recent RAND Corporation study also shows that
patients in VA's health care system are significantly more
likely to receive recommended care than our private sector
patients.
This is all the more impressive when you consider the
explosive growth in VA health care usage. In 2006, the VA will
treat about 1 million more patients than were treated in 2001.
The President's budget will ensure there is no slippage in our
high level of performance, even at these elevated patient
levels. Ninety-four percent of the primary care appointments
are scheduled within 30 days of the patient's desired date, and
93 percent of the specialty care appointments are also
scheduled within that time frame.
The President's 2006 budget asks that you enact two
important provisions affecting only priority 7 and 8 veterans:
an annual enrollment fee of $250 and an increase in pharmacy
co-payments from $7 to $15 for a 30-day supply of drugs.
The proposed enrollment fee is similar to the fee paid by
career military retirees enrolled in the TRICARE system and
some would argue even more justified. As you know, most TRICARE
enrollees have served on active duty for at least 20 years and
are former enlisted personnel with modest retirement incomes.
The proposed enrollment fee would apply to those veterans who
may have served as few as 2 years and who have no service-
connected disability and who do have reasonable incomes.
In addition, those veterans who are in priority group 8
have incomes above the HUD geographic means test.
I would like to turn to long-term care. This budget
provides all long-term care needs for veterans who are 70
percent or more service-connected. It also provides for
patients requiring short-term care subsequent to a hospital
stay and those needing hospice or respite care and those with
special needs such as ventilator dependence or spinal cord
injury.
To ensure fairness and consistency, the VA proposes similar
eligibility criteria across all institutional, long-term care
venues, VA, contract community, and State nursing homes. The
Department would continue to expand access to non-institutional
long-term care with an emphasis on community-based and in-home
care. In many cases this approach allows veterans to receive
these services in the comfort and familiar settings of their
homes surrounded by their families.
In order to be more prepared to care for our veterans
returning from Iraq and Afghanistan, the VA's 2006 medical care
request includes $1.2 billion for the prosthetics program,
which is $100 million over the fiscal year 2005 enacted level.
This will support the increasing workload associated with the
purchase and repair of prosthetics and sensory aids to improve
veterans' quality of life.
The budget will also provide $2.2 billion, or $100 million
over the 2005 level, to standardize and further improve access
to mental health services across the system, including PTSD.
We are also proposing a number of program enhancements to
cover out-of-pocket costs for emergency care for eligible
veterans in non-VA facilities, to exempt former POW's from co-
payments for VA extended care and exempt veterans from co-
payments for hospice care delivered in hospitals or at home.
We have projected increased health care management
efficiencies of 2 percent in 2006 which will yield about $600
million in savings.
The $750 million requested for CARES in 2006 brings the
total 3-year investment to $2.15 billion. At its core CARES
means greater access to higher quality care for more veterans
closer to where they live. Its impact is already being felt in
Chicago where the proceeds from an enhanced use lease of VA's
Lakeside Hospital property are being reinvested at VA's
Westside facility. This will lead to a new modern bed tower for
Chicago's veterans.
Finally, the $786 million proposed in support of VA's
medical and prosthetic research program would fund about 2,700
high-priority research projects to expand knowledge in areas
critical to veterans health care needs. The combination of VA
appropriations and funding from other sources would bring our
2006 research budget to nearly $1.7 billion.
Veterans benefits. The President's request includes $37.4
billion for the entitlement costs associated with all benefits.
Our request includes $1.26 billion for the management of the
Department's benefits program, which is 6.6 percent over the
2005 level. Veterans Benefits will continue to address an
increased volume of compensation claims from separating service
members and older veterans who had not previously submitted
claims and from current recipients.
The VA has made significant improvements to the claims
decision process, but clearly more must still be done. VA takes
seriously its obligation that every veterans claim must be
treated fairly and equitably, regardless of the locality. We
will and must be consistent. To address the issue of
consistency, the IG is performing an independent system-wide
review.
Also, Veterans Benefits leadership is looking at training,
medical exams, and other aspects of the system to ensure we
clearly are working toward a consistent, fair, and equitable
case-decision process for all veterans.
The President's request would also permit us to continue
the Benefits Delivery at discharge program. This program
enables active duty service members to file disability
compensation claims with VA staff at military bases, complete
physical exams, and have their claims evaluated before their
military separations or soon thereafter.
Burial benefits. The 2006 budget includes $290 million in
discretionary funding for VA's burial program, including
operating and maintenance expenses for the National Cemetery
Administration, capital programs, the administration of
mandatory burial benefits, and the State cemetery grants
program. This total is nearly $17 million, or 6.4 percent, over
the 2005 level.
It includes $90 million for cemetery construction projects.
We are requesting $41 million in major construction funding for
land acquisition for six new national cemeteries and $32
million for the State cemetery grants program. These resources
would enable us to increase to 82 percent, the percentage of
veterans having a veterans cemetery burial option within 75
miles of their homes.
Madam Chairman, I would be remiss if I did not note that
last year's VA National Cemetery Administration earned the
highest rating ever achieved by a public or private
organization in the 2004 American Customer Satisfaction Index,
a rating of 95 on a scale of 100.
PREPARED STATEMENT
So in closing, Madam Chairman, despite the many competing
demands for Federal funding, the President continues to make
veterans benefits and services a top priority of his
administration. Our veterans deserve no less.
We are now prepared to take your questions. Thank you.
[The statement follows:]
Prepared Statement of R. James Nicholson
Madam Chairman and members of the Committee, good afternoon. I am
happy to be here and I am deeply honored that the President has given
me the opportunity to serve as Secretary of Veterans Affairs. My
service in the United States Army was the defining experience of my
life and instilled me with a strong sense of duty and esteem for my
fellow veterans. I look forward to working with you and the thousands
of dedicated employees who are carrying out the compelling mission of
the Department of Veterans Affairs (VA) by ensuring the timely delivery
of high-quality benefits and services to those veterans in need of same
earned through their sacrifice and service in defense of freedom.
In his February 2 State of the Union Address, the President
underscored the need for America to restrain spending in order to
sustain our economic prosperity. As part of this restraint, it is
important that total discretionary and non-security spending be held to
levels proposed in the 2006 budget. The budget savings and reforms in
the budget are important components of achieving the President's goal
of cutting the budget deficit in half by 2009. This budget gives VA
what it needs to accomplish our priority mission and we urge the
Congress to support it. The 2006 budget includes more than 150
reductions, reforms, and terminations in non-defense discretionary
programs. The Department wants to work with the Congress to achieve
these savings.
I am pleased to be here today to present the President's 2006
budget proposal for VA. The request totals $70.8 billion--$37.4 billion
for entitlement programs and $33.4 billion for discretionary programs.
Our budget request for discretionary funds represents an increase of
$880 million, or 2.7 percent, over the enacted level for 2005, and a 47
percent increase since the beginning of the Bush Administration.
With the resources requested for VA in the 2006 budget, we aim to
build upon many of the Department's achievements that have dramatically
improved benefits and services to veterans and their families since the
President came to office. The most noteworthy accomplishments are that
VA:
--provides health care to about 1 million more patients
--improved the quality of patient care that sets the national
standard of excellence for the health care industry
--dramatically lowered the backlog of rating claims for disability
compensation and pension from a high of 432,000 to 321,000 (for
all claims the backlog peaked at over 600,000)
--reduced the average length of time to process compensation and
pension claims from a high of 230 days to approximately 160
days
--continued the largest expansion of the national cemetery system
since the Civil War to honor veterans with a final resting
place and lasting memorial that commemorates their service to
our country.
With strong support from the President, VA has made excellent
progress in sharpening its focus on more effectively meeting the needs
of those veterans who count on us the most--veterans with service-
connected disabilities, those with lower incomes, and veterans with
special health care needs. I fully support this strategy and am
committed to ensuring that our health care resources continue to be
concentrated on care for veterans most in need of the Department's
services. As an integral part of this focused strategy, we will make it
a top priority to provide ongoing benefits and services to the
servicemen and women who served in Operation Enduring Freedom and
Operation Iraqi Freedom. VA's goal is to ensure that every seriously
injured or ill serviceman or woman returning from combat receives
priority treatment and consideration. We will continue to work closely
with the Department of Defense (DOD) to develop ways by which to move
records more efficiently between the two agencies, share critical
medical information electronically, protect the health of troops
stationed in areas where environmental hazards pose threats, process
benefit claims as one shared system, and in every way possible, ease
their transition from active duty to civilian life.
MEDICAL CARE
The President's 2006 request includes total budgetary resources of
$30.7 billion (including $750 million for construction and $2.6 billion
in collections) for the medical care program, an increase of 2.5
percent over the enacted level for 2005, and more than 47 percent above
the 2001 level. The $750 million in construction will be devoted to the
Capital Asset Realignment for Enhanced Services (CARES) program,
bringing the total Department investment to $2.15 billion over 3 years.
Given the current fiscal environment, it is more important than
ever that VA concentrate its resources, policies, and strategies on
those veterans identified by Congress as high priority. The President's
2006 budget request includes policies and strategies used successfully
during the last few years to focus VA health care resources on veterans
with service-connected disabilities, those with lower incomes, and
veterans needing our specialized services. In particular, this budget
assumes continued suspension of enrollment of new Priority 8 veterans,
as this has proven to be the most effective vehicle through which to
focus our health care resources on our highest priority patients.
But maintaining the current enrollment policy will not in itself
ensure us sufficient resources for the care of those who need us the
most. The President's 2006 budget asks that you enact two important
legislative proposals--an annual enrollment fee of $250 and an increase
in pharmacy co-payments from $7 to $15 for a 30-day supply of drugs,
both pertaining to only Priority 7 and 8 veterans. This fee and the
increase in co-payments pertain only to veterans who have no
compensable service-connected disabilities and do have the means to
contribute modestly to the cost of their care. This budget asks these
veterans to assume a small share of the cost so that we may adequately
care for high-priority veterans.
The proposed enrollment fee is very similar to the fee the law
requires retired career service members to pay in order to participate
in TRICARE, and is arguably even more justified. As you know, TRICARE
enrollees generally must have served on active duty for at least 20
years, and many of them are former enlisted personnel with modest
retirement incomes. The proposed enrollment fee would apply to those
veterans who may have served as few as 2 years and who have no service-
connected disability. In addition, some of these veterans (those in
Priority Group 8) have incomes above the HUD geographic means test.
I recognize that Congress has not supported either of these
proposals during the past 2 years. However, these two legislative
proposals are consistent with the priority health care structure
Congress enacted several years ago, and will help us meet the needs of
our highest priority veterans. In addition, past utilization of VA's
health care services has demonstrated that veterans with higher incomes
(Priority 7 and 8 veterans) rely less on VA for delivering their health
care and usually have other health care options, including third party
insurance coverage and Medicare. An annual enrollment fee of $250 and
an increase in co-payments for pharmacy benefits from $7 to $15 would
give higher income, non-disabled Priority 7 and 8 veterans the option
of sharing a small portion of the cost of their care or utilizing other
health care options. Our high-priority patients typically do not have
other health care options, so we must act decisively to protect their
interests by making sure that sufficient resources are available to
handle their health care needs.
With medical care resources of $30.7 billion, we project that we
will treat more than 5.2 million patients. Those in Priorities 1 to 6
will comprise 78 percent of the total number of veteran patients in
2006. This will represent the third consecutive year during which our
high-priority veterans will increase as a percentage of all veterans
treated. In addition, about 9 of every 10 medical care dollars in 2006
will be devoted to meeting the health care needs of those veterans who
count on us the most.
Even with an increasing patient workload among our highest priority
veterans, we will continue our steadfast commitment to providing high-
quality and accessible health care that sets the national standard of
excellence for the health care industry. Our two primary measures of
health care quality--clinical practice guidelines index and prevention
index--focus on the degree to which VA follows nationally recognized
guidelines and standards of care that the medical literature has proven
to be directly linked with improved health outcomes for patients and
more efficient care. Our performance on the clinical practice
guidelines index, which focuses on high-prevalence and high-risk
diseases that have a significant impact on veterans' overall health
status, is expected to hold steady at the current high performance
level of 77 percent. As an indicator aimed at primary prevention and
early detection recommendations dealing with immunizations and
screenings, the prevention index is projected to remain at its existing
high rate of performance of 88 percent. VA continues to exceed the
performance of private sector and Medicare providers for all 15 key
health care quality indicators for which comparable data are available.
These indicators include cancer screening for early detection, and
immunization for influenza and pneumonia. In addition, they cover
disease management measures such as compliance with accepted clinical
guidelines in managing diabetes, heart disease, hypertensive disease,
and mental health.
The Department has greatly improved access to our health care
services during the last few years by opening additional outpatient
clinics, applying information technology strategies to streamline
administrative, business, and care delivery processes, and implementing
pay policies and human resource management practices to facilitate
hiring and retain sufficient health care workers to meet capacity
demands across the full continuum of care. These initiatives have
helped VA raise the percent of primary care appointments scheduled
within 30 days of the patient's desired date to 94 percent and the
percent of specialty care appointments scheduled within 30 days of the
patient's desired date to 93 percent. By continuing these types of
strategies, improving clinical efficiencies, and effectively utilizing
the resources requested in our 2006 budget, VA will maintain these high
performance levels.
The Department's record of success in health care delivery is
substantiated by the results of the 2004 American Customer Satisfaction
Index (ACSI). Conducted by the National Quality Research Center at the
University of Michigan Business School, the most recent ACSI survey
found that customer satisfaction with VA's health care system was
markedly above the satisfaction level for Federal Government services
as a whole. Results released in December 2004 revealed that inpatients
at VA medical centers recorded a satisfaction level of 84 out of a
possible 100 points, while outpatients at VA clinics registered a
satisfaction score of 83. Both of these are well above the government
average of 72.
While VA is excelling compared to its private sector counterparts,
we are committed to doing even better in the future. The results of a
recent study conducted by the RAND Corporation revealed that patients
in VA's health care system were more likely to receive recommended care
than private-sector patients. Quality of care was better for VA
patients on all measures except acute care, for which care was similar
for both patient groups. RAND researchers examined the medical records
of nearly 600 VA patients and about 1,000 non-VA patients with similar
health problems. They compared the treatment received by both groups to
well-established standards for medical care for 26 conditions. They
found that 67 percent of VA patients received care that met the latest
standards of the health care profession compared with 51 percent of
non-VA patients. For preventive care, such as vaccination, cancer
screening, and early disease detection and treatment, 64 percent of VA
patients received the appropriate care compared to only 44 percent in
the private sector. The RAND researchers attributed the difference in
patient care to technological innovations, such as VA's computerized
patient records, and to performance measurement policies holding top
managers accountable for standards in preventive care and the treatment
of long-term conditions.
As another means by which to ensure sufficient resources are
available to address the health care needs of those veterans who count
on us the most, VA is proposing to revise the eligibility criteria for
long-term care services to focus on the following groups of veterans:
--those injured or disabled while on active duty, including veterans
who served in Operation Enduring Freedom and Operation Iraqi
Freedom
--those catastrophically disabled
--patients requiring short-term care subsequent to a hospital stay
--those needing hospice or respite care.
These eligibility criteria would be applied to VA-sponsored long-
term care services, including VA, community, and State nursing homes.
This long-term care strategy will save approximately $496 million that
will be redirected toward meeting the health care needs of veterans
with service-connected disabilities, those with lower incomes, and
veterans with special health care needs.
In 2006 the Department will continue to expand access to non-
institutional long-term care services to all enrolled veterans with an
emphasis on community-based and in-home care. In many cases this
approach allows VA to provide these services to veterans where they
live and to care for them in the comfort and familiar setting of their
home surrounded by their family. During 2006 VA will increase the
number of patients receiving non-institutional long-term care, as
measured by the average daily census, to about 35,500. This total is
over 50 percent above the number of patients receiving this type of
care in 2001. Funding for non-institutional long-term care in 2006 will
be about 67 percent higher than the resource level devoted to this type
of health care service in 2001.
VA's 2006 medical care request includes $1.2 billion ($100 million
over the 2005 enacted level) to support the increasing workload
associated with the purchase and repair of prosthetics and sensory aids
to improve veterans' quality of life. VA is already providing
prosthetics and sensory aids to many military personnel who served in
Operation Enduring Freedom and Operation Iraqi Freedom and the
Department will continue to provide them as needed.
The President's 2006 budget includes $2.2 billion ($100 million
over the 2005 level) to continue our effort to improve access to mental
health services across the country. These funds will help ensure VA
provides standardized and equitable access throughout the Nation to a
full continuum of care for veterans with mental health disorders. The
Department will place particular emphasis on providing care to those
suffering from post-traumatic stress disorder as a result of their
service in Operation Enduring Freedom and Operation Iraqi Freedom.
We have included a management efficiency rate of 2 percent which
will yield about $600 million in 2006. We continue to monitor and
emphasize the need for performance that results in minimizing unit
costs where possible, and eliminating inefficiency in the provision of
quality health care. To that end, we have included within this savings
target, $150 million that will be achieved through implementation of
improved contracting practices with medical schools and other VA
affiliates for scarce medical specialties. This is a long-standing
issue for which the Department is aggressively implementing management
changes to ensure fair pricing for the services provided by our
affiliates.
As a result of continual improvements in our medical collections
processes and the policy changes presented in this budget request, we
expect to collect about $2.6 billion in 2006 that will substantially
supplement the resources available from appropriated sources. This
figure is $635 million (or 32.5 percent) above the 2005 estimate, with
two-thirds of the increase due to the two important legislative
proposals (the $250 enrollment fee and the increase in pharmacy co-
payments), and is more than 48 percent higher than the 2004 collections
total. VA has an expanded revenue improvement strategy that focuses on
modeling industry best performance by establishing industry-based
performance and operational metrics, developing technological
enhancements, and integrating industry-proven business approaches,
including the establishment of centralized revenue operation centers.
There are two electronic data initiatives underway that will add
efficiencies to the billing and collections processes. The electronic
and insurance identification and verification project is providing VA
medical centers with an automated mechanism to obtain veterans'
insurance information from health plans that participate in this
electronic data exchange. We are pursuing enhancements which will
provide additional insurance information stored by other government
agencies. Our second initiative will result in electronic outpatient
pharmacy claims processing to provide real-time claims adjudication.
capital asset realignment for enhanced services (cares)
The President's budget request includes $750 million in 2006 to
continue the CARES program that renovates and modernizes VA's health
care infrastructure and provides greater access to higher quality care
for more veterans, closer to where they live. About $50 million of this
total relates to the sale of assets and enhanced use proceeds of the
Lakeside hospital in Chicago. The budget request provides a 3-year
(2004-2006) investment total of $2.15 billion committed to this
historic transformation of our health care system. These resources will
be used to address our prioritized list of major capital investments.
The proposed projects for 2006 will advance the CARES program by
providing construction funding for five projects for which design work
has already started, as well as two additional projects to be initiated
in 2006. All of these capital projects support the recommendations
included in the CARES Decision report. About half of the CARES funding
requested for 2006 will be devoted to three major construction
projects:
--Las Vegas, Nevada, New Medical Facility--$199 million to complete
phase two construction, providing up to 90 inpatient beds, a
120-bed nursing home care unit, ambulatory care center, and
administrative and support functions, all of which will expand
capacity and increase the scope of health care services
available; VA is working with DOD to ensure mutual needs are
met
--Cleveland, Ohio, Cleveland-Brecksville Consolidation--$87.3 million
to complete phase two construction; this project will
consolidate and co-locate all clinical and administrative
functions of a two-division medical center at the Wade Park VA
Medical Center, leading to annual cost savings of more than $23
million and enhancing the quality of care
--Pittsburgh, Pennsylvania, Consolidation of Campuses--$82.5 million
to complete phase two construction; this project will
consolidate a three-division health care delivery system into
two divisions which will improve patient care by providing a
state-of-the-art health care environment and reducing operating
expenses.
Our capital investment planning process and methodology involve a
Department-wide approach for the use of capital funds and ensure all
major investments are based upon sound economic principles and are
fully linked to strategic planning, budget, and performance measures
and targets. All CARES projects have been reviewed using a consistent
set of evaluation criteria that address service delivery enhancements,
safeguarding assets, support of special emphasis programs and services,
capital portfolio goals, alignment with the President's Management
Agenda, and financial priorities.
MEDICAL AND PROSTHETIC RESEARCH
The President's 2006 budget includes $786 million to support VA's
medical and prosthetic research program. This resource level will fund
nearly 2,700 high-priority research projects to expand knowledge in
areas critical to veterans' health care needs, most notably research in
the areas of aging, acute and traumatic injury, the effects of military
and environmental exposures, mental illness, substance abuse, cancer,
and heart disease.
The requested level of funding for the medical and prosthetic
research program will position the Department to build upon its long
track record of success in conducting research projects that lead to
clinically useful interventions that improve veterans' health and
quality of life. Examples of some of the recent contributions made by
VA research to the advancement of medicine are:
--development of an artificial nerve system that enables a patient
with upper-limb paralysis to grasp objects
--creation of a new collaborative model for treating depression in
older adults, the application of which potentially saves lives,
reduces patients' level of pain, and improves their overall
functioning
--the finding that proper intake of cereal fiber and vitamin D are
among the best ways to prevent serious colon polyps that may
lead to colorectal cancer
--development of an oral drug that halts the deadly action of the
smallpox virus.
In addition to VA appropriations, VA researchers compete and
receive funds from other Federal and non-Federal sources. Funding from
external sources is expected to continue to increase in 2006. Through a
combination of VA resources and funds from outside sources, the total
research budget in 2006 will be nearly $1.7 billion.
VETERANS' BENEFITS
The Department's 2006 budget request includes $37.4 billion for the
entitlement costs mainly associated with all benefits administered by
the Veterans Benefits Administration (VBA). This total includes an
additional $812 million for disability compensation payments to
veterans and their survivors for disabilities or diseases incurred or
aggravated while on active duty. Recipients of these compensation
benefits are projected to increase to 3 million in 2006 (2.7 million
veterans and 0.3 million survivors, or 400,000 more than when the
President came to office).
The President's budget request includes $1.26 billion for the
management of the following benefits programs--disability compensation;
pension; education; vocational rehabilitation and employment; housing;
and life insurance. This is $77 million, or 6.6 percent, over the 2005
level. As a result of the enactment of the Consolidated Appropriations
Act, 2005 (Public Law 108-447), an additional $125 million will be made
available to VBA (through a transfer of funds from medical care) for
disability benefits claims processing. Of this total, $75 million will
be used during 2005 and the remaining $50 million will be used in 2006.
The overwhelming majority of these funds will be used to address the
increased volume of compensation claims from both separating service
members and older veterans who had not previously submitted claims.
As a Presidential initiative, improving the timeliness and accuracy
of claims processing remains the Department's top priority associated
with our benefits programs. Last year the timeliness of our
compensation and pension claims processing improved by 9 percent (from
182 days in 2003 to 166 days in 2004). While we were successful in
reducing the time it takes to process claims for compensation and
pension benefits, we were not able to improve timeliness as much as we
had projected at the beginning of the year. Entering 2004, VA was well
positioned to meet our performance goals pertaining to the timeliness
of processing claims. However, a September 2003 decision by the Federal
Circuit Court in the case of the Paralyzed Veterans of America et. al.
v. the Secretary of Veterans Affairs required VA to keep veterans'
claims open for 1 year before making a decision to deny a claim. As a
result, decisions on over 62,000 claims were deferred, many for as much
as 90 days. While the President signed correcting legislation in
December 2003, the impact of the court decision in the early portion of
2004 was substantial, as the number of pending claims had grown
dramatically. VA made significant progress during the last half of the
year, but we were not able to fully overcome the negative effects from
this court decision on our claims processing timeliness.
We have had to revise our claims processing timeliness goals for
the next 2 years due, in part, to the lingering effect of the Federal
Circuit Court decision. Also having an impact on the timeliness of
processing is the increasing volume of disability claims and the
complexity of the claims. In addition, VA will continue to face the
retirement of staff members highly experienced in processing claims.
While we have established a sound succession plan, the new employees we
are hiring will require both extensive training and substantial claims
processing experience in order for them to reach the productivity level
of those leaving the Department.
During 2005 we expect to reduce the average number of days to
process compensation and pension claims to 145 days, an improvement of
12.7 percent from the 2004 performance level. With the resources
requested in the 2006 budget, we will be able to maintain this improved
timeliness in support of this Presidential initiative. In addition, we
will reduce the number of pending claims for compensation and pension
benefits to 283,000 by the end of 2006, a reduction of 12 percent from
the total at the close of 2004.
We will increase our efforts to ensure the consistency of our
disability evaluations from one regional office to another. VA has made
significant improvements in both the accuracy and consistency of its
benefit entitlement decisions due to increased quality assurance
efforts and more focused training of claims adjudicators. However, more
must be done to ensure the Department meets its commitment to treating
every veteran's claim fairly and equitably regardless of locality. A
system-wide review of the rating program for disability compensation is
underway. In addition to this independent review, the Veterans'
Disability Benefits Commission has been established to carry out a
study of the statutory benefits that are provided to compensate and
assist veterans and their survivors for disabilities and deaths
attributable to military service. This commission is expected to
examine and make recommendations concerning the appropriateness of
these statutory benefits, the appropriateness of the level of the
benefits, and the appropriate standard or standards for determining
whether a disability or death of a veteran should be compensated. VA's
efforts to improve the consistency of disability evaluations are
supported in the 2006 budget by a request for $1.2 million for skills
certification testing and $2.6 million for continued development of
computer-based training tools. These initiatives will complement other
ongoing efforts supported by our budget that address the issue of
consistency and accuracy. Among these are:
--revision of all of the regulations that govern the compensation and
pension programs in plain language to ensure that the rules can
be applied consistently and fairly
--in-depth data analysis of benefit decisions to identify potential
areas of inconsistency, increasingly possible with our new
information technology applications and tools
--centralized processing of appeals remanded by the Board of
Veterans' Appeals, and ongoing quality reviews of appealed
claims decisions.
An important and successful component of VA's vision for providing
a seamless transition for service members separating from active duty
is the Benefits Delivery at Discharge (BDD) program. The BDD program
enables active duty service members to file disability compensation
claims with VA staff at military bases, complete physical exams, and
have their claims evaluated before, or closely following, their
military separation dates. Transitioning service members benefit
greatly from the BDD program, which has been a vital part of the
Department's strategy for improving timeliness and accuracy of
disability compensation claims processing.
We believe the BDD program provides opportunities to not only
benefit transitioning service members through timely and accurate
claims processing, but also to bring new processing improvements and
efficiencies to the system through consolidation of claims evaluation
activities. An initiative is currently underway to consolidate
disability compensation rating and authorization actions on all BDD
claims to two sites nationwide. VA staff will continue work with
transitioning service members at military bases to establish claims and
arrange for timely medical exams, thereby retaining these successful
aspects of the BDD program.
In support of the education program, the 2006 budget proposes $7.8
million for continued development and implementation of the Education
Expert System. The requested funds will be used to first transition
education processing to VBA's corporate environment, followed by the
development and deployment of a processing system that receives
application and enrollment information electronically and processes
that information in the new corporate environment without human
intervention. While it will be a number of years before this system is
fully deployed, it will ultimately lead to substantial improvements in
education claims processing timeliness.
In April 2004 the Department's Vocational Rehabilitation and
Employment Task Force released its report containing more than 100
recommendations on how to improve service to disabled veterans. The
focus of the report was on development and implementation of a new,
integrated service delivery system based on an employment-driven
process. In response to the task force's recommendations, VA is
including $4.4 million in the 2006 resource request to be used for
establishing a job resource lab in each regional office. These labs
will include all of the necessary equipment, supplies, and resource
materials to aid VA staff and veterans in conducting comprehensive
analyses of local and national job outlooks, developing job search
plans, preparing for interviews, developing resumes, and conducting
thorough job searches. These self-service job resource labs will assist
veterans in acquiring suitable employment through the use of a
comprehensive on-line employment preparation and job-seeking tool.
In order to make the delivery of VA benefits and services more
convenient for veterans and more efficient for the Department, we are
requesting $4.4 million for the collocation and relocation of some
regional offices. This effort may involve collocations using enhanced-
use authority, which entails an agreement with a private developer to
construct a facility on Department-owned grounds and then leasing all
or part of it back to VA. At the end of these long-term lease
agreements, the land and all improvements revert to VA ownership.
BURIAL
The President's 2006 budget includes $290 million in discretionary
funding for VA's burial program, which includes operating and
maintenance expenses for the National Cemetery Administration, capital
programs, the administration of mandatory burial benefits, and the
State Cemetery Grants program. This total is nearly $17 million, or 6.4
percent, over the 2005 enacted level.
The 2006 request includes $167 million in administrative funding
for VA's burial program, an increase of $7.3 million (or 4.6 percent)
from the 2005 enacted level. Within this total, $156 million is for the
operations and maintenance of VA's national cemeteries and $11 million
is for the administrative processing of claims for burial benefits. The
additional funding will be used to meet the growing workload at
existing cemeteries, primarily by increasing staffing and contract
maintenance. The growth in workload is a direct result of the aging of
the veteran population. The annual number of veteran deaths continues
to rise and VA projects an increase in interments of about 4 percent a
year for the next several years.
Our budget request for the burial program includes $90 million for
construction projects. Of this total, $65 million is for major projects
and $25 million is for minor projects. Consistent with the provisions
of the National Cemetery Expansion Act of 2003, we are requesting $41
million in major construction funding for land acquisition for six new
national cemeteries in the areas of Bakersfield, California;
Birmingham, Alabama; Columbia-Greenville, South Carolina; Jacksonville,
Florida; Sarasota, Florida; and southeastern Pennsylvania. The 2006
request also includes funding to develop an annex for the expansion of
Fort Rosecrans National Cemetery in Miramar, California. In addition,
this budget provides $32 million for the State Cemetery Grants program.
Our resource investments in the burial program produce positive
results in service delivery to veterans and their families. We will
expand access by increasing the percent of veterans served by a burial
option within 75 miles of their residence to 82.2 percent in 2006,
which is 6.9 percentage points above the 2004 figure. While our 2004
performance was extremely high in several key areas, we will continue
to improve our performance in 2006. We have established the following
performance goals for 2006:
--increase to 96 percent (from 94 percent in 2004) those who rate the
quality of service provided by the national cemeteries as
excellent
--increase to 99 percent (from 98 percent in 2004) those who rate
national cemetery appearance as excellent
--increase to 89 percent (from 87 percent in 2004) the proportion of
graves in national cemeteries marked within 60 days of
interment.
These performance improvements will further enhance the outstanding
reputation of VA's National Cemetery Administration which, in 2004,
earned the highest rating ever achieved by a public or private
organization in the American Customer Satisfaction Index (ACSI). These
results demonstrated that the Department's national cemeteries produced
a customer satisfaction rating of 95 out of a possible 100 points. This
is two points higher than the last survey conducted in 2001 when VA's
national cemeteries also ranked number one among Federal agencies in
customer satisfaction.
MANAGEMENT IMPROVEMENTS
VA continues to aggressively pursue a variety of initiatives aimed
at ensuring we apply sound business principles to all of the
Department's operations. Two of our most successful management
improvement efforts during the last year focus on the strategic
management of human capital and capital asset management.
As an integral component of our succession planning activities, we
released a state-of-the-art ``VA Recruitment'' CD-ROM in September 2004
promoting the Department as an employer of choice. We distributed this
to colleges and universities, military transition centers, veterans
organizations, and VA vocational rehabilitation centers, offices, and
medical centers. This initiative creates a corporate recruitment
marketing approach that will give VA a competitive edge in attracting
highly-qualified career applicants. The CD-ROM uses graphics and video
streaming to present a wide spectrum of career opportunities and
describes VA's goals and services, occupations, and the benefits of
working for the Department. We will continue to focus on creative
marketing initiatives and outreach to prospective applicants.
VA has also launched a Capital Asset Management System (CAMS) which
is an integrated, Department-wide system that enables us to establish,
analyze, monitor, and manage our portfolio of diverse capital assets
through their entire lifecycle from formulation through disposal. CAMS
provides a strategic view of existing, in-process, and proposed asset
investments across all VA program offices and capital asset types. All
offices now use this shared system to collect and monitor real property
and capital asset information. In addition, VA has been approached by
numerous agencies, including the Departments of Defense, Homeland
Security, Commerce, and Interior to explore the replication of CAMS in
their organizations.
VA's progress in this area places it in the forefront of other
Federal agencies in terms of its ability to meet the real property
performance measures and guidelines that were recently finalized by the
newly created Federal Real Property Council.
We are currently in the process of fully evaluating all of the
information gathered during the operational tests of the Core Financial
and Logistics System (CoreFLS) conducted last year. This year we will
complete a comprehensive analysis of the product and any existing
configuration gaps, examine lessons learned from the pilot tests, and
reevaluate our business processes. This will provide us with the
information needed to refine the system as well as develop improved
change management, training, and implementation procedures that are
critical to successful deployment. In anticipation of an enhanced
financial management system moving forward to full deployment at VA
facilities nationwide, the Department's 2006 budget includes $70.1
million for this project.
In support of one of the primary electronic government initiatives
for improving internal efficiencies and effectiveness, the Department's
2006 budget provides $8 million to continue the migration of VA's
payroll services to the Defense Finance and Accounting Service (DFAS).
This initiative will consolidate 26 Federal payroll systems down to 2
Federal payroll provider partnerships. VA is working with DFAS on all
required tasks to ensure successful migration.
CLOSING
In summary, Madam Chairman, our 2006 budget request of $70.8
billion will provide the resources necessary for VA to:
--provide timely, high-quality health care to more than 5.2 million
patients; 78 percent of all veteran patients will be veterans
with service-connected disabilities, those with lower incomes,
or veterans with special health care needs
--maintain the 2005 performance level of 145 days, on average, to
process compensation and pension claims
--increase access to our burial program by ensuring that more than 82
percent of veterans will be served by a burial option within 75
miles of their residence.
I look forward to working with the members of this committee to
continue the Department's tradition of providing timely, high-quality
benefits and services to those who have helped defend and preserve
freedom around the world.
That concludes my formal remarks. My staff and I will be pleased to
answer any questions.
Senator Hutchison. Thank you very much, Mr. Secretary.
I would like to have a 5-minute round. Each of us can have
one round and then we will definitely have a second and maybe a
third.
First of all, Mr. Secretary, I certainly agree with the
Veterans Administration's principle that we should focus on
care for priority 1 through 6 veterans. I think everyone would
agree that that should be our highest priority. Do you agree
that we must have full funding for those priority 1 through 6
veterans, whatever else happens?
Secretary Nicholson. Yes, Madam Chairman. This budget
reflects that. We have a mandate to take care of those veterans
who need us the most, and that is those veterans who have been
injured as a result of their service or become ill, including
mental illness as a result of that service, those that are down
and out, the poor, indigent, and those in need of unique,
special care, and that is those categories.
Senator Hutchison. This is my question. If the policy
provisions regarding 7's and 8's with the added enrollment fees
and co-payments were not enacted, would there still be full
funding in this budget for priorities 1 through 6?
Secretary Nicholson. Yes, Madam Chairman, there would. We
would still be able to take care of those priorities.
Senator Hutchison. Thank you.
THIRD PARTY COLLECTIONS
Along that line, I understand that you have the authority
to collect payments from private health insurance for the cost
of treating veterans' non-service-connected disabilities. So
when we are looking at the priority 7's and 8's, which have
become really the growth area for the medical care for
veterans, according to the GAO your present collection rate is
only 41 percent and your fiscal year 2006 budget submission
sets a target of only 41 percent. I wondered why this
collection target seems low and if you are looking at trying to
improve that collection rate and perhaps a different way to get
more income from the 7's and 8's to make sure that we are doing
the best we can with what we have.
Secretary Nicholson. Let me respond in part, Madam
Chairman, and then I am going to ask Dr. Perlin to comment. It
is 6 weeks today that I have been Secretary, so there are just
one or two things that I do not know yet.
Senator Hutchison. We understand totally and we are not
expecting perfection until next year.
Secretary Nicholson. It is a very important question. You
will note that in this budget proposal it shows collections
being up by 15 percent over last year. I will say that I think
the VA has shown a commendable transformation in its culture,
going from virtually no collections, a no-collection culture
habit mandate, to in a very short time, collecting a
significant amount of money. But it is still a work in process.
It is very important.
I will ask Dr. Perlin if he would comment further.
Senator Hutchison. Dr. Perlin.
Dr. Perlin. Thank you, Madam Chairman. The Secretary is
absolutely right in terms of our Veterans Health Administration
learning how to collect, and the progress has been substantial.
In fact, in 2001, our collections were on the order of $700
million. Today they will approach in the 2006 budget on the
order of $2.1 billion. That budget builds in an 11 percent
increase, or collections of $211 million additional.
I think the 41 percent is important because we need to keep
moving up, but I would note that it is unadjusted for Medicare.
As you know, we cannot collect for Medicare, but the figure
actually reflects the funds that we are not able to collect. So
actually it is artificially deflated. We do benchmark against
private sector, and we have been using gross days revenue
outstanding, and I am pleased to say that we are closing in on
setting aggressive targets. But your point is well taken. We
will continue to push the aggressive collections.
[The information follows:]
The Department of Veterans Affairs (VA) is not allowed (by law) to
bill and collect from Medicare. The unadjusted billing to collection
ratio of 41 percent reflects the large number of over-65, Medicare-
eligible population that VA serves which cannot be billed or collected.
VA maintains an adjusted billing to collection ratio which accounts for
the Medicare-eligible population and this ratio has been in the 75
percent range for fiscal year 2004 and fiscal year 2005 and provides a
more realistic measure of performance.
To improve the collections to billings Medicare-adjusted ratio, VA
is taking the following actions:
--Metric Calculation.--Collections to billings calculation attempts
to quantify net billings by projecting net amounts due from
third parties and secondary payors. The current calculation
utilizes national data and does not fully reflect VISN
differences in population compositions (veterans older and
younger than 65) and Health Maintenance Organization (HMO)
penetration that impacts this performance metric.
--Action.--The Veterans Health Administration (VHA) is working to
enhance the metric calculation for fiscal year 2006 to
incorporate population variations and HMO penetration
differences that could impact overall results. Also, full
implementation of the e-MRA (Medicare-equivalent remittance
advice) system throughout VHA will improve the specificity
of predicting these net realizable amounts.
--Denial-Management Tracking System.--The private sector approaches
aggressively the identification, tracking, and resolution of
third-party denials. VHA is presently establishing several
best-practice denial-management initiatives at the Veterans
Integrated Service Network (VISN) level.
--Action.--VHA is working to compile the best practices from the
VISN pilots and roll out a comprehensive national denial-
management strategy in the upcoming months.
--Formalized Managed-Care Contracts.--The private sector has the
ability to project net billings with great specificity due to
established contract rates with managed-care payors, which can
easily be loaded into their systems to track deviations due to
over- and under-payments.
--Action.--VHA has established a National Payor Compliance Office
(NPCO) to assist VISNs in addressing negotiations
strategically with managed-care payors. As this process
matures, VHA will be able to track expected reimbursements
better, similar to the private sector.
--Enhanced Development of Revenue-Cycle Productivity Tools.--The
private sector has invested considerable time and effort to
ensure that the necessary staff and resources are dedicated to
the revenue cycle. VHA actively monitors monthly performance of
its facilities though use of a web-based system (POWER) that
reports performance using a stop-light color-coded approach.
This system is considered a best practice when compared to
private-industry standards. The VISNs have also adopted
monitoring tools to measure productivity and to ensure that
appropriate resources are dedicated to the revenue-cycle
collection process.
--Action.--VHA is taking a leadership role to extend nationally the
best practices identified at the VISN level to improve
overall effectiveness in the collection process.
Senator Hutchison. I guess that would be my point. Would
you continue to look for ways where there is an outside
insurer, a private insurer, that we would make as many of those
collections as absolutely possible to offset costs?
My time is up, and I would like to give my colleagues a
chance to have a first round of questions before this vote
starts. Senator Feinstein.
Senator Feinstein. Thanks very much, Madam Chairman. I
appreciate that.
GRANTS FOR STATE EXTENDED CARE FACILITIES
Mr. Nicholson, the President's fiscal year 2006 budget
request for the VA suspends grants for the State extended care
facilities. Could you explain to us why it is necessary to
impose a 1-year moratorium on grants for construction of long-
term extended care facilities when there is such a need for VA
homes throughout this Nation? How would this affect the current
priorities list for funding under this program? Do you
anticipate altering this list in fiscal year 2007?
California, my State, with three homes and 2.3 million
veterans is one of two States classified under great need in
regard to home funding. The State plans to request $125 million
in fiscal year 2007 under this grant program to fund its
largest project to date which is the greater Los Angeles,
Ventura County home which includes three separate facilities.
How would the 1-year moratorium impact funding for this
project?
So there are essentially three questions in one. If you
want me to go one by one, I will.
Secretary Nicholson. Thank you, Senator. It is an important
area. Let me address the suspension of the grants. In this
budget, I think it would reflect a reduction of just over $100
million for this coming fiscal year 2006. I am going to ask Dr.
Perlin if he would address the specifics as to California.
Dr. Perlin. Thank you, Senator. Let me start with the piece
of the question you asked about the 2005 commitments. The
commitments are proceeding as was planned. I would have to get
back to you with the specific information on California.
Senator Feinstein. And how will this affect 2007?
Dr. Perlin. I think I would be unable to speculate in terms
of the future.
Senator Feinstein. All right. So what you are telling me
then is you do not know about California. You do not know about
the future, and it is a 1-year moratorium essentially.
Could you tell me what the rationale for a 1-year
moratorium is when the needs are so great?
[The information follows:]
The fiscal year 2006 VA budget proposes a 1-year moratorium
on new grants to States for construction and renovation of
extended care facilities. This will permit VA to complete an
assessment of its nationwide institutional long-term care
infrastructure and ensure that future construction aligns with
the areas of greatest projected need. Grants that have already
been awarded will not be affected by the 1-year moratorium.
VA has already committed to all planned fiscal year 2005
projects on the current Priority List. The States are currently
completing the requirements for fiscal year 2005 grant awards.
VA has committed the maximum fiscal year 2005 appropriations
and the remaining fiscal year 2004 carryover funds to these
projects.
The Priority List is revised annually, as of August 15th.
All new and existing pending projects are ranked and included
in the annual list. Once approved by the Secretary, the list is
used to identify ranked projects and commit funding for
projects for that fiscal year award or to finalize
conditionally approved projects. For fiscal year 2007, VA would
follow the same procedures and commit funds available at that
time to the projects in rank order. VA cannot predict at this
time how the California project will be ranked in fiscal year
2007 or whether there will be sufficient appropriations to fund
it.
Secretary Nicholson. Well, I can address the issue in
brief, Senator. If you take a look at the VA as a whole, it has
gone through a major transformation from being a hospital-
centered medical care provider to a clinical-centered provider
and more outreach and moving out more to where the veterans
are.
The same philosophy is operating in extended care. We are
finding that it is very often both more efficient and effective
to treat institutional care people or what used to be
institutionalized people in a non-institutionalized setting
using the new tools that are available of telemedicine,
telehealth, social workers, people being allowed to remain in
their homes or closer to their homes.
Senator Feinstein. I think I see where you are going, and
correct me if I am wrong. Is this then an effort to begin to
phase out long-term care for veterans and sort of go to an
outpatient treatment process?
Secretary Nicholson. Well, I think there are certainly some
people that will need long-term care. There are some people who
are not candidates for the new capabilities that we have for
extended non-institutionalized care. So no, I do not think it
is a path toward the end of them, but it is a trend and one
that is finding a lot of satisfaction among the people being
treated that remain at home. They have a social worker come
there and provide them with care and bathing. With the
electronics that we have now, we can take blood pressure, get
their blood sugar, and all that on-line daily with a medical
mentor talking to them in their home. If they need care, we can
then move them.
Senator Feinstein. Let me just, if I might, say a word on
behalf of the 2.2 million veterans in my State. California is a
very high cost-of-living State. The extended care facilities
are very expensive for the most part, particularly if an
individual does not have Medicaid or Medicare. I guess what I
hope is that this is just not an effort to absolve us of the
Federal responsibility to take care of veterans in later years
who cannot take care of themselves and push it onto the State
because I think the veterans are not then going to be well
cared for. So I will leave you with that.
Senator Craig.
Senator Craig. Well, thank you very much. I think we are
going to run out of time rapidly here, Senator Feinstein, as it
relates to a vote that is now underway.
Mr. Secretary, from my initial visit with you and our
initial hearing on your budget, we have proposed a variety of
changes, somewhat different from what you proposed, which we
think will offer a little more flexibility in funding and still
meet all of the needs that you have projected are out there and
the savings that you have projected are out there.
PER DIEM PAYMENT POLICY TO STATE HOMES
There are many that concern me and I think concern all of
us, but the State home program, by most accounts, has been a
very successful partnership between the Federal and State
governments for the care of aging veterans, and yet VA proposed
to modify this past per diem payment policy, a change in policy
the VA says would reduce the number of State beds by more than
50 percent. We have, obviously, disagreed on that and are
proposing not to do so.
Why does VA want the States to reduce the number of State
home beds? I guess that would be the first question. Even if VA
does not want to provide institutional care for the non-
service-connected, why does it want to discourage States from
attempting to meet that need?
Secretary Nicholson. Well, one of the things operating
here, Senator Craig, is a goal of getting in uniform
conformance with the law from the VA's perspective, which is
that those people eligible for long-term institutional care are
those that are 70 percent disabled or more. The goal, as I have
stated to Senator Feinstein, of--you know, realizing the
benefits of the care more in the community where the people
are.
I am not sure that the VA is desirous of the States getting
out of the long-term institutional care.
Senator Craig. I guess then the question, does VA believe
that it has the legal authority to simply stop paying per diem
payments to the States for the care of veterans VA does not
define as a priority?
Secretary Nicholson. No, I do not think so. I think there
would be a legislative piece needed. I could also say that this
budget does not contemplate that a veteran that is in a
facility who really needs to be there would be moved from that
bed.
Senator Craig [presiding]. Well, I am going to run out of
time, and I need to go vote. So I am going to put the committee
at recess until the chairman returns. So with that, the
committee will stand in recess.
Thank you all very much for being here today.
Senator Hutchison [presiding]. I am going to call the
committee back to order. We will try to finish the questions.
TRANSITIONAL PHARMACY BENEFIT PILOT PROGRAM
Let me ask you about the transitional pharmacy benefit
pilot program. Last year the Department implemented the
transitional pharmacy benefit pilot program to allow veterans
on the waiting list to have their privately written
prescriptions filled at the VA without seeing a VA physician. I
think this makes great sense, and tying up VA doctors just to
write a prescription when someone can get one outside probably
is not the best use of their time.
I understand the pilot did achieve its goal of improving
access to VA prescription drugs, but there were implementation
errors reported by the Inspector General. I am concerned that
maybe the errors did not give an accurate assessment of whether
this type of program should be continued. So I wanted to ask
you what is the status of that pilot program and is it
something that you are going to implement as a policy?
Secretary Nicholson. Madam Chairman, this budget does not
contemplate that. There was that pilot program and it
encompassed 48,000 people. What was most notable I think about
that was that approximately half of those prescriptions that
were presented for filling by the VA pharmacies were requesting
pharmaceuticals that did not meet the formulary inventory of
the VA. So it caused difficulties for people on both sides of
that transaction, as well as the need then for VA functionaries
who were very dutiful to call the prescriber, if they could
find them, to see if they could prescribe a comparable for the
patient that was in our formulary holding.
I will ask Dr. Perlin, who was there and has been through
that test, if he would like to elaborate.
Dr. Perlin. Madam Chairman, thank you for your interest in
this area. I know it has been positive that the substitution of
the ability to fill pharmaceuticals might relieve some of the
waiting when, in fact, a patient wants just a prescription.
By way of disclosure, I would need to indicate that we have
learned from the transition pharmacy benefit a few facts. As
Secretary Nicholson said, almost half of the prescriptions were
off of our formulary. Even with negotiation, it was still a
much, much higher rate of non-formulary, which meant that we
did not achieve some of the efficiencies in terms of cost of
the prescription that we would in our normal course of
practice. So it is something that I think deserves further
consideration, and I would want to consult with the Secretary
in terms of his future thoughts on the topic.
Senator Hutchison. Well, I understand the point that was
being made that perhaps it ends up not being a good tradeoff.
You save the doctor's time, but you make it harder for the
pharmacies and maybe more expensive. So I would like for you to
look at it again just to see if it is worth continuing a pilot
or if you determine that the good does not outweigh the bad. It
just seemed like a good concept.
Secretary Nicholson. So noted, Madam Chairman. It is
something that we have discussed quite a bit actually in the
few weeks that I have been there because on its face it does
seem to have a lot of appeal, especially some of those
prescribers have been Medicare paid doctors so the public is
already paying for that service.
MEDICAL PROSTHETIC RESEARCH
Senator Hutchison. Let me ask you a question on the
research budget. The budget request proposes a $9.3 million cut
to the medical and prosthetic research account. But I wanted to
ask you if you feel that that is going to be enough.
Further, Secretary Principi had made a commitment of $15
million a year for the Gulf War Syndrome research for a 4-year
period for a total of $60 million. That is something that is
very important to me because I think our veterans got very
short-changed when they came home with these symptoms, that in
a previous administration, were sort of swept aside as, well,
it was post-traumatic stress syndrome type thing, and it turns
out that there is a causal connection between brain damage and
exposure to chemicals. We, through the Veterans Administration
under Secretary Principi, were on the road to making that a
larger study, with the long-term goal of, of course, getting
antidotes for that or trying to determine if someone is
predisposed because of a brain deficiency--an enzyme
deficiency, that is--to not send someone to an area where there
might be chemical weapons.
My question is does this cut in the budget give you enough
funding for your Department to do all of the things that are a
priority and is Gulf War Syndrome research still going to get
the full $60 million commitment, in $15 million increments,
that Secretary Principi had said he would do?
Secretary Nicholson. Madam Chairman, this budget is
$1,653,000,000 for research in total. We are asking for an
appropriation of $786 million. That is sufficient to underwrite
something like 2,700 different research projects.
As to your question, is there sufficient funding in here
approved for the current year Gulf War illness research of $15
million, the answer is yes.
We have had some discussion about the $60 million, the 4-
year program, and counsel to me is that it is not a hard
commitment. That has been discussed. What I will say to you is
that the $15 million is absolutely in here, and the subsequent
years, as I get more familiar with it, I will take a very
serious look at this. But we will probably be back to you in
discussion with this.
I think the answer to your question overall is that there
is enough in this to do the research that we think should be
done.
There is a $100 million in this budget for prosthetics, and
there is an increase of $100 million for PTSD research and
application.
Senator Hutchison. Could you clarify? You are saying that
the $60 million over the 4 years is not a commitment. So are
you saying that $15 million is in for this year but you are not
making a commitment for future years?
Secretary Nicholson. Well, I am going to first ask the
general counsel if he would address that from his perspective,
and then I will respond.
Mr. McClain. Madam Chairman, we do have $15 million in
additional research funding for the Gulf War illnesses. That is
for this particular year in unspecified projects but they will
go toward Gulf War research. As far as future years, we really
cannot speculate as to what might come out in future years for
research dollars, but certainly we have been committed over
several years now to putting additional resources toward Gulf
War research.
Senator Hutchison. Mr. Secretary, do you consider that the
Gulf War Syndrome is a legitimate area for research?
Secretary Nicholson. Yes, I do. I know something about
that. I have been briefed by a team of doctors on that, and I
think that is a very legitimate area to try to understand. So
that is not an issue for me, but we have to do it legally.
I would like to ask Dr. Perlin, if I could, Madam Chairman,
if he would comment a bit on the current status of the
research.
Dr. Perlin. Madam Chairman, this is an absolutely critical
area. Right now we have 146 separate projects on environmental
exposures at a cost of about $35 million in the 2006 budget
proposed.
In the area of Gulf War illnesses, VA has funded 111
projects since 1991 and currently there are 48 ongoing. VA's
commitment to date has been $73 million. The Federal commitment
has been in excess of $300 million. Of that $15 million, I can
tell you that right now $5 million have been executed late this
spring. There is a request for applications to make sure that
we have the best research in that area.
I think one of the most promising endeavors this year,
something that we worked hard with the Research Advisory
Committee on Gulf War Illnesses to develop is a new center for
the study of promising treatments for Gulf War illness. While
we may not have full insight into the mechanisms of what causes
these unexplained symptoms, we passionately feel the obligation
to care for these veterans to treat their symptoms. This new
center promises to help us align our best tools to understand
what treatments may be promising.
Senator Hutchison. So you are not in any way saying it is
not a priority. You will be saying that it is a priority. Is
that what you are saying?
Secretary Nicholson. Yes, exactly.
DALLAS VA MEDICAL CENTER
Senator Hutchison. I wanted to talk about a couple of local
issues. First of all, in November of 2004, your own Department
ranked the Dallas Veterans Affairs Medical Center the worst VA
hospital in the country. Of course, that was a revelation to
many people in the Dallas area. I know improvements have been
made. I know that the head of that hospital is no longer there.
But I just wanted to ask you, Mr. Secretary, if you are
satisfied that the changes being made there are bringing that
VA hospital up to your standards.
Secretary Nicholson. Yes. That has been problematic. I
noted that as soon as I began getting briefed for this job. As
you noted, some of the key management personnel have been
replaced. There have been several reviews made of that
internal. An accrediting association has looked at that. They
found some deficiencies and have given recommendations to us to
institute. I am satisfied that those corrective measures are
underway. We have some good new people in place, but it is
something that is very important and we are keeping an eye on.
Senator Hutchison. That is what I was going to follow up
and ask. Is there a mechanism by which, when you have a
hospital that gets this low a rating, you would go in and check
more carefully and more frequently to assure that the changes
are being implemented?
Secretary Nicholson. I am going to ask Dr. Perlin to answer
that.
Dr. Perlin. Thank you, Mr. Secretary.
Madam Chairman, absolutely. We are following up with
objective evidence of improvement. We have the performance
measurement system throughout the VHA. As our Inspector General
noted, the performance was not where the citizens of Texas and
Dallas deserved. That is changing already objectively on the
basis of data. We can demonstrate that there is significant
improvement.
In addition to a new director, Betty Brown, there is also a
new associate director, Dan Heers, a new chief of staff, a new
chief nursing executive. And my own calls to individuals down
there tell me that the progress has been light-speed.
I would note to you that I plan to make a visit to Dallas
in April to assure myself that what I am seeing on paper is
actually represented as the best improvements.
I think it is important to note that while there have been
some individuals who have been problematic, that part of my job
is to encourage the 90 percent of the staff that really go
above and beyond to give their best for the veterans. So I want
to make sure that the message is complete, that we sanction and
improve and hold accountable where we need to, but that we also
encourage and support those individuals who really do give our
veterans their best.
WACO AND BIG SPRING, TEXAS SITES
Senator Hutchison. Thank you. I would be very interested,
after your visit, in hearing what your findings are.
There are two veterans sites that are in the 18 in the
CARES plan that are cited as needing more study. One is in
Waco. I have discussed this with you, Mr. Secretary.
The Waco facility is a campus. It is a beautiful campus. It
is under-utilized, that is for sure. The care that it gives is
excellent. The mental health care, from everything that we
could tell, did a very solid, good job. But the plan now is for
there to be a master plan for the Waco facility that is
supposed to be put together with the city leaders in Waco and
the consultants from the VA. I just wanted to ask you if we can
expect that you would continue the commitment to look for a
master plan for that site so that it can be efficiently used.
One of the things that I did not quite understand in the
CARES Commission report is that they closed two smaller clinics
and recommended that there be a VA clinic built in Waco. It
just seemed to me that with the facility there being under-
utilized that perhaps having the clinic move to the long-term
care facility that there might be an added benefit there and be
the right thing for the veterans in the area as well as for the
efficient operation that you would be seeking.
So do you have any status report on that, or can you just
at least say that we will have the master plan moving forward
and that the Department will work with the community leaders
for that plan?
Secretary Nicholson. Absolutely I can say that, Madam
Chairman. In fact, I am planning to go to Waco myself hopefully
in April. I want to go down there and get on the ground and see
the facilities, not to preempt the process but so that I know
and have a feeling myself for the physical assets that are
there. I know that the continued process out of the CARES
process is underway, and I think that will run its course and
have great community involvement. We are very committed and
interested in that.
Senator Hutchison. Well, I certainly am pleased that you
are going there. I hope I can join you. So I would like to call
your office and see if we can do that together.
Secretary Nicholson. We will try to coordinate.
Senator Hutchison. There is a second facility at Big
Spring. It is a hospital that I visited a few months ago. It is
in a central location which is 40 miles from Midland, 60 miles
from Odessa, 87 miles from San Angelo, and 110 miles from
Abilene. The next closest VA hospital is 200 miles from any of
those locations.
I had asked Secretary Principi to consider a public/private
partnership between the Big Spring VA and Scenic Mountain
Medical Center to increase the services to the veterans in that
area. It is the area that all of those communities support the
VA hospital because it is the most centrally located. As you
know, we have two Air Force bases, one in Abilene and one in
San Angelo, that feed into that veterans hospital, plus Midland
and Odessa feeding in. And if you put it in any of the other
places, it would be much farther from other population centers.
So I would ask that you also visit that one--it might be a
good day to go to both of those at the same time--and look at
the possibilities of, again, making your service more efficient
but keeping it at the Big Spring facility where you already
have a major investment.
Secretary Nicholson. I will try to do that, Madam Chairman.
I am committed to Waco. I will see if we can make it work at
Big Spring. I would like to. I can tell you, as you probably
know, I think the first open forum of that advisory board for
Big Spring is scheduled to meet, I think, April 7 for the first
time with our consultant, Price Waterhouse.
ADDITIONAL COMMITTEE QUESTIONS
Senator Hutchison. Well, I know this is all pretty
overwhelming and you have only been there a short time. But I
would look forward to working with you to assure that the
community has its input and that we can do the best for the
veterans in the area. I think you will be pleased when you see
both of those facilities.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Kay Bailey Hutchison
MAJOR CHALLENGES AND GOALS
Questions. I recognize you have been in office only a few weeks,
but I would like to hear your preliminary observations about the
Department.
Specifically, what do you see as the Department's main challenges?
As VA Secretary, what are the main goals you would like to achieve
before the end of your tenure?
Answers.
Challenges
VA is a very large, multi-business organization requiring diverse
management service delivery skills. More than 220,000 dedicated VA
employees operate its 157 hospitals, 134 nursing homes, 860 outpatient
clinics, 57 regional benefit offices, and 120 national cemeteries and
receive pre-discharge claims for disability benefits at 139 military
sites. They strive to provide world- class service to America's
deserving veterans who seek (1) health care; (2) the benefits they have
earned to restore their capability and ensure a smooth transition from
active military service to civilian life; and (3) honor and fitting
memorials in death.
Our single greatest challenge is making sure our veterans receive
the highest return on the taxpayers' dollar. To do that, VA needs to
make sure it operates with only the best business practices in place.
This alone, will make it easier for our veterans to access the quality
care and services we provide. We must continually improve our business
practices, maximize sharing opportunities with DOD and others and focus
our services on those most in need. I look forward to tackling the
challenges of ensuring best practices in all areas of VA endeavor and
building on today's successes for even greater achievements in the
future.
Goals
--I want to ensure that timely access to medical care continues to
improve for those who depend on VA the most, and I want to
ensure that significant improvements in both accuracy and
consistency of benefit entitlement decisions are a primary
focus across regional offices.
--I want to achieve the right balance of informed, centralized policy
decision-making with appropriate, responsible decentralized
implementation at levels closest to the provision of day-to-day
services to our veterans.
--I want to lead VA to the forefront of integrating accountability
systems based on results. VA provides essential, life-saving
and life-enhancing services for America's veterans, and I want
the Department to be able to articulate, based on solid
metrics, the incredible results that are achieved on an on-
going basis for veterans, their dependents and survivors.
--I want to continue to build on the objective measures currently
being used to assess maximum resource-allocation efficiency so
that every dollar is invested wisely toward the outcome of
improving veterans' lives.
--I want to sharpen this organization's focuses on improved
information and knowledge management and human-capital
development.
Madam Chairman, there is so much more I could address, but first
and foremost, I want to ensure that all 220,000 employees of this
Department strive every day to improve the lot of those heroic,
selfless Americans we are privileged to serve--our Nation's veterans.
VETERANS RETURNING FROM IRAQ AND AFGHANISTAN
Question. There are concerns about VA's ability and capacity to
treat all returning service members from Operations Enduring Freedom
and Iraqi Freedom (OEF/OIF). Further, there have been media reports of
some returning veterans who are falling through the cracks and
experiencing such things as delayed benefits and medical care and
homelessness.
For the record, do you have enough resources to meet the needs of
all returning veterans from Iraq and Afghanistan for this current
fiscal year 2005?
Answer.
Dr. Perlin. Yes, VA has the necessary resources in fiscal year 2005
to continue meeting the needs of all returning veterans from Iraq and
Afghanistan.
Admiral Cooper. VA has the resources, capacity, and systems in
place to provide priority care and claims processing for all seriously
injured veterans of Iraq and Afghanistan. We have the resources
available to continue our highly successful Benefits Delivery at
Discharge (BDD) program, through which service members are able to file
disability compensation claims prior to their separation from service.
Their claims are then processed expeditiously immediately upon the
service members' separation from service. Last year claims filed
through the BDD program were processed in an average of 55 days,
compared to the national average for all disability determinations of
165 days. We have the resources to conduct briefings for separating
members of the active components and specialized outreach to
demobilized reserve component forces. In fiscal year 2004 we conducted
benefit briefings for more than 88,000 members of the Guard and
Reserve. VA will continue to meet its responsibilities to America's
current returning war veterans while working to lower inventories,
reduce claims processing times, and deal with high claims activity by
veterans from earlier service periods.
Question. Does the budget request for fiscal year 2006 provide
adequate funding to meet the needs of all returning OEF and OIF
veterans?
Answer.
Dr. Perlin. Yes, VA requested the necessary resources in fiscal
year 2006 to continue meeting the needs of all veterans who have
suffered injuries or diseases as a result of the conflicts in Iraq and
Afghanistan.
Admiral Cooper. The funding request for 2006 is adequate and will
enable us to continue the efforts described in the previous response.
Question. Has the VA exhausted all means to reach service members
who may separate from active duty? Has the VA used public service
announcements?
Answer. While there is always more that could be done to reach
veterans and their families, VA has extensive outreach programs for
returning service personnel, including Reserve/National Guard members.
News Releases.--Last year, VA produced a 30-second public service
video entitled ``Our Turn to Serve'' which was distributed to domestic
viewing markets near or at major military transition and separation
bases. It was placed as a streaming video file on the VA Internet Web
site and marketed electronically to other domestic TV station
programmers in markets with large military populations. It is now about
to run on AFRTS outlets serving military based overseas. A new VA
outreach video program, ``The American Veteran,'' is airing on the
Pentagon Channel, which reaches military audiences at Department of
Defense (DOD) installations, communities, and sites in this country and
around the world. It is a half-hour video magazine featuring stories
and information of interest to military personnel and veterans that
focuses on their benefits and how they can access and use them. This is
a continuing series of monthly programs that will be marketed
domestically to cable systems, PBS stations, and community access
cable.
Transition Assistance Program (TAP) and Other Military Services
Briefings.--From October 2002 through January 2005, VBA military
services coordinators conducted transition briefings and related
personal interviews in the United States as reflected in the chart
below. These briefings include pre- and post-deployment briefings for
Reserve and National Guard members.
OVERALL BRIEFINGS
----------------------------------------------------------------------------------------------------------------
Fiscal year Briefings No. attendees No. interviews
----------------------------------------------------------------------------------------------------------------
2003............................................................ 5,368 197,082 97,352
2004............................................................ 7,210 261,391 115,576
2005 \1\........................................................ 2,263 79,105 34,106
----------------------------------------------------------------------------------------------------------------
\1\ Through January 2005.
In addition to military services briefings in the U.S., VBA
representatives conduct briefings overseas under arrangement with DOD.
VBA provides two tours each year with 6 to 7 VBA representatives
providing this service for each tour. Each is home-based at a major
military site and provides services at the site and surrounding areas.
The countries serviced are England, Germany, Japan, and Italy. Korea is
serviced by staff from the Benefits Delivery at Discharge office in
Yong San. A representative from the St. Petersburg Regional Office
provides that service for Guantanamo Bay. We were recently requested by
DOD to add Bahrain to our overseas schedule beginning with the May 2005
tour. The following chart reflects statistics regarding overseas
briefings:
OVERSEAS BRIEFINGS
----------------------------------------------------------------------------------------------------------------
Fiscal year Briefings No. attendees No. interviews
----------------------------------------------------------------------------------------------------------------
2003............................................................ 472 12,943 12,947
2004............................................................ 624 15,183 6,544
2005 \1\........................................................ 36 1,278 464
----------------------------------------------------------------------------------------------------------------
\1\ Through January 2005.
Briefings for Reserve/Guard Members.--Outreach to Reserve/Guard
members is part of the overall VBA outreach program. In peacetime, this
outreach is generally accomplished on an ``on call'' or ``as
requested'' basis. With the activation and deployment of large numbers
of Reserve/Guard members following the September 11, 2001, attack on
America, and the onset of OEF/OIF, VBA outreach to this group has been
greatly expanded. National and local contacts have been made with
Reserve/Guard officials to schedule pre- and post-mobilization
briefings for their members. Returning Reserve/Guard members can also
elect to attend the formal three-day TAP workshops. The following data
on Reserve/Guard briefings is a subset of the Overall Briefings data
provided in the first chart:
RESERVE/GUARD BRIEFINGS
------------------------------------------------------------------------
Fiscal year Briefings No. attendees
------------------------------------------------------------------------
2003.................................... 821 46,675
2004.................................... 1,399 88,366
2005 \1\................................ 531 32,448
------------------------------------------------------------------------
\1\Through January 2005.
Briefings Aboard Ships.--VA provided TAP briefings aboard the USS
Constellation, the USS Enterprise, and the USS George Washington on
their return from the Persian Gulf to the United States. VBA will
continue to support requests from the Department of the Navy for TAP
workshops aboard ships.
Seamless Transition--Military Treatment Facilities (MTFs)
In 2003, VA began placing Veterans Service Representatives at key
military treatment facilities (MTFs) where severely wounded service
members from OEF/OIF are frequently sent. Representatives of the VBA
Benefits Delivery at Discharge office in Germany work closely with the
staff at the Landstuhl Army Medical Center to assist returning injured
service members who are patients at that facility and family members
temporarily residing at the Fischer House.
Since March 2003, a VBA OEF/OIF coordinator is assigned for each
MTF. Full time staff is assigned to the Walter Reed Army Medical Center
in Washington, D.C., and the Bethesda Naval Medical Center in Maryland.
Similar teams work with patients and family members at three other MTFs
serving as key medical centers for seriously wounded returning troops:
Eisenhower, Brooke, and Madigan Army Medical Centers. Itinerant service
is conducted at all other major military treatment facilities. As of
January 2005, over 4,500 hospitalized returning service members were
assisted through this program at Walter Reed, Bethesda, Eisenhower,
Brooke, and Madigan. Since March 2003, each claim from a seriously
disabled OEF/OIF veteran has been case managed for seamless and
expeditious processing.
Web Page.--As part of the Seamless Transition effort, VBA created a
new web page for OEF/OIF, directly accessible from the VA homepage.
Information specific to Reserve/Guard members who were activated is
included, as well as links to other Federal benefits of interest to
returning service members. The web page has been accessed over 340,000
times since its activation in December 2003.
Benefits Delivery at Discharge (BDD).--VA's BDD program operates in
concert with the military services outreach program. Under BDD, service
members can apply for disability compensation within 180 days before
discharge. The required physical examinations are conducted and service
medical records are reviewed prior to discharge. The goal is to
adjudicate claims within 30 days following discharge. Upon receipt of
the claimant's DD Form 214 (Report of Release from Active Military
Service), benefits are immediately authorized so that the recently
separated veteran can receive his/her first disability check the month
following the month of discharge or shortly thereafter. Currently, 141
military installations worldwide participate in this program, including
two sites in Germany and three in Korea. Approximately 26,000 BDD
claims were finalized in fiscal year 2003; 40,000 in fiscal year 2004;
and 12,000 in fiscal year 2005 to date.
Recently-Separated Veterans
Veterans Assistance at Discharge System (VADS).--All separating and
retiring service members (including Reserve/Guard members) receive a
``Welcome Home Package'' that includes a letter from the Secretary, a
copy of VA Pamphlet 21-00-1, A Summary of VA Benefits, and VA Form 21-
0501, Veterans Benefits Timetable, through VADS. Similar information is
again mailed with a 6-month follow-up letter.
Secretary's Outreach Letter to Returning Service Members.--Outreach
letters from the Secretary of Veterans Affairs have been sent to
approximately 240,000 returning service members who have separated/
retired from active duty. Enclosed with the letters are copies of VA
Pamphlet 21-00-1, A Summary of VA Benefits, and IB 10-164, A Summary of
VA Benefits for National Guard and Reserve Personnel.
PRIORITY 7 AND 8 VETERANS
Question. Clearly, we must ensure full funding for Priority 1
through 6 veterans, but I am also concerned about our Priority 7 and 8
veterans.
Given the escalating costs of private health care insurance and
cuts to other publicly funded programs, what is going to happen to the
tens of thousands of uninsured Priority 7 and 8 veterans? Has the VA
performed any analysis to project the outcomes of these veterans? Does
the VA have a good understanding of who these veterans are,
demographically, and what resources they may have in the event VA
medical care is not available to them?
Answer. VA has health insurance coverage data on veterans from the
fiscal year 2001 Survey of Veterans. VA also obtains health insurance
coverage data for VA health care enrollees from the annual VHA Enrollee
Survey. VA has also considered the impact of its proposed policies on
uninsured veterans. For example, the cost-sharing policies (annual
enrollment fee and increased pharmacy co-payments) in the fiscal year
2006 President's budget will enable uninsured Priority 7 and 8 enrolled
veterans to continue to have access to the VA health care system for a
very modest amount of cost sharing. We expect that Priority 7 and 8
enrollees who are uninsured will pay the enrollment fee, while many
Priority 7 and 8 enrollees who have other health care coverage are not
expected to enroll because of their alternative sources of care.
MANAGEMENT EFFICIENCIES
Question. This year's request estimates savings of some $1.8
billion in management efficiencies--an increase of some $590 million
over the fiscal year 2005 level. I support efforts by the Department to
improve its management practices, and clearly the Inspector General's
office has identified a number of areas where savings could be
achieved. But we haven't seen a lot of detail or reliable data to back
up these savings projections.
For example, the budget projects saving $150 million through
improved contracting practices with medical schools and other VA
affiliates for scarce medical specialties. Can you explain exactly how
you will achieve this $150 million in savings?
Answer. VA anticipates that $150 million in savings will result
from improved contracting practices. A new directive is about to be
issued that encourages competitive contracting for services and
provides contracting officers specific guidance on appropriate costs to
include in a sole-source contract, when that vehicle is appropriate. In
addition, there will be increased Office of Inspector General audits of
sole source contracts with VA's affiliates, which will result in
further savings from originally negotiated rates.
Question. Can you provide the committee with details on how the
Department will achieve its overall management savings goal of $1.8
billion for fiscal year 2006?
Answer. The $1.8 billion in management efficiencies is composed of
recurring and anticipated new efficiencies in standardization of
pharmaceuticals and supplies; inventory management; productivity; and
administrative/clinical consolidations and VA/DOD sharing.
HOMELESSNESS
Question. By some accounts, homeless veterans number around
200,000; even some veterans returning from Iraq and Afghanistan are
experiencing homelessness.
Can you explain why there continues to be such a large number of
homeless veterans in this country?
Answer. While homeless veterans tend to be older and better
educated than their non-veteran counterparts, they face the same
vulnerabilities that increase their risk of homelessness. These
liabilities include mental illness and substance use disorders, lack of
adequate social supports, disadvantages associated with past histories
of incarceration, and poor employment prospects.
VA estimates that there may be 200,000 homeless veterans living on
the streets or in shelters on any given day. Data from the National
Survey of Homeless Service Providers and Clients conducted in 1996
indicates that the proportion of veterans among homeless men declined
to 23 percent from an estimate of 34 percent identified in a similar
study conducted in the mid 1980s. We believe that VA, working together
with community-based and faith-based organizations, has put in place a
wide range of services to address the needs of homeless veterans and
this system of services is helping veterans move out of homelessness to
independence and self sufficiency.
Question. Why are some of our OEF and OIF veterans experiencing
homelessness?
Answer. From August through December of 2004, VA has reached out to
128 homeless OEF and OIF veterans, about 1 percent of all homeless
veterans contacted through outreach during those months. Review of
intake assessment information about these veterans suggests that, for
the most part, these homeless veterans have problems similar to those
of homeless veterans from other eras and periods of service. However,
homeless OEF/OIF veterans are younger and appear to have fewer problems
with substance abuse and they seem to have more short-term situational
problems such as changes in family status (e.g. separation or divorce).
These veterans are less likely to be chronically homeless, which gives
us hope that they can return more easily to self sufficiency.
VISN STRUCTURE
Question. The President's Task Force (PTF) found that the VA's
veterans integrated systems network (VISN) structure ``resulted in the
growth of disparate business procedures and practices.'' Further, the
PTF's report stated that the ``VISN structure alters the ability to
provide consistent, uniform national program guidance in the clinical
arena, the loss of which affects opportunities for improved quality,
access, and cost effectiveness.'' Due to these findings, the PTF
recommended ``the structure and processes of VHA should be reviewed.''
Do you agree with the PTF's findings? If so, what are your thoughts
on altering the VISN structure? If not, what alternatives do you offer?
Answer. There is always a tension between centralization and
decentralization, such as we find in the current VA network structure.
A system that is too centralized is grossly ineffective and
inefficient. On the other hand, a system that is too decentralized
loses the integration and cohesiveness that defines it as a ``system.''
Achieving the proper balance to avoid both too much centralization and
too much decentralization requires continual monitoring and refinement
where necessary. So to that extent, we agree that the structure and
processes of the VISN structure require continual review. But continual
review does not necessarily entail significant alterations. Nor is it
clear that the VISN structure has impaired VA's ability to provide
consistent, uniform national clinical guidance.
VA operates a large, integrated health care system that functions
both efficiently and effectively. Improvements in quality, access,
veteran satisfaction, and efficiency are measurable and have been
widely recognized. Health care policy is established centrally in
Washington and is expected to be executed uniformly throughout all 21
VISNs. I expect the VISNs to address the unique challenges of their
respective environments, and we will hold management at all levels
accountable for implementing national policy consistently. I am a firm
believer in the benefits of performance measurement, and I will hold
all VISN directors accountable for the same set of performance measures
and goals. The individual means to achieve the goals set may vary
somewhat from VISN to VISN, depending on their individual
circumstances, but the requirement for implementation of overall
national health care policies is immutable.
STATE HOME CONSTRUCTION
Question. The budget request proposes a 1-year moratorium on
providing grants for construction of State nursing homes until the VA
has completed a review of its long-term care needs.
Since State veterans' nursing homes account for more than half of
VA's nursing home workload, to what extent will the moratorium impact
veterans access to long term-care?
Answer. The proposed 1-year moratorium on grants for construction
of State nursing homes will have a minimal effect on veterans' access
to long-term care. Nationally, State Veterans Homes operate at
approximately 85 percent capacity; consequently the existing capacity
can accommodate additional veterans. Moreover, construction projects
that are already underway are anticipated to add more than 1,600
additional State Home beds nationally over the next 3-4 years.
Question. Are there State nursing home projects with established
and documented need that will be delayed because of the funding
moratorium?
Answer. There are nursing home projects for which the States have
committed matching funds that will be delayed by the moratorium for 1
year. Because the Priority List is revised annually, VA cannot predict
how many or which specific projects will be delayed. All new and
existing pending projects are ranked as of August 15 and included in
the annual list.
VA-DOD COLLABORATION
Question. For several years, there have been numerous efforts to
promote health care collaboration between the Department of Defense and
the VA. The fiscal year 2003 National Defense Authorization Act
directed DOD and VA to establish a joint program to identify and
provide incentives to implement, fund, and evaluate creative health
care coordination and sharing initiatives between the two departments.
Can you give us a status and any initial findings on this new
program?
Answer. Section 721 of Public Law 107-314, the fiscal year 2003
National Defense Authorization Act, requires that DOD and VA establish
a joint incentives program through the creation of a DOD-VA Health Care
Sharing Incentive Fund. The intent of the program is to identify, fund,
and evaluate creative local, regional, and national sharing
initiatives.
A DOD-VA Memorandum of Agreement (MOA), signed on July 8, 2004,
assigned VA as administrator of the fund under the direction of the VA-
DOD Health Executive Council (HEC). The HEC appointed the Financial
Management Work Group to issue the calls for proposals, recommend the
proposals to be funded, and monitor the projects selected. There is a
minimum contribution of $15 million by each Department ($30 million
total per year) each year for 4 years (fiscal year 2004-fiscal year
2007).
In fiscal year 2004, 12 proposals were approved. Those proposals
require $37.5 million in funding over 2 years. Approved proposals
involve a wide range of services including various tele-health
projects, women's health services, a joint cardiac catheterization lab,
a joint dialysis unit, and a joint clinic.
In fiscal year 2005, 56 proposals have been submitted, and they
will compete for $22.5 million in funding for the first year. VA and
DOD are currently reviewing the projects submitted for the fiscal year
2005 awards cycle.
There has been a high level of interest by VA and DOD in submitting
projects for funding. There have been many lessons learned in
administering the program, such as allowing sufficient time to permit
review up the chains of commands within both VA and DOD; the need for
information technology projects to be consistent with the national
level solutions being developed; and the need for projects to clearly
identify a benefit to both Departments. The projects selected for
funding in fiscal year 2004 have not been operational long enough to
provide an individual project assessment of the results.
______
Questions Submitted by Senator Larry Craig
SERVICES
Question. The 116th Calvary Brigade Combat Team of the Idaho Army
National Guard are now stationed overseas in Iraq and fighting in
Operation Iraqi Freedom. Like all National Guardsmen, when they return
from active duty they will resume their duties of working under the
command of the Governor of Idaho.
What will their eligibility be for VA services, including health
care and benefits, when they separate from active duty service?
Answer. Army National Guard personnel activated by Federal
declaration and who served on active duty in a theater of combat
operations which includes Operation Iraqi Freedom are eligible for
hospital care, medical services, and nursing home care. Public Law 105-
368 amended title 38, United States Code, to authorize VA to provide
combat veterans with care for conditions potentially related to their
combat service for a 2 year period following discharge. Care is cost-
free for conditions that cannot be disassociated from combat service.
Care for other conditions is subject to applicable copayments. Veterans
who enroll with VA under this authority retain enrollment eligibility,
regardless of any enrollment restriction that may be in effect after
this 2-year post discharge period. Combat veterans who choose not to
enroll with VA during the 2-year period would be able to enroll in the
future only if they are otherwise eligible to enroll.
In addition to health care benefits, they are also eligible for a
full array of benefits offered through the Veterans Benefits
Administration (VBA) to include:
--Disability Benefits
--Education and Training Benefits
--Vocational Rehabilitation and Employment
--Home Loans
--Life Insurance
--Burial Benefits
--Dependents' and Survivors' Benefits
Question. Does the Department have any programs in place that will
continue to follow these Guardsmen after their completion of their
combat mission and they return home to a civilian life?
Answer. Under 38 U.S.C. 1710(e)(1)(D) and 1710(e)(3)(C), OIF/
OEF veterans may enroll in the VA health care system and, for a 2-year
period following the date of their separation from active duty, receive
VA health care without co-payment requirements for conditions that are
or may be related to their combat service. After the end of the 2-year
period, they may continue their enrollment but may be subject to any
applicable co-payment requirements. For OIF/OEF veterans who do not
enroll with VA during the 2-year post-discharge period, eligibility for
enrollment and subsequent health care is, of course, subject to such
factors as a service connected disability rating, VA pension status,
catastrophic disability determination, or financial circumstances.
OIF and OEF veterans have sought VA health care for a wide-variety
of physical and psychological problems. The most common health problems
have been musculoskeletal ailments (principally joint and back
disorders); diseases of the digestive system (with teeth and gum
problems predominating); and mental disorders (predominantly adjustment
reactions). The medical issues we have seen to date are those we would
expect to see in young, active, military populations, and no particular
health problem stands out among these veterans at present. We will
continue to monitor the health status of recent OIF and OEF veterans to
ensure that VA aligns its health care programs to meet their needs.
Following is a brief description of VA initiatives that have been
developed in response to the service needs of veterans from Operations
Iraqi Freedom (OIF) and Enduring Freedom (OEF). Many of these are brand
new programs that were developed to meet these needs. All of them
represent ``lessons learned'' from VA's experiences responding to the
health care and other benefits needs of veterans returning from the
1991 Gulf War and from the Vietnam War before that.
Immediate Health Care Needs for Combat Veterans.--In response to
immediate health concerns for OIF and OEF veterans, on March 26 and 27,
2003, VA developed a program called ``Caring for the War Wounded,''
which was broadcast over the VA Knowledge Network satellite broadcast
system. This program provided timely and relevant information about the
anticipated health care needs of veterans of the current conflict in
Iraq, included VA experts on treatments for traumatic injuries;
chemical warfare agent health effects; infectious diseases;
radiological health effects; and post-deployment readjustment health
concerns, and was converted into a new Veterans Health Initiative (VHI)
health care provider independent study guide, called ``Caring for the
War Wounded,'' which is available online at vaww.va.gov/VHI/and on the
Internet at http://www.appc1.va.gov/vhi/.
New Clinical Guidelines for Combat Veteran Health Care.--In
collaboration with DOD, VA developed two Clinical Practice Guidelines
on combat veteran health issues, including one general guideline to
post-deployment health, and a second dealing with unexplained pain and
fatigue. The new clinical guidelines give our health care providers the
best medical evidence for diagnoses and treatment. VA highly recommends
these for the evaluation and care of all returning combat veterans,
including veterans from OIF and OEF. The value of the guidelines in
providing care to returning veterans is described in a video ``The Epic
of Gilgamesh: Clinical Practice Guidelines for Post-Deployment Health
Evaluation and Management,'' at www.va.gov/Gilgamesh.
New Specialized Combat Veteran Health Care Program.--In 2001, VA
established two new War Related Illness and Injury Study Centers
(WRIISCs) at the Washington, DC, and East Orange, NJ, VAMCs. Today, the
WRIISCs are providing specialized health care for combat veterans from
all deployments who experience difficult to diagnose but disabling
illnesses. Concerns about unexplained illness are seen after all
deployments including OIF/OEF, but VA is building on our understand of
these illnesses. More information is available online at www.va.gov/
environagents under the heading ``WRIISC Referral Eligibility
Information.''
Expanded Education on Combat Health Care for VA Providers.--In
addition to the programs already described, VA has developed several
Veterans Health Initiative (VHI) Independent Study Guides relevant to
veterans returning from Iraq and Afghanistan:
--``A Guide to Gulf War Veterans Health'' was originally on health
care for combat veterans from the 1991 Gulf War. The product,
written for clinicians, veterans and their families, remains
very relevant for OIF and OEF combat veterans because many of
the hazardous exposures are the same.
--``Endemic Infectious Diseases of Southwest Asia'' provides
information for health care providers about the infectious
disease risks in Southwest Asia, particularly in Afghanistan
and Iraq. The emphasis is on diseases not typically seen in
North America.
--``Health Effects from Chemical, Biological and Radiological
Weapons'' was developed to improve recognition of health issues
related to chemical, biological and radiological weapons and
agents.
--``Military Sexual Trauma'' was developed to improve recognitions
and treatment of health problems related to military sexual
trauma, including sexual assault and harassment.
--``Post-Traumatic Stress Disorder: Implications for Primary Care''
is an introduction to PTSD diagnosis, treatment, referrals,
support and education, as well as awareness and understanding
of veterans who suffer from this illness.
--``Traumatic Amputation and Prosthetics'' includes information about
patients who experience traumatic amputation during military
service, their rehabilitation, primary and long-term care,
prosthetic, clinical and administrative issues.
--``Traumatic Brain Injury'' presents an overview of TBI issues that
primary care practitioners may encounter when providing care to
veterans and active duty military personnel.
All are available in print, CD ROM, and on the web at www.va.gov/
VHI.
Outreach to Combat Veterans.--VA has many new products to offer
combat veterans and their families.
--The Secretary of Veterans Affairs sends a letter to every newly
separated OIF and OEF veteran, based on records for these
veterans provided to VA by DOD. The letter thanks the veteran
for their service, welcomes them home, and provides basic
information about health care and other benefits provided by
VA.
--In collaboration with DOD, VA published and distributed one million
copies of a new short brochure called ``A Summary of VA
Benefits for National Guard and Reservists Personnel.'' The new
brochure does a tremendous job of summarizing health care and
other benefits available to this special population of combat
veterans upon their return to civilian life (also available
online at www.va.gov/EnvironAgents).
--``Health Care and Assistance for U.S. Veterans of Operation Iraqi
Freedom'' is a new brochure on basic health issues for that
deployment (also at www.va.gov/EnvironAgents).
--``OIF and OEF Review'' is a new newsletter mailed to all separated
OIF and OEF veterans and their families, on VA health care and
assistance programs for these newest veterans (online at
www.va.gov/EnvironAgents).
--``VA Health Care and Benefits Information for Veterans'' is a new
wallet care that succinctly summarizes all VA health and other
benefits for veterans, along with contact information, in a
single, wallet-sized card for easy reference (also at
www.va.gov/EnvironAgents).
Special Depleted Uranium (DU) Program.--OIF veterans concerned
about possible exposure to depleted uranium can be evaluated using a
special DU exposure protocol that VA began after the 1991 Gulf War.
This program offers free DU urine screening tests by referral from VA
primary care physicians to veterans who have concerns about their
possible exposure to this agent.
Combat Veteran Health Status Surveillance.--Today, we can monitor
the overall health status of combat veterans very efficiently by using
VA's electronic inpatient and outpatient medical records. This
surveillance summarizes every single visit by a combat veteran
including all medical diagnoses. VA has developed a new Clinical
Reminder (part of VA's computerized reminder system) to assist VA
primary care clinicians in providing timely and appropriate care to new
combat veterans.
Question. What resources are being devoted this year to put into
effect the co-location of the Boise VA Medical Center and Regional
Office? What are projected for next year?
Answer. In fiscal year 2005, staff resources in VBA will accomplish
the following:
--Secure a letter from the GSA initiating the transfer of the 2.13
acre parcel to VA and get VA Secretary's signature accepting
transfer and control of the property.
--Complete a concept paper for the business case for a project to
construct a new office building for the Boise Regional Office
on the subject property.
--Complete an Exhibit 300 business case application for a project to
construct a new office building for the Boise Regional Office
on the subject property.
--Select an Architect/Engineer (A/E) firm to prepare a preliminary
design and a Request for Proposals (RFP) for a Design-Build
contract for the construction of the new office building. Funds
from the Minor Construction program will be allocated to this
contract.
--Begin the preliminary design for the new office building.
In fiscal year 2006, staff resources in VBA will accomplish the
following:
--Complete the preliminary design and the RFP for the Design-Build
contract.
--Work with the VHA contracting officer to prepare the solicitation
for the Design-Build contract.
--Advertise the project in the FedBizOps for a contract award in
early fiscal year 2007.
--Identify the necessary minor construction funds in the fiscal year
2007 budget for the construction contract.
PRESCRIPTION DRUGS
Question. Last year, Congress enacted the Medicare Modernization
Act which, for the first time, provides Medicare beneficiaries with
prescription drug coverage.
Has VA conducted any assessments of the impact this legislation
will have on the number of veterans who rely on VA health care to
provide prescription drug coverage? If so, what has this assessment
shown?
Answer. Milliman, Inc., the private-sector actuarial firm that
develops projections of veteran demand for VA health care, has advised
VA that the impact of the new Medicare drug benefit on VA enrollment,
utilization, and expenditures is expected to be minimal. The biggest
impact is expected to come from reductions in employer-based
prescription drug coverage. However, the impact may not become
significant until as late as 2016 since the most recent cutbacks have
been for future retirees only; those eligible for retirement (over age
55) have been grandfathered into employer's current plan. Based on
recent estimates of retirees who could lose benefits, enrollment in VA
health care could increase by an estimated 35,000 within the 10-15 year
period following the start of the Medicare prescription drug benefit.
VA currently treats about 5.2 million veterans per year.
Question. Does VA believe that there is a way VA can work in
concert with Medicare on the provisions of prescription medications for
Medicare-eligible veterans? If so, has VA leadership approached the
leadership of the Centers for Medicare and Medicaid Services to discuss
and proposals?
Answer. VA believes that VA and the Department of Health and Human
Services' Centers for Medicare and Medicaid Services (CMS) can work
together so that beneficiaries who chose to use both VA and CMS
prescription benefits do so in a safe and cost-effective manner.
To that end, VA Pharmacy Benefits Management staff and staff from
the Centers for Medicare and Medicaid Services (CMS) have had
preliminary discussions about potential VA /CMS patient safety and
electronic prescribing initiatives.
VA will continue to provide prescription medications to enrolled
veteran patients who are also eligible for Medicare. VA will continue
to provide this prescription coverage to Medicare eligible veterans who
chose VA as their health care provider, even after Medicare Part D is
fully implemented.
STATE HOME PER DIEM PROPOSALS
Question. The State Home program, by most accounts, has been a
successful partnership between the Federal and State governments for
the care of aging veterans. Yet VA proposes to modify its past per diem
payment policies--a change in policy that VA says will reduce the
number of State home beds by more than 50 percent.
Why does VA want the States to reduce the number of State home
beds? Even if VA does not want to provide institutional care to the
non-service-connected, why does it want to discourage States from
meeting that need?
Answer. VA is not proposing that the States reduce the number of
State Home beds. State Veterans Homes are owned, operated, and financed
by the States. VA provides limited financial assistance to the States
in the form of per diem payments for nursing home, hospital,
domiciliary, and adult day healthcare. Only the nursing home per diem
is affected by the fiscal year 2006 budget proposal. The cost of care
in State Veterans Homes varies from State to State, as does the amount
of assistance provided to the Homes by the State. Currently, costs not
covered by the VA per diem payments are covered from various sources,
including the veterans themselves and State and Federal programs such
as Medicare and Medicaid. VA's proposal could increase the share of
costs borne by the State, depending upon the State's own policies for
coverage of the costs of State Home care. State Homes will continue
operations to the extent that individual States discharge their fiscal
responsibility for the operation and management of the Homes. VA does
not have information on the plans of individual States to respond to
the change in VA policy.
The average daily census in State Veterans Homes on whose behalf VA
pays a per diem payment would decrease from 17,328 to 7,217 from fiscal
year 2004 to fiscal year 2006. Over the same period, however, VA is
projecting a substantial increase in both workload and funding for the
non-institutional programs it supports. The average daily census in
these home and community-based care (HCBC) programs is projected to
rise from 25,523 in fiscal year 2004 to 35,540 in fiscal year 2006 (a
39 percent increase). Funding is projected to increase from $287.3
million in fiscal year 2004 to over $400 million in fiscal year 2006
(also a 39 percent increase). The projected increases in HCBC programs
will serve to offset some of the reductions in nursing home care. VA
believes the proposals on long-term care in this budget provide an
appropriate balance between congressionally mandated nursing home
services and the national trend toward increased use of non-
institutional home and community-based services in preference to
nursing home care. HCBC is preferred by most patients and their
families and is more cost effective than inpatient care.
Question. Does VA assume bed closures will occur when payments for
non-priority veterans (those without a service-connection) cease? Does
VA believe that it has the legal authority to simply stop paying per
diem payments to States for the care of veterans VA doesn't define as a
priority?
Answer. VA is seeking legislative authority to align VA per diem
payments to State veterans homes with VA's revised long-term care
eligibility policy. Enactment of this proposal would ensure fairness
and consistency in how VA treats veterans needing long-term care across
all venues, including VA nursing homes, community nursing homes, and
State nursing homes. We are unable to comment on how the individual
States would respond to this change in policy.
Question. It seems to me that VA encouraged the States to build
long-term care capacity by offering them construction subsidies. Would
a change in the ``rules of the game'' after these State homes have been
built not break the bargain that the Federal Government has struck with
the States?
Answer. The VA State Home Construction Grant Program assists States
in construction and renovation costs for nursing homes, domiciliary
facilities and adult day healthcare. The program does not require the
state to participate in the State Veteran Home Per Diem Grant Program,
or guarantee the ongoing subsidy of per diem payments. The law is
separate for each of the programs.
______
Questions Submitted by Senator Dianne Feinstein
STATE EXTENDED CARE FACILITIES GRANTS PROGRAM
Question. Today I asked about the decision to impose a 1-year
moratorium on funding for the State Extended Care Facilities Grants
program. Specifically, I asked for the rationale behind the decision
and if he could explain its impact on States, such as California, which
critically need additional veterans homes. I also inquired about
whether the moratorium was really a plan to ultimately phase out
funding for State veterans homes.
Can you explain to this committee why it is necessary to impose a
1-year moratorium on grants for construction of long-term extended care
facilities when there is such a need for VA homes throughout this
Nation?
Answer. The fiscal year 2006 VA budget proposes a 1-year moratorium
on new grants to States for construction and renovation of extended
care facilities. This will permit VA to complete an assessment of its
nationwide institutional long-term care infrastructure and ensure that
future construction aligns with the areas of greatest projected need.
Grants that have already been awarded will not be affected by the 1-
year moratorium.
Question. How would this moratorium affect the current priorities
list for funding under this program?
Answer. VA has already committed to all planned fiscal year 2005
projects on the current Priority List. The States are currently
completing the requirements for fiscal year 2005 grant awards. VA has
committed the maximum fiscal year 2005 appropriations and the remaining
fiscal year 2004 carryover funds to these projects.
Question. Do you anticipate altering this priorities list for
fiscal year 2007?
Answer. The Priority List is revised annually, as of August 15th.
All new and existing pending projects are ranked and included in the
annual list. Once approved by the Secretary, the list is used to
identify ranked projects and commit funding for projects for that
fiscal year award or to finalize conditionally approved projects. For
fiscal year 2007, VA would follow the same procedures and commit funds
available at that time to the projects in rank order.
Question. Can you provide this committee a better sense of your
plans going forward and how it would affect funding for future State
veterans home projects?
Answer. VA will complete its assessment for our nationwide long-
term care infrastructure and assess the construction grants program
priority during the fiscal year 2007 budget deliberations.
Question. Is the Administration considering a plan to phase out
grant funding for State veterans homes?
Answer. The Administration will reevaluate the funding for the
State Extended Care Facilities Grant program during the fiscal year
2007 budget deliberations.
Question. I also know that the State of California plans to request
$125 million in fiscal year 2007 under this grant program to fund its
largest project to date, the Greater Los Angeles-Ventura County Home,
which includes 3 separate facilities. How would the 1-year moratorium
impact funding for this project?
Answer. The fiscal year 2006 VA budget proposes a 1-year moratorium
on new grants to States for construction and renovation of extended
care facilities. This will permit VA to complete an assessment of its
nationwide institutional long-term care infrastructure and ensure that
future construction aligns with the areas of greatest projected need.
Grants that have already been awarded will not be affected by the 1-
year moratorium.
VA has already committed to all planned fiscal year 2005 projects
on the current Priority List. The states are currently completing the
requirements for fiscal year 2005 grant awards. VA has committed the
maximum fiscal year 2005 appropriations and the remaining fiscal year
2004 carryover funds to these projects.
The Priority List is revised annually, as of August 15th. All new
and existing pending projects are ranked and included in the annual
list. Once approved by the Secretary, the list is used to identify
ranked projects and commit funding for projects for that fiscal year
award or to finalize conditionally approved projects. For fiscal year
2007, VA would follow the same procedures and commit funds available at
that time to the projects in rank order. VA cannot predict at this time
how the California project will be ranked in fiscal year 2007 or
whether there will be sufficient appropriations to fund it.
MEDICAL CARE PROGRAMS
Question. The Administration's overall request for Medical Care
Programs is $30.8 billion. However, if you discount the collections
that you anticipate through the Medical Care Collections Fund, as well
as the new fees that would be imposed on thousands of veterans, you are
left with a base appropriation request for Medical Care Programs of
$28.2 billion. Which is only 0.4 percent increase over last year's
enacted level. This falls well below the standard compounded medical
inflation rate of 3.9 percent.
Do you believe that this is sufficient funding given the number of
veterans returning home from the Middle East?
Answer. Yes, VA requested the necessary resources in fiscal year
2006 to continue meeting the needs of all veterans who have suffered
injuries or diseases as a result of the conflicts in Iraq and
Afghanistan.
MEDICAL AND PROSTHETIC RESEARCH
Question. I am happy to see the fiscal year 2006 budget calling for
$1.2 billion for prosthetics and sensory aids, a $100 million increase
over fiscal year 2005, however, I am concerned about the cut to Medical
and Prosthetic Research (from $402 million in fiscal year 2005 to $393
million in fiscal year 2006). As you know, 11,000 men and women of our
Armed Forces have suffered injuries in Iraq and Afghanistan and to many
of them functional and efficient prosthetics will make all the
difference in the world. The VA has made tremendous progress in
developing new, state-of-the-art prosthetics, but we should not stop
there. We should continue to fund a robust prosthetic research program.
None of us ever wants to have to explain to one of our soldiers who has
lost a leg, that more could have been done.
Can you please explain why the fiscal year 2006 budget reduces
money in this area?
Answer. The VA research program is funded by three funding
sources--direct appropriation, private grant funding, and Federal grant
funding. The overall estimated funding is expected to rise in fiscal
year 2006 by $49 million or 3.1 percent to $1.7 billion. The total
research program level of effort and number of projects for veterans
will be at a similar level to that of fiscal year 2005. VA, like other
Departments across Government, must be a responsible partner in
assisting to achieve many important, competing priorities. Reducing the
deficit for the current and long-term strength of this country is very
important. Therefore, tough choices had to be made in maximizing
resource impact in a slower growth environment. Medical care for those
who need VA the most and timely, consistent benefits delivery are also
crucial services for veterans. A balanced approach in wisely investing
resources was a guiding principle in the development of this budget.
Research that enhances veterans' lives continues to be an important
priority of the VA.
In terms of prosthetics research, VA is expanding its support of
multidisciplinary research approaches and examination of enabling
technologies that aim to ease the physical and psychological pain of
veterans. The VA Office of Research and Development (ORD) is
collaborating with clinical services to evaluate the delivery of care
and help identify optimal utilization of all patient services including
durable medical equipment for veterans. VA is also dedicated to the
generation of the rigorous data required to formulate policy and
establish clinical care guidelines.
In addition to evaluating existing practices, VA is expanding upon
its longstanding support for advances in surgical approaches to primary
amputation to include operative revision and limb lengthening
procedures that can potentially aid in fitting prostheses and enhance
function beyond what is now possible. VA is also aggressively examining
other techniques such as osseointegration, a procedure that replaces
missing limbs with titanium rods inserted directly into residual bone.
Examples of ongoing projects include:
--partnerships with the Department of Defense and Walter Reed Army
Medical Center to investigate immediate concerns of returning
Operation Enduring Freedom (OEF) and Operation Iraqi Freedom
(OIF) veterans;
--trials of current prosthetic designs and improvements for future
designs;
--use of telerehabilitation to prevent complications resulting from
amputation;
--bio-hybrid limb projects using regenerated tissue, lengthened bone,
internal and external titanium implants, and sensors that allow
amputees to use brain signals and residual limb musculature to
move their prostheses;
--new uses for sensory and implanted control devices and biological
sensors for the detection of health and function including
microelectro-mechanical or nanotechnologies;
--evaluation and updates of rehabilitation strategies; and
--examination of how best to implement research results and develop
best practices across VHA.
MEFLOQUINE (LARIAM) USE
Question. As you may be aware, I have been concerned about the
Department of Defense's (DOD) use of the anti-malarial drug mefloquine
(Lariam) and its impact on our service members. In June 2004, I wrote
your predecessor Secretary Principi with my concerns about the use of
this drug, especially after hearing that several service members had
been diagnosed with permanent brainstem and vestibular damage from
mefloquine toxicity. Shortly thereafter, the Veterans Health
Administration issued an Information Letter outlining the potential for
serious complications associated with mefloquine.
The VA's health care system is likely to be the first line of
treatment for service members who have returned from active duty. And
the VA will bear much of the cost and burden of treatment and
rehabilitation for service members with mefloquine toxicity.
Knowing that mefloquine was issued to active duty military in the
wars in Afghanistan and Iraq, will you take steps to actively monitor
the impact this drug has on these veterans' health conditions?
Answer. VA is actively monitoring the DOD studies of possible
adverse effects of mefloquine and is following the medical literature
and reported studies. At DOD's invitation, VA participated in a special
meeting of DOD's Armed Forces Epidemiology Board that DOD charged with
helping to plan studies on long-term health effects among OIF and OEF
veterans from mefloquine. VA regularly participates in DOD briefings on
the status of DOD's studies on this health issue. In addition, VA
developed an Under Secretary for Health Information Letter that
reviewed medical and scientific literature on known health effects from
taking mefloquine (IL 10-2004-007), ``Possible Long-Term Health Effects
From The Malarial Prophylaxis Mefloquine (Lariam),'' June 23, 2004).
This information letter alerts VA health care providers to the range of
possible long-term health effects from taking mefloquine. It is
important to note that mefloquine is an FDA approved drug that is
widely used in the civilian community and not just in the military.
Question. In the past, I have suggested that it is necessary for
the Department of Defense (DOD) to immediately implement a program that
will allow soldiers to report side effects and be evaluated, diagnosed
and treated without fear of reprisal and that reporting such side
effects not negatively affect their military service or careers. Would
you be willing to implement such a program at the Department of
Veterans' Affairs and will you work with DOD on such a program?
Answer. Mefloquine side effects begin while a person is actually
taking the drug--in this case, while they were still on active duty.
Side effects appearing while a service member was still on active duty
may be recorded by DOD health care providers. Few if any veterans are
still taking malaria prophylaxis after leaving active military duty and
then enrolling for VA health care. VA's Information Letter on
mefloquine side effects (IL 10-2004-007) is intended to alert VA health
care providers to any side effects that may persist in veterans after
they have separated from military service. Any relevant findings then
may be entered into the veteran's health record. Moreover, no health
problem identified by the VA would result in reprisals or harm to a
veterans' career because of the strict confidentiality and
professionalism within the VA health care system.
Question. As you may know, DOD is undertaking an investigation of
the impact of mefloquine use by service members. What has the VA's role
been in this investigation and has the Department participated in DOD's
investigation?
Answer. VA has been briefed on this study and actively supports
DOD's efforts. VA is actively monitoring the DOD studies of possible
adverse effects of mefloquine and is following the medical literature
and reported studies. At DOD's invitation, VA participated in a special
meeting of DOD's Armed Forces Epidemiology Board that DOD charged with
helping to plan studies on long-term health effects among OIF and OEF
veterans from mefloquine. VA regularly participates in briefings on the
status of various DOD studies on this topic.
ENROLLMENT FEES
Question. The budget submission assumes a $250 enrollment fee on
Priority 7 and 8 veterans.
How many veterans will have to pay the $250 enrollment fee? How
many veterans will leave VA if they have to pay this premium? AND How
does the VA plan to collect this fee from veterans?
Answer. In 2006, 1.26 million Priority 7 and 8 veterans are
expected to pay the $250 annual enrollment fee. This policy is expected
to reduce enrollment for Priority 7 and 8 veterans by 1.1 million and
reduce the number of Priority 7 and 8 unique patients by 213,000.
VA will notify all Priority 7 and 8 enrolled veterans of the
requirement to pay the enrollment fee by letter with appropriate
payment guidance. Veterans will be provided a specified period of time
to pay the entire fee or to agree to a quarterly payment schedule with
payment of the first quarterly payment by a specified date. Payments
will be processed through a central ``lockbox'' utility separate from,
but similar to, existing processes used for receipt of veteran co-
payments.
PHARMACY CO-PAY INCREASE
Question. The budget includes an assumption that the pharmacy co-
payments for certain veterans will increase from $7 to $15.
How did VA choose $15 as the amount for the prescription drug co-
payment?
Answer. This and the other proposed policies in VA's 2006
President's budget were designed to ensure that VA is able to fulfill
its core mission--providing timely access to high-quality health care
to veterans with serviced connected disabilities, low incomes, and
those with special needs. The $15 pharmacy co-payment proposal and
other cost-sharing proposals would only affect higher income, better-
insured veterans in the lowest priorities and have been strategically
priced to refocus the VA system on those veterans who need us most. The
$15 drug co-pay would more closely align VA with other private and
public health care plans.
RETURNING TROOPS
Question. There are new challenges arising to ensure that returning
troops are receiving their entitled benefits and services as veterans.
The new challenges include reaching every veteran.
What steps is the VA taking to reach out to all of our returning
troops from Iraq and Afghanistan?
Answer. Returning troops are provided information about VA benefits
and services and assistance in applying for these benefits through the
following VA outreach programs.
Transition Assistance Program (TAP) and Other Military Services
Briefings.--From October 2002 through January 2005, VBA military
services coordinators conducted transition briefings and related
personal interviews in the United States as reflected in the chart
below. These briefings include pre- and post-deployment briefings for
Reserve and National Guard members.
OVERALL BRIEFINGS
----------------------------------------------------------------------------------------------------------------
Fiscal year Briefings No. attendees No. interviews
----------------------------------------------------------------------------------------------------------------
2003............................................................ 5,368 197,082 97,352
2004............................................................ 7,210 261,391 115,576
2005 \1\........................................................ 2,263 79,105 34,106
----------------------------------------------------------------------------------------------------------------
\1\ Through January 2005.
In addition to military services briefings in the United States,
VBA representatives conduct briefings overseas under arrangement with
the Department of Defense (DOD). VBA provides two tours each year with
6 to 7 VBA representatives providing this service for each tour. Each
is home-based at a major military site and provides services at the
site and surrounding areas. The countries serviced are England,
Germany, Japan, and Italy. Korea is serviced by staff from the Benefits
Delivery at Discharge office in Yong San. A representative from the St.
Petersburg Regional Office provides that service for Guantanamo Bay. We
were recently requested by DOD to add Bahrain to our overseas schedule
beginning with the May 2005 tour. The following chart reflects
statistics regarding overseas briefings:
OVERSEAS BRIEFINGS
----------------------------------------------------------------------------------------------------------------
Fiscal year Briefings No. attendees No. interviews
----------------------------------------------------------------------------------------------------------------
2003............................................................ 472 12,943 12,947
2004............................................................ 624 15,183 6,544
2005 \1\........................................................ 36 1,278 464
----------------------------------------------------------------------------------------------------------------
\1\ Through January 2005.
Briefings for Reserve/Guard Members.--Outreach to Reserve/Guard
members is part of the overall VBA outreach program. In peacetime, this
outreach is generally accomplished on an ``on call'' or ``as
requested'' basis. With the activation and deployment of large numbers
of Reserve/Guard members following the September 11, 2001, attack on
America, and the onset of Operations Enduring Freedom and Iraqi Freedom
(OEF/OIF), VBA outreach to this group has been greatly expanded.
National and local contacts have been made with Reserve/Guard officials
to schedule pre- and post-mobilization briefings for their members.
Returning Reserve/Guard members can also elect to attend the formal 3-
day TAP workshops. The following data on Reserve/Guard briefings is a
subset of the overall briefings data provided in the first chart:
RESERVE/GUARD BRIEFINGS
------------------------------------------------------------------------
Fiscal year Briefings No. attendees
------------------------------------------------------------------------
2003.................................... 821 46,675
2004.................................... 1,399 88,366
2005 \1\................................ 531 32,448
------------------------------------------------------------------------
\1\ Through January 2005.
Briefings Aboard Ships.--VA provided TAP briefings aboard the USS
Constellation, the USS Enterprise, and the USS George Washington on
their return from the Persian Gulf to the United States. VBA will
continue to support requests from the Department of the Navy for TAP
workshops aboard ships.
Seamless Transition--Military Treatment Facilities (MTFs)
In 2003, VA began placing Veterans Service Representatives at key
military treatment facilities (MTFs) where severely wounded service
members from OEF/OIF are frequently sent. Representatives of the VBA
Benefits Delivery at Discharge office in Germany work closely with the
staff at the Landstuhl Army Medical Center to assist returning injured
service members who are patients at that facility and family members
temporarily residing at the Fisher House.
Since March 2003, a VBA OEF/OIF coordinator is assigned for each
MTF. Full time staff is assigned to the Walter Reed Army Medical Center
in Washington, D.C., and the Bethesda Naval Medical Center in Maryland.
Similar teams work with patients and family members at three other MTFs
serving as key medical centers for seriously wounded returning troops:
Eisenhower, Brooke, and Madigan Army Medical Centers. Itinerant service
is conducted at all other major military treatment facilities. As of
January 2005, over 4,500 hospitalized returning service members were
assisted through this program at Walter Reed, Bethesda, Eisenhower,
Brooke, and Madigan. Since March 2003, each claim from a seriously
disabled OEF/OIF veteran has been case managed for seamless and
expeditious processing.
Web Page.--As part of the Seamless Transition effort, VBA created a
new web page for OEF/OIF, directly accessible from the VA homepage.
Information specific to Reserve/Guard members who were activated is
included, as well as links to other Federal benefits of interest to
returning service members. The web page has been accessed over 340,000
times since its activation in December 2003.
Benefits Delivery at Discharge (BDD).--VA's BDD program operates in
concert with the military services outreach program. Under BDD, service
members can apply for disability compensation within 180 days before
discharge. The required physical examinations are conducted and service
medical records are reviewed prior to discharge. The goal is to
adjudicate claims within 30 days following discharge. Upon receipt of
the claimant's DD Form 214 (Report of Release from Active Military
Service), benefits are immediately authorized so that the recently
separated veteran can receive his/her first disability check the month
following the month of discharge or shortly thereafter. Currently, 141
military installations worldwide participate in this program, including
two sites in Germany and three in Korea. Approximately 26,000 BDD
claims were finalized in fiscal year 2003; 40,000 in fiscal year 2004;
and 12,000 in fiscal year 2005 to date.
Recently-Separated Veterans
Veterans Assistance at Discharge System (VADS).--All separating and
retiring service members (including Reserve/Guard members) receive a
``Welcome Home Package'' that includes a letter from the Secretary, a
copy of VA Pamphlet 21-00-1, A Summary of VA Benefits, and VA Form 21-
0501, Veterans Benefits Timetable, through VADS. Similar information is
again mailed with a 6-month follow-up letter.
Secretary's Outreach Letter to Returning Service Members.--Outreach
letters from the Secretary of Veterans Affairs have been sent to
approximately 240,000 returning service members who have separated/
retired from active duty. Enclosed with the letters are copies of VA
Pamphlet 21-00-1, A Summary of VA Benefits, and IB 10-164, A Summary of
VA Benefits for National Guard and Reserve Personnel.
Question. It is imperative for the Department of Defense and the
Veterans Administration to work closely to ensure that troops returning
from Iraq and Afghanistan receive the benefits and assistance to which
they are entitled.
How do the VA and Department of Defense coordinate information on
returning troops? Is the VA getting timely and accurate information
from the Department of Defense on returning troops? In what manner is
information on returning troops transmitted to the VA from DOD?
Answer. VA's Office of the General Counsel continues to negotiate
with DOD to obtain the complete range of returning service member data
VA needs for identification, tracking, and statistical/reporting
purposes. A formal Memorandum of Agreement (MOA) between VA and DOD is
still pending.
However, a preliminary agreement has been reached that will allow
VA to receive a flow of basic data from DOD on a regular basis, thus
facilitating a seamless transition of seriously disabled service
members into the VA system. As part of this agreement, VA will begin
receiving data on those disabled service members who are entering the
Physical Evaluation Board process.
Question. What is VA doing to reach out to reservists and national
guardsmen that were activated and deployed who are now returning home
and are entitled to benefits?
Answer. See the response above to the question concerning outreach
to all of our returning troops from Iraq and Afghanistan. Outreach to
reservists and National Guard members is addressed in that response.
COLORECTAL CANCER
Question. Colorectal cancer is the second leading cause of cancer
deaths in the United States, yet survival rates are greater than 90
percent among those whose cancer is detected early.
Roughly, what percentage of patients who receive their health care
at a Veterans Administration facility undergoes routine screening for
colon cancer?
Answer. Screening for colorectal cancer in the VA has increased
significantly. In fiscal year 2004, 74 percent of the established
veterans (those who received care from VA in the past 12 months)
requiring colorectal screening received it. The percentage of veterans
requiring colorectal screening has been increasing. In fiscal year
1996, the percentage was 34 percent; in fiscal year 2001, 60 percent;
in fiscal year 2002, 64 percent; and in fiscal year 2003, 67 percent.
Question. Many patients resist colon cancer screening tests due to
the anticipated discomfort and inconvenience. On the other hand, those
who choose to be screened by colonoscopy--the most accurate of the
current modalities--must often wait months for access to a surgical
suite and trained gastroenterologist. On average, how long must
veterans wait for a screening colonoscopy at veterans' hospitals and
clinics?
Answer. Diagnostic colonoscopies (for patients with symptoms or
positive findings) are scheduled as soon as possible with an average
wait time of 32 days. Screening colonoscopies (for asymptomatic
patients) are scheduled for the next available appointment. VA does not
measure specifically for screening colonoscopies, but we are providing
the following waiting time information for diagnostic colonoscopies and
GI clinics (which includes upper endoscopies and colonoscopies).
VHA has completed 20,186 diagnostic colonoscopies for the first 4
months of fiscal year 2005 with an average wait time from the patient's
desired appointment date (from the date appointment created if a new
patient) of 32 days. Half the appointments were completed within 17
days (median wait time was 17 days).
VHA completed 55,933 appointments for the GI Endoscopy Clinic for
the first 4 months of fiscal year 2005. The average wait time from the
patient's desired appointment date (or the date the appointment created
if a new patient) was 31 days. Half were completed within 7 days
(median wait time was 7 days).
Question. In the fiscal year 2004 Omnibus Appropriation, Congress
urged the VA to pursue aggressively new technologies available for
diagnosing colorectal cancer that are less invasive, less expensive and
provide equal or better evaluations than older methods. What has the
Administration done in response?
Answer. VA is committed to improving the colorectal screening
methods and overall percentage of screened veterans. In general, VA
follows the evidence-based review of the U.S. Preventive Services Task
Force (USPSTF) in screening for colon cancer, which is found online at
http://www.ahrq.gov/clinic/uspstf/uspscolo.htm. As noted in their
conclusion, ``It is unclear whether the increased accuracy of
colonoscopy compared with alternative screening methods (for example,
the identification of lesions that FOBT [fecal occult blood test] and
flexible sigmoidoscopy would not detect) offsets the procedure's
additional complications, inconvenience, and costs.'' However, the Task
Force also found insufficient evidence that newer screening
technologies (for example, computed tomographic colography) are
effective in improving health outcomes. VA is still looking for
evidence to show benefit of the newer technologies and works closely
with USPSTF.
VA offers screening for colon cancer using all recognized effective
modalities. If a patient experiences symptoms or has positive findings
on a screening by any other modality than colonoscopy, then a
diagnostic colonoscopy is scheduled.
______
Questions Submitted by Senator Tim Johnson
MEDICAL HEALTH CARE
Question. Recently, I introduced the Assured Funding for Veterans
Health Care Act (S. 331). This bill would ensure adequate veterans
health care funding is available by making VA medical care mandatory
spending. This legislation has been endorsed by all of the leading
veterans organizations.
Do you support this legislation, and if not, why?
Answer. An analysis of your proposed legislation would need to be
made in light of the President's fiscal year 2006 budget submission and
overall guidance on the budget.
That said, however, VA has not supported similar legislation
introduced in previous Congresses. While mandatory funding may appear
to be an interesting approach to provide resources to America's
veterans, VA has some serious concerns about its applicability to a
very complex, highly dynamic and sophisticated health care delivery
system such as the VA. A mandatory funding approach could inhibit VA's
ability to appropriately react to rapid advances in medical science and
technology and the development of new drugs and equipment have
dramatically changed treatment modalities and the manner in which
health care is delivered over the last decade. It could also fail to
keep up with the demographic or health status changes among veterans
and possibly create a false impression that VA would have full funding
to enroll all veterans. Therefore, a mandatory funding system based
upon static or untimely fixed indices may not be the best way to ensure
that adequate resources are available to maintain the high quality of
care that VA has become renowned for to care for our Nation's veterans.
Former VA Secretary Principi testified that the VA needs at least a
13 percent-14 percent increase in medical funding each year just to
maintain current health care services for veterans. The Bush
Administration's fiscal year 2006 budget request for VA medical care
does not include such an increase in funding.
Question. If the Administration's proposed VA health care funding
levels were enacted would there be a decrease in any veterans health
care services or was Secretary Principi incorrect in his analysis?
Answer. The Veterans Health Administration has received record
budget increases over the last 4 years. With this budget proposal, the
President, working in partnership with Congress, will have increased
health care funding for veterans by more than 47 percent since fiscal
year 2001.
In fiscal year 2006, VA plans to operate within the level of the
President's Budget request of $30.7 billion (including $750 million for
construction and $2.6 billion for collections) for the medical care
program, an increase of 2.5 percent over the enacted level of fiscal
year 2005. With this funding level, VA will be able to treat more than
5.2 million patients and VA will focus its health care resources on
veterans with service-connected disabled conditions, those with lower
incomes, and veterans needing our specialized services. In 2006, nearly
80 percent of veteran patients are expected to be high priority--those
veterans who count on VA the most.
The President's Task Force to Improve Health Care Delivery for Our
Nation's Veterans--a 15-member panel that was assembled to study the
health care needs of our Nation's veterans--released their
recommendations in a report on May 28, 2003. The report stated clearly
that the most pressing problem facing the VA health system is that
funding is not keeping pace with the need for care. While the panel
encouraged greater cooperation between the VA and the Department of
Defense's health care system, they recognized this would not address
the fundamental problem. Instead, the panel recommended two solutions
to the VA's funding problems: create an independent board which will
set the level of VA health care spending each year, or establish a
formula and provide a mandatory amount of funding for VA medical care.
Question. Do you plan to endorse or act on either of these
recommendations from the President's Task Force to Improve Health Care
Delivery for Our Nation's Veterans?
Answer. Thank you for your question regarding the endorsement of
mandatory health care funding for the Department of Veterans Affairs.
We are most appreciative of your interest and concern to ensure that
sufficient resources are available to provide high-quality health care
to our Nation's veterans.
The discretionary legislative process currently in place has
provided for substantial increases for the Department of Veterans
Affairs health care budget over the past several years, nearly a 47
percent increase since 2001.
While mandatory funding may appear to be an interesting approach to
provide resources to America's veterans, VA has some serious concerns
about its applicability to a very complex, highly dynamic and
sophisticated health care delivery system such as the VA. A mandatory
funding approach could inhibit VA's ability to appropriately react to
rapid advances in medical science and technology and the development of
new drugs and equipment have dramatically changed treatment modalities
and the manner in which health care is delivered over the last decade.
It could also fail to keep up with the demographic or health status
changes among veterans and possibly create a false impression that VA
would have full funding to enroll all veterans. Therefore, a mandatory
funding system based upon static or untimely fixed indices may not be
the best way to ensure that adequate resources are available to
maintain the high quality of care that VA has become renowned for to
care for our Nation's veterans.
Since 2001 VA has been utilizing a professional actuarial model as
a basis for the formulation of the budget. These actuarial forecasts
also have been integrated into the VHA's capital and strategic planning
processes. This demand model has contributed significantly to the
achievement of VA's strategic goals and performance measures to provide
enrolled veterans with access to timely, quality care. This has allowed
decision makers to ensure that resources are available to meet the
expected demand or develop policies to address any gap between the
expected demand and available resources. This professional,
businesslike approach to forecasting is similar to that employed by
many large private-sector organizations such as major insurance
corporations throughout our country. The model utilized is highly
sophisticated and is capable of predicting patient utilization,
reliance, morbidity, etc. We continue to revise and update the model in
order to assure that future projections will be as accurate as
possible.
VA therefore strongly believes that the utilization of a highly
professional, scientific, actuarial model is a much more professional,
effective, and businesslike approach for budget formulation and
forecasting than those like mandatory funding.
______
Questions Submitted by Senator Mary L. Landrieu
Question. In May 2001, President George W. Bush signed Executive
Order 13214 creating the President's Task Force to Improve Health Care
Delivery for Our Nation's Veterans. The PTF Task Force. This task force
was charged to identify ways to improve health care delivery to VA and
Department of Defense beneficiaries. One important recommendation of
this task force was recently addressed in a letter sent to the VA
Secretary and to Defense Secretary Rumsfeld. This recommendation
directed the VA to develop electronic medical records that are
interoperable and bi-directional, allowing for a two-way electronic
exchange of health information and occupational and environment
exposure data. These electronic medical records should also include an
easily transferable electronic DD214 forwarded from the DOD to the VA.
This would allow the VA to expedite the claims process and give the
service member faster access to health care and benefits.
What progress has been made towards accomplishing this task which
is necessary in order to ensure that servicemen and women have a
seamless transition from military to civilian life?
Answer. The Defense Personnel Records Image Retrieval System
(DPRIS) is currently operational between the Department of Veterans
Affairs, Veterans Benefits Administration (over 3,000 users) and the
Official Military Personnel File systems of the Army, Navy, and Marine
Corps. DPRIS connects to the VA Personnel Information Exchange System
(PIES) and allows VA users to electronically request and receive
official military personnel documentation. The interface with the Air
Force will be completed in June 2005, and the VA will be able to
retrieve imaged copies of military personnel records from the Air Force
by September 2005. All of these systems contain the DD214 and many
additional military personnel documents that VA uses. The most commonly
requested form is the DD214, and although the performance parameter for
DPRIS is to return the requested documents to VA within 48 hours, it is
currently operating in near real time. In addition to the interagency
collaboration on DPRIS, DOD and VA are also collaborating on VA access
to military personnel information that will be stored as data in the
Defense Integrated Military Human Resources System (DIMHRS). VA
requirements for military information have been an integral and on-
going part of the requirements collection for DIMHRS, and the two
departments are now moving into the technical integration phase which
will determine the most efficient and expeditious way for VA to access
information in DIMHRS when it comes on line in 2006. The electronic
exchange of DD214 information will be fully implemented with DIMHRS.
Question. According to a New England Journal of Medicine study
published on July 1, 2004, dealing with Mental Health Problems and
Barriers to Care with respect to Service Members Returning From Combat
Duty in Iraq and Afghanistan, 82 percent of veterans acknowledged a
need for mental health treatment, however only 24 percent reported ever
receiving any mental health treatment within 1 year after returning
from combat. Among the concerns veterans reported after returning from
combat, were depression, anxiety, post traumatic stress disorder and
almost one third reported the misuse of alcohol. With thousands of
service members returning from Iraq and Afghanistan this year, these
numbers will increase significantly. As you know, often times symptoms
of post traumatic stress do not manifest themselves for months or even
years after returning from combat.
Given the importance of mental health issues and the impact that
these concerns will have on not only the service member's entire
quality of life, as well as the quality of life of his or her family
and community, what programs has the VA in place at present to deal
with these matters and what plans do you have to deal with the
increased numbers who will require this type of health care?
Answer. Meeting the needs of our returning veterans and their
families is among VA's highest priorities. VA has indeed anticipated
and prepared for the increased numbers of those requiring mental health
services. VA's approach toward the returning troops and their families
emphasizes health promotion and preventive care principles. This
approach is designed to identify and resolve problems in readjustment
to civilian life, before they progress to problems requiring more
intensive clinical interaction. For those that require clinical
interaction, VA provides state-of-the-art psychotherapy and
psychopharmacology treatments.
Based on VA's experience and research we do not expect that a great
majority of Operation Enduring Freedom and Operation Iraqi Freedom
(OEF/OIF) veterans will suffer long-term consequences of their war zone
experience. However, many likely will have some short-term reactions to
the horrors of war. Of those who do develop mental/emotional problems,
PTSD will not be the only problem to be addressed. VA provides
comprehensive care for veterans with mental disorders through a
continuum of services designed to meet patients' changing needs.
Major depression and substance abuse are two problems that can be
anticipated, and these disorders carry with them significant risk for
dangerous behaviors such as suicide and family violence. VA provides
care through 144 specialized PTSD programs throughout the country along
with 206 (soon to be 207) Readjustment Counseling Centers (RCS), often
called Vet Centers. In addition, Outpatient Clinical PTSD Teams,
Specialized Inpatient PTSD Programs, and Residential Treatment Programs
are located across the Nation. There are PTSD programs in all States.
VA's ongoing PTSD program evaluation indicates improvements in PTSD
symptoms and functioning in patients treated by VA for PTSD. In fiscal
year 2004, VA spent more than $3 billion on the provision of treatment
services (medical and psychiatric) to veterans with a mental illness.
The tasks for these teams are those of outreach, health promotion,
consultation, and liaison. The working title for these programs is:
Returning Veterans Outreach, Education and Care programs and there will
be at least one program in every Veterans Integrated Service Network.
VA's National Center for PTSD is creating an educational program
entitled ``PTSD 101'' specifically for clinicians who will be hired
into the new PTSD programs. There will be basic and advanced care
modules. Linked to the concepts of the PTSD Clinical Practice Guideline
and the Iraq Clinician War Guide, it will ensure the provision of the
latest evidence-based care to veterans with PTSD and associated mental
disorders.
Analysis of DOD data as of December 2004 shows that 244,054 troops
had returned from Iraq, with 20 percent (48,733) receiving care in a VA
medical center. Of those returned troops, 12,422 had a mental health
diagnosis: 4,783 were previously diagnosed with PTSD, and 3,500 were
diagnosed with a depressive disorder. An additional 2,082 veterans were
diagnosed with PTSD at Vet Centers.
Readjustment Counseling Service takes the lead in providing
outreach and counseling services through the 206 (soon to be 207)
community-based centers throughout the United States. Fifty additional
Global War on Terrorism counselors have been added to these centers to
meet this need. In addition the Secretary has assigned authority to RCS
to deliver bereavement counseling to those in need.
To position VA for future needs, we have allocated $100 million in
fiscal year 2005 to implement initiatives contained in the Department's
Mental Health Strategic Plan. The President's fiscal year 2006 budget
submission proposes an additional $100 million for mental health
initiatives in fiscal year 2006. These initiatives will benefit all
veterans receiving mental health care from VA and include OEF/OIF
outreach programs designed to provide preventive health services that
should, in many instances, identify problems and address them before
they require more extensive clinical intervention. These enhancements
will also address increased clinical needs of returning veterans and
existing veterans who come to VA for PTSD care.
Question. A core mission of the Department of Veterans Affairs is
the provision of benefits to relieve the economic effects of disability
upon veterans and their families. For those benefits to effectively
fulfill their intended purpose the VA must process and adjudicate
claims in a timely and accurate fashion. Rather than making headway and
overcoming the chronic claims backlog and consequent protracted delays
in claims disposition, the VA has lost ground to the problem, with the
backlog of pending claims growing substantially larger. Historically,
many underlying causes acted in concert to bring on this intractable
problem. These dynamics acting in concert have been thoroughly detailed
in several studies into the problem. While the problem has been
exacerbated by lack of appropriate and decisive action, most of the
causes can be directly or indirectly associated with inadequate
resources.
What steps does the Veterans Administration plan to take by virtue
of this recommended budget in order to improve the quality,
proficiency, and efficiency within the Veterans Administration with
respect to claims processing and adjudication?
Answer. The focus of the 2006 budget is to continue progress, in
support of the President's initiative, to improve the timeliness and
accuracy of claims processing. Recipients of compensation and pension
benefits are projected to increase from 2.62 million in 2001 to 3.02
million in 2006, a 15.3 percent increase. The projected increase is due
to a number of factors, including the current record levels of DOD
active duty end strength resulting from the large number of activated
reserve units.
--We continue to receive increasing numbers of claims. Between 2000
and 2004, the number of disability claims received annually
rose from 674,000 to 771,000, or more than 14 percent. This
budget conservatively estimates a 3 percent increase for 2005
and another 3 percent for 2006 in claims receipts. This
increase is due to both the high active duty levels mentioned
above, as well as an increase in the number of reopened claims
due to various changes, including the addition of
cardiovascular disease and residuals of stroke to the
presumptive list for former Prisoners of War.
--To address projected workload increases, this budget continues to
ensure a sufficient workforce in our compensation and pension
programs to meet our targets. The FTE in the compensation and
pension programs will increase by 128 in 2006.
This budget also continues VBA's goal to improve organizational
designs and information technology investments to process claims as
efficiently and accurately as possible. For example:
--In 2005 VBA will begin the consolidation of the disability
determination aspects of the Benefits Delivery at Discharge
Program into two rating activities located in Salt Lake City
and Winston-Salem.
--In 2006 VBA will complete implementation of the Cooperative
Separation Process/Examination initiative at the local level.
This is a joint VA and DOD initiative that streamlines the
military discharge process for separating servicemembers with
disabilities.
--Funds are provided to continue reorganizing our field financial
functions to reduce overhead and realign critical resources to
our business processes directly serving veterans.
--$4.4 million is provided to begin implementation of the Vocational
Rehabilitation & Employment Task Force recommendations to
establish self-service job resource labs at each regional
office to aid VR&E staff and veterans in comprehensive analyses
of employment opportunities.
--Over $15 million has been allocated to support our highest priority
IT initiative--VETSNET--and continue efforts in C&P, Education,
and VR&E to move off the existing Benefits Delivery Network to
the new corporate environment. VETSNET, when fully deployed,
will greatly expand the information available to decision
makers, reduce the number of times data must be entered both
increasing efficiency and insuring that the same data is
available throughout the Department.
In addition, the 2006 budget submission will enable VA to continue
its efforts in skill certification. Skill certification is a core
initiative of the Department to insure that claims processors in
regional offices have tested and validated competencies in the
essential aspects of their positions. We believe that skill
certification directly addresses quality and proficiency.
VA will also continue its Benefit Delivery at Discharge (BDD)
program. That program greatly simplifies the claims process and
significantly reduces the amount of time required to process a claim.
Question. There are 119 State Veterans Homes in 48 States and
Puerto Rico. For more than 100 years the Federal Government has
provided support for our State Veteran's Homes in partnership with
State governments. The Federal Department of Veteran's Affairs budget
for fiscal year 2006 would change the eligibility for Federal support
excluding for the first time whole priority groups of deserving
veterans. As a result, up to 80 percent of veterans in many States may
no longer qualify for partial Federal support through per diem
payments. Budget assumptions reduce the VA Per Diem grant by $293
million. The budget would also place a moratorium on Federal
construction grants for renovations and new construction of State
Veterans Homes. After decades of partnership with the States--during
which State taxpayers across the country have contributed millions of
dollars to build and maintain the State Veterans Homes--the President's
budget reneges on this commitment to our State homes, State taxpayers,
and worst of all, our honored veterans. The impact of the proposal
would be devastating for the residents of the State Veterans Homes. Of
veterans currently residing in the Homes, approximately 20 percent
would continue to receive the Federal per diem payments.
What suggestions does the VA have for veterans who cannot afford to
pick up these additional payments as a result of the per diem change
and what plan do you have for Louisiana Veterans Homes which will be
unable to meet their operating costs as a result of this massive blow?
Answer. State Veterans Homes are owned, operated, and financed by
the States. VA provides limited financial assistance to the States in
the form of per diem grants for nursing home, hospital, domiciliary,
and adult day healthcare. Only the nursing home per diem is affected by
the fiscal year 2006 budget proposal. The cost of care in State
Veterans Homes varies from State to State, as does the amount of
assistance provided to the Homes by the State. Currently, costs not
covered by the VA per diem payments are covered from various sources,
including the veterans themselves and State and Federal programs such
as Medicare and Medicaid. VA's proposal could increase the share of
costs borne by the State, depending upon the State's own policies for
coverage of the costs of State Home care. State Homes will continue
operations to the extent that individual States discharge their fiscal
responsibility for the operation and management of the Homes. VA does
not have information on the plans of individual States to respond to
the change in VA policy.
______
Questions Submitted by Senator Robert C. Byrd
Question. According to the Congressional Research Service, the 2003
decision by the Administration to suspend health care enrollments for
the lowest priority veterans called Category 8 veterans will affect
522,000 veterans by the end of the current fiscal year.
Secretary Nicholson, how many Category 8 veterans in West Virginia
are no longer eligible to enroll in the VA health care as a result of
the 2003 decision?
Answer. As of the end of fiscal year 2004, VA estimates there were
78,688 veterans in West Virginia who were Priority 8 of which 24,649
were enrolled. VA projects there were 54,039 Priority 8 veterans in
West Virginia who were not eligible to enroll with VA for health care.
Question. If this policy continues, as your budget proposes, how
many Category 8 veterans in West Virginia will be affected in fiscal
year 2006 and beyond? How many veterans will be affected nationally?
Answer. VA projects there are 9,818 Priority 8 enrollees residing
in West Virginia who will pay the enrollment fee in fiscal year 2006
and another 8,789 who will choose not to pay. At the national level,
642,772 Priority 8 enrollees would pay the enrollment fee and 579,929
would not. These new collections will allow VA to continue to refocus
resources on veterans that fall under VA's core medical care mission
(those with service-related disabilities, lower incomes, and special
health needs). The fees are more closely aligned with other public and
private health plans.
PROPOSED BECKLEY VA MEDICAL CENTER NURSING HOME
Question. Mr. Secretary, I made your predecessors acutely aware of
my very strong support for the construction of the proposed Beckley VA
Medical Center Nursing Home, and I want to take this opportunity to
familiarize you of my interest in this project, as well. The nursing
home was authorized by the Veterans Programs Enhancement Act of 2000,
with the sponsorship of Senator John D. Rockefeller, IV. The project
was originally authorized at $9.5 million. However, after further
consultation with VA Headquarters officials, the estimates were
reformulated, with a new total cost of approximately $18 million for a
120-bed, 71,300 gross-square foot facility.
I have been supportive of this project since its inception. To aid
in its development, I added $1 million to the fiscal year 2001 VA-HUD
Appropriations bill for the design of such a nursing home on thirteen
acres of available space owned by the Beckley VA Medical Center, a site
for which I secured $100,000 several years ago in anticipation of
increased demand for nursing home care in Southern West Virginia.
Further, I have included language in the Senate reports accompanying
the fiscal year 2002, 2003, 2004, and 2005 VA-HUD Appropriations bills
to encourage that funds for the project be included in subsequent
Administration budgets.
I understand that the project has undergone the Capital Asset
Realignment for Enhanced Services (CARES) review process and that it
has been included in the February 2005 VA Five-Year Capital Plan, 2005-
2010, which lists the VA's highest priority major medical facility
construction requirements over the next 5 years. While I am pleased
that the proposed nursing home is on this list, I am disappointed that
it is ranked #46 (out of 48 projects).
Mr. Secretary, is the VA adhering to its capital investment
methodology by funding construction projects in priority order? Have
there been any exceptions made? What are they?
Answer. The Department has adhered to the capital investment
methodology when funding CARES projects. VA has only allowed projects
to be funded out of order in extremely limited situations, based upon
funding allocations, as described below.
The only exception being:
--To Allow for Maximizing of the Utilization of Major Construction
Funds.--In fiscal year 2005 #29 San Diego, CA, $48.3 million
was funded prior to #28 Dallas, TX. Clinical expansion at San
Diego was funded since it was less expensive and within VA's
funding allowance. This occurred again in fiscal year 2006 when
the design for #6 project in Fayetteville, AR, was funded prior
to other higher ranking projects because of the availability of
funding.
Question. At the current level of funding and the current rank of
the Beckley VAMC Nursing Home, when do you anticipate that funds will
be included in the President's Budget for this project? What can be
done to move Beckley up the list?
Answer. When Beckley will be included in the President's budget
cannot be determined at this time as new projects are added (and some
may drop out) to the review process each year. For example, for fiscal
year 2006 two additional projects were reviewed as compared to the
previous year. Existing projects which have not received CARES funding
and new projects are rescored each year. Split funded projects that
have received previous CARES funds (because of their higher score)
retain their ranking.
Based on the current capital decision criteria, it will be
difficult for a project like Beckley to compete with other medical
projects that clearly provide more access to care, or have a life-
safety component (such as seismic) and/or provide for special
disability services (spinal cord injury). How well a project addresses
these criteria leads to an improved score.
Question. Will the VA's highest major construction priorities be
reevaulated in the future, providing an opportunity for the proposed
Beckley Nursing Home to move up on the list?
Answer. The Department rescores and ranks major projects every
year. In the next few months, VA will again review and rank major
construction projects. The highest ranking will be included in the
congressional budget submission for fiscal year 2007.
Question. Since the proposed Beckley Nursing Home has already been
designed with funds that I added in fiscal year 2001 and the land is
already owned by the VA, why can't this project be moved up on the list
since it is ready to go to construction?
Answer. The ranked list of projects are developed based on how well
each project specifically addresses each of the main criteria and sub-
criterion used for ranking CARES projects. It would not be equitable
for the Department to move a project up this list simply based on the
fact that it is designed. Our capital investment planning process and
methodology involve a Department-wide approach for the use of capital
funds and ensure all major investments are based upon sound economic
principles and are fully linked to strategic planning, budget, and
performance measures and targets. All CARES projects have been reviewed
using a consistent set of evaluation criteria that address service
delivery enhancements, safeguarding assets, support of special emphasis
programs and services, capital portfolio goals, alignment with the
President's Management Agenda, and financial priorities.
Question. What level of funding for the VA's major construction
program will be required annually and for what period of time to
complete all of the projects listed in the VA's Five-Year Capital Plan,
2005-2010?
Answer. VA will need to reexamine its needs each year and determine
the appropriate breakout between major and minor construction. The
Department is unable to determine for what period of time it would take
to complete all the projects listed in our Five-Year Capital Plan
because the plan is a dynamic document which is updated each year based
on competing new projects and priorities. In addition, VA is still
developing cost estimates for the 70 outyear projects that are listed
in the plan. Most of these conceptual projects require further
refinement and development. To date, VA has committed $2.15 billion to
implementing CARES plans, and additional funding will be requested in
the outyears as specific capital plans are designed.
Question. How many design awards has the Department made to date
and for which projects? How many land purchases and for which projects?
How many construction awards have been made and for which projects?
Answer. There have been 16 design awards and 2 construction awards.
There were no land purchases.
Design Awards:
--Atlanta, GA--Modernize Patient Wards--6/04
--Chicago Westside, IL--Modernize Inpatient Space--11/02
--Columbus, OH--Outpatient Clinic--8/04
--Des Moines, IA--Extended Care Building--7/04
--Durham, NC--Renovate Patient Wards--9/04
--Las Vegas, NV--New Medical Facility--2/05
--North Chicago, IL--Surgical Suite/Emergency--11/03
--Pensacola, FL--Outpatient Clinic--1/04
--Pittsburgh, PA--Medical Center Consolidation--12/04
--San Antonio, TX--Ward Upgrades and Expansion--1/05
--San Diego, CA--Seismic Corrections--1/05
--San Francisco, CA--Seismic Corrections--12/03
--Tampa, FL--SCI--10/04
--Tampa, FL--Upgrade Electrical--10/04
--Tucson, AZ--Mental Health Clinic--8/04
--Wes Los Angeles, CA--Seismic Corrections--3/03
Construction Awards:
--Chicago Westside, IL--Modernize Inpatient Space--9/04
--North Chicago, IL--Surgical Suite Emergency--9/04
--Pensacola, FL--Outpatient Clinic--3/05
______
Questions Submitted by Senator Patty Murray
REAL HEALTH CARE INCREASE
Question. This budget cites an increase of $522 million over last
year; however, the number is much lower in reality--about $100 million.
As is typical of this Administration, smoke and mirrors are used to
deflect attention from the real number. Mr. Secretary, let's be
perfectly clear about what the President is offering as an increase for
VA health care. Your testimony cites a 2.5 percent increase for medical
spending. The Majority staff on the Veterans' Affairs Committee
provided a terrific chart which tries to make sense of the number and
found that the requested increase is under $80 million. That's only $80
million more for the nearly 7 million veterans who are enrolled in VA
healthcare, for the 170 hospitals and hundreds of outpatient clinics,
for medical inflation, and payroll increases for thousands of VA health
care workers. Mr. Secretary, Washington state has nearly 700,000
veterans and the population is growing. The CARES commission and my
VISN director have told these veterans that two outreach clinics--in
North Central Washington and Whatcom County--are on the way. But now
they are on hold because of funding shortages.
Simply put: help me to understand how an $80 million increase keeps
our promise to veterans? Set aside the possible increased revenue from
insurance companies and the spending associated with new veterans'
fees.
Answer. The President's 2006 request includes budgetary resources
of $30.7 billion which will enable VA to provide the high-quality
health care services that VA has become renowned for to more than 5.2
million patients in fiscal year 2006.
Question. The Budget proposes $30.7 billion (including collections)
for medical care--a $0.8 billion (2.5 percent) increase over the 2005
enacted level--to treat over 5.2 million patients. The Budget assumes
that Congress will authorize new authority whereby veterans with higher
incomes and no military disabilities will pay a $250 annual enrollment
fee and higher drug co-pays (from $7 to $15). These will still be low
and more aligned with other public and private health plans.
What is the amount the President is requesting Congress appropriate
for VA's hospitals and clinics?
Answer. VA is requesting the following appropriations in fiscal
year 2006:
[In thousand of dollars]
------------------------------------------------------------------------
Description Amount
------------------------------------------------------------------------
Medical Services........................................ 19,789,141
Medical Care Collections Fund........................... 2,588,000
Medical Administration.................................. 4,439,124
Medical Facilities...................................... 3,888,469
---------------
Total 2006 Budget Request......................... 30,704,734
------------------------------------------------------------------------
Question. And again to be clear: what is the amount associated with
payroll increases and inflation? The amount associated with payroll and
inflation for VA health care is more than $1 billion, so the
President's request doesn't even cover inflation.
Answer. The 2006 budget request reflects an increase of $858.9
million for payroll increases and an increase of $539.7 million for
inflation. These increases are offset by a decrease in requested
appropriations of $1.1 billion from a comprehensive set of legislative
and regulatory policy proposals and a decrease of $590,000 for
management efficiencies.
INCREASED COSTS FOR MIDDLE-INCOME VETS/BAN ON PRIORITY 8S
Question. This budget includes an increase in the drug co-payment
and an annual enrollment fee of $250 for Priority 7 and 8 veterans. The
threshold for Priority 7 is only $25,163 a year, so veterans with
incomes above this level would be required to pay these new fees. The
budget also continues the ban on Priority 8 veterans, who in some
regions of the country can be making as little as $28,000 a year and
still not be eligible for VA care. The President's co-pay increase and
new enrollment fee are designed to literally drive veterans out of the
system. Two years ago, the President had no qualms about prohibiting
enrollment for new ``middle-income'' veterans. That policy continues
today. In fact, the testimony touts that the President's enrollment
decision was the ``most effective'' vehicle to manage health care
resources. This budget takes a different route, however. The goal is to
make the cost of coming to VA for health care prohibitively expensive.
Either way, I have to question the priorities of this Administration.
As you know, my father returned home from World War II as a disabled
veteran and during the Viet Nam War, I interned in the Seattle VA
hospital. I know first-hand the scars and wounds that burden our
veterans when they come back home.
Mr. Secretary, our veterans--new and old--are some of our most
important national security assets. Why not provide sufficient
resources to care for all veterans?
Is this care not part of the cost of past wars and the current
conflicts in which we are engaged?
Do you agree that VA healthcare for our soldiers returning home is
a cost of war?
Answer. In the Eligibility Reform legislation, Congress established
a priority-based enrollment system and required the VA Secretary, every
year, to assess veteran demand for VA health care and determine whether
or not resources are available to provide timely, quality care to all
enrollees. Using this legislatively mandated system for prioritizing
care to veterans, VA suspended enrollment in Priority 8 and has
proposed cost-sharing policies for Priority 7 and 8 enrollees as a
means of balancing veteran demand for VA health care and available
resources. These policies also refocus the VA health care system on
those veterans who need us most. With the implementation of the
enrollment fee for Priority 7 and 8 enrollees, VA expects that 71
percent of all those using VA's health care system in 2006 will be
veterans with service-connected medical conditions, special needs, and
low incomes, up from 66 percent in 2004. The fees are more closely
aligned with other public and private health plans.
REAL EFFECTS OF INCREASING OUT-OF-POCKET COSTS
Question. The Administration's budget calls for increasing the drug
co-payment from $7 to $15 per 30-day prescription for Priority 7 and 8
veterans, as mentioned in an earlier question. It also would require
these veterans to pay a $250 annual enrollment fee. At the bottom end
of this spectrum, older veterans on fixed incomes could be making as
little as $26,000 a year and still be subject to these increases in
costs.
I'd like to briefly discuss the potential impact of some of your
proposals on veterans in the ``middle-income'' bracket. Some of these
veterans could be making as little as $26,000 a year and still be
subject to the increases in out-of-pocket costs that are built into
your budget. And, for a veteran living on a fixed income in a city with
a high cost of living, like Seattle, this is quite harsh. For example,
an older veteran on an average of eight medications would see a cost
increase per year of more than $1,000, just to continue getting his or
her needed medications and continue enrollment in VA health care.
How do you reconcile this with VA's mission of providing care to
all who have served?
Answer. In the Eligibility Reform legislation, Congress established
a priority-based enrollment system and required the VA Secretary, every
year, to assess veteran demand for VA health care and determine whether
or not resources are available to provide timely, quality care to all
enrollees. Using this legislatively mandated system for prioritizing
care to veterans, VA has proposed cost-sharing policies for Priority 7
and 8 enrollees as a means of balancing veteran demand for VA health
care and available resources. These policies also refocus the VA health
care system on those veterans who need us most. With the implementation
of the enrollment fee for Priority 7 and 8 enrollees, VA expects that
71 percent of all those using VA's health care system in 2006 will be
veterans with service-connected medical conditions, special needs, and
low incomes, up from 66 percent in 2004. The fees are more closely
aligned with other public and private health plans.
STATE VETERANS HOMES: ON THE CHOPPING BLOCK
Question. This budget contains proposals that will severely affect
the State Veterans Home program. On the one side, the President will be
seeking authority to restrict who can receive VA funding for care in
these homes. While 50 percent of the veterans currently being cared for
in Washington state's three facilities, the State Home Association has
told me that in many States, 80 percent or more of State Home residents
will be excluded by this change. According to the VA's average daily
census for long-term care, there are estimated to be more than 19,000
individuals in State nursing homes. This budget would slash that figure
to about 7,000--a 62 percent decline in 1 year.
Explain to me how you believe these homes will remain viable if
these proposed policies are accepted?
Answer. State Veterans Homes are owned, operated, and financed by
the States. VA provides limited financial assistance to the States in
the form of per diem grants for nursing home, hospital, domiciliary,
and adult day healthcare. Only the nursing home per diem is affected by
the fiscal year 2006 budget proposal. The cost of care in State
Veterans Homes varies from State to State, as does the amount of
assistance provided to the Homes by the State. Currently, costs not
covered by the VA per diem payments are covered from various sources,
including the veterans themselves and State and Federal programs such
as Medicare and Medicaid. VA's proposal could increase the share of
costs borne by the State, depending upon the State's own policies for
coverage of the costs of State Home care. In addition, VA long-term
care has shifted from inpatient to outpatient, similar to the private
sector. This is more convenient to patients and their families, and is
more cost-effective
VA NURSING HOMES: ALSO ON THE CHOPPING BLOCK
Question. The Administration would also like to reduce VA's in-
house capacity by almost 14,000 beds.
What can you tell me about where VA is in meeting the non-
institutional capacity called for by GAO, and relied upon so heavily in
your budget, to make up for this loss?
Answer. Non-institutional home and community-based care (HCBC) is
part of the medical and extended care benefits package available to all
enrolled veterans. We recognize that access to these services varies
across VA's health care system. Last year, VA adopted a policy of
increasing HCBC capacity by 18 percent annually to meet the full need
of enrolled veterans by 2011, and established a performance measure for
Network Directors to meet that goal. Capacity growth is targeted to
those regions with the greatest current and projected need for services
in order to reduce variability in access to care. Progress so far has
been excellent. Capacity growth exceeded 20 percent in fiscal year 2004
and is at 113 percent of target so far in fiscal year 2005. The number
of individual programs is also expanding. For example, VA recently
approved its 100th Home-Based Primary Care Program (up from 77 less
than 5 years ago), and Care Coordination services have now been
approved in all 21 VISNs.
Care Coordination services involve the ongoing monitoring and
assessment of selected patients using telehealth technologies to
proactively enable prevention, investigation, and treatment that
enhances the health of patients and prevents unnecessary and
inappropriate utilization of resources. Care coordination provides
patients a continuous connection to clinical services from the
convenience of their place of residence.
SUBCOMMITTEE RECESS
Senator Hutchison. So with that, we are in our second vote
and I am going to close this meeting. I thank you very much for
your patience and look forward to working with all of you. And
thank you, Dr. Perlin, for your comments as well.
[Whereupon, at 3:37 p.m., Tuesday, March 15, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES
APPROPRIATIONS FOR FISCAL YEAR 2006
----------
WEDNESDAY, MARCH 16, 2005
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2:08 p.m., in room SD-138, Dirksen
Senate Office Building, Hon. Kay Bailey Hutchison (chairman)
presiding.
Present: Senators Hutchison, Allard, and Feinstein.
DEPARTMENT OF DEFENSE
Department of the Army
STATEMENT OF GEOFFREY G. PROSCH, PRINCIPAL DEPUTY
ASSISTANT SECRETARY OF THE ARMY FOR
INSTALLATIONS AND ENVIRONMENT
ACCOMPANIED BY:
MAJOR GENERAL GEOFFREY D. MILLER, ASSISTANT CHIEF OF STAFF,
INSTALLATION MANAGEMENT
MAJOR GENERAL WALTER F. PUDLOWSKI, SPECIAL ASSISTANT TO THE
DIRECTOR, ARMY NATIONAL GUARD
BRIGADIER GENERAL GARY M. PROFIT, DEPUTY CHIEF, ARMY RESERVE
OPENING STATEMENT OF SENATOR KAY BAILEY HUTCHISON
Senator Hutchison. I'll call this meeting order. I'm very
pleased to be able to have our second hearing on military
construction. Last week, we had the first of our hearings, and
today we are doing Army and Air Force. I want to welcome all of
you to the Committee. My Ranking Member will be here shortly,
but I wanted to go ahead and start so we could stay on time.
This is a dynamic year in military construction, and
especially for the Army. Surely, the Army is doing more than
probably we could ever have expected, doing modularity, global
restationing and BRAC, all at the same time, as we are fighting
the war in Iraq with heavy Army effort.
There are many demands on the Army right now, and a tough
budget environment, but it doesn't change the fact that every
soldier who is reassigned, restationed, or realigned will need
a place to eat, sleep, and train, and every family will need
quality education and healthcare.
Also, the experience of our military families throughout
the processes of moving will directly affect morale, readiness,
and retention of our men and women at a time when we must have
retention.
So with all of these moving pieces, it seems to me that the
Army should be investing heavily in infrastructure in order to
have adequate facilities in place for its soldiers and their
families when they arrive at the new post. Yet this year's
budget request is $1.48 billion, down 16 percent from last
year's request, 25 percent from last year's enacted levels.
I brought this up last week at the Defense Appropriations
hearing, with both the Secretary and with General Schoomaker,
so I do want everyone to know that I am concerned about the
Army, the demands we're putting on the Army, and a lower
military construction budget at the same time.
Having said that, I do so support where the Army is putting
its increases, and that is in the Guard and Reserve. They are
going up 23 and 22 percent, respectively, over their 2005
requests, and the Reserve request is 15 percent above enacted
levels. That is, I think, a good thing. We have shortchanged
Guard and Reserve facilities for many years. So, while we're
not nearly where we need to be, I do support those increases.
But I will ask you, as the representative of the Department,
Mr. Prosch, to take back the message that I really believe we
are shortchanging the Army in military construction.
On the Air Force, you have a 61 percent increase over
fiscal year 2005. And, while the Air Force is not facing quite
the level of change as the Army in the coming year, it will be
actively participating in BRAC, global restationing, and the
global war on terror. So there will be infrastructure needs
over the next few years as these changes play out.
The Air Force has significantly boosted its family-housing
budget request. It's up 18 percent from last year. And, as
ardent a supporter as I am of housing privatization, I am
pleased to know that with the budgetary cap on the program
lifted, the Air Force is now really fully engaged in
privatization. I am concerned that in our desire to meet the
fiscal year 2007 goal of eliminating inadequate housing to all
Services, that we also don't forgo responsible budgeting. I do
think that the Committee, our Committee, needs to be kept
apprised of the workings of the privatization, and, in cases
where MILCON has been appropriated for certain projects that
are now being converted to privatization, I think we need to be
kept apprised of that and we need to have input when changes
like that are made.
With that, I'm going to turn to Senator Allard to see if he
has an opening statement. And when Senator Feinstein comes, I
will certainly recognize her.
Senator Allard.
STATEMENT OF SENATOR WAYNE ALLARD
Senator Allard. Thank you, Madam Chairman. I'd like to
thank the panel for testifying today. And I'd like to thank
you. I appreciate the opportunity to welcome our guests from
both the Army and the Air Force here today.
Too often, in Congress, we focus on our military's fighting
units and forget that significant combat-power multipliers are
Defense installations. If we have the best installations and
facilities, it will make it that much easier for our soldiers,
sailors, and the airmen and marines to focus on their mission
of defending our Nation.
I'm pleased to welcome our guests here from the Army today.
I've been impressed by the proactive approach the Army has
taken to address many of the pressing problems facing its
military posts, facilities, and training ranges. By thinking
ahead, I believe the Army is a couple of steps ahead of other
services, addressing difficult problems, like encroachment and
shrinking utility of our training ranges.
And, Madam Chairman, I'll also say that we've got, there at
Fort Carson--we have some privatization of the housing which
seems to be working very well. And both Congressman Hefley and
myself have been following it very closely.
This praise does not mean the Army doesn't have problems.
In particular, I am concerned about the redeployment of our
troops stationed overseas to the continental United States. I
support this redeployment, as it better addresses our global
posture, but I am concerned the Army has not thought this
through. I look forward to asking the witnesses some--from the
Army some questions on this particular issue, if I'm here.
Madam Chairman, I've got to leave in about 15 minutes or so.
Also, we'll be hearing testimony from witnesses from the
Air Force. And, Madam Chairman, I have serious concerns about
the way the Air Force has handled the cleanup of one of
Colorado's former Air Force bases that was closed during a
prior BRAC round. Once we've gone through BRAC closure, I think
the follow-up in carrying through your commitments afterwards
is extremely important. And so, I'll be asking questions in
regard to the Air Force's lack of effort, and some issues
regarding a closure that we had in Colorado. I may not be able
to ask them in person, but, if not, we'll maybe submit
questions to the Committee. Or perhaps, we'll submit them to
the Army, and perhaps--maybe they can submit them back to the
Committee for a response.
I look forward to working with all of you as we go through
some difficult priorities setting here on the Committee. And I
want to thank you, Madam Chairman, for giving me the time to
say a few words.
Senator Hutchison. Thank you, Senator Allard.
We have our first panel today, Mr. Geoffrey Prosch, the
Principal Deputy Assistant Secretary of the Army for
Installations and Environment; Major General Geoffrey Miller,
Assistant Chief of Staff of the Army for Installation
Management; Major General Walter Pudlowski, Special Assistant
to the Director of the Army National Guard; and Brigadier
General Gary Profit, the Deputy Chief of the Army Reserve.
Mr. Prosch, I'm going to ask you to make your statement,
but I do want to say how pleased I am with your accessibility.
I have called on you many times, and you have responded, and I
appreciate that very, very much. It helps for a very strong
working relationship.
So if you--let me just see if my Ranking Member would like
to make her opening statement now, or would you prefer to wait?
Senator Feinstein. No statement, Madam Chairman, just to
welcome everybody. I look forward to their presentations.
Senator Hutchison. Senator Burns submitted a statement to
be included in the hearing.
[The statement follows:]
Prepared Statement of Senator Conrad Burns
Thank you, Chairwoman Hutchison. Gentlemen, thank you for coming to
brief our subcommittee this afternoon. Your service and work is
critical to the development and maintenance of the facilities for our
soldiers, sailors, airmen, and marines around the world. Since today,
we are talking specifically about Air Force and Army military
construction, I will restrict my remarks to those areas. I intend to
honor our men and women serving and those who have made the ultimate
sacrifice for our country by ensuring that our active, reserve, and
national guard have the resources they need to support the current and
future requirements with which they have been tasked.
Our military personnel are based in dangerous areas all around the
world. It speaks well of the character of our young men and women, who,
despite these dangers, accept this duty and continue their voluntary
service to our Nation. We must ensure that we provide the resources
needed to maintain their installations both at home and overseas.
I hold firm in my belief that replacing dangerous and outdated
facilities improves morale for our military forces worldwide,
contributing to better-trained, more enthusiastic service members who
can complete the mission more effectively and safely. Investing in
facilities to support the fielding, training, operations, and quality
of life of our forces pays dividends. When I chaired this subcommittee
years ago, I did just that in my State of Montana. Our Air Force and
Guard facilities were ``vintage 1940'' buildings. Today Montana has
state of the art facilities and it has made all the difference in the
world for those men and women. So it is that I really feel our
commitment to quality of life and modern facilities must not end with
the active forces. We must continue to support essential infrastructure
improvements for our National Guard forces, which are fighting
alongside our active duty forces.
Part of this quality of life includes physical fitness. It is clear
that Air Force Chief of Staff, General Jumper, is making fitness a
priority throughout the Air Force. I think this is a good thing. We are
desperately in need of a new physical fitness center at Malmstrom Air
Force Base (AFB), in Great Falls, Montana. Some of you may know that it
can get a little chilly up in Montana during the year. . . . This,
combined with the fact that Malmstrom AFB has the youngest average age
of any Air Force base, has really accelerated the need for expansion of
the existing facility. I hope you--Secretary Kuhn and Major General
Fox--will work with me in finding a way to get this project
accomplished as soon as possible.
We have also had some problems with Air Force contractors over the
years at Malmstrom AFB, on various family housing projects. It just
shouldn't be something that our airmen have to worry about--sinking
foundations, front steps separating from the rest of the house, etc.
While most of this is currently in litigation, I do look appreciate
your willingness to continue discussions on these issues with you,
should further steps need to be taken.
Mr. Prosch, I also note with interest a specific initiative the
Army is undertaking as part of an overall improvement to its facilities
posture. As we listen to your testimony today, I would like to hear
more about the Army's ``Range and Training Land Strategy'' and hope we
can discuss this further. Fort Harrison, in Helena, Montana, is a
wonderful asset to not only the Montana National Guard, but the entire
United States military. Various units from across the country love to
come to Fort Harrison to train. I wonder if Fort Harrison could fit
into this strategy somehow.
You will continue to have my strong support in these areas, as we
invest in training and quality of life measures. It is of utmost
importance that we do what we can to maintain the proficiency,
readiness, and morale of these soldiers and airmen, whom this Nation
relies upon to protect freedom and our way of life.
Again, I thank you for being here today and look forward to your
testimony. Thank you, Chairwoman Hutchison.
Senator Hutchison. Thank you.
Mr. Prosch.
Mr. Prosch. Thank you, ma'am.
STATEMENT OF GEOFFREY G. PROSCH
Madam Chairman Hutchison, Ranking Member Feinstein, Senator
Allard, I'm pleased to appear before you with my Army
Installation partners, Major General Geoffrey Miller from the
Active Army, Major General Walt Pudlowski from the Army
National Guard, and Brigadier General Gary Profit from the Army
Reserve.
This is my fourth year to have this distinct honor to
represent our great Army and to testify before Congress. It is
wonderful to be here today with friends and Army supporters
from this Committee. We look forward to the opportunities this
Committee brings toward leveraging enhanced quality of life for
our soldiers and families.
We have provided a written statement for the record that
provides details on our Army's fiscal year 2006 Military
Construction budget. On behalf of the Army Installation
Management team, I would like to comment briefly on the
highlights of our program.
We begin by expressing our great appreciation for the
tremendous support that the Congress has provided to our
soldiers and their families who are serving our country around
the world. We are a Nation and an Army at war, and our soldiers
would not be able to perform their missions so well without
your support.
We have submitted a military construction budget of $3.3
billion that will fund our highest-priority active Army, Army
National Guard, and Army Reserve facilities, along with our
family housing requirements. This budget request supports our
Army vision encompassing current readiness, transformation, and
people.
As we are fighting the global war on terrorism, we are
simultaneously transforming to be a more relevant and ready
Army. We are on a path with the transformation of installation
management that will allow us to achieve these objectives. We
currently have hundreds of thousands of soldiers mobilizing and
demobilizing, deploying and redeploying. More troops are coming
and going on our installations than in any era since World War
II. Our soldiers and installations are on point for the Nation.
And on a special note I would ask everyone here to keep our
forward-deployed soldiers in your thoughts and prayers. New
forces have rotated recently to Iraq. The 3rd Infantry Division
and the 3rd Armored Cavalry Regiment have returned for their
second tour of duty. The 42nd Infantry Division, Army National
Guard, the Rainbow Division, has deployed. Now, they are over
there. The enemy will test them early on. So keep them in your
prayers.
The Army recently identified key focus areas to channel our
efforts to win the global war on terrorism and to increase the
relevance and readiness of our Army. One of our focus areas is
``installations as flagships,'' which enhances the ability of
our installations to project power and support families. Our
installations support an expeditionary force, where soldiers
train, mobilize, and deploy to fight and are sustained as they
reach back for enhanced support. Soldiers and their families
who live on and off the installation deserve the same quality
of life as is afforded the society they are pledged to defend.
Installations are a key ingredient to combat readiness and
well-being.
Our worldwide installations' structure is critically linked
to Army transformation and the successful fielding of the
modular force. Military construction is a critical tool to
ensure that our installations remain relevant and ready.
Our fiscal year 2006 Military Construction budget will
provide the resources and facilities necessary for continued
support of our mission. Let me summarize what this budget will
provide for our Army: new barracks for 5,190 soldiers, adequate
on-post housing for 5,800 Army families, increased MILCON
funding for the Army National Guard and the Army Reserve over
last year's request, new readiness centers for over 3,300 Army
National Guard soldiers, new Reserve centers for over 2,700
Army Reserve soldiers, a $292 million military construction
investment in training readiness, and facilities support and
improvements for our Stryker Brigades.
With the sustained and balanced funding represented by this
budget, our long-term strategies will be supported. With your
help, we will continue to improve soldier and family quality of
life, while remaining focused on our Army's transformation to
the future force.
PREPARED STATEMENT
In closing, Madam Chairman, we thank you for the
opportunity to outline our program. As I have visited Army
installations, I have witnessed progress that has been made,
and we attribute much of this success directly to the
longstanding support of this Committee and your able staff.
With your continued assistance, our Army pledges to use fiscal
year 2006 MILCON funding to remain responsive to our Nation's
need.
Thank you for the opportunity to appear before your
Subcommittee and answer any questions you may have.
[The statement follows:]
Prepared Statement of Geoffrey G. Prosch
INTRODUCTION
Madam Chairman and members of the subcommittee, it is a pleasure to
appear before you to discuss our Army's Military Construction budget
for fiscal year 2006. Our request includes initiatives and sustainment
of programs of critical importance to our Army, the Congress, and the
Global War on Terrorism, and we appreciate the opportunity to report on
them to you. We would like to start by thanking you for your unwavering
support to our Soldiers and their families who serve our Nation around
the world. Their courage and sacrifices remain the foundation of our
Army, and they would not be able to perform their global missions so
successfully without your steadfast support.
OVERVIEW
Installations are the home of combat power--a critical component to
the Nation's force capabilities. The Department of Defense and our Army
are working to ensure that we deliver cost-effective, safe, and
environmentally sound capabilities and capacities to support the
national defense mission.
Today, United States forces are engaged worldwide in a war against
global terror. Operations Enduring Freedom and Iraqi Freedom clearly
underscore the need for a joint, integrated military force ready to
defeat all threats to United States interests. To meet the security
challenges of the 21st Century, we require the right blend of people,
weapons, and support systems. Regarding support systems, we need a
global framework of Army installations, facilities, ranges, airfields
and other critical assets that are properly distributed, efficient, and
capable of ensuring that we can successfully carry out the roles,
missions, and tasks that safeguard our security at home and overseas.
The Army's installations framework is multi-purposed. It must
sustain the regular forward presence of U.S forces as well as their
emergency deployment in crisis, contingency, and combat. It must have
the surge capacity to support the mobilization and demobilization of
our Army reserve component forces. It must also focus 10 to 20 years
into the future to develop technologically advanced, affordable, and
effective joint systems and platforms and develop highly qualified and
committed installation management personnel who will operate and
maintain them. Our framework must provide a productive, safe, and
efficient workplace and offer a decent quality of service and
facilities for our Soldiers and their families (comparable to the
American citizens off post they are pledged to defend).
We recognize the enormity of the task to provide the right
installations framework given the other competing funding programs. We
are challenged to find the optimum management approach that balances
the many purposes of our assets. For example, while our installations
retain their primary military mission to organize, train and equip our
forces, they also are home to rare species of plants and animals while
experiencing encroachment from outside civilian communities. Our
stewardship thus embraces the joint warfighting requirements of the
Combatant Commanders with environmental management and stewardship of
our Earth.
DEFENSE INSTALLATIONS STRATEGIC PLAN
In August 2001, the Department of Defense issued the first-ever
Defense Installations Posture Statement along with the initial Defense
Facilities Strategic Plan. Those concepts and initiatives have guided
the Department's programs and budgets and enabled substantial
improvements in the management and sustainability of our installation
assets. However, the attacks of September 11, 2001, and the ongoing
Global War on Terrorism significantly altered our requirement for
homeland security. The Department of Defense 2004 Installations
Strategic Plan significantly expands the scope and depth of the initial
Strategic Plan. The expanded scope reflects the integral relationship
between natural and manmade assets on our installations. It advances
the integration of installations and the environmental, safety, and
occupational health activities to enhance overall support of the
military mission.
Our vision is to ensure installation assets and services are
available when and where needed, with joint capabilities and capacities
necessary to effectively and efficiently support DOD missions.
Our mission is to provide, operate, and sustain, in a cost-
effective and environmentally sound manner, the installation assets and
services necessary to support our military forces--in both peace and
war.
Our goals include the following.
Right Size and Place.--Locate, size, and configure installations
and installation assets to meet the requirements of both today's and
tomorrow's force structure.
Right Quality.--Acquire and maintain joint Army installation assets
to provide good, safe, and environmentally sound living and working
places, suitable base services, and effective support for current and
future missions.
Right Safety and Security.--Protect Army installation assets from
threats and unsafe conditions to reduce risk and liabilities.
Right Resources.--Balance requirements and resources--money,
people, and equipment--to optimize life-cycle investments and reduce
budget turbulence.
Right Tools and Metrics.--Improve portfolio management and planning
by embracing best business practices, modern asset management
techniques, and performance assessment metrics.
THE WAY AHEAD
Army installations are the home of U.S. combat power and are an
inseparable element of the Nation's military readiness and wartime
effectiveness. From our installations, we generate the combat power
required today and develop the combat power that will be needed in the
future. To operate installations effectively and efficiently, we must
sustain, restore, and modernize all of our installation assets and
services--all the natural and manmade assets associated with owning,
managing, and operating an installation, including the facilities,
people, and internal and external environments.
Our plan is to deliver a framework of installations, facilities,
ranges, and other critical assets that is properly distributed,
efficient, and capable of ensuring that we can successfully carry out
the roles, missions, and tasks that safeguard our security at home and
overseas. We have made good progress in many areas, but much remains to
be done. America's security depends upon installation assets that are
available when and where needed and with the right capabilities to
support current and future mission requirements. As the guardians of
Army installations and environment, we embrace transformation as the
only way to guarantee these capabilities are delivered--effectively and
efficiently.
ARMY INSTALLATION STRATEGIES
To improve our Army's facilities posture, we have undertaken
specific initiatives to focus our resources on the most important
areas--Barracks, Family Housing, Revitalization/Focused Facilities,
Range and Training Land Strategy, and Current to Modular Force.
Barracks Modernization Program.--Our Army is in the 12th year of
its campaign to modernize barracks to provide 136,000 single enlisted
permanent party Soldiers with quality living environments. The new
complexes meet the Department of Defense ``1+1'' or equivalent standard
by providing two-Soldier suites, increased personal privacy, larger
rooms with walk-in closets, new furnishings, adequate parking,
landscaping, and unit administrative offices separated from the
barracks.
Army Family Housing.--This year's budget continues our significant
investment in our Soldiers and their families by supporting our goal to
have contracts and funding in place to eliminate inadequate housing by
fiscal year 2007 in the United States and by fiscal year 2008 overseas.
For families living off-post, the budget for military personnel
maintains the basic allowance for housing that eliminates out of pocket
expenses.
Revitalization/Focused Facilities.--Building on the successes of
our housing and barracks programs, we are moving to improve the overall
condition of Army infrastructure with the Focused Facility Strategy.
The Installation Status Report is used to determine facilities quality
ratings of C-1 to C-4 based on their ability to support mission
requirements.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
We are a C-1 Army living and working in C-3 facilities. Our goal is
to reach an overall Army average of C-2 quality by concentrating on
seven types of C-3 and C-4 facilities. These focus facilities are
general instruction buildings, Army National Guard Readiness Centers,
Army Reserve Centers, tactical vehicle maintenance shops, training
barracks, physical fitness centers, and chapels.
Army Range and Training Land Strategy.--Ranges and training lands
enable our Army to train and develop its full capabilities to ensure
our forces are relevant and ready. Our Army Range and Training Land
Strategy supports the Department of Defense's training transformation
goals, Army transformation, and our Army's Sustainable Range Program.
The Strategy identifies priorities for installations requiring
resources to modernize ranges, mitigate encroachment, and acquire
training land.
Current to Modular Force.--The fiscal year 2006 budget includes
projects to ensure that our ``training battlefields'' continue to meet
the demands of force structure, weapons systems, and doctrinal
requirements. As of fiscal year 2005, we have constructed or funded 80
percent of the Military Construction requirements for the Stryker
Brigade Combat Teams.
Leveraging Resources.--Complementary to these budget strategies,
the Army also seeks ways to leverage scarce resources and reduce our
requirements for facilities and real property assets. Privatization
initiatives such as Residential Communities Initiative (RCI), Utilities
Privatization, and build-to-lease family housing in Europe and Korea
represent high payoff programs which have substantially reduced our
dependence on investment funding. We also benefit from agreements with
Japan, Korea, and Germany where the Army receives host nation funded
construction.
In addition, Congress has provided valuable authorities to utilize
the value of our non-excess inventory under the Enhanced Use Leasing
program and to trade facilities in high cost areas for new facilities
in other locations under the Real Property Exchange program. In both
cases, we can capitalize on the value of our existing assets to reduce
un-financed facilities requirements.
Looking toward the immediate future, we are aggressively reviewing
our construction standards and processes to align with industry
innovations and best practices. In doing so, we hope to deliver more
facilities capability at comparable costs and meet our requirements
faster.
MILITARY CONSTRUCTION
Our Army's fiscal year 2006 budget request includes $3.3 billion
for Military Construction appropriations and associated new
authorizations.
----------------------------------------------------------------------------------------------------------------
Authorization
Authorization of Appropriation
Military Construction Appropriation Request Appropriations Request
Request
----------------------------------------------------------------------------------------------------------------
Miltiary Construction Army (MCA).......................... $1,262,719,000 $1,479,841,000 $1,479,841,000
Military Construction Army National Guard (MCNG).......... NA 327,021,000 327,012,000
Military Construction Army Reserve (MCAR)................. NA 106,077,000 106,077,000
Army Family Housing (AFH)................................. 549,636,000 1,362,629,000 1,362,629,000
-----------------------------------------------------
Total............................................... 1,812,355,000 3,275,559,000 3,275,559,000
----------------------------------------------------------------------------------------------------------------
MILITARY CONSTRUCTION, ARMY (MCA)
The Active Army fiscal year 2006 Military Construction request is
$1,262,719,000 for authorization and $1,479,841,000 for authorization
of appropriations and appropriation. As was the case last year, we have
included only minimal, critical, overseas projects in this year's
budget. These projects will provide the infrastructure necessary to
ensure continued Soldier readiness and family well-being that is
essential throughout any period of transition.
People Projects.--The well-being of our Soldiers, civilians, and
families is inextricably linked to our Army's readiness. We are
requesting $759 million or 51 percent of our MCA budget for projects to
improve well-being in significant ways.
Our Army continues to modernize and construct barracks to provide
enlisted single Soldiers with quality living environments. This year's
budget includes 19 barracks projects to provide new or improved housing
for 5,190 Soldiers. With the approval of $716 million for barracks in
this budget, 85 percent of our requirement will be funded at the
``1+1'' or equivalent standard. We are making considerable progress at
installations in the United States, but will only fund high-priority
projects at enduring installations in Europe and Korea.
We are requesting full authorization of $331 million for multi-
phased barracks complexes, but requesting only $156 million in
appropriations for these projects in fiscal year 2006. Our plan is to
award each complex, subject to subsequent appropriations, as single
contracts to gain cost efficiencies, expedite construction, and provide
uniformity in building systems.
We are also requesting the second increment of funding, $21 million
for a Basic Combat Training Complex that was fully authorized last
year. This Complex will house 1,200 basic trainees and provide company
and battalion headquarters with classrooms and an exterior physical
fitness training area. The fiscal year 2006 budget also includes a
physical fitness center for $6.8 million and a child development center
for $15.2 million.
Current Readiness Projects.--Projects in our fiscal year 2006
budget will enhance training and readiness by providing arrival/
departure facilities, maintenance facilities, and the second phase of a
library and learning center. We will also construct combined arms
collective training facilities, shoot houses, an infantry platoon
battle course, a qualification training range, a multipurpose squad
course, a digital multipurpose training range, urban assault courses,
and a modified record fire range. These facilities will provide our
Soldiers realistic, state-of-the-art live fire training. We are
requesting a total of $424 million for these high priority projects.
Modular Force Projects.--Our budget supports transformation of the
Army to a modern, strategically responsive force. Projects include a
road upgrade, a tactical vehicle wash facility, a battle area complex,
a modified urban assault course, and a vehicle maintenance facility.
Our budget contains $115 million for these projects.
Other Worldwide Support Programs.--The fiscal year 2006 MCA budget
includes $141 million for planning and design of future projects. As
executive agent, our Army also provides oversight of design and
construction for projects funded by host nations. The fiscal year 2006
budget requests $20 million for oversight of approximately $800 million
of host nation funded construction in Japan, Korea, and Europe for all
Services.
The fiscal year 2006 budget also contains $20 million for
unspecified minor construction to address unforeseen critical needs or
emergent mission requirements that cannot wait for the normal
programming cycle.
MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCNG)
Our Army National Guard's fiscal year 2006 Military Construction
request for $327,012,000 (for appropriation and authorization of
appropriations) is focused on Current Readiness, Modular Force, and
other worldwide and unspecified programs.
Current Readiness Projects.--In fiscal year 2006, our Army National
Guard has requested $71.6 million for six projects to support current
readiness. These funds will provide the facilities our Soldiers require
as they train, mobilize, and deploy. Included are one Readiness Center,
two maintenance facilities, two training projects, and a training range
environmental mitigation project.
Modular Force Projects.--This year, our Army National Guard is
requesting $201.7 million for 37 projects to transform to a Modular
Force. There are 13 projects for our Army Division Redesign Study,
three for Aviation Transformation to provide modernized aircraft and
change unit structure, four for the Army Range and Training Land
Strategy, and 17 for the Stryker Brigade Combat Team initiative.
Other Worldwide Support Programs.--The fiscal year 2006 MCNG budget
also contains $46.1 million for planning and design of future projects,
along with $7.6 million for unspecified minor military construction to
address unforeseen critical needs or emergent mission requirements that
cannot wait for the normal programming cycle.
MILITARY CONSTRUCTION, ARMY RESERVE (MCAR)
Our Army Reserve's fiscal year 2006 Military Construction request
for $106,077,000 (for appropriation and authorization of
appropriations) is for Current Readiness and other worldwide
unspecified programs.
Current Readiness Projects.--In fiscal year 2006, our Army Reserve
will invest $56.4 million to construct four new Reserve Centers and the
second phases of two other Reserve Centers; invest $15.4 million to
construct the first phase of a three-phase noncommissioned officer
academy; and $5.4 million for a Public Safety Center--for a total
facility investment of $77.2 million. Construction of the six Army
Reserve Centers will support over 2,700 Army Reserve Soldiers. In
addition, our Army Reserve will invest $11.5 million to construct six
training ranges, which will be available for joint use by all Army
components and military services.
Other Worldwide Unspecified Programs.--The fiscal year 2006 MCAR
budget request includes $14.4 million for planning and design for
future year projects. The fiscal year 2006 MCAR budget also contains
$3.0 million for unspecified minor military construction to address
unforeseen critical needs or emergent mission requirements that cannot
wait for the normal programming cycle.
ARMY FAMILY HOUSING CONSTRUCTION (AFHC)
Our Army's fiscal year 2006 family housing request is $549,636,000
(for appropriation, authorization of appropriation, and authorization).
It continues the successful and well-received Whole Neighborhood
Revitalization initiative approved by Congress in fiscal year 1992 and
supported consistently since that time, and our Residential Communities
Initiative (RCI) program.
The fiscal year 2006 new construction program provides Whole
Neighborhood replacement projects at seven locations in support of 709
families for $231.7 million. In addition, we will replace 709 houses
and upgrade another 1,112 using traditional military construction.
The Construction Improvements Program is an integral part of our
housing revitalization and privatization programs. In fiscal year 2006,
we are requesting $162.4 million for improvements to 1,112 existing
units at three locations in the United States and five locations in
Europe, as well as $138.0 million for scoring and direct equity
investment in support of privatizing 3,606 units at three RCI
locations.
In fiscal year 2006, we are also requesting $17.5 million for
planning and design for future family housing construction projects
critically needed for our Soldiers.
Privatization.--RCI, our Army's Family Housing privatization
program, is providing quality, sustainable housing and communities that
our Soldiers and their families can proudly call home. RCI is a
critical component of our Army's effort to eliminate inadequate family
housing in the United States. The fiscal year 2006 budget provides
support to continue implementation of this highly successful program.
We are leveraging appropriated funds and Government assets by
entering into long-term partnerships with nationally recognized private
sector real estate development/management and homebuilder firms to
obtain financing and management expertise to construct, repair,
maintain, and operate family housing communities.
The RCI program currently includes 45 installations with a
projected end state of almost 84,000 units--over 90 percent of the
family housing inventory in the United States. By the end of fiscal
year 2005, our Army will have privatized 29 installations with an end
state of 60,000 homes. We have privatized over 50,000 homes through
December 2004, and with your approval of the fiscal year 2006 budget,
we will have privatized over 71,600 homes by the end of fiscal year
2006.
ARMY FAMILY HOUSING OPERATIONS (AFHO)
Our Army's fiscal year 2006 family housing operations request is
$812,993,000 (for appropriation and authorization of appropriations),
which is approximately 59 percent of the total family housing budget.
This account provides for annual operations, municipal-type services,
furnishings, maintenance and repair, utilities, leased family housing,
demolition of surplus or uneconomical housing, and funds supporting
management of the Military Housing Privatization Initiative.
Operations ($138 million).--The operations account includes four
sub-accounts: management, services, furnishings, and a small
miscellaneous account. All operations sub-accounts are considered
``must pay accounts'' based on actual bills that must be paid to manage
and operate family housing.
Utilities ($132 million).--The utilities account includes the costs
of delivering heat, air conditioning, electricity, water, and
wastewater support for family housing units. While the overall size of
the utilities account is decreasing with the reduction in supported
inventory, per-unit costs have increased due to general inflation and
the increased costs of fuel. We continue to make steady progress in the
privatization of utility systems/infrastructure on our installations.
Maintenance and Repair ($309 million).--The maintenance and repair
(M&R) account supports annual recurring maintenance and major
maintenance and repair projects to maintain and revitalize family
housing real property assets. Since most Family Housing operational
expenses are fixed, M&R is the account most affected by budget changes.
Funding reductions results in slippage of maintenance projects that
adversely impacts on Soldiers and family quality of life.
Leasing ($214 million).--The leasing program provides another way
of adequately housing our military families. The fiscal year 2006
budget includes funding for 13,190 housing units, including existing
Section 2835 (``build-to-lease''--formerly known as 801 leases) project
requirements, temporary domestic leases in the United States, and
approximately 8,100 units overseas.
RCI Management ($20 million).--The RCI management program provides
funding for the implementation and oversight requirements for
procurement, environmental studies, real estate support, portfolio
management, and operation of the overall RCI program.
BASE REALIGNMENT AND CLOSURE (BRAC)
In 1988, Congress established the Defense Base Realignment and
Closure Commission to ensure a timely, independent and fair process for
closing and realigning military installations. Since then, the
Department of Defense has successfully executed four rounds of base
closures to rid the Department of excess infrastructure and align the
military's base infrastructure to a reduced threat and force structure.
Through this effort, our Army estimates approximately $10 billion in
savings through 2005.
Our Army is requesting $93.9 million in fiscal year 2006 for prior
BRAC rounds ($4.5 million to fund caretaking operations of remaining
properties and $89.4 million for environmental restoration). In fiscal
year 2006, our Army will complete environmental restoration efforts at
four installations, leaving nine remaining BRAC installations requiring
environmental restoration. We also plan to dispose of an additional
1,119 acres in fiscal year 2006.
To date, our Army has disposed of 227,429 acres (88 percent of the
total acreage disposal requirement of 258,607 acres). We have 31,186
acres remaining to dispose of at 21 installations. Our Army continues
to save more than $900 million annually from previous BRAC rounds. To
date, the Army has spent $2.6 billion on BRAC environmental
restoration.
OPERATION AND MAINTENANCE
The fiscal year 2006 Operation and Maintenance budget includes
funding for Sustainment, Restoration, and Modernization (S/RM) and Base
Operations Support (BOS). The S/RM and BOS accounts are inextricably
linked with our Military Construction programs to successfully support
our installations. The Army has centralized the management of its
installations assets under the Installation Management Agency (IMA) to
best utilize operation and maintenance funding.
Sustainment, Restoration, and Modernization.--S/RM provides funding
for the Active and Reserve Components to prevent deterioration and
obsolescence and restore the readiness of facilities on our
installations.
Sustainment is the primary account in installation base support
funding responsible for maintaining the infrastructure to achieve a
successful readiness posture for our Army's fighting force. It is the
first step in our long-term facilities strategy. Installation
facilities are the mobilization and deployment platforms of America's
Army and must be properly maintained to be ready to support current
Army missions and future deployments.
The second step in our long-term facilities strategy is
recapitalization by restoring and modernizing our existing facility
assets. Restoration includes repair and restoration of facilities
damaged by inadequate sustainment, excessive age, natural disaster,
fire, accident, or other causes. Modernization includes alteration or
modernization of facilities solely to implement new or higher
standards, including regulatory changes, to accommodate new functions,
or to replace building components that typically last more than 50
years, such as foundations and structural members.
Base Operations Support.--This funds programs to operate the bases,
installations, camps, posts, and stations for our Army worldwide. The
program includes municipal services, government employee salaries,
family programs, environmental programs, force protection, audio/
visual, base communication services and installation support contracts.
Army Community Service and Reserve Component family programs include a
network of integrated support services that directly impact Soldier
readiness, retention, and spouse adaptability to military life during
peacetime and through all phases of mobilization, deployment, and
demobilization.
Installation Management Agency.--The Installation Management Agency
(IMA) is a result of the Army leadership's vision to streamline
headquarters, create more agile and responsive staffs, reduce layers of
review and approval, focus on mission, and transform the Army. IMA
brings together all installation support services under one umbrella to
promote optimal care and support of Soldiers and families. IMA is at
the center of the Army's initiative to mold installation support
functions into a corporate structure, enabling equitable, efficient,
and effective management of Army installations worldwide. IMA supports
readiness, promotes well-being, and preserves infrastructure and the
environment.
In its first 2 years, IMA has been successful in executing the
tasks associated with growing a new organization, while simultaneously
supporting the Global War on Terrorism. In the upcoming year, IMA will
continue to develop a cadre of leaders to orchestrate excellence in
installation management; manage installations equitably, effectively,
and efficiently; support the well-being of the Army's people; practice
sound stewardship and resource management; deliver improved mission
support to all organizations; and develop and sustain an innovative,
team-spirited, highly capable, service-oriented workforce.
HOMEOWNERS ASSISTANCE FUND, DEFENSE
Our Army is the Department of Defense Executive Agent for the
Homeowners Assistance Program. This program provides assistance to
homeowners by reducing their losses incident to the disposal of their
homes when military installations at or near where they are serving or
employed are ordered to be closed or the scope of operations reduced.
For fiscal year 2006, there is no request for appropriations and
authorization of appropriations. Requirements for the program will be
funded from prior year carryover and revenue from sales of homes.
Assistance will be continued for personnel at five installations that
are impacted with either a base closure or a realignment of personnel,
resulting in adverse economic effects on local communities. The fiscal
year 2006 Homeowners Assistance Program budget does not include
resources for potential requirements that the new Base Realignment and
Closure 2005 process may cause.
FISCAL YEAR 2005 SUPPLEMENTAL BUDGET REQUEST
The fiscal year 2005 Supplemental request funds facilities that
directly support the Global War on Terrorism in both the United States
and overseas locations. It contains $990.1 million in Military
Construction for the Active Component Army.
Within the Central Command area of operations in Afghanistan and
Iraq, there are $687.3 million for military construction projects.
Projects in Afghanistan include barracks, a fuel storage tank farm and
distribution system, Joint operations center, power generation plant,
and an ammunition supply point. Projects in Iraq include barracks, a
tactical operations building, medical facilities, an overhead cover
system for force protection, an equipment support activity, a battalion
and company headquarters, a 60-mile supply route, and a project to
encapsulate hazardous materials bunkers.
Within the Southern Command area of operations at Guantanamo Bay,
Cuba, there is $41.8 million for two military construction projects--a
detention facility and a radio range security fence.
Within the United States, there is $261 million for military
construction relating to modularity. The projects, distributed to seven
different locations, include site preparation and utility work, an
aircraft maintenance hangar, an aircraft hangar, and mobilization and
training barracks.
Additionally, the fiscal year 2005 Supplemental budget includes
$248 million in Other Procurement, Army for relocatable buildings to
provide temporary barracks, company operations, and dining and
maintenance facilities at five locations in the United States. These
are required to support our Soldiers as they prepare for battle.
SUMMARY
Madam Chairman, our fiscal year 2006 budget is a balanced program
that supports our Soldiers and their families, the Global War on
Terrorism, Army transformation, readiness and Department of Defense
installation strategy goals. We are proud to present this budget for
your consideration because of what this $3.3 billion fiscal year 2006
budget will provide for our Army:
--New barracks for 5,190 Solders
--New housing for 5,800 families
--Management of 71,600 privatized homes
--Operation and sustainment of 48,000 government-owned and leased
homes
--New or improved Readiness Centers for over 3,300 Army National
Guard Soldiers
--New Reserve Centers for over 2,700 Army Reserve Soldiers
--Three Aviation Transformation projects
--$292 million investment in training ranges
--Facilities support for two Stryker Brigades
--Transfer/disposal of 88 percent of prior Base Realignment and
Closure acreage
Our long-term strategies for installations will be accomplished
through sustained and balanced funding, and with your support, we will
continue to improve Soldier and family quality of life, while remaining
focused on our Army's transformation.
In closing, we would like to thank you again for the opportunity to
appear before you today and for your continued support for our Army
Senator Hutchison. Thank you, Mr. Prosch. You are the only
one on the panel making a statement?
Mr. Prosch. Yes, ma'am.
Senator Hutchison. Then I would like to defer to Senator
Allard, since he has to go, for the first questions. And then I
will call on Senator Feinstein, and then I will go next. We are
going to have a 5 minute time rule.
Senator Allard. Thank you, Madam Chairman.
EASEMENTS TO PREVENT URBAN ENCROACHMENT
One of the things that's happening in Fort Carson is that
we have an opportunity to begin to take advantage of some
easements around the base there to prevent urban encroachment.
This is a problem, when we were on Armed Services Committee,
that we've addressed with some authorizing legislation. And it
seems as though we have reached a consensus, as far as the
community leaders are concerned; we have reached consensus as
far as the base commander is concerned; and we have reached a
consensus with the property owners around there. The owners are
willing sellers. In fact, there's only just a couple of
property owners there who own very large ranches that border
Fort Carson. There is urban encroachment that's occurring on
that area, and I think everybody's concerned about it.
And so, I just want to inquire of you, Mr. Prosch, what
sort of priority will these conservation easements have
particularly when we have everything pretty well lined up.
Mr. Prosch. Sir, we think it's a great program. And we've
had some real successes in dealing with encroachment at Fort
Bragg. We're getting some great successes also at Fort Hood and
at the National Training Center. We've found that at Fort
Bragg, our pilot initiative with these easements, we were able
to obtain land around Fort Bragg and work in close coordination
with the Fish and Wildlife Service, and actually develop a
nature habitat surrounding Fort Bragg, which allowed us to move
endangered species habitat to that area and free up training
area.
We're doing the same thing at Fort Hood. On the 16th of
April, we're going to commemorate a partnership with Central
Texas that will allow us to free up 47,000 acres of land at
Fort Hood for both training and cattle grazing.
We're doing the same thing at the NTC, with the leadership
of Senator Feinstein. And I would welcome the opportunity to
work closely with you and the great people in Colorado to help
that.
If you look at the challenges we have in the environmental
arena, encroachment and endangered species are the two biggest
challenges that we have, because they threaten readiness. And
if we can not do live-fire training and maneuver training, we
can not get your soldiers combat-ready in the way that the
threat they're going to see when they hit the ground in another
area.
Senator Allard. Well, I thank you for that statement and
agree with what you're saying.
RESTATIONING FACILITY REQUIREMENTS--FORT CARSON
The other thing that's happening in Colorado is that the
2nd Combat Brigade Team, the 2nd Infantry is being permanently
transferred from Korea to Fort Carson, Colorado. I understand
that there may be some significant restationing facility
requirements. These requirements may cost as much as 300
million in military construction. I think Fort Carson is not
the only base facing these challenges. What is the Army's plan
to meet these requirements?
Mr. Prosch. Sir, we're anxiously awaiting their arrival, in
August. And I would turn it over to Geoff Miller, my active
duty army assistant here, for the details.
General Miller. Thank you.
One of the things, Senator, that's going on--you know,
we're going to do a combination of things at Fort Carson, for
example. We're going to renovate 17 of our barracks to the
``One-Plus-One'' standard to welcome the 2nd Brigade Combat
Team back in. We're also going to do some interim facilities
that will round out that capability. But we do--and we will
need to come back to the Congress to ask for military--MILCON
to be able to have permanent capability once the final
stationing choices are made, after the BRAC announcements are
made. So----
Senator Allard. So that's a request you would make in the
next budget year, in the 2007 budget year?
General Miller. Yes, sir, that's correct.
Senator Allard. I see. Okay.
Madam Chairman, that pretty well wraps up my questions. And
I see my time's close to running out. And I thank you.
Senator Hutchison. Thank you.
Senator Feinstein.
Senator Feinstein. Thank you very much, Madam Chairman.
Senator Hutchison. And we're on a 5 minute rule.
Senator Feinstein. Thank you.
DECREASED BUDGET REQUEST
Why is the Army's request decreased by 16\1/2\ percent,
when the Army's overall facilities quality rating is C3?
Mr. Prosch. Ma'am, you'll see a decrease in military
construction in this budget over what we did last year. Some of
the rationale on that is that, because of the great success in
our privatization for housing, we don't have to do as much
military construction for housing. You can see that our OCONUS
military construction is focused in our enduring installations.
We're going to ask for your support for that OCONUS
construction. Our military housing overseas, we are now----
Senator Feinstein. Well, let me just stop you. As I
understand, the housing request has a drop of $220 million, or
13 percent--actually, 12.9 percent--from last year's request,
but the overall MILCON is down 16\1/2\ percent. In the time
I've been on the committee, I've never seen anything quite like
this, in terms of a decrease of the most active service engaged
in war today.
RCI PROGRAM
Mr. Prosch. Yes, ma'am. The family housing operations is
dropped because of the success of the RCI program, because the
operations are funded by Basic Allowance for Housing (BAH)
funds to our privatization partner now. So that's one reason
why you see a drop there. And that's been very successful. And
that accounts for several hundred million dollars in drop of
the family housing operations piece. But if you look at the----
Senator Feinstein. You're saying that the same number of
housing units are built, but built this much more cheaply?
Mr. Prosch. We have 23 installations where we have
privatized housing. One of the great success stories is at
Presidio of Monterey. And what you see there is, we used the
basic allowance for housing as the income stream to fund that.
And our privatization partners construct and do the family
housing operations for those programs, so that the Army is
still funding it, but it's a different stream; it's not through
the military construction program now. And----
Senator Feinstein. Well, I'm just wondering, can you say,
then, that private building of military housing is a big enough
savings to reduce your budget by 16\1/2\ percent?
Mr. Prosch. I'm just talking about the operations of family
housing right now.
Senator Feinstein. Something--I mean, just something in the
numbers don't jive.
Mr. Prosch. Right.
Senator Feinstein. And maybe we could work together and see
if----
Mr. Prosch. Sure.
Senator Feinstein [continuing]. We can get an understanding
of those numbers.
Mr. Prosch. Yes, ma'am.
Senator Feinstein. Because I don't understand it.
I would like to ask you a question about--Senator Allard
has similar concerns but about Fort Ord in----
Mr. Prosch. Yes, ma'am.
FORT ORD BURN--REMEDIATION FUNDING
Senator Feinstein [continuing]. California. The Army,
according to this, intends to spend $4.8 million this coming
year. And last year, range fires burned nearly 2,000 acres of
Fort Ord at a location that the Army has had difficulty
clearing because of native grasses. So the fire took care of it
for you. Could you please describe for me the efforts taken by
the Army last year at Fort Ord, and explain the funding and the
time required to complete the remediation actions there?
Mr. Prosch. Yes, ma'am.
At Fort Ord, the Army had scheduled a 500-acre programmed
burn to try to take out some of the chaparral, native species,
endangered plant there. And it got out of control, but was
contained on post, and 1,470 acres were, in fact, burned. We
have been able to surface-clear all of that 1,470 acres. The
unexploded ordnance is the biggest challenge that we have with
the range there at Fort Ord. To date, the Army has spent $344.4
million at Fort Ord. So we are steadily making progress. Last
year, we spent $26.9 million in order to try to continue to
make steady progress at Fort Ord. We have cleared, so far, a
total of 27,000 acres at Fort Ord. We have, remaining, 14,000.
The biggest challenge is the impact area there, the 7,000
acres, in a range where the Army has been firing ordnance since
1917. The $4.8 million allocated for fiscal year 2006, we
believe, is a balanced approach to try to deal with land that
we're prepared to turn over. Should we have an opportunity to
have a more rapid turnover, we could put some more money into
that.
I would like to compliment Congressman Farr and the
stakeholders there in the Monterey area. They have established
a Strategic Management Assessment Requirements Technology Team,
called a SMART Team. And we have very, very good cooperation
with the stakeholders, the local people, the environmental
community there. And we will continue to try to press on with
this, as best we can.
Anything you'd like to add, Geoff?
General Miller. I think one other thing, Senator, if we can
add onto--is the SMART Team that's come on. We're using a new
technology, which is an aerial survey technology using ground-
penetrating radar to locate the ordnance in the old impact area
so we can more rapidly make the decision. We think this is
going to speed our ability to get at this last 14,000 acres,
and then move back to public use of that land as quickly as
possible.
Senator Feinstein. So you have adequate funding to do what
you need to do.
General Miller. Yes, ma'am.
Senator Feinstein. So if I watch, I'll be very pleased by
what I see?
General Miller. We believe that after we do this next
survey, that we can more rapidly get in, and there may be an
opportunity to invest in some--in the success that that will
have.
Senator Feinstein. Okay.
WEAPONS OF MASS DESTRUCTION CIVIL SUPPORT TEAMS FUNDING
General Pudlowski, this committee has added funding each of
the past 3 years to implement the construction program of the
Army Guard's Weapons of Mass Destruction CST program. How many
facilities remain to be completed? And how much funding will be
necessary?
General Pudlowski. Thank you, ma'am.
First, let me thank you and the rest of the leadership, and
tell you that the Guard soldiers are performing extremely well
today in the Gulf and in other places throughout the world. And
particularly from California, the number of soldiers that have
come out of the 40th Division have been tremendous in assisting
other commands in their preparations and efforts----
Senator Feinstein. This committee anticipates that Guard
soldiers from California and Texas are the best in America.
General Pudlowski. Ma'am, I will tell you that they are
doing extremely well----
Senator Hutchison. And if you don't mention Texas pretty
fast, you're going to be in big trouble.
General Pudlowski. I will tell you that the 56th Brigade
and the 36th Infantry Division is doing just as well in the
environment today. Those comments are coming back daily. And
the 36th Division's got other missions ahead for their future,
as well. And, sir, that's not to take away from what Colorado
has done and how they've contributed.
Ma'am, to your question, the Civil Support teams are an
important piece of what we have in the inventory of the
National Guard, and how they've been employed. We have 23
additional units that still have to be organized. We're in the
process of organizing it from a facility perspective. We would
need the facilities for those 23. Total cost is approximately
$40 million. And if that resource was made available----
Senator Feinstein. Okay. So this is how many out of how
many?
General Pudlowski. This is 23 out of 55.
Senator Feinstein. Thank you. And so, you anticipate that
it'll be completed when? All 55.
General Pudlowski. At the current rate, it would take us
the next 5 years of the FYDP to accomplish that. But for a cost
of $40 million--each one is approximately two-point-some-
approximately $2 million apiece--we would be able to complete
that whole operation.
Senator Feinstein. Thank you.
RESERVES TRAINING--CALIFORNIA
Mr. Prosch. Ma'am, may I just make one comment about a
great contribution that Fort Hunter Liggett and Camp Roberts in
California provide to all the Reserves in the western part of
the United States. Without Fort Hunter Liggett, we wouldn't
have a significant maneuver area for them to utilize, because
the National Training Center is very busy with the active
force. Camp Pendleton has encroachment challenges and they're
busy, and Fort Lewis is very busy. So it's very important for
our Reserve forces. And Hunter Liggett allows not only the
combat brigades, but also the combat-service support and the
logistical units to train there. So they have tremendous
capability, and they also have good support with the local
communities. So we thank you.
Senator Feinstein. So it's reasonable to believe, Mr.
Secretary, that the Army is going to retain Hunter Liggett.
Mr. Prosch. The Army is evaluating all installations fairly
and squarely. You'll be very proud of the process, when the
list comes out on May 17, based on military criteria.
Senator Feinstein. Thank you.
GLOBAL RESTATIONING FUNDING
Senator Hutchison. Mr. Prosch, the Army is the service most
affected by the Integrated Global Presence and Basing Strategy,
and we're looking at 60,000 to 70,000 troops coming home. That
has been announced. You know, I advocated that initiative, and
am very pleased that it is going forward. I don't see very much
in this budget request that supports restationing, aside from
around $392 million earmarked in the BRAC account for global
restationing.
My question is, first of all, is that $392 million in the
BRAC account for the global restationing for the Army? That's
my first question on this subject.
SUPPLEMENTAL FUNDING
Mr. Prosch. We are going to be relying heavily on the
supplemental to assist us with the standup of our ten new
brigades and with the restationing of units that come from
overseas. We are using BRAC as a strategic lever to determine
the right location to put all these places.
Senator Hutchison. Are you--you're saying
``supplemental''--are you looking at a future supplemental,
after BRAC, in which you would start the process of preparing
bases that are going to take these people, or are you talking
about a great big MILCON commitment in the next year's budget
for that purpose?
Mr. Prosch. When you look at the supplemental right now,
you see that we've got money earmarked to support modularity--I
have some handouts here that your people could perhaps show to
you--that we're using to provide facilities at the temporary
locations where we put our ten new brigades. On the 17th of
March, as part of the BRAC announcement, we will also include
the locations of where we're going to move the units that are
coming from overseas.
We are going to come to you, after the BRAC is announced,
to get your support for the MILCON funding for the long-term
answer to these organizations. But we're using the supplemental
now in 2005, because we're standing up new brigades, as we
speak.
Geoff, do you want to comment?
Senator Hutchison. You meant May, sir.
Mr. Prosch. 16th of May. I'm sorry.
Senator Hutchison. Yeah, I was thinking, what's today?
Mr. Prosch. On the 15th of March, they're going to announce
the BRAC commissioners.
Senator Hutchison. Yes.
Mr. Prosch. So the 16th of May is----
Senator Hutchison. Is the BRAC day.
And you will be, in that BRAC announcement, making the
choices of where the incoming brigades are going.
Mr. Prosch. Yes, ma'am.
Senator Hutchison. So I'd just--the reason I'm pursuing
this is that I've gotten some mixed signals about funding for
the moves. I just want to make sure that the commitment to the
moves is made, it is there, and the money will follow.
Mr. Prosch. Yes, ma'am.
Senator Hutchison. Thank you.
Mr. Prosch. I would just add that we have announced the
units that are going to be returning.
Senator Hutchison. Yes. You just haven't announced where
they're going.
Mr. Prosch. The when and the where--the where will be
determined by the BRAC analysis.
Senator Hutchison. Right.
Mr. Prosch. And the when--we're going to try to make the
right decisions, based on quality of life. We will want to
coordinate with the local school districts. We're going to want
to make sure that we have adequate housing. But we're going to
want to make sure that we've developed brigade-sized facilities
for these units when they come back.
Senator Hutchison. Yes, I think all of that is absolutely
essential and the correct way to approach it. I just have
gotten mixed signals about the money being available to make
these moves. And as long as you're telling me the commitment is
going to be kept, that those troops will be moving home, and
that we will have the funding request to do it. That's all I
need to know.
Mr. Prosch. Yes, ma'am.
Senator Hutchison. And you have said yes. Correct?
Mr. Prosch. Yes, ma'am.
OVERHEAD AND COMPARTMENT PROTECTION LOCATIONS
Senator Hutchison. In the supplemental that is going to be
before us shortly, the Army has requested $300 million for
overhead and compartment protection at various locations, but
no specificity. Could you elaborate on where those will be and
what you're envisioning the uses for that $300 million to be?
Mr. Prosch. Yes, ma'am. Let me start, then I'll turn it to
Geoff Miller, who returned from Iraq about 3 months ago.
As part of the supplemental, one of the requests from the
combatant commander, General Abizaid, was to try to provide
enhanced overhead protection for our soldiers in theater. And
so, we, as the executive agent, are trying to support the
combatant commander's request. As you recall, there was a
dining facility that was attacked recently. There is a distinct
threat from mortar and rocket attacks. And so, they would like
to provide enhanced protection for the large-density troop-
soldier areas. It's a two-level type of facility, to where the
top level would absorb the blast, and the second level would
actually stop the fragmentation from hitting the troops.
Senator Hutchison. And where--I understand that, and that's
a very good explanation, but as you are expanding, are you
looking at doing these all throughout Iraq and also
Afghanistan, or are we just looking at Iraq?
General Miller. Senator, right now they're focused on Iraq.
There are 41 different locations, and, as Mr. Prosch said,
they're in--where troops are concentrated--in living areas, in
dining facilities. And kind of the rule of thumb, if there are
more than 50 soldiers in an area, we wanted to put overhead
cover, because we have a--we were having a fairly significant
challenge in mortars. And that's going down. But these went in.
So they will go into the Afghanistan--really, around Baghram
Airport--as we build that up.
Senator Hutchison. I just want to, on a personal note, say,
I was privileged to give four Purple Hearts to those who were
in that dining facility, and I was--it was during December--I
was most struck by how quickly they got to Brooke Army Medical.
I think they got there Christmas Eve, and the attack was maybe
the 19th, something very quick. I was very pleased. And, of
course, they were great. I met with each of them before I was
able to give them their Purple Hearts, and they were great
young people. Just amazing.
General Miller. Senator, if I can, for the record, we'll
come back and give you the 41 locations----
Senator Hutchison. Okay.
General Miller [continuing]. Where we're going to put--be
putting this overhead cover.
Senator Hutchison. Thank you.
[The information follows:]
Overhead Cover Locations--Iraq
The following list identifies the 41 facilities currently scheduled
to receive overhead cover. U.S. Central Command is continuing to
identify additional facilities that require overhead cover:
[In thousands of dollars]
------------------------------------------------------------------------
Location Facility Cost
------------------------------------------------------------------------
Anaconda............................ Dining Facility........ $14,590
Anaconda............................ Post Exchange--East.... 3,660
Anaconda............................ Post Exchange--West.... 3,000
Fallujah............................ Dining Facility 1...... 3,200
Fallujah............................ Dining Facility 2...... 3,200
Fallujah............................ Post Exchange.......... 800
Marez............................... Dining Facility........ 12,000
Kalsu............................... Dining Facility........ 1,450
Freedom............................. Dining Facility........ 2,129
Hope................................ Dining Facility........ 6,000
Falcon.............................. Dining Facility........ 7,278
Taji................................ Dining Facility 1...... 8,400
Taji................................ Dining Facility 2...... 8,400
Diamondback......................... Dining Facility........ 8,000
Rustimiyah.......................... Dining Facility........ 3,090
Brassfield.......................... Dining Facility/Gym.... 200
McKenzie............................ Dining Facility........ 1,920
Caldwell............................ Dining Facility 1...... 2,077
Caldwell............................ Dining Facility 2...... 2,077
Caldwell............................ Dining Facility........ 804
Warrior............................. Building 4098.......... 5,683
Warrior............................. Building 4088.......... 1,151
Warrior............................. Building 4096.......... 172
Prosperity.......................... Dining Facility........ 2,000
Victory............................. Dining Facility........ 6,626
Victory South....................... MWR Dining Facility.... 19,700
Victory South....................... Cafe Dining Facility... 15,400
Liberty............................. Dining Facility 6,750
DeFleury.
Liberty............................. Dining Facility Black.. 6,750
Liberty............................. Dining Facility Pegasus 3,129
Gaines Mills........................ Dining Facility........ 160
Speicher............................ Dining Facility........ 3,710
Speicher............................ Dining Facility Victory 3,710
Danger.............................. Dining Facility........ 2,000
Cobra............................... Dining Facility I...... 408
Summerall........................... Post Exchange.......... 50
Summerall........................... Dining Facility........ 124
Hurricane Point..................... Dining Facility........ 846
Hurricane Point..................... Post Exchange.......... 48
Taqqadum............................ Dining Facility 1...... 13,617
Taqqadum............................ Dining Facility 2...... 1,808
Various Sites....................... Miscellaneous.......... 113,833
----------
TOTAL......................... ....................... 300,000
------------------------------------------------------------------------
Senator Hutchison. My last question, and then I'll see if
Senator Feinstein has any others for this panel.
JOINT BASING--ELLINGSTON FIELD
Mr. Prosch, as you know I am supportive of the service's
move toward joint basing, specifically Ellington Field. You are
very familiar with what we're doing there, and have been
terrifically supportive. And I just wanted to ask you what the
status is, from your standpoint, of the move of the Army over
to Ellington Field from its present location, the Reserve unit
in Houston, and see if you think that everything is going to go
well there, and what you determine the status to be.
Mr. Prosch. Ma'am, I'm very pleased to announce that
Ellington Field is on schedule.
Senator Hutchison. Great.
Mr. Prosch. And I would like to thank the Members of
Congress for giving us a really good tool, which is called the
Real Property Exchange. And we have been able to use that in a
lot of places around the country where you have old armories in
an urban, central part of town, where the land is very
valuable, but the facilities are antiquated, and then trade
that land and build a modern joint facility out in the suburbs.
And that's exactly what we're doing at Ellington Field. We're
taking some valuable land, we've got a partnership with the
University of Texas Medical Association, and we're going to get
a fair market value and plow that into a joint facility, with
both the Army, Navy, Marine, and Air Guard at Ellington Field,
which is a very strategic location, critical for the defense of
the petrochemical industry.
And the land surveys are on track. We anticipate that the
environmental studies will be completed in June of this year.
We plan to complete all of the actual construction plans this
summer. We anticipate to do an award in 2006, and actually
break ground in 2006. We hope to have a memorandum of agreement
signed with the Army and the University of Texas in August, and
we'll send you an invitation to that signing ceremony.
Senator Hutchison. Thank you very much. I'm very pleased
that it is going on track. I think what you're doing there and
in other places is so right. It's right for the community, and
it's right for our Services to be in better locations. And
particularly this one, with the unique security risk of those
chemical complexes, I think it is just essential to have the
Air Force, Army, and Navy and Marine components there. It will
very helpful. Along with the Coast Guard.
Mr. Prosch. I might ask my colleagues from the Reserves to
comment.
Senator Hutchison. General Pudlowski?
JOINT FACILITIES
General Pudlowski. Ma'am, if I may, we, too, have seen, in
the Guard, the opportunities that are presented by joint
facilities. Last year when we came here, we had approximately
140 facilities that we had occupied in a joint fashion. By the
end of the year, that had jumped up to 170 locations, and we've
got 26 more projects that are scheduled in the FYDP.
I'll just give you a couple of examples of that. In Austin,
Texas, we have two facilities, one of which will be a
maintenance facility, that'll be a joint maintenance facility
shared with the Army Reserve. And we have an Armed Forces
Reserve Center that'll be shared with the Army Reserve, the
National Guard, the Marine Corps Reserve, and the Naval
Reserve, which gives us a greater approach and a greater appeal
as to how we're going to do that. In California, we have the
Los Alamitos facility that's going to be shared, not only with
the Army Reserve, but also with the active Army. We continually
look for those opportunities.
We're also seeing some others occur--for example, in West
Virginia, where we have a training site--that we would look at
the potential of that to be shared as a joint COOP site, with
perhaps even the Department of Energy.
So there are opportunities here, and each time we find this
opportunity, we seek it because it, in effect, conserves some
of the State cost for that additional 25 percent when we make
it a full Federal project.
Thank you.
Senator Hutchison. Thank you very much. I'm so pleased that
you're doing that throughout the country. I just think it's the
right thing.
General Profit. Ma'am, I would only add to what Mr. Prosch
said about Ellington Field, that we're proud to be leading that
effort in the Army Reserve, and I think your leadership in this
particular effort has been pivotal, and I appreciate it.
Thank you very much.
Senator Hutchison. Thank you very much.
That's all I have for this panel.
Senator Feinstein.
MILCON PROJECTS IN SUPPLEMENTAL
Senator Feinstein. I'm still into the 16\1/2\ percent. As I
understand it, you took $138 million in MILCON projects and put
them into the supplemental. And they include $100 million in
these areas: the child development center for Fort Carson--I
don't know why that's an emergency, if, in fact, it is in the
supplemental; a barracks complex at Fort Lewis for $15\1/2\
million; a barracks at Fort Leonard Wood for $14.8 million; and
then you have the whole--I guess, the modularity thing
worldwide, at $100 million. Is that all correct, what I've just
read?
Mr. Prosch. I'm going to ask Geoff Miller to talk to
specifics, and then let me try another try at why our MILCON
request is down 16 percent.
General Miller. Senator, the----
Senator Feinstein. I think I probably misspoke. And I still
don't understand it. But you have put an amount for modularity
into the supplemental, right?
Mr. Prosch. Yes, ma'am.
Senator Feinstein. How much is that? Is that $100 million?
Mr. Prosch. Geoff?
Senator Feinstein. What is it? It's $180 million? All for
modularity, in the supplemental?
General Miller. Ma'am, we have a total of $559 million in
the supplemental that is supporting modularity and movement
through there. And it is a combination of OPA funds to buy
modular facilities, interim facilities, in MILCON to do the
preparatory work to allow these modular facilities that are
barracks and headquarters.
So this is startup money, as Senator Hutchison pointed out,
because we will come back in the future and ask for MILCON as
we make the permanent stationing choices then to be able to
transition these troops that are coming back from overseas and
in the modularity piece, so we can have permanent facilities
there.
Senator Feinstein. Well, just so--I don't know whether this
qualifies as an emergency, but, clearly, it's certainly a way
of doing it. I mean, what you did is, you took a part of out of
this budget and simply put it in the emergency supplemental, if
I understand it.
MODULAR FACILITIES
Mr. Prosch. Well, if I could just comment, we are growing
10 new brigades to try to stretch out the OPTEMPO period that
our soldiers have so they don't have to go back to Iraq every
other year. As we stand up these ten new brigade formations--we
recruited soldiers at Fort Lewis, at Fort Bliss, at Fort Hood--
and so, these soldiers, in order to not to have to put them
inside gymnasiums and tents, we're going to use these modular
facilities. So, in a way, this is really helping us fight the
war on terror, by stretching out the OPTEMPO, and we believe
this is the right thing to do. And with this supplemental, we
can do this in 2005, immediately, versus several years in the
MILCON piece.
Senator Feinstein. Well, is this going to continue to
happen as more people come home, that the modulars are going to
be in emergency supplementals and not part of the regular
budget process?
Mr. Prosch. I believe that, after we get these 10 brigades
stood up, and this time next year when we're testifying before
you, we're going to be able to lock into military construction,
because we will have determined the end state for our 43 new
active brigades and our 77 total brigades in the Army. And
we'll want to do it the old-fashioned way, with MILCON, with
permanent facilities.
Senator Feinstein. I appreciate that statement, Mr.
Secretary.
Mr. Prosch. Yes, ma'am.
Senator Feinstein. I'm going to write it in indelible ink,
and hopefully hold you to it.
Mr. Prosch. Yes, ma'am.
Senator Feinstein. Thank you.
Thanks, Madam Chairman.
Senator Hutchison. Well, and I think we could even do
something before then. If, on May 17, we know where they're
going, we could start making preparations, depending on the
timetable that you all have for them moving, but----
Mr. Prosch. Yes, ma'am, that will be helpful. And we will
come see you immediately, because it might make sense to do
some reprogramming within----
Senator Hutchison. I think one thing that I gleaned from
Senator Feinstein, and I will say I agree with, the fewer
modular units and the more permanent construction we can get a
head start on, the better off we are.
Senator Feinstein. I really agree with that.
Senator Hutchison. I just hate that you're doing it right
now, and it's a huge expense that goes away in use. If we see,
on May 17, where people are coming back and we can start
military construction, even if the moves are a year or two
away, and we can have permanent facilities and not waste money
on modular units, that would be my preference, for sure. And I
think we're seeing that on the committee.
BARRACKS
Mr. Prosch. I would like to, just for the record, thank you
all for the steady progress and support you've made. This is
our 13th year of our barracks program, and over one-half of our
active Army MILCON budget is going towards barracks. And we are
going to be 85 percent complete at the end of 2006 to build out
to the One-Plus-One standard. And I'm sure you're familiar with
that. We now, as a standard in the Army, we want our soldiers
to have a suite, where we have two private sleeping areas with
a walk-in closet, and a common kitchenette and bathroom area--I
took my son, when he was a college student, to one of these,
and he said, ``Wow, where do you enlist, Dad?''
Senator Hutchison. That's true. I saw those at Fort Bliss,
the new ones, and it is very, very nice, and so much better
than what we had before. It's great. They love it.
ADDITIONAL COMMITTEE QUESTIONS
Thank you very much. We appreciate not only your
accessibility and your work, but also your testimony today.
Thank you.
Mr. Prosch. Thank you.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Dianne Feinstein
BRAC ENVIRONMENTAL
Question. The Navy has sold portions of its previously BRAC'd
property and ploughed that money back into environmental remediation.
Has the Army experienced such sales, and, if so, do you have a similar
agreement with the DOD Comptroller to use those funds for environmental
remediation?
Answer. Yes, the Army has received revenues for BRAC properties and
used the proceeds for environmental remediation.
ARMY MODULARITY
Question. Generals Pudlowski and Profit, do the National Guard and
Reserves have additional MILCON requirements related to Army
Modularity?
Answer. Yes, for the Army National Guard there are additional
requirements for transformation to the Army Modular Force. The Army
National Guard is currently assessing and validating all the
requirements. We will program for these needs once this process is
complete.
The Army Reserve does not currently have additional Military
Construction requirements related to Army Modular Force transformation.
However, as Army Reserve force structure in support of Modular Forces
is determined, additional requirements may be identified. The Army
Reserve will program for any such requirements as soon as they are
known.
GUANTANAMO PRISON
Question. DOD is requesting a total of $41.8 million, through the
Army Supplemental request, for construction of a permanent prison and a
new security fence at Guantanamo, Cuba. The justification documents for
the Guantanamo construction do not make clear what will be done with
the current temporary facilities once the new prison is constructed. Do
you intend to remove or demolish these facilities, or are they to be
kept in case the prison population exceeds the 220 capacity of the new
facility? In other words, is DOD expanding the detention facilities at
Guantanamo, or replacing them?
Answer. The funding requested in the fiscal year 2005 Supplemental
Request is to construct a 176 cell, long-term maximum-security
detention facility for 220 detainees at Guantanamo Bay, Cuba. This
facility, known as the Camp 6 Detention Facility, will allow for the
closure of temporary Camps 1, 2, and 3. Although these camps would be
closed, they would not be destroyed, retaining capability for the Joint
Task Force commander to reopen them should the detainee population
surge. By ``mothballing'' these camps and constructing Camp 6, the
commander will be able to reduce the total internal guard force by 124
military police.
Question. If the new prison is to be strictly a replacement
facility, does that mean the maximum capacity for housing detainees
will be 220?
Answer. Camp 6 will have the capacity for 220 maximum security
detainees. The existing Camp 5, with a capacity of 100 maximum security
detainees, and Camp 4, with a capacity of 200 medium security
detainees, will be retained, providing a total capacity of 520.
Question. What is the current capacity at Guantanamo, and what is
the current detainee population?
Answer. The current capacity in Guantanamo (GTMO) in Camps 1
through 5 is 1,116. The current detainee population, as of March 16,
2005, exceeds 530. Camps 1, 2 and 3 were designed as temporary medium-
security detention facilities requiring robust forces to guard ``must
retain'' maximum-security detainees. As temporary facilities, these
camps are nearing the end of their life expectancy. Refurbishment and
maintenance costs are becoming prohibitive.
Question. How did DOD arrive at the 220 bed requirement?
Answer. The fiscal year 2005 Supplemental funding request is to
build a 176 cell long-term maximum security facility with a capacity
for 220 detainees at Guantanamo Bay, Cuba. The facility will include
132 single cells and 44 double cells. In September 2004, the detainee
population exceeded 580 detainees. One assumption was that 250 of those
detainees would be classified as ``retain in DOD control''. The
remaining 336 would be transferred for continued detention or released
to their country of origin. The 250 ``retain in DOD control'' would
require long-term detention due to conviction by military commission,
intelligence value, or because they are deemed too dangerous to
transfer or release. The ``retain in DOD control'' number has since
been revised upward to 300.
A second assumption was that, as the Global War on Terrorism
continues, small numbers of additional detainees will arrive for
screening. Since March 2004, 10 additional detainees have arrived in
Guantanamo Bay.
The final assumption is that by building a facility with 220 beds,
the Joint Task Force could close the temporary detention Camps 1, 2,
and 3, reduce the number of personnel needed to guard the detainees.
This will also maintain the capability to provide maximum security,
long-term detention for up to 320 ``retain in DOD control'' detainees
in Camps 5 and 6, and medium security detention for an additional 200
detainees in Camp 4.
Question. When do you expect the prison population to be reduced to
that level?
Answer. Based on detainee movement operations already approved by
the Deputy Secretary of Defense, the number of detainees could be
reduced to less than 520 by May 1, 2005.
Question. What other MILCON will be required to support the
permanent housing of detainees at Guantanamo? For example, what
additional facilities will be required for the permanent stationing of
the military personnel assigned to this mission?
Answer. We do not plan to seek additional MILCON funding for
permanent structures at Guantanamo Bay at this time due to other higher
priorities. The fiscal year 2005 Supplemental funding will be used to
build the Camp 6 Detention Facility and the Radio Range Security Fence
to allow for reduced force manning.
Department of the Air Force
STATEMENT OF FRED W. KUHN, DEPUTY ASSISTANT SECRETARY
OF THE AIR FORCE INSTALLATIONS
ACCOMPANIED BY MAJOR GENERAL L. DEAN FOX, FOR AIR FORCE CIVIL ENGINEER,
DEPUTY CHIEF OF STAFF FOR INSTALLATIONS AND LOGISTICS
Senator Hutchison. And now we will turn to our second
panel. That would be Mr. Fred Kuhn, the Acting Assistant
Secretary of the Air Force for Installations, Logistics, and
Environment; Major General Dean Fox, the Air Force Civil
Engineer and Deputy Chief of Staff of the Air Force for
Installations and Logistics.
Mr. Kuhn. Madam Chairman, Senator Feinstein, distinguished
members of the committee, good afternoon.
This year's Air Force MILCON budget is the largest in 14
years, with increases across the spectrum of Air Force
operations throughout our Total Force. Our fiscal year 2006
military family housing submission is the largest in Air Force
history. It keeps us on target to meet our goal of funding, to
eliminate CONUS inadequate housing in 2007, and overseas
inadequate in 2009. The Air Force remains committed to funding
restoration and modernization to meet the OSD goal of a 67-year
recapitalization rate by fiscal year 2008 and beyond. The Air
Force is meeting OSD's facilities sustainment goal by funding
$2 billion this year, and will continue to fund sustainment in
accordance with that DOD facility sustainment model.
I sincerely thank the committee and the Congress for its
efforts to lift the cap on housing privatization, because the
Air Force would not have otherwise been able to meet our goal
of funding the elimination of inadequate housing for Airmen and
their families by 2007. We thank you for providing the
privatization tools that allowed us to leverage 173 million
taxpayer dollars into nearly $1.6 billion invested in 13 of our
bases and in their local communities. This leverage of nine
privatized dollars for every taxpayer dollar invested allows us
to fix 11,000 homes now, and another 34,500 homes over the next
2 years, rather than burdening the Federal budget with an
additional $5.6 billion in MILCON funds.
The success of our privatization program would not be
possible without the authority you provided in Title 10, United
States Code, Section 2883, which allows the Secretary of
Defense to transfer military construction appropriations into
the family housing improvement fund in order to fund these
forward costs of our privatization projects. For example,
Congress appropriated $15 million for Hickam Air Force Base,
Hawaii, in fiscal year 2002 MILCON to renovate 102 units, but
we were successful in awarding a privatization project with a
portion of those MILCON funds to fix 1,356 Hickam Air Force
Base homes for Airmen and their families. That project had a
project development value of $298 million invested in the local
economy at a leverage of 71-to-1. We were able to use the
remaining MILCON dollars to award other privatization projects,
like Wright-Patterson Air Force Base, Ohio, where we are
providing 1,536 homes, totaling $109 million in development.
Similarly, at Beale Air Force Base, in California, we are
privatizing 1,344 homes and gaining $151 million in development
with a government investment of $6.7 million, a 22-to-1
leverage. This project was in jeopardy following the fiscal
year 2005 congressional rescission however, using the Section
2883 authority, we redirected funds from appropriations for
Eglin Air Force Base, Florida, and Travis Air Force Base,
California, to cover the Government's fund appeal.
When using the Section 2883 authority, we always make the
appropriate notifications to Congress. And I want to emphasize
that we always fix housing only at locations directed by
Congress. To that end, we will privatize 2,155 homes at Eglin
Air Force Base and its neighbor, Hurlburt Field, and 1,179
homes at Travis Air Force Base, California, using the funds
originally appropriated for replacement projects at those
bases.
The final example I would like to provide is Randolph Air
Force Base, in Texas, where Congress appropriated funds for
three MILCON projects in fiscal years 2003 through 2005. These
three projects would have eliminated 406 inadequate homes at
Randolph Air Force Base, in Texas. However, by delaying these
projects and privatizing Randolph in a group with six other
bases, we will now be able to fix the required inventory of
3,898 homes, while injecting $415 million into the local
communities of these seven installations.
PREPARED STATEMENT
These examples are typical of how the Air Force has
maximized the use of MILCON funds and transfer authority of
Title 10 to accelerate our program and eliminate inadequate
housing. As our program continues to execute and we look for
additional opportunities to privatize, we will absolutely keep
the Congress informed of every change we make in this area.
On behalf of all of our Air Force men and women and their
families, I thank you.
[The statement follows:]
Prepared Joint Statement of Fred W. Kuhn and Major General L. Dean Fox
Madam Chairman, Senator Feinstein, and distinguished members of the
committee, the strength and flexibility of airpower and our joint
warfighting success in operations around the world is made possible by
three interdependent factors; outstanding Airmen, superior weapons
platforms, and an agile support infrastructure. The Air Force fiscal
year 2006 military construction (MILCON) submission is our commitment
to these three factors. It provides our Airmen and their families the
proper facilities to work and live, which in turn will enable them to
better execute our air and space missions. This year's Air Force MILCON
budget request is the largest in 14 years, over $4.7 billion, with
increases across the spectrum of air and space operations and
throughout our Total Force. Our fiscal year 2006 Military Family
Housing (MFH) submission will keep us on target to eliminate inadequate
housing. The Air Force is committed to funding facility restoration and
modernization at a 67-year recapitalization rate by fiscal year 2008,
and funding facility sustainment consistent with OSD's Facility
Sustainment Model (FSM). Sound investment in our installations allows
us to take care of our people and their families through quality of
life and work place improvements.
INTRODUCTION
Air Force facilities, housing, and environmental programs are key
components of our support infrastructure. At home, our installations
provide a stable training environment and a place to equip and
reconstitute our force. Both our stateside and overseas bases provide
force projection platforms to support combatant commanders. Because of
this, the Air Force has developed an investment strategy focused on
sustaining and recapitalizing existing infrastructure, investing in
quality of life improvements, accommodating new missions, continuing
strong environmental leadership, optimizing use of public and private
resources, and eliminating excess and obsolete infrastructure wherever
we can. Our total force military construction, family housing, and
sustainment, restoration, and modernization programs are vital to
supporting operational requirements and maintaining a reasonable
quality of life for our men and women in uniform and their families.
The Air Force fiscal year 2006 President's Budget (PB) request of
just over $1.3 billion for Total Force military construction reflects
our highest construction priorities. It balances the restoration and
modernization of current mission facilities, quality of life
improvements, new mission requirements, future project designs, and
limited funding for emergency requirements. This request includes $1.07
billion for active military construction, $165 million for the Air
National Guard, and more than $79 million for the Air Force Reserve.
The Air Force fiscal year 2006 PB request of $1.2 billion for the
Military Family Housing investment program balances new construction,
improvements, and planning and design work. It will also advance our
Housing Privatization program. But, while we continue to strive to
eliminate inadequate housing, we cannot allow more housing to fall into
disrepair. We need your support to keep our housing operations and
maintenance submission intact.
In fiscal year 2006, we will bolster our operations and maintenance
(O&M) investment in our facilities infrastructure. This investment has
two components: Sustainment (S) and Restoration and Modernization
(R&M), which we refer to together as our SRM program. Sustainment funds
are necessary in order to keep ``good facilities good.'' R&M funding is
used to fix critical facility deficiencies and improve readiness. In
this request we have dedicated $2 billion to Total Force sustainment.
That is 95 percent of the requirement from OSD's Facilities Sustainment
Model. However, in fiscal year 2006 the Air Force's Total Force R&M
funds is restricted to $173 million. This means we must defer some R&M
requirements, which has a cumulative effect on Air Force facilities and
infrastructure that we must reverse. In the out years we intend to
invest more heavily in critical infrastructure maintenance and repair
through our O&M program in order to achieve the Air Force goal of a
facility recapitalization rate of 67 years by 2008.
Overseas Military Construction
The quality of installations overseas remains a priority. Even
though the majority of our Airmen are assigned in the United States, 20
percent of the force is assigned to extended tours overseas, including
29,000 Air Force families. Overseas base infrastructure is old and
progressively deteriorating, requiring increased investment to replace
and maintain. Host nation funding helps, but it is not enough. We also
must provide supplemental funding to support time-critical
infrastructure necessary for the Global War on Terror. The fiscal year
2006 request for overseas construction includes $193 million for 18
separate infrastructure and quality of life projects in the United
Kingdom, Germany, the Azores, Italy, Turkey, Guam, and Korea. All
projects are in places designated as enduring locations by regional
commanders, as described in the Global Basing Strategy.
In addition, we want to thank you for the essential overseas fiscal
year 2004 MILCON funding you approved in the Emergency Supplemental
Appropriations Act (H.R. 3289). The supplemental provided essential
construction projects in Southwest Asia and at critical en-route
airlift locations directly supporting ongoing operations in that
region.
Planning and Design/Unspecified Minor Construction
This year's Air Force MILCON request includes almost $96 million
for planning and design (P&D), including $40.4 million for military
family housing. The request includes $79 million for active duty, $12.9
million for the Air National Guard, and $3.8 million for the Air Force
Reserve. These funds will allow us to complete the design work for
fiscal year 2006 construction programs and to start the designs for
fiscal year 2007 projects, allowing us to award contracts that year.
However, P&D funds for Congressional inserts and directed designs are
not funded in the President's Budget request. They are accomplished at
the expense of other Air Force designs. We would greatly appreciate
your assistance ensuring adequate P&D funding for any Congressional
inserts.
This year's request also includes $24 million for the Total Force
unspecified minor construction (UMC) program, our primary means for
funding small, unforeseen projects that cannot wait for the normal
military construction process. Because these projects emerge over the
year, it is not possible to predict the total funding requirements.
When UMC requirements exceed our funding request, we augment them by
reprogramming available MILCON construction funds.
SUSTAIN, RESTORE, AND MODERNIZE OUR INFRASTRUCTURE
The Air Force remains focused on sustaining, restoring, and
modernizing our infrastructure. In 2006, we have increased sustainment
funding to keep our ``good facilities good'' and targeted limited
Restoration and Modernization (R&M) funding to fix critical facility
deficiencies and improve readiness.
Our sustainment program is aimed at maximizing the life of our
infrastructure by keeping our facilities in good condition. Without
proper sustainment, our infrastructure wears out more rapidly. In
addition, commanders in the field use O&M accounts to address facility
requirements that impact their near-term readiness.
When facilities require restoration or modernization, we use a
balanced program of O&M and military construction funding to make them
``mission ready.'' Unfortunately, restoration and modernization
requirements in past years exceed available O&M funding, causing us to
defer much-needed work. The restoration and modernization backlog is
projected to grow to nearly $9.8 billion in 2006. It is important for
us to steadily increase the investment in restoration and modernization
in order to halt the growth of this backlog, while fully funding
sustainment to maximize the life of our good infrastructure
The Air Force Total Force sustainment funding in fiscal year 2006
is $2.0 billion, 95 percent of the amount called for by the Facility
Sustainment Model (FSM) and consistent with established OSD goals. The
fiscal year 2006 Total Force R&M funding is $173 million. This budget
carefully balances sustainment, restoration, modernization, and
military construction programs to make the most effective use of
available funding in support of the Air Force mission.
CONTINUE DEMOLITION OF EXCESS, OBSOLETE FACILITIES
In addition to modernizing and restoring worn out facilities, we
also demolish excess and obsolete facilities. This ensures funds are
spent on facilities we need, not on sustaining ones we do not. For the
past seven years, the Air Force has aggressively demolished or disposed
of facilities that are unneeded or no longer economically viable. From
fiscal year 1998 through fiscal year 2004, we demolished 18.5 million
square feet of non-housing building space. This is equivalent to
demolishing more than three average size Air Force installations and
has allowed us to target our infrastructure funding to maintain more
useful facilities. While this demolition cost us $221 million in O&M
funding in the short term, it saves us money in the long term. For
fiscal year 2005 and beyond, the Air Force will continue to identify
opportunities to eliminate unnecessary facilities.
INVEST IN QUALITY OF LIFE IMPROVEMENTS
The Air Force sees a direct link between readiness and quality of
life. When Airmen deploy, time spent worrying whether their families
are safe and secure is time not spent focusing on the mission. Quality
of life initiatives are critical to our overall combat readiness and to
recruiting and retaining our country's best and brightest. Family
housing, dormitories, and other quality of life initiatives reflect our
commitment to our Airmen.
Family Housing
The Air Force Family Housing Master Plan details our Housing
military construction, O&M, and privatization efforts. It is designed
to ensure safe, affordable, and adequate housing for our members. To
implement the plan, our fiscal year 2006 budget request for the family
housing investment program is more than $400 million over the fiscal
year 2005 budget. Consistent with Department of Defense Strategic
Planning Guidance, the Air Force intends to eliminate inadequate family
housing units in the United States by 2007, accelerate funding at four
northern tier bases one year earlier than originally planned, and
eliminate inadequate overseas family housing units by 2009. We thank
you for your assistance in helping keep us on the path to meet these
goals.
For fiscal year 2006, the $1.2 billion requested for our housing
investment program will provide over 2,900 new homes at 17 bases,
improve more than 2,000 homes at 16 bases, and support privatization of
more than 2,200 homes at three bases. An additional $767 million will
be used to pay for maintenance, operations, utilities and leases to
support the family housing program.
Dormitories
We are just as committed to providing adequate housing for our
unaccompanied junior enlisted personnel. We are making great progress
in our Dormitory Master Plan, a three-phased dormitory investment
strategy. Phase I, eliminating central latrine dormitories, is complete
and we are now concentrating on the final two phases of the investment
strategy. In Phase II we are building new dormitories to eliminate our
room shortage. In Phase III, we will replace existing dormitories at
the end of their useful life with a standard Air Force-designed private
room to improve our young Airmen's quality of life.
The total Air Force requires 60,200 dormitory rooms. It will cost
approximately $711 million to fully execute the Air Force Dormitory
Master Plan. That will replace all inadequate permanent party dormitory
rooms by fiscal year 2007 and all inadequate technical training
dormitories by fiscal year 2009. This fiscal year 2006 budget request
moves us much closer toward these goals, requesting $184 million for
eight dormitory projects--creating 1,648 new rooms for unaccompanied
personnel at both stateside and overseas bases. With this request, we
will reach 47 percent of our final permanent party goal and 19 percent
of our technical training goal.
Fitness Centers/Family Support Centers
Along with housing, fitness centers are a critical component of the
Air Force's quality of life. Our expeditionary nature requires that
Airmen deploy to all regions of the world, and into extreme
environments. They must be physically prepared to deal with these
challenges. Our Airmen must be ``fit to fight.'' Under our new fitness
program, Airmen are devoting more time and energy to physical fitness.
As a result, fitness center use has increased dramatically. The Air
Force Fitness Center Master Plan prioritizes requirements based on
need, facility condition, MAJCOM input, Operations Tempo, and a
location's remoteness or isolation. The fiscal year 2006 military
construction program includes two fitness centers: Charleston Air Force
Base (AFB), SC and Vandenberg AFB, CA.
Family Support Centers are also critical to the quality of life of
our Airmen and their families. They provide needed support services and
ensure a strong sense of community on our bases. This is especially
important in overseas locations where our Airmen and their families are
separated from cultural and community support networks they are
accustomed to in the United States. For them, our Air Force family
becomes their primary support structure, especially when a spouse is
deployed. The fiscal year 2006 submission includes a new Family Support
Center at Aviano Air Base, Italy.
ACCOMMODATE NEW MISSIONS
Our Airmen are the best in the world, but superior weapons have
also played a key role in recent joint warfighting successes in the
Global War on Terrorism. Advanced weapon systems enable our combatant
commanders to respond quickly in support of national security
objectives. The fiscal year 2006 Total Force new mission military
construction program consists of 40 projects, totaling more than $402
million, and supports core modernization, beddown of new missions, and
expansion of existing missions. These include Global Hawks at Beale
AFB, California; Predator force structure changes at Indian Springs Air
Force Auxiliary Field, Nevada; Combat Search and Rescue aircraft
beddown at Davis-Monthan AFB, Arizona and a HC-130P simulator facility
at Kirtland AFB, New Mexico; a Distributed Common Ground Station at
Hickam AFB, Hawaii; and small diameter bomb facilities at RAF
Lakenheath, United Kingdom. In particular, two new systems, the F/A-22
Raptor and the C-17 Globemaster III, require extensive construction
support.
The F/A-22 Raptor is the Air Force's next generation air
superiority fighter, but it is equally capable attacking ground targets
or gathering intelligence data. Langley AFB, Virginia, will be home for
the first operational F/A-22 squadrons. Flight training, weapons
training, and aircraft battle damage repair training will be conducted
at Tyndall AFB, Florida, Nellis AFB, Nevada, and Hill AFB, Utah. Our
fiscal year 2006 military construction request includes one F/A-22
project at Langley AFB, one project at Tyndall AFB, two projects at
Nellis AFB, and one project at Hill AFB for a total of $47.5 million.
These projects support the F/A-22 initial beddown and training and will
not be affected by the final aircraft purchase number.
The C-17 Globemaster III is replacing our fleet of C-141
Starlifters. C-17s will be based at Elmendorf AFB, Alaska; Travis AFB
and March Air Reserve Base (ARB) in California; Dover AFB, Delaware;
Hickam AFB, Hawaii; Jackson Air National Guard Base, Mississippi;
McGuire AFB, New Jersey; Altus AFB, Oklahoma; Charleston AFB, South
Carolina; and McChord AFB, Washington. Thanks to your support, the
construction funding requirements for Charleston and McChord are
complete. The request for fiscal year 2006 includes two projects for $6
million at Dover AFB, three facility projects for $12.6 million at
Travis AFB, and two facility projects for $54.8 million at Elmendorf
AFB.
OPTIMIZE USE OF PUBLIC AND PRIVATE RESOURCES
Housing Privatization
We would also like to thank you for eliminating the cap on the
Department of Defense Family Housing Improvement Fund. Our Airmen and
their families appreciate your staunch commitment to their quality of
life. To date, we have awarded thirteen privatization projects
providing 10,977 privatized homes for our Air Force families. The Air
Force has leveraged an investment of $173 million with private sector
funding to yield $1.6 billion in total development.
Last year, we completed three privatization projects (Elmendorf
AFB, Alaska; Robins AFB, Georgia; and Dyess AFB, Texas) and have three
more under construction (Wright-Patterson AFB, Ohio; Patrick AFB,
Florida; and Kirtland AFB, New Mexico). We recently awarded five new
privatization projects at Moody AFB, Georgia; Little Rock AFB,
Arkansas; Buckley AFB, Colorado; Hanscom AFB, Massachusetts; Hickam
AFB, Hawaii; and awarded the second phase of the project at Elmendorf
AFB. Two years ago we set a goal to privatize 60 percent of U.S.-based
family housing by 2007. With this budget we are on track to beat that
goal by an additional 12 percent. The fiscal year 2006 request includes
$65 million to start privatizing more than 2,200 units at three more
bases: Peterson AFB and the U.S. Air Force Academy in Colorado; and
F.E. Warren AFB, Wyoming.
Utility Privatization
In addition to privatizing housing, the Air Force is interested in
privatizing utilities where it makes economic sense and does not
adversely affect readiness, security, or mission accomplishment. Our
installations are key to our operational capabilities. Our network of
bases provides necessary infrastructure for deploying, employing, and
sustaining air and space operations and re-deploying and reconstituting
the force afterwards. Our bases are also the training platforms from
which skilled Airmen learn their trades and prepare for deployment.
Reliable utility services are essential to operations at every Air
Force base.
To date, under OSD's utilities privatization program, the Air Force
has conveyed 10 systems, with a plant replacement value in excess of
$230 million. By the time the program is complete, we anticipate as
many as 100 of about 500 systems could be privatized. We are on track
to meet 95 percent of OSD's milestone: completing Source Selection
Decisions by September 30, 2005. During the course of this process, we
expect that many competitive solicitations will end up as sole source
procurements from local utility companies.
CONCLUSION
The readiness of our fighting force, now and in the future, depends
upon our infrastructure. We will continue to enhance our installations'
capabilities and our Airmen's quality of life and ensure Air Force
infrastructure remains ready to support our global operations.
HOUSING PRIVATIZATION
Senator Hutchison. Thank you very much, Mr. Secretary.
I think the Air Force has come to privatization a little
later than some of the other Services, and with some of the
MILCON money, there has been a determination, after MILCON has
been appropriated, that privatization would be the better
route. My question is, How are you going to work with the
committee in the future to come to us with a change, if you're
not going to use MILCON money where you told Congress you
would? Where would this money go if there is a reprogramming
request? If you're going to go to privatization, we need to
have some sort of notification. How would you propose to handle
that?
Mr. Kuhn. I think there are many ways that we have done
this and we will continue to do this. One of the ways is, the
gentleman to my right and the individuals in his office have
come over to the Congress to talk about every housing
privatization project in the Air Force, where the MILCON
started for the projects, and how they interrelated.
I also see that there are three points in which we also
come to you under congressional notification. One is in the
concept approval of the housing privatization program, in which
we not only do a notification, but we offer to come over to
talk to your staff about these issues. And we come back a
second time, before award, to talk to you about the project
itself, the dollars that were leveraged, any details that you
would like. And then there's the third notification when the
money actually gets transferred into the family housing
improvement fund.
But I think my commitment to you, and General Fox's
commitment to you, is that we can, and have, offered to come
over to talk to this issue on a systematic, periodic basis with
your staffs, and they have been incredibly responsive to us in
that, and it's been a very helpful dialogue.
Senator Hutchison. Good. Thank you.
Mr. Kuhn. Yes, ma'am.
Senator Hutchison. Bolling Air Force Base was going to be
traditional construction but now it is going into
privatization.
Mr. Kuhn. Yes, ma'am, into a group.
Senator Hutchison. Yes. My question is, you're going to
privatization for Bolling, and are you going to preserve the
historic houses? How are you going to handle those historic
homes?
General Fox. Madam Chairman, we are looking at Bolling Air
Force Base as a privatization candidate. And when we initially
looked at Bolling and ruled it out the first time that we
looked, it was because it was too good a deal for a developer,
if you would. The basic allowance for housing was too high to
make it feasible for the government to press ahead. So the only
way that we look at it and say that it's a smart move for the
government is to group it with some other bases that might not
be quite as good a deal. So, in essence, it becomes the way to
carry some other bases that are not as good a leverage.
As Mr. Kuhn mentioned, the great thing about privatization
is the up-front capability that it gives us. We are now seeing
nine-to-one leverage across our entire housing privatization
program, which means, for every dollar that the Government puts
forward up front, we're leveraging nine in private development.
So that's what makes the program successful for us.
At Bolling Air Force Base, we're looking at potentially
grouping with five other bases. And so, as we look at those
bases and what we press ahead with in privatization, certainly
we will have the developer give us proposals that will include
preserving the historic units. I believe that the developer who
would then own those units will probably have other proposals,
as well. But, at this point, I don't think that we're able to
tell you what a proposer would give us, in terms of the
different propositions that they might make to us.
Senator Feinstein. Madam Chairman?
Senator Hutchison. Yes?
Senator Feinstein. At 2:30, we have a closed intelligence
meeting on the defense intelligence budget.
Senator Hutchison. Sure.
Senator Feinstein. And I'd like to be excused. It's the
only chance I have----
Senator Hutchison. Of course. Do you have a question before
you leave? Whatever is your pleasure.
Senator Feinstein. I think--can I ask one question----
Senator Hutchison. Sure.
SPANGDAHLEM AIR BASE, GERMANY
Senator Feinstein [continuing]. On Spangdahlem? Because
we've gone over this before. There are two project requests for
Spangdahlem, the large-vehicle inspection station, at $5.4
million, and the control tower, at $7.1 million. The question I
wanted to know is, Do we know which air assets will remain at
Spangdahlem following the global realignment that would support
the infrastructure improvement? And, secondly, why haven't we
requested NATO funding for these projects?
And another project that appears to be eligible for NATO
funding is a warehouse at Aviano.
General Fox. Senator Feinstein, the purpose for
Spangdahlem, for the long term, it is an enduring base.
Spangdahlem is one of two bases, coupled with Ramstein Air
Base, also in Germany, that replaced the capability that Rhein-
Main Air Base has provided us.
Senator Feinstein. General, we went over this. I think it
was--was it last year?
Senator Hutchison. Yes.
Senator Feinstein [continuing]. Last year, so we're
relatively familiar with it. I mean, part of our problem has
been that you folks change your mind periodically after we've
begin a project. And I guess what I want to see is that there
really is going to be the air assets there to support the
improvements.
General Fox. Senator Feinstein, there's no change in
Spangdahlem, nor Ramstein.
Senator Feinstein. But that still doesn't answer my
question, because we've never really, to my knowledge, been
really assured that the air assets are going to be there.
General Fox. Both those bases, for the long term, replace
the Rhein-Main capability that brings heavy airlift through
Central Europe en route to other NATO locations or Southwest
Asia.
Senator Feinstein. So what you're telling us is that, on a
permanent basis, there will be sufficient air assets at
Spangdahlem to justify these permanent improvements.
General Fox. Yes, ma'am. Yes, ma'am. At Spangdahlem and
Ramstein, both of those become airlift capabilities, to include
wide-body aircraft, C-5 and C-17 aircraft.
Senator Feinstein. Have we asked for NATO funding for any
of this?
General Fox. Yes, ma'am.
Senator Feinstein. And is it forthcoming?
General Fox. The vehicle inspection gate is not eligible
for NATO funding, but the tower is partially eligible, and we
have asked for NATO recoupment of funds. So when we go forward
with that project, we pre finance, and then go back to NATO and
ask for recoupment of those funds. But Spangdahlem and Ramstein
both are enduring locations.
Senator Feinstein. And they will recoup $7.1 million?
General Fox. No, ma'am. We----
Senator Feinstein. How much will they give you?
General Fox. I would have to estimate, at this point. I'll
answer, for the----
Senator Feinstein. Well, I'd just like----
General Fox [continuing]. For the record.
Senator Feinstein [continuing]. To get you on the record so
we know the money comes back and that you don't use it for
something else.
NATO PRECAUTIONARY PREFINANCE STATEMENT
General Fox. Senator, the money does not come back to us,
and I can't use it for something else. When--in a NATO
scenario, we file a--what is known as a precautionary pre
finance statement, which tells NATO we intend for them to pay
back any and all funds that are eligible under NATO. NATO funds
a minimum military essential requirement. So when they look
across all NATO member countries, they say--if those NATO
member countries have a very-much-smaller control tower
requirement--and usually most countries don't build to our
standards--they will fund to the minimum standard. And so, we
can expect to recoup whatever the minimum standard is that
other countries----
Senator Feinstein. Of that----
General Fox [continuing]. Would get.
Senator Feinstein [continuing]. $7.1 million?
General Fox. Yes, ma'am.
Senator Feinstein. Or in excess of the $7.1 million?
General Fox. A portion of that $7.1 million.
Senator Feinstein. I guess I don't understand the word
``recoup''--does that mean----
General Fox. Recoupment----
Senator Feinstein [continuing]. They pay you dollars?
General Fox. Recoupment means that NATO applies, then,
funds that they will fund against--a project that we pre
finance--against the United States share to the NATO Security
Investment Program. So then the following year, the United
States does not contribute as much as it ordinarily would to
NATO.
NATO contributes--NATO's budget, in Security Investment
Program, is in the neighborhood of about $550 to $600 million
per year. The United States share of----
Senator Hutchison. The question I think----
General Fox [continuing]. That's about 25 percent.
Senator Hutchison. Right. But what she's saying is, okay,
we fund it, NATO comes back, say, and gives us $4 million of
the $7 million in credits to other NATO accounts. So the Air
Force has funded the NATO commitment, basically.
General Fox. So----
Senator Feinstein. So it's taken off of----
General Fox. Basically, it buys down----
Senator Feinstein [continuing]. Our NATO commitment.
General Fox [continuing]. It buys down our normal
contribution in subsequent years to NATO. It reduces our share.
Senator Feinstein. Is that same thing true for the
warehouse at Aviano?
General Fox. It would be. I can't tell you exactly what
percentage of the warehouse at Aviano Air Base qualifies for
NATO, based on the minimum NATO standard. But it is exactly
true, as a normal course of business in Europe, the U.S. Air
Forces in Europe files a recoupment request for anything that
is or might be eligible for NATO funding. NATO funds, normally,
operational requirements only, and then to a common minimum
standard across NATO.
Where we've really leveraged NATO funding very well for the
United States is when we went to Aviano and did the Aviano
beddown. We convinced them that, since it was a replacement for
Crotone Air Base that was not built, that they should also fund
support facilities, as well. So we leveraged something like
$350 million that NATO paid for the Aviano beddown, for
example. So we do claim, for the U.S. Government, everything
that NATO makes eligible across member nations.
Senator Feinstein. But it's just deducted from our
contributions today----
General Fox. It just means that----
Senator Feinstein [continuing]. So it's just a fungible
exchange.
General Fox. Yes, ma'am. We do not get funding back; it
just decrements the amount in subsequent years that we the
United States would normally contribute.
Senator Feinstein. Thank you both very much. I appreciate
that.
Thanks, Madam Chairman.
Senator Hutchison. Thank you.
GOODFELLOW AIR FORCE BASE, TEXAS
I just have one more, and this is more of a local nature.
Goodfellow Air Force Base, in San Angelo, Texas, is one of
the good examples of true joint training facilities. All of the
services are represented there. I wanted to ask you, it seems
to me that Goodfellow has a lot of expansion room, and they're
doing this intelligence training and language training that is
so essential right now. My question is, do you have any plans
to expand that mission profile with the same type of
intelligence and its cryptology and language training for
intelligence services? Are you looking at any expansions of
that at this time?
Mr. Kuhn. I don't know of any expansions, vis-a-vis the Air
Force. I don't know what DOD or, for instance, the joint cross-
service groups in the BRAC might be looking at for that. But
I've met with the Goodfellow community on many occasions. We've
talked about the lands, we've talked about their jointness in
that area and in other areas, and they've been in the forefront
of this issue for a lot of years.
Senator Hutchison. Well, it seems that it has really picked
up with our war on terrorism, because, of course, we're
recruiting more people who can, not only----
Mr. Kuhn. Yes, ma'am.
Senator Hutchison [continuing]. Learn to speak Arabic, but
to try to decipher signals. And I just----
Mr. Kuhn. Yes, ma'am. Where jointness becomes even more
important. Yes, ma'am, I agree with you. But just where I sit
in the Air Force, I don't know of any plans of the Air Force to
do anything for that particular----
ADDITIONAL COMMITTEE QUESTIONS
Senator Hutchison. But there is a lot of expansion room
there.
Mr. Kuhn. Yes, ma'am, there is.
Senator Hutchison. Have you been there to see their
facilities?
Mr. Kuhn. Yes, ma'am. Had a barbeque there. Yes, ma'am.
Senator Hutchison. Oh, yes, that's----
Mr. Kuhn. Yes, ma'am.
Senator Hutchison. Well, the barbeque is at Dyess, in
Abilene, also. That's another big one.
Mr. Kuhn. Been there, too.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted to Fred W. Kuhn
Questions Submitted by Senator Kay Bailey Hutchison
FAMILY HOUSING
Question. Mr. Kuhn, is the Air Force privatizing family housing at
places where authorization and appropriation for the family housing
requirements have not been received?
Answer. No. All of the awarded AF housing privatization projects
had MILCON projects (for significantly smaller scope or number of
units) slated for them, including Patrick AFB, which had funds,
authorized and appropriated that were rescinded by Congress. The Air
Force uses the authority under Title 10, United States Code Section
2883, to transfer Military Construction appropriations into the Family
Housing Improvement Fund in order to fund the scored costs of our
privatization projects. During the March 16, 2005 Senate Appropriations
MILCON and Veterans Affairs Committee hearing, Mr. Kuhn affirmatively
answered Senator Hutchinson's question regarding whether the Air Force
would notify the committee in cases where MILCON would be used for
privatization projects. As our Military Family Housing program
continues to execute and we look for additional privatization
opportunities we will continue to keep the committee informed of
changes in our program.
BUDGET OVERVIEW
Question. Mr. Kuhn, I understand you hoped to bring forward a $1.8
billion MILCON request, but it was reduced to $1.3 billion in the last
rounds of the budgeting process. What did not get funded as a result of
that cut?
Answer. Many changes occurred from the fiscal year 2005 President's
Budget Request Future Year Defense Program (FYDP) to the fiscal year
2006 President's Budget Request. Major Commands and Bases were forced
to defer requirements to future years due to competing budget
priorities. A list of deferred requirements is attached
JOINT FUNDING/JOINT BASING
Question. Mr. Kuhn, the Defense Department consistently says it
will emphasize jointness in the upcoming BRAC round which I think is
exactly the right thing to do. The Air Force generally has the best
facilities among the Services. How do you intend to embrace jointness
and still ensure Air Force facilities are of the quality you believe
you need to most effectively execute your mission?
Answer. Thank you for the compliment regarding the existing
infrastructure structure within the Air Force. The Air Force fully
embraces the concept of jointness through the joint utilization of
infrastructure assets. This is not a new concept for us. This is
something we are already doing at the majority of our installations,
active, guard and reserve today. We strongly believe the responsibility
to maintain the installation at these high standards belongs to the
host unit commander. Prior to a new tenant from another service moving
onto an Air Force installation, the potential tenant and Air Force
personnel conduct a site survey. The host unit commander informs
potential tenants of construction compatibility standards, the inter-
service support agreement standards, and tenant funding
responsibilities. Final approval for inter-service beddown activities
is at the Secretariat-level where facility and inter-service support
levels are addressed. This high-level review reinforces the expectation
to support existing facility and installation services standards. The
Installation Capability Council, which is chaired by OSD with members
from the Services and their Secretariats have chartered a Joint Basing
Group. This group is developing a policy for the Common Delivery of
Installations Support. The policy will include standards, metrics and
pricing or reimbursement rules for installations support.
______
Questions Submitted by Senator Wayne Allard
LOWRY AIR FORCE BASE-HAZARDOUS WASTE
Question. All the developers at Lowry Air Force Base, save one,
have had their claims for asbestos remediation rejected by the Air
Force. The Colorado Delegation has been patient with the asbestos
reimbursement cost process, but the Air Force's response has been most
unsatisfactory. What is remarkable is that the Air Force continues to
talk up the Lowry Redevelopment as its shining example in the BRAC
process, yet this glaring unresolved problem remains. Why has the Air
Force refused to acknowledge its responsibility for the asbestos it
left at Lowry Air Force Base, including the asbestos found in utility
pipes?
Answer. Our approach to asbestos, as well as to other unknown and
undisclosed contamination on former Air Force property, is consistent
with the law. We accept the full responsibility imposed by Federal law
with respect to Air Force contamination that poses an unacceptable risk
to human health and the environment. Where--as at Lowry--the condition
of the property was disclosed to and accepted by the Lowry
Redevelopment Authority (LRA), and where much of the soil there has
been relocated from other locations on Lowry or brought onto Lowry at
the direction of the developers or the LRA, our obligations have
changed. And where--as at Lowry--there has never been a credible,
science-based assertion that a situation poses an unacceptable risk to
human health and the environment, the obligations of the Federal
Government are nonexistent. With respect to your question on asbestos
materials in utility pipes, the Air Force does not remove underground
utility pipes from base closure property. The LRA and its builders have
been aware that the Air Force did not remove the underground utility
lines. It is the developer's responsibility to ensure the proper
management of such pipes during construction activities.
Question. All the developers at Lowry Air Force Base, save one,
have had their claims for asbestos remediation rejected by the Air
Force. The Colorado Delegation has been patient with the asbestos
reimbursement cost process, but the Air Force's response has been most
unsatisfactory. What is remarkable is that the Air Force continues to
talk up the Lowry Redevelopment as its shining example in the BRAC
process, yet this glaring unresolved problem remains. Why has the Air
Force refused to reimburse the developers who used their own money to
pay for the Air Force's hazardous waste?
Answer. Please be assured that the decisions to deny claims were
made only after careful review of the facts and applicable law, and
that the decisions were made with the full support of the U.S.
Department of Justice. The privileged nature of the settlement
discussions prevents us from discussing any details.
Question. All the developers at Lowry Air Force Base, save one,
have had their claims for asbestos remediation rejected by the Air
Force. The Colorado Delegation has been patient with the asbestos
reimbursement cost process, but the Air Force's response has been most
unsatisfactory. What is remarkable is that the Air Force continues to
talk up the Lowry Redevelopment as its shining example in the BRAC
process, yet this glaring unresolved problem remains. Don't you find it
embarrassing that this hasn't been resolved particularly when
communities from around the country are meeting at Lowry this Spring to
discuss successful redevelopment strategies?
Answer. No. The Air Force has followed Federal and State laws in
its response to the discovery of asbestos at Lowry Air Force Base. The
developers incurred their costs at the behest of a State agency that
directed unprecedented sampling and response actions and then, without
any basis, informed the developers that the Air Force would pay for it.
It is not the Air Force's responsibility to resolve such errors. We
believe that Lowry is an excellent example of successful redevelopment
and we applaud the LRA for the work it has accomplished to date. We
also note that the meeting in question is sponsored by a non-Federal
group, the National Association of Installation Developers (NAID). The
announcement for the June 4-7, 2005 conference presents the following
information: ``. . . Lowry . . . has reached marketplace success must
faster than anticipated, while driving an economic engine that is
helping the region recover . . .'' and ``since closing in 1994, and
then breaking ground in 1997, Lowry has become one of Denver's hottest
neighborhoods. Nearly 3,000 new homes for 6,500 residents now command
premium prices . . . to date the LRA estimates a $4 billion economic
benefit to the State.''
LOWRY AIR FORCE BASE-PRIVATIZATION INITIATIVE
Question. I would also like to point out a good news story from
Lowry, and that is the privatization initiative. This plan would allow
the Air Force and the Lowry Redevelopment Authority to privatize the
remaining environmental issues and to complete the conveyance of all
the remaining land at Lowry. This effort would effectively end any Air
Force involvement at Lowry, protect them against any future
environmental clean-ups, and allow the LRA to privately contract out
all of the remediation efforts left at the site. I believe that if this
plan had been put in place prior to the discovery of asbestos in the
soil at Lowry, the entire issue would have been taken care of in a much
less confrontational manner. I hope that as we proceed with another
round of BRAC that the DOD will push for these agreements. Will the
Department of Defense continue to pursue privatization initiatives with
the communities that are affected by the BRAC process?
Answer. Yes, the Air Force will continue to pursue privatization
initiatives at locations where it is economically feasible. In addition
to Lowry, the Air Force Real Property Agency is pursuing privatization
at the former McClellan AFB, CA. In coordination with the Department of
Defense, the Air Force is developing criteria for the BRAC 2005
Handbook that will aggressively reflect privatization as a viable
method under BRAC 2005.
______
Questions Submitted by Senator Dianne Feinstein
SUPPLEMENTAL REQUEST/KUWAITI AERIAL PORT
Question. Because of the timing of the President's Budget Request,
and the submission of the $75 billion Supplemental request, it's
impossible not to question projects included in the supplemental as
emergencies. The Air Force has asked for an aerial port at Ali Al Salem
Air Base in Kuwait. The request is for $75 million and that's just the
first phase of an unspecified number of phases. First, can you give me
the total cost and number of phases for this project, and secondly, why
our location at Kuwait City Airport isn't sufficient? These are
temporary facilities, are they not?
Answer. The $75.5 million MILCON request in the fiscal year 2005
Supplemental is an emergency. It is intended to provide the minimum
construction requirements necessary to move all flying operations out
of the Kuwait City International Airport (Mubarak AB) and meet the
current contingency requirements in support of Operation IRAQI FREEDOM
(OIF). The project expands the runway, taxiway, aircraft parking, and
fueling capability at Ali Al Salem (AAS) in order to enable the
airfield to support wide-body aircraft. Additionally, the project
provides only the basic facility needs to process passengers, handle
cargo, plus billeting/dining facilities (using pre-engineered
buildings). The $75.5 million project in the fiscal year 2005
Supplemental was developed last year assuming continued commercial
traffic into Kuwait City International Airport (KCIA). Current revised
planning assumption is that all U.S. flights will be redirected to AAS
vice KCIA. With this increased number of daily commercial landing and
takeoffs, recent pavement/soil analysis done by the Corp of Engineers
determined that the existing design and condition of the Host Nation
(HN) airfield will require repairs ($18.3 million to $35 million
depending on design) to the existing airfield pavements in order to
support heavy aircraft beyond 2 years. We will request HN funding for
this effort, and if unsuccessful in obtaining HN funding will submit
O&M funded repair under section 2811. Bottom line: the $75.5 million
project will effectively move all operations out of KCIA in the short
term, but the additional load on the AAS runway will cause it to fail
unless it is repaired. Next, there is a four-phase plan to transition
Ali Al Salem into an enduring base with permanent type facilities in
accordance with the long range CENTCOM Master Plan. These phases are
not tied to OIF, (like the interim $75 million Supplemental project
mentioned above), and will be submitted for Host Nation funding/cost
sharing and potential future U.S. MILCON funding. The preliminary scope
of work and cost estimates for these future phases are reflected in
detail in the below spreadsheet.
[In thousands of dollars]
------------------------------------------------------------------------
HN funding
Project title request
------------------------------------------------------------------------
Phase 1 Priority:
Conc Strat Lift Ramp 8 wide/48 other................ 75,300
Connecting Taxiways................................. 2,800
Engine Runup & Maint Pad............................ 3,100
Fuel Hydrant Sys (8 Strat, 24 Other), Ph 1.......... 15,000
Flightline/Satellite Fire Station................... 3,000
2 Lane Asphalt road, Ph 1........................... 2,000
Communications...................................... 2,200
Supporting fac, utilities, demo, sitework........... 7,000
Demining, Ph 1...................................... 7,000
---------------
Phase 1 Total..................................... 117,400
===============
Phase 2 Priority:
Operational Fuel Storage............................ 10,000
Fuel Hydrant Sys (8 Strat, 24 Other), Ph 2.......... 24,900
PAX Terminal........................................ 5,000
Fleet Service Warehouse............................. 2,300
Air Freight Terminal................................ 5,000
Wide body Maintenance Hangar........................ 22,400
Maintenance Shops w/Hangar.......................... 4,500
Hangar Apron........................................ 3,600
Squadron Ops Facility............................... 3,400
AMU Facility........................................ 3,400
Fuels Ops & Testing Facility........................ 1,100
2 Lane Asphalt road, Ph 2........................... 800
Army Fac (Troop Processing, Hospital, etc).......... 59,000
Supporting fac, utilities, demo, sitework........... 7,000
Demining, Ph 2...................................... 7,000
---------------
Phase 2 Total..................................... 159,400
===============
Phase 3 Priority:
12,000 <greek-e> 200 Runway w/50 shoulders.......... 23,000
7,500 <greek-e> 100 Taxiway w/50 shoulders.......... 10,500
Asphalt Overruns.................................... 1,300
Ladder & High Speed Taxiways........................ 16,900
Hot Cargo Pad....................................... 4,900
Air Traffic Control Tower........................... 1,800
Airfield Lighting/NAVAIDS........................... 11,200
2 Lane Asphalt road, Ph 3........................... 800
Supporting fac, utilities, demo, sitework........... 7,000
Demining, Ph 3...................................... 7,000
---------------
Phase 3 Total..................................... 84,400
===============
Phase 4 Priority:
80 km Pipeline from Refinery........................ 38,400
Flightline Dining Facility.......................... 2,700
Housing (10<greek-e>24 room)........................ 8,400
Repair old runway/taxiway after move................ 24,600
MWR & Support Facilities............................ 2,800
2 Lane Asphalt road, Ph............................. 42,900
Supporting fac, utilities, demo, sitework........... 7,000
Demining, Ph 4...................................... 7,000
---------------
Phase 4 Total..................................... 93,800
---------------
Cost Sharing Totals............................... 455,000
------------------------------------------------------------------------
The transition from Kuwait International Airport to Ali Al Salem
serves two purposes. One, the Government of Kuwait (GoK) has requested
that all Military operations relocate as they move to establishing a
Free Trade Zone and increase tourism to their country. Second, by
consolidating the Aerial Port of Debarkation APOD (currently at KCIA)
with the passenger processing and tactical airlift (currently at AAS)
the force protection risk of convoying deploying/redeploying forces
between these locations is mitigated. Currently Military and U.S.
commercial aircraft are parked adjacent to the uncontrolled freeway and
accessible by commercial vehicles operating on KCIA. Bussing troops
from KCIA to Camp Buehring for in processing, then on to AAS for
airlift into Iraq exposes them to risk of attack. The fiscal year 2005
Aerial Port project allows relocation of APOD from KCIA to mitigate
force protection risks to troops, improves efficiency of logistics and
troop movements, and satisfies HN request to allow KCIA civil aviation
expansion. The facilities to be constructed are pre-engineered
temporary facilities with anticipated life expectancy of 5 to 7 years
given the extreme temperature conditions of AAS.
RECAPITALIZATION RATE
Question. Mr. Kuhn, as promised, the Air Guard's request is up
nearly 30 percent from last year's request, but that still only
represents a $38 million increase. When compared to the amount funded
with Congressional ads, the Air Guard still falls $73 million below
last year's funded amount. The recapitalization rate for the Air Guard
is 163 years--just slightly less than 100 years off the 67 year goal
set by DOD. Given that only 24 percent of this year's request buys
current mission projects, how do you plan to buy down the
recapitalization rate?
Answer. The OSD goal for the Services to achieve a 67-year
recapitalization rate is by fiscal year 2008; a goal which the Air
National Guard is currently programmed to meet. The Air National
Guard's fiscal year 2006 and fiscal year 2007 MILCON programs continue
to be dominated by new mission requirements for the beddown of the C-5
at Memphis, TN and Martinsburg, WV. Projects associated with these
beddowns are primarily new footprint and do not count toward the
recapitalization rate. The completion of these beddowns and the up-turn
in funding projected for fiscal year 2008 will make this possible.
______
Questions Submitted to Major General L. Dean Fox
Questions Submitted by Senator Kay Bailey Hutchison
SUSTAINMENT/BASE OPERATIONS SUPPORT (BOS)
Question. General Fox, your testimony notes your restoration and
modernization (R&M) backlog will grow to nearly $9.8 billion in 2006.
It also notes your request for R&M funds was restricted to $173 million
in fiscal year 2006. How do you expect to make any progress against the
backlog with such small R&M request?
Answer. The readiness of our infrastructure remains an emphasis
item for the Air Force; however, near-term fiscal constraints
prohibited us from bringing forward a more robust R&M request. During
the Program Review period, the Air Force was forced to react to major
adjustments in the overall Department of Defense budget, including
reductions of almost $4.8 billion to the Air Force budget in fiscal
year 2006. In developing options to source funding in response to this
direction, we looked at the full range of Air Force programs, from
flying programs to installation support programs. While our fiscal year
2006 budget request for R&M is less than we would prefer, in the out-
years we intend to invest more heavily in critical infrastructure
maintenance and repair through our R&M program in order to achieve a
facility recapitalization rate of 67 years by fiscal year 2008. This
strategy is in line with established OSD goals. This additional
investment in our R&M program will assist in making progress against
our R&M backlog.
Question. General Fox, your testimony notes your restoration and
modernization (R&M) backlog will grow to nearly $9.8 billion in 2006.
It also notes your request for R&M funds was restricted to $173 million
in fiscal year 2006. What funding strategy does the Air Force intend to
employ to bring down this backlog?
Answer. Our strategy is to invest more heavily in the out-years in
critical infrastructure maintenance and repair in order to achieve a
facility recapitalization rate of 67 years by fiscal year 2008. This
strategy is in line with established OSD goals. This strategy will
assist in making progress against our R&M backlog.
Question. General Fox, your testimony notes your restoration and
modernization (R&M) backlog will grow to nearly $9.8 billion in 2006.
It also notes your request for R&M funds was restricted to $173 million
in fiscal year 2006. Given the backlog, why has the Air Force not asked
for more R&M?
Answer. Near-term fiscal constraints prohibited us from bringing
forward a more robust R&M request. During the Program Review period,
the Air Force was forced to react to major adjustments in the overall
Department of Defense budget, including reductions of almost $4.8
billion to the Air Force budget in fiscal year 2006.
Question. General Fox, your testimony notes your restoration and
modernization (R&M) backlog will grow to nearly $9.8 billion in 2006.
It also notes your request for R&M funds was restricted to $173 million
in fiscal year 2006. Why has the Air Force not submitted a larger
sustainment and BOS budget?
Answer. Sustainment, Base Operating Support (BOS), and Restoration
and Modernization (R&M) are three separate programs, each with separate
requirements and associated funding goals. For Sustainment, the Air
Force's fiscal year 2006 budget request is in keeping with established
OSD goals; namely, it represents 95 percent of the requirement derived
from the OSD Facility Sustainment Model. For BOS, while our fiscal year
2006 budget request is less than we would prefer, near-term fiscal
constraints prohibited us from bringing forward a more robust BOS
budget. During the Program Review period, the Air Force was forced to
react to major adjustments in the overall Department of Defense budget,
including reductions of almost $4.8 billion to the Air Force budget in
fiscal year 2006. In developing options to source funding in response
to this direction, we looked at the full range of Air Force programs,
from flying programs to installation support programs.
______
Questions Submitted by Senator Dianne Feinstein
VANDENBERG AFB/MCCLELLAN AFB
Question. General Fox, the Air Force plans to spend $34.7 million
in fiscal year 2006 for environmental remediation at the former
McClellan AFB. Could you please tell me, what is the extent of
remediation efforts still required at McClellan, how much time and how
much funding is still required?
Answer. Former McClellan AFB is on the EPA National Priorities List
(NPL) list and is a very complex environmental site. There are nine
operable units, which have been organized into 15 specific Records of
Decision (RODs). Two RODs are completed. 2010 is the projected Final
ROD date, with 2015 being the final remedy in place date. The Estimated
Cost to Complete is $752 million. The Air Force is seeking to implement
alternate contracting methods to buyout all or portions of the
environmental program over the FYDP. Currently 11 percent of the
property is conveyed. All conveyances are estimated for completion by
end of 2016.
FOREIGN CURRENCY EXCHANGE
Question. Maj Gen Fox, Your program notes the challenging foreign
currency exchange rate. The dollar has been in decline for a couple of
years now. When submitting requests for this budget, did your estimates
take into consideration the weakened value of the dollar? If so, given
a consistent dollar valuation, will exchange rates continue to be a
challenge in fiscal year 2006?
Answer. Yes, we have taken into consideration the weakened value of
the dollar in developing the cost estimates of our fiscal year 2006
overseas projects. However our prior year projects were programmed at
higher rates of exchange and the issue of exchange rates will remain a
challenge when making payment for these projects in fiscal year 2006.
SUBCOMMITTEE RECESS
Senator Hutchison. Yeah.
Well, thank you very much. Those are my questions. And I
appreciate your being here and look forward to working with
you.
Mr. Kuhn. Thank you very much.
General Fox. Thank you.
Senator Hutchison. Thank you.
Our hearing is recessed.
[Whereupon, at 3:16 p.m., Wednesday, March 16, the
Subcommittee was recessed, to reconvene subject to the call of
the Chair.]
MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES
APPROPRIATIONS FOR FISCAL YEAR 2006
----------
TUESDAY, JUNE 28, 2005
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 4 p.m., in room SD-138, Dirksen
Senate Office Building, Hon. Kay Bailey Hutchison (chairman)
presiding.
Present: Senators Hutchison, Allard, Feinstein, Johnson,
and Landrieu.
OVERSEAS BASING COMMISSION
STATEMENT OF HONORABLE AL CORNELLA, CHAIRMAN, OVERSEAS
BASING COMMISSION
ACCOMPANIED BY:
MAJOR GENERAL LEW E. CURTIS, III, UNITED STATES AIR FORCE
(RET.)
VICE ADMIRAL ANTHONY A. LESS, UNITED STATES NAVY (RET.)
BRIGADIER GENERAL KEITH MARTIN, PENNSYLVANIA ARMY NATIONAL
GUARD (RET.)
LIEUTENANT GENERAL H.G. TAYLOR, UNITED STATES ARMY (RET.)
OPENING STATEMENT OF SENATOR KAY BAILEY HUTCHISON
Senator Hutchison. The hearing will come to order. I
apologize for being late, I thank all of you for being here and
I'm very pleased that we now have our report and our hearing.
The Commission has concluded that making the necessary changes
in the report did not have a material affect on its conclusions
and recommendations, thus the report has been edited in
response to concerns of the Department, and we appreciate all
of the cooperation by both the Department of Defense and the
Overseas Basing Commission.
The Overseas Basing Commission was created in November of
2003 in the Military Construction Appropriations Act, Senator
Feinstein and I were the authors of that legislation. We passed
the legislation because we were concerned that the United
States was pouring large amounts of money into overseas
military facilities that were more appropriate to the Cold War
than to the security environment of the 21st century. I also
was concerned that the Department was not thinking boldly
enough about the posture more appropriate to that new security
environment, and creating the Commission served a dual
purpose--providing Congress with an independent view of our
overseas basing needs, and working with the Department of
Defense to tackle this effort vigorously.
We have before us a fresh look at these important
questions, not necessarily does it have all the right answers,
but it is another independent view of the subject. I believe
we'll find that the Commission's very existence will prove to
have been as important as any of the specific recommendations
it has to make.
I'm pleased to note the Commission report overall is in
support of the Global Basing Strategy of the Department of
Defense, and while the Commission diverges from the Department
on some of the specifics, its plan, in the words of the report
says, ``The Commission fully understands the need for change
and endorses most of the initiatives undertaken in the
Department of Defense's Integrated Global Posture and Basing
Strategy.''
I will not read the rest of my opening statement, but just
to say that I think the goal of the Commission and our goal in
passing the legislation authorizing the Commission has been
met, and I think that in the main it is also in agreement with
the Department of Defense Global Basing Initiative. There are
some differences, and we will discuss those. We will certainly
want to hear from the Department of Defense as well, but I
think when we are looking at some of the problems that we had
in transporting troops during the run up to the situation in
Iraq, and the training constraints that we have at overseas
bases, that certainly the move now to having more troops at
home and deploying from here is something that is in the works,
thanks to a lot of effort on the part of the Department.
So, with that, let me ask my ranking member, Senator
Feinstein for her opening statement, and as the co-sponsor of
the legislation to create the Commission, we're very pleased
that we now have a report, and we believe it will add to the
body of knowledge to make all of our bases better training
facilities, and better places for our service men and women to
live and work. Senator Feinstein.
STATEMENT OF SENATOR DIANNE FEINSTEIN
Senator Feinstein. Thank you very much, Madame Chairman,
and my thanks to the Commission, to its Chairman, Al Cornella,
to the members, I really think you have done an excellent job.
I had a chance at reading the classified version and have just
received this new one now and look forward to looking through
it.
I am very pleased you're working through the classification
issues which have arisen in conjunction with the report, and
we've reached the point where we can go forward with this
hearing today. Senator Hutchison's and my goal in establishing
the Commission was really to enable and obtain an objective,
informed overview of the global basing plan from the
perspective of experts outside of the Pentagon. Your report
offers precisely the type of overview we were hoping to achieve
and it raises a number of valid and very thought-provoking
questions.
The timing of the report in conjunction with the ongoing
BRAC process could not really be more propitious. I understand
you've been invited to testify before the BRAC Commission, and
I would anticipate that your insight into the global basing
plan will be a valuable asset to them in their deliberations.
I agree with both you and the Defense Department that it is
time to re-think the stationing of the United States military
forces around the world, but I also share your concerns that
the Pentagon may be moving too fast, too soon without giving
enough consideration to America's overarching foreign policy
and national security objectives. This isn't just an exercise
of moving pieces on a chessboard. When, how and where we
reposition existing military forces overseas has a far-reaching
impact, not only on our national security interest, but also on
a whole host of economic and political interests. The movement
of troops from Europe and Korea back to the United States will
have a huge impact on the communities to which they are
returning, as your report rightly points out, quality of life
is a key element of the global re-basing strategy, so the
Department needs to be very careful to avoid returning American
troops and their families to bases in communities that are not
ready to receive them, and this is a major concern, I think, of
Senator Hutchison, and certainly of my own.
How the Pentagon expects to accomplish this in the midst of
the wholesale realignment of domestic bases that will occur as
a result of BRAC is a question that needs to be answered, and
interestingly enough, I see where, in your report, you
mentioned that costs, which are anticipated to be between $9
and $12 billion with only $4 billion currently budgeted from
fiscal year 2006 to 2011. You mentioned that these may be
understated, and that an independent analysis conducted for
your Commission put the tab at closer to $20 billion. I think
this is something that we need to come to grips with, I hope,
Mr. Cornella, that you will talk about that in your remarks.
Secondly, timing and synchronization are central themes,
but your report is a great first step, I really want to thank
you for it, and I certainly look forward to your testimony.
Thanks, Madame Chairman.
Senator Hutchison. Thank you. Senator Allard.
STATEMENT OF SENATOR WAYNE ALLARD
Senator Allard. Madame Chairman, I would like to make my
full statement a part of the record.
But I would just like to just briefly make these comments.
In some respects the Commission was critical of the manner
in which the Department of Defense put together its current
Integrated Global Basing Posture and Basing Strategy, and some
may even be tempted to argue that the Commission's
recommendations indicate that we need to delay, or stop
entirely, the BRAC process. Madame Chairman, I disagree with
that assessment.
PREPARED STATEMENT
I note that the Overseas Basing Commission stating it
fully, agrees with the Department's contention, that there's
considerable need for a rebasing initiative, in fact, the
Commission strongly endorses most of the rebasing initiatives
undertaken by the Department of Defense, and I look forward to
getting to the heart of the recommendations offered by the
Commission, and I believe that this hearing will further
demonstrate how important it is that the BRAC process move
forward, and that the Department's re-basing initiative is
fully implemented, and I note with interest that there's one
bullet in your conclusions and recommendations where you state
that the overseas basing posture of the United States and
domestic base closure and realignment are closely related.
Although the Commission calls for an overarching review of the
overseas basing posture, you state that we believe that the
BRAC process should move forward as scheduled, thank you,
Madame Chairman.
[The statement follows:]
Prepared Statement of Senator Wayne Allard
Thank you, Madame Chairman for holding this important hearing.
The Commission on the Review of Overseas Military Facility
Structure of the United States has performed a great service for our
country. The Commission's report lays out several principles that
should be considered when reviewing the Department of Defense's
overseas rebasing initiative. These principles include among others:
--Ensuring that the rebasing initiative is tied to a master plan
--Coordinating with agencies outside the Department of Defense
--Assessing the impact of rebasing on intelligence, force protection,
homeland security, and other important national priorities
In some respects, the Commission was critical of the manner in
which the Department of Defense put together its current Integrated
Global Posture and Basing Strategy. Some may even be tempted to argue
that the Commission's recommendations indicate that we need to delay or
stop entirely the BRAC process.
Madame Chairman, I disagree with that assessment. I note that the
Overseas Basing Commission stated it fully agrees with the Department's
contention that there is considerable need for a rebasing initiative.
In fact, the Commission strongly endorsed most of the rebasing
initiatives undertaken by the Department of Defense.
I look forward to getting to the heart of the recommendations
offered by the Commission. I believe that this hearing will further
demonstrate how important it is that the BRAC process move forward and
that the Department's rebasing initiative is fully implemented.
Thank you for the opportunity to say a few words. I look forward to
the testimony of our witnesses.
Senator Hutchison. Senator Landrieu.
STATEMENT OF SENATOR MARY L. LANDRIEU
Senator Landrieu. Thank you, Madame Chair, I have a full
statement for the record.
I would just like to add, I think it's very important that
our desires and needs as a Nation be brought into line with our
budget and monies that we have to allocate, and I'm seeing,
unfortunately, a pattern of setting out on a course
underestimating the costs associated, and basically running up
the debt. And so, I think we've got to be very practical in
this approach, we have some strategic defense postures to keep
in place, but we also have some very real budget constraints,
and if the cost is going to be twice or three times as much as
we had anticipated, then we're going to need to find the money
somewhere, and just can't pretend that we can do this with
minimal to no cost, and we've got to be able to be more
realistic about that, and I'll say more about that in the
statement that I submit. Thank you.
[The statement follows:]
Prepared Statement of Senator Mary L. Landrieu
Madame Chairman, thank you for calling this hearing to review the
Overseas Basing Commission recommendations.
Since the end of the Cold War, the United States has stood as the
unrivaled military leader in the world. Our fighting men and women have
preserved national security and served our foreign policy interests
admirably since the collapse of the Soviet Union. However, the attacks
of September 11, 2001 on the United States highlighted the need to
transform our national defense strategy to address the terrorist and
extremist threats which seek to destroy our country's influence in the
world.
Admiral Nimitz, one of our foremost Naval heroes defined the task
for us. He noted that ``whoever gets there firstest with the mostest
wins.'' That is our contemporary challenge which positions U.S.
fighting men and women abroad. We must place them around the globe in
such a way as to assure that U.S. forces are the first in the The
Theater, and that they can bring overwhelming force to bear.
Yet while our government contemplates a global strategy to keep our
Nation more secure, we must also consider the personal impacts our
decision-making will have. As we contemplate closing facilities in
Germany and other places in Europe, we must keep a special focus on our
military families. We are already asking them to make incredible
sacrifices. We do not need to add the inevitable burdens of separation
and worry by relocating our bases to places where it is unlikely or
impossible for their families to follow.
Another consideration for this process is ensuring that our allies
and friends recognize that we aim to strengthen our commitment to
secure our common interests. We must explore ways in which we can
together transform our partnership in order to enhance our collective
defense capabilities. It is time for our allies to work toward this
goal together. Gone are the days when the United States can be expected
to foot the bill for every cause.
Madam Chairman, while I trust that all the members of the Overseas
Basing Commission will provide valuable recommendations to strengthen
the U.S. Global Defense Posture, I think it is important that this
subcommittee keep in mind that managing this complex concept is a
costly endeavor. While have put much effort into the building blocks of
posture changes which include the facilities that make up our overseas
footprint. However, we also need a new approach to managing the force
which includes our permanent and rotational presence overseas must
include our allies and their own accountability for the goals which
they can no longer expect to achieve without their own proportionate
investment.
We must make certain that we keep our Nation's obligation to those
who have served and sacrificed in its defense. I believe that the U.S.
Global Defense Posture is important and necessary. I also believe that
our commitment to this endeavor must be tempered by realistic
expectations to be achieved and by appropriate and responsible
contributions to be made by the United States as well as our Allies.
In its report, the Overseas Basing Commission expressed areas where
the Department of Defense can provide for a more secure America.
Suggestions in the report range from better communication and a wider
spectrum of views by partners in the decision-making process to a more
cohesive overall design which would be administered by a specific body
that would be assigned responsibilities to both guide and monitor its
implementation. Also, the Commission suggests Congress exercise its
full authority in ensuring that plans and programs are appropriate to
the task.
The Commission's recommendations are critical in the strategy of
transformation which will change the face of national security for many
years to come. It is essential we have an honest and open dialogue to
insure America continues to preserve the lives of its citizens for
generations to come.
Thank you all for your testimony. Also, I hope that in the future
we will be able to discuss one of the most important issues which faces
this committee, the shortfall in Veterans Health Care funding.
Madame Chairman, Senator Hutchison, thank you for your continued
leadership on these issues. I look forward to the testimony of our
witnesses.
Senator Hutchison. Senator Johnson.
STATEMENT OF SENATOR TIM JOHNSON
Senator Johnson. Thank you, Madame Chairman. I want to in
particular welcome a fellow South Dakotan, Al Cornella,
Chairman of the Commission, to the panel today and express my
appreciation and the Senate's appreciation for you leadership.
Mr. Cornella is a former BRAC Commissioner and has been willing
to take on the very significant task of chairing the Overseas
Basing Commission, and we're appreciative of that, Al, we are
proud of your service to the country. I welcome our other panel
members here, as well, who have each of them, undertaken a very
large scale, but very important undertaking, and will serve the
Senate well, I'm certain. I will submit a full statement,
Madame Chairman.
I do, however, want to note that I believe that the
Overseas Basing Commission recommendations and the ongoing
quadrennial review are of such significance that it would have
been my preference to have seen those issues resolved prior to
going onto the BRAC Commission's deliberations about the
closure and the Department of Defense's recommendations,
frankly, for the closure of military bases around the country.
I think that all of these interact with each other, and it is
hard for me to imagine how the recommendation from the
Department of Defense could be, well premised without in fact
having prior access to the studies and reviews of the
quadrennial review as well as the Overseas Basing Commission.
Nonetheless, here we are, and I look forward to the
testimony of the Commission, and I want to tell the Commission
that I was very supportive of this effort I think that your
work is going to be a very constructive and positive
contribution to our overall review of America's military
posture in the world and domestically as well, thank you.
[The statement follows:]
Prepared Statement of Senator Tim Johnson
Mr. Johnson. I would like to thank Chairwoman Hutchison and Ranking
Member Feinstein for calling today's hearing to discuss the Overseas
Basing Commission's interim report.
I would also like to thank Chairman Al Cornella for appearing
before the Subcommittee today. The work performed by the Overseas
Basing Commission is vitally important to our national security and the
long-term viability of our military force.
Today the Military Construction and Veterans Affairs Subcommittee
will hear testimony from Commission members about redeploying
servicemembers from U.S. military facilities overseas. Their report
could not come at a more important time.
The threats facing the United States today are vastly different
from those during the Cold War. Much has changed since that conflict
ended and we must shift our security posture to confront new and
emerging enemies. In addition, Secretary Rumsfeld has released his list
of proposed domestic base closures and realignments, and the Base
Realignment and Closure (BRAC) Commission has begun their important
work to review and revise the Secretary's list. Domestic base closures
have a profound effect on our military force and the economic health of
local communities. We should not close a single domestic base if it may
unduly compromise our ability to defend our homeland.
Currently, the Department of Defense is undertaking a monumental
shift in overseas deployments. The threats confronting the United
States have changed dramatically following the collapse of communism
and the terrorist attacks of September 11. In response, approximately
70,000 soldiers, as well as 100,000 family members and civilian
employees, will be returning from overseas in the next decade. This
shift in our military force abroad is long overdue.
However, the Overseas Basing Commission's interim report raises a
number of important questions that must be addressed. For instance, the
U.S. military plans to move troops stationed overseas back to American
soil, but according to the Commission, if a crisis arises abroad, the
military does not have enough sea and air transportation to rotate
forces rapidly enough to respond. Just as troubling, the Bush
Administration has projected it will cost $12 billion to redeploy
soldiers back to the United States, but has only budgeted $4 billion
for fiscal years 2006 through 2011. The Commission believes these costs
are understated and according to their independent analysis the price
tag is closer to $20 billion.
Furthermore, if the Defense Department's proposed changes in
overseas bases are enacted, it will result in additional troop
rotations. The Commission's report argues that extended and more
frequent rotations could strain U.S. military personnel and their
families to the point where the United States is incapable of
maintaining an all-volunteer force. I am extremely concerned with these
conclusions. The military is already having trouble meeting recruitment
and retention quotas. Creating more stress for our soldiers and their
families will exacerbate this problem and irreparably damage our
military.
In response to these concerns, the Commission cautions the
Department of Defense and urges them to reduce the speed of returning
soldiers from overseas bases, and I believe this idea has merit. At a
time when we are fighting wars in Iraq and Afghanistan, we must ensure
the redeployment of American service members is in accord with our
long-term strategic defense goals and should be thoughtfully planned
and executed.
Additionally, the Commission contends overseas redeployment should
wait until the Department of Defense determines which domestic military
bases will be shuttered during this round of base closures. If
Secretary Rumsfeld and the Pentagon continue to move forward with their
plan to bring troops back to the United States from overseas
deployments, I believe we must consider postponing this current round
of domestic base closures. Simultaneously closing domestic and overseas
bases may irrevocably damage our ability to defend against threats at
home and abroad.
I commend the Overseas Basing Commission for addressing the
critical issues and concerns raised in preparation for shifting troops
back to the United States. I strongly encourage Secretary Rumsfeld and
the Department of Defense to seriously consider the Commission's
recommendations. We must reorganize our military force in order to
respond to the threats of the 21st century. The challenge is to do so
in a manner that is not detrimental to our national security and the
men and women who proudly serve our country.
Senator Hutchison. Thank you, Senator Johnson. I think that
the Department in the next panel will discus how it took into
consideration the troops that were coming back during the BRAC
process, so we will get a chance to question them on that.
Mr. Cornella, thank you for Chairing the Commission, I want
to thank each Commissioner for all of the time and effort that
you have put into doing this, you came to Washington many
times, you went overseas, we appreciate the effort for this
volunteer force that you gave us, and with that, let me ask
you, Mr. Cornella, to give us the synopsis of the report, and
whatever you would wish you say.
STATEMENT OF AL CORNELLA
Mr. Cornella. Madame Chairman, Senator Feinstein, staff
members, distinguished guests, members of the general public,
my name is Al Cornella. As I was introduced, I serve as the
Chairman on the Commission of Overseas Military Facilities
Structure of the United States, thankfully more commonly known
as the Overseas Basing Commission.
I serve with five other Commissioners, four of whom are
present today. From my far left, the Commission vice-Chairman
Lou Curtis, Major General United States Air Force, Retired,
Tony Less, United States Navy, Retired, Pete Taylor on my
right, Lieutenant General, United States Army, Retired, and
Keith Martin, Brigadier General, Pennsylvania Army National
Guard, Retired. Dr. James Thompson, our sixth Commissioner and
President of BRAC is out of the country and unable to be here
with us today.
I would also like to introduce the Commission's Executive
Director, Ms. Patricia Walker, seated behind me.
Madame Chairman, I would respectfully ask that the
statements you received be entered into the record, and I be
allowed to make a brief opening statement.
The Commission's talented staff included lead research
analysts, a general counsel administrative staff, and analysts
detailed from the Department of Defense and Government
Accountability Office. The Commissioners and staff have worked
diligently to prepare the May 2005 report. A final report will
be provided to Congress and the President by August 15, 2005.
We were asked to provide this early report so it might be used
in conjunction with the domestic BRAC process.
OVERVIEW
The Overseas Basing Commission was established by public
law in fiscal year 2004. The Commission's task is to
independently assess whether the current overseas basing
structure is adequate to execute current missions, and to
assess the feasibility of closures, realignments or
establishment of new installations overseas to meet emerging
defense requirements.
However, the Commission's work is not intended to preclude
the Department of Defense's effort toward developing an
integrated global presence and basing strategy, or IGPBS, and
you'll probably hear me use that acronym several times. Rather,
the Commission report should assist Congressional Committees in
performing their oversight responsibilities for DOD's basing
strategy military construction appropriations, and the 2005
base re-alignment and closure determinations.
But one thing I would like to add as I note from your
opening statements, that there are views about criticism of the
Department. I do not believe that our report is offered as
criticism of the Department, it's offered as ways to strengthen
the IGPBS plan, but we feel these are constructive thoughts
that we're sending forth.
The Commission has been active since May 2004 and began
with a thorough analysis of national security, defense and
military strategies. The Commission completed a careful review,
the Foundation for Global Reposturing, the 2004 Department of
Defense, again IGPBS. It is important to note, at this point,
the Department on several occasions has advised us that we are
entitled to and have received all of the information that has
been provided to Congress relative to overseas basing.
Second, based on the Commission's interview, interviews of
key officials in the office of the Secretary of Defense, the
Joint Staff, the Combatant Commanders and the State Department,
the Commission developed evaluation criteria to assess how
effectively the current and future overseas basing posture
support current and future national security and military
operations. In addition, the Commission consulted with former
senior military leaders, and other national security experts.
We conducted four public hearings where we received testimony
from former experts, military experts, defense analysts and
experts on military family issues. At the final hearing, we had
representatives from the Department of Defense and the State
Department. We have engaged in briefings from the Department of
Defense, the State Department, the Congressional Budget Office,
Congressional research service, and other entities. We visited
military installations in many countries, meeting with U.S.
forces, embassy representatives, foreign military officers and
local officials. We have met with the majority of combatant
commands, and in most cases, with the commanders and their
staffs. We have made two trips to the Pacific Command, three to
the European Command, and one to the Central Command. We spent
about 2 months overseas traveling, the Commissioners also
received briefings from U.S. Southern Commands, Special
Operations Command, and Transportation Command. We have
interacted with several thousand people over the past year, the
vast majority from within the Department of Defense. All of the
Commissioners and I have learned a great deal from these
discussions, both here and abroad.
Based on this review and analysis, the Commission has
identified six major areas of concern--geopolitical
considerations, timing and synchronization, operational
requirements, mobility, quality of life and costs, and I will
touch on a few of these briefly, and then we are prepared to
address all of them in your questions.
TIMING AND SYNCHRONIZATION
The Commission would like to make note that decisions have
been made in regard to locations and force levels before the
2005 Quadrennial Defense Review, QDR, and the 2005 Mobility
Capability Study had been completed. The simultaneous
activities of Service Transformation Army Modularity Operation
Enduring Freedom, Operation Iraqi Freedom and the Global War on
Terrorism, IGPBS, BRAC, resetting the forces and rebuilding, of
pre-positioned equipment--have all competed for funding within
a limited budget, not to mention the stress that's created on
the forces, the current schedule of IGPBS moves will adversely
impact the service's ability to adequately fund modernization
and readiness.
In regard to mobility, strategic and infra-theater, lift
and sea lift capabilities must be significantly upgraded. We
have yet to meet the lift capabilities identified by the
mobility requirement study of 2005, which was conducted in the
year 2000. In addition, announcements of global reposturing are
being made before the presently ongoing Mobility Capability
Study is concluded. Again, it would seem prudent to wait for
the results of that study. It is clear that the mobility of our
military forces being stressed by the current strain on
strategic infra-theater lift and sea lift capabilities, the
stress on strategic lift capabilities is being caused in large
part by ongoing military operations in Afghanistan and Iraq.
Strategic mobility is the key to our ability to respond to
events worldwide, plans for sea and air lift capabilities as
well as pre-positioned equipment sets must take into account
the additional demands that IGPBS could place on an
increasingly continental United States-based force. Surging
forces from the continental United States will be problematic
if strategic and tactical life capabilities and pre-positioned
stocks are not in place.
QUALITY OF LIFE
Next, I'll briefly turn to quality of life issues. These
issues are complex, but are also key concerns of the global
positioning strategy, primarily because the United States
relies on an all-volunteer force. In order to sustain the
military force both in numbers and in strength, the
expectations of military personnel and their families with
regard to active and reserve duty as well as redeployments must
be met. If these expectations are not adequately met, then the
U.S. military risks being severely compromised. Needless to
say, this has enormous consequences politically, and in terms
of maintaining national security. We have a moral obligation to
our men and women in uniform and to their families to provide
the quality of life support that they deserve. Returning forces
and families should have housing, schools for their children
and adequate medical facilities in place before they return,
and the same should be maintained abroad until the last service
member departs.
The Commission calls this the ``last day-first day''
approach; not only does this have moral implications, but it
will also be reflected in retention rates. The Commission notes
with concern that the impact in recruiting and retention by
IGPBS rotational forces has not been adequately evaluated, nor
have associated risks to sustaining the voluntary force been
assessed. We strongly recommend that this be given priority,
and that necessary assessments be completed as quickly as
possible.
GEOPOLITICAL CONSIDERATIONS
In the present era of the global War on Terror and the
indisputable global competition in defense, intelligence,
diplomacy, commerce and energy matters, the Commission feels it
would be wise to broaden the underlying assumptions, scope and
participation in the IGPBS process to include vital players
involved in other areas of national security. The inter-agency
process, for example, might include the Departments of Defense,
State, Energy, Homeland Security, Justice, Commerce and
Treasury, the National Intelligence Director and others. After
completing the interim report, we were advised that have a
fourth Commission, but we of the fourth Commission have come to
a similar conclusion--the others are in the 9/11 Intelligence
Commission--while moving troops back to the United States may
be a political priority, force projection demands can only be
met by developing a rebasing strategy and coordination with
strategic U.S. alliances abroad, both existing and future.
Many of our overseas basing capabilities rest on
contingencies such as future political relations with bilateral
partners involving fully negotiated and ratified legal
agreements that support those relations. In many cases the
status of forces agreements, Article 98 agreements and other
legal agreements are not in place at the proposed new
locations.
TROOP LEVELS
I will mention one specific recommendation, as it is the
only one that has potential to change the number of returning
troops, and we estimate this recommended change to affect
roughly 4,000 troops. In order to hedge against uncertainty in
regard to near-term threats, demonstrate aid and continued and
enduring commitment to NATO, and allow for heavy force
military-to-military contact with our NATO allies, at least one
of the heavy brigade combat teams scheduled for return to the
United States should remain in Europe, fully manned, until one,
the Balkans support mission is lifted to a ground-based
defensive tank killing system is stationed in Europe and
Operation Iraqi Freedom is mitigated. Additionally, heavy
brigade combat teams' equipment should be repositioned to float
in the region. These recommendations are in addition to the
Department's plan for a Stryker Brigade in Germany, and the
173rd Airborne Brigade in Italy, and again, we offer these
suggestions only to strengthen the Department's plan, not as a
criticism.
PREPARED STATEMENT
As a final note, I wish to thank the members of the
committee for inviting the Commission to appear today. It's
been my privilege to briefly describe the Commission work to
date. Of course, the report has not been finalized and it is my
hope that this will be the beginning of dialogue in this
matter, so that the Commission can strengthen its analysis,
conclusions and recommendations before submitting the final
report on August 15. Please be assured that the Commission and
staff are open to the views and concerns of Congress.
Thank you for giving us this opportunity to serve your
needs and those of the Nation, and we will be happy to answer
any questions you may have at this time.
[The statement follows:]
Prepared Statement of Al Cornella
My name is Al Cornella, and I serve as the Chairman of the
Commission on the Review of Overseas Military Facility Structure of the
United States, more commonly known as the Overseas Basing Commission
(OSBC).
I serve with five other Commissioners four of whom are present
today--the Commission Vice Chairman, Lewis Curtis, Major General United
States Air Force (Retired); Anthony Less, Vice Admiral, United States
Navy (retired); Pete Taylor, Lieutenant General, United States Army
(Retired); Keith Martin, Brigadier General, Pennsylvania Army National
Guard (Retired). Dr. James Thomson, our sixth Commissioner and the CEO
and president of RAND is out of the country and could not be here
today. I would also like to introduce the Commission's Executive
Director, Ms. Patricia Walker.
The Commission's talented staff included lead research analysts, a
general counsel, administrative staff, and analysts detailed from the
Department of Defense and the Government Accountability Office. The
Commissioners and staff have worked diligently to prepare this May 2005
report. A final report will be provided to Congress and the President
by August 15, 2005. We were asked to provide this early report so it
might be used in conjunction with the domestic BRAC process.
The Overseas Basing Commission was established by public law in
fiscal year 2004. The Commission's task is to independently assess
whether the current overseas basing structure is adequate to execute
current missions and to assess the feasibility of closures,
realignments, or establishment of new installations overseas to meet
emerging defense requirements.
However, the Commission's work is not intended to preclude the
Department of Defense's efforts toward developing an integrated global
presence and basing strategy. Rather, the Commission report should
assist Congressional committees in performing their oversight
responsibilities for DOD's basing strategy, military construction
appropriations, and the 2005 Base Realignment and Closure Commission
determinations.
This Commission has been active since May 2004, and has conducted
four hearings where we received testimony from former military experts,
defense analysts, and experts on military family issues. We have
engaged in briefings from the Department of Defense, the State
Department, the Congressional Budget Office, Congressional Research
Service, and other entities. The Commission has met with commanders and
received extensive briefings on the transformation plan for the
European Command, Pacific Command, and Central Command. The Commission
has also met with the Transportation Command, Special Operations
Command, and Southern Command. The majority of our time was dedicated
to the areas of greatest change.
Main Testimony
Congress created the Overseas Basing Commission as an independent,
unbiased entity to produce a report that advises Congress on the
current and future overseas basing structure of U.S. military forces.
This is truly a daunting task. In order to explain the preliminary
conclusions and recommendations that the Commission is prepared to
offer to this committee today, let me begin by explaining the analytic
approach we took examining and thoroughly studying various important
aspects of the overseas basing structure.
Analytic Approach
First, the Commission began with a thorough analysis of national
security, defense, and military strategies. The Commission completed a
careful review of the foundation document for global reposturing, the
2004 Department of Defense Integrated Global Presence and Basing
Strategy (IGPBS).
Second, based on the Commission's interviews of key officials in
the Office of the Secretary of Defense, the Joint Staff, the COCOMs,
U.S. Transportation Command, and the State Department, the Commission
developed evaluation criteria to assess how effectively the current and
future overseas basing postures support current and future national
security and military operations.
In addition, the commission consulted with former senior military
leaders and other national security experts. Commissioners and staff
participated in six overseas trips to various commands. We conducted
four public hearings where we received testimony from former military
experts, defense analysts, and experts on military family issues. At
the final hearing we had Mr. Doug Feith and Vice Admiral Robert F.
Willard from the Department of Defense and Ambassador Rose Likens as a
representative of the State Department. We have engaged in briefings
from the Department of Defense, the State Department, the Congressional
Budget Office, Congressional Research Service, and other entities.
We visited military installations in many countries, meeting with
U.S. Forces, embassy representatives, foreign military officers, and
local officials. We have met with the majority of Combatant Commands
and in most cases with the commanders and their staffs. The
Commissioners have received briefings from U.S. Central Command, U.S.
Southern Command, U.S. Special Operations Command and U.S.
Transportation Command. We have made two trips to the Pacific Command,
three to the European Command, and one to the Central Command. All the
Commissioners, and I, have learned a great deal from these discussions,
both here and abroad.
Finally, based on its review and analysis, the Commission
identified six major areas of concern:
--Geopolitical Considerations;
--Timing and Synchronization;
--Operational Requirements;
--Mobility;
--Quality of Life; and
--Costs.
I will briefly address each area of concern, and explain the
findings and conclusions of the Commission on each issue.
Geopolitical Considerations
The Commission has determined that the DOD's IGPBS does not
adequately address current and future geopolitical and strategic needs
in response to existing and emerging security threats for two reasons.
First, it is the view of the Commission that the IGPBS is too narrowly
based on military concerns. While the Commission wishes to commend the
Department of Defense on the design of IGPBS--which is a strategy that
is directly aimed at addressing the matrix of existing and emerging
threats--it is clear that the IGPBS has been almost exclusively
designed by and for the military.
In the present era of a global war on terror and the indisputable
global competition in defense, intelligence, diplomacy, commerce and
energy matters, the Commission feels that it would be wise to broaden
the underlying assumptions, scope and participation in the IGPBS
process to include vital players involved in other areas of our
national security. The interagency process might, for example, include
the Departments of Defense, State, Energy, Homeland Security
(especially Immigration and Customs and Border Patrol), Justice
(especially the Federal Bureau of Investigation), Commerce, and
Treasury, the National Intelligence Director, and others. After
completing the interim report, we were advised that we are the fourth
commission to come to this conclusion. (Others are 9-11, Intelligence,
and Roles and Missions Commissions)
The basic concept of the IGPBS--as established by DOD--is
fundamentally strong, and can be further refined to include issues
related to homeland security, law enforcement, energy, non-
proliferation, and other pressing national needs and priorities.
Information sharing and inter-agency coordination among government
agencies is a top priority of this Administration, and we feel that
IGPBS can support this goal by broadening and diversifying its approach
and implementation.
Indeed, many of our overseas basing capabilities rest on
contingencies such as future political relations with bilateral
partners fully negotiated and ratified legal agreements that support
those bilateral relations. In many cases, the Status of Forces
Agreements (SOFA), access agreements, Article 98 agreements, and other
legal agreements are not in place in proposed new locations.
Timing and Synchronization
Another reason the Commission feels that the IGPBS should be
modified relates to more particular matters of the proposed timing and
synchronization of IGPBS. The Commission has concluded that while the
IGPBS is an ambitious plan to restructure our global posture, it does
so without fully taking into account other dynamic, ongoing and, in
some cases, unpredictable changes.
If the IGPBS is based on the 2001 Quadrennial Defense Review (QDR),
why would you not wait for the results of the current 2005 QDR--
scheduled to be completed this fall--or the 2005 Mobility Capabilities
Study (MCS) to be completed in August before announcing movements of
forces?
The simultaneous activities of service transformation, Army
modularity, Operation Enduring Freedom, Operation Iraqi Freedom, the
Global War on Terrorism, IGPBS, BRAC, resetting the forces, and
rebuilding of pre-positioned equipment sets all compete for funding
within a limited budget. Not to mention the stress on forces. The
current schedule of IGPBS moves will adversely impact the Services
ability to adequately fund modernization and readiness.
Operational Requirements
The commission is concerned that heavy forces in Europe are being
removed from the mix. We also note the strategic importance of Okinawa.
Diminishing our capabilities on the island would pose risk to our
allies and our national interests in the region. At the same time, we
feel it is important to move from Futenma Marine Corps Air Station.
Moreover, not enough attention has been given to our ability to
train and exercise the force in the formulation of the overseas basing
plan. Infrastructure is sparse in some regions and, capabilities for
integrated training across services and with allies remain sketchy.
The Commission notes with concern that the impact on recruiting and
retention by IGPBS rotational forces has not been adequately evaluated,
nor have associated risks to sustaining the volunteer force been
assessed. We strongly recommend that this be given priority, and that
the necessary assessments be completed as quickly as possible.
Mobility
It is clear that the mobility of our military forces is being
compromised by the current strains on strategic lift, intra-theater
lift, and sealift capabilities. The stress on strategic lift
capabilities is being caused, in large part, by our on-going military
operations in Afghanistan and Iraq. However, other tactical lift
demands in terms of responding to political crises such as in Haiti and
Sudan, as well as unanticipated natural disasters necessitating
military intervention such as in the recent December 2004 tsunami
event, also play a factor in challenging DOD's mobility capabilities.
While moving troops back to the United States may be a political
priority, force projection demands can only be met by developing a
rebasing strategy in coordination with strategic U.S. alliances abroad
(both existing and future).
Strategic and Intra-theater air and sealift mobility capabilities
must be significantly upgraded. We have yet to meet the lift
capabilities identified by the Mobility Requirements Study 2005
(conducted in the year 2000). In addition, announcements of global
reposturing are being made before the presently ongoing Mobility
Capabilities Study (MCS) is concluded. It would seem prudent to wait
for the results of that study.
Strategic mobility is the key to our ability to respond to events
worldwide. Plans for sea and airlift capabilities, as well as
prepositioned equipment sets, must take into account the additional
demands that IGPBS could place on an increasingly continental United
States (CONUS)-based force. Surging forces from CONUS will be
problematic if strategic and tactical lift capabilities and
prepositioned stocks are not in place.
Quality of Life
Next, I would like to turn to quality of life issues. These issues
are complex but are also key concerns of the global positioning
strategy, primarily because the United States relies on an all-
volunteer force. In order to sustain the military force (both in
numbers and in strength), the expectations of military personnel and
their families with regard to active and reserve duty as well as
redeployments must be met. If these expectations are not adequately
met, then the U.S. military risks being severely compromised. Needless
to say, this has enormous consequences politically and in terms of
maintaining national security.
We have a moral obligation to our men and women in uniform--and to
their families--to provide the quality of life support they deserve.
Returning forces and families should have housing, schools for their
children, and adequate medical facilities in place before they return
and the same should be maintained abroad until the last service member
departs. The commission calls this a ``last-day, first-day'' approach.
Not only does this have moral implications, but will also be reflected
in retention rates.
Costs
Now, with regard to the cost of changing the overseas basing
structure and the realignment and closure of bases in general, the
Commission recognizes that the costs are significant. In many cases, it
is not even possible to predict the true costs of certain strategic
changes.
The cost of IGPBS is estimated at $8 to $12 billion. An independent
analysis for the commission put the figure closer to $20 billion. Many
costs are sunk into projected host nation support that may not come to
fruition. In other cases, the services are expected to pay from within
their service budgets.
For example, costs need to be estimated and planned for troop and
base relocations. Significant upgrades of main operating bases, forward
operating sites, cooperative security locations, and pre-positioned
combat support sites need to be planned. Let us also not lose sight of
the fact that significant financial investments in new weapons systems,
strategic lift capabilities, training, and integrated systems need to
be made in order to keep the U.S. military as the premier fighting
force in the world.
Finally, these changes need to keep abreast of making Quality of
Life expenditures in order to attract and keep a dedicated military
force. Investing in the training of our military force is also a vital
component of maintaining strategic capability, and requires the
expenditure of enormous funds.
In light of this, the Commission recognizes that Congress should be
informed of realistic costs as to coordinate strategic and operational
requirements with budgetary needs and constraints. The Congress needs
accurate estimates to determine what is prudent, and must be prepared
to support IGPBS if it is to succeed.
Therefore, in light of the previously mentioned concerns, the
Commission makes the following recommendations:
--The detailed synchronization required by so massive a realignment
of forces requires that the pace of events be slowed and
reordered. We know of no nation asking us to leave. These moves
should be conducted at a pace that does not place additional
stress on our armed forces.
--That the entire effort of overseas basing be integrated into one
overarching design that is coordinated and synchronized with
all ongoing initiatives. Furthermore, an interagency review
process is put in place to periodically consider the impacts of
the global force posture and to ensure that outcomes are
consistent with overall national interests.
--The Commission believes strongly that Congressional oversight of
the global posture review is truly necessary. The Congress,
including the Armed Services and Foreign Relations Committees,
should provide more rigorous oversight (to include hearings) of
the global basing process given the scope and cost of the DOD
rebasing plans, their impacts on the individual services, the
men and women of our armed services and their families, and to
the political and trade alliances of the United States.
Particular attention should also be paid to the timing and
synchronization and cost of all the related efforts.
--DOD must ensure that all necessary infrastructure and quality of
life programs (such as housing, medical, schools, etc.) are
retained at overseas bases until the last day the service
members and their families depart. At the same time, Congress
must ensure that the necessary infrastructure and quality of
life programs are already in place by the first day the first
troops and families arrive from their overseas locations.
--Moreover, the Commission strongly urges that the planned overseas
basing structure be coordinated with strategic lift
considerations, especially with regard to troop and equipment
mobilization. We feel that this planning is necessary in terms
of adequately meeting the demands of the overall global pre-
positioning strategy
Additionally, the Commission recommends that:
--Marine Corps air assets assigned to Futenma Marine Corps Air
Station on Okinawa should relocate to Kadena Air Base and/or
Iwakuni Marine Corps Air Station; all other Marine Corps assets
should remain on Okinawa.
--In order to hedge against uncertainty in regard to near term
threats, demonstrate a continued and enduring commitment to
NATO, and allow for heavy force military to military contacts
with our NATO allies, at least one of the heavy brigade combat
teams scheduled for return to the United States should remain
in Europe fully manned until: (1) The Balkan's support mission
is lifted; (2) a ground-based offensive tank killing system is
stationed in Europe; and (3) Operation Iraqi Freedom is
mitigated. Additionally, a heavy brigade combat team equipment
set should be pre-positioned afloat in the region. These
recommendations are in addition to the current DOD plan for a
Stryker Brigade in Germany and the 173rd Airborne Brigade in
Vicenza, Italy.
--Further, there should be a commitment to support continuous
rotational deployments to Eastern Europe and provide U.S.
military-to-military presence in the new NATO countries.
--The U.S should review its treaty with Iceland, and update it to
reflect the post-Cold War security environment.
--Greater depth is needed in Africa to secure long term United States
interests against potential competitors. The Horn of Africa
initiative should be replicated in those locations elsewhere on
the African Continent that may prove to be of increasing
importance to future strategic concerns. To some extent,
similar initiatives are needed in Latin America.
Final Remarks
As a final note, I wish to thank the members of this committee for
inviting the commission to appear today. It has been my privilege to
describe the work of the Commission to date, and to express its
preliminary recommendations.
Of course, the report has not been finalized, and it is my hope
that this will be the beginning of a dialogue in this matter so that
the Commission can strengthen its analysis, conclusions and
recommendations before submitting its final report on August 15, 2005.
Please be assured that the Commission and staff are open to the views
and concerns of Congress. Thank you for giving us this opportunity to
serve the needs of the Congress and of the Nation, and we will be happy
to answer any questions that you may have at this time.
Senator Hutchison. Thank you very much, Mr. Cornella, and
we will do 5 minute rounds so that everyone will have a chance,
and then we'll go back through for a second round.
TIMING OF IMPLEMENTATION
Let me start with the slowing of the plan, and that is the
area that concerns me the most in your recommendations. I
certainly agree that in a perfect world we would have
everything right up to the last day overseas for a family, and
then the first day they arrive everything would be in place,
but I don't know that that is realistic, nor do I think it is
necessarily in the best interest of the families or the
military, and here's why.
General Schoomacker has made modularity a priority for our
forces to be trained for the kind of combat that they are
seeing today, and I just wondered, if you are looking at the
military capability, did you consider that moving the troops
home, and having the modular brigades begin to train together
so that they could go back into Iraq and Afghanistan, what
impact slowing the process down, as you have suggested, would
have on that capability?
Mr. Cornella. Well, I'm going to let some others answer as
well, but I will start with your question, Senator. I think you
point out exactly what may be the problem, in the sense that
for modularity to occur, the timing is sensitive. And as forces
are moved back from overseas for all of this to take place, it
is intermeshed and it has to happen, but that is one of our
concerns, that in order for that to happen on the schedule that
has been put forth, we are very concerned that that
infrastructure, as you indicate, will not be in place at those
receiving locations, and we think that's critical, both in
regard to the moral obligation to our forces that I indicated,
and to quality of life for those folks, and for retention. I'm
going to see if any of the other Commissioners would like to
respond; I do have a little more to follow up on.
Senator Hutchison. I'd be happy to hear from anyone else on
that, but just if you could also direct your attention to the
capabilities to do that overseas, versus on our own bases.
Mr. Cornella. I'm not sure I understand your question,
Senator.
Senator Hutchison. Well, if they're trying to get these
brigades trained and ready to go, and they designated the bases
to do that, we don't have that kind of capacity in Europe and
Germany right now.
Mr. Cornella. I would turn to General Taylor.
General Taylor. Madame Chairman, I appreciate the
opportunity to respond to that.
TROOP MOVEMENT
I think there may be a little bit of misunderstanding about
what we have recommended. We're not saying that the forces
should not come back except in that one case, and we explained
why we felt that was necessary, or suggested that the
Department should consider leaving one heavy brigade there, but
the majority of the forces, large majority of them, we're in
agreement, they should come back. All we're saying is that,
don't do it until we have both the quality of life and the
training capability at our bases here in the United States to
receive these. The bases here in the United States are fairly
well occupied right now, and it's going to take some
infrastructure, in both quality of life resources as well as
training capability, new ranges--just a piece of desert is not
necessarily enough to train forces, we've got to build the
modern digistat ranges, we've got to make sure there's adequate
infrastructure there to receive them.
Our forces in Germany are being trained right now, yes, and
I've served there many years, and yes, there are some
challenges, but we have been able to train some forces over
there, our forces have given a good account of themselves in
Iraq and Afghanistan that have been moved from Europe, but
again, I emphasize that we're not suggesting that they
shouldn't come back, we just want to synchronize with the
preparation of the infrastructure here, at the receiving bases
here in the United States before we do that. And maybe that's
going to happen, but based on the information that we were able
to obtain through the conduct of our assessments, we didn't see
that the right resources had been allocated, or the right plans
had been made for that.
Senator Hutchison. Well, it just seems to me that building
permanent facilities at a foreign base that you know you're
closing is certainly not a wise use of funds, and you cannot
train the number of brigades that we're talking about in
Germany, which I'm not telling you anything that you don't
know, it just seems that maybe the focus should be more on
getting the facilities ready in the bases that are going to
take them here, and that would certainly be the more permanent
use of the dollars that are going into this, because if you
delay too long, you may be really affecting the capabilities to
transform the military, which certainly, the Department is
trying to do right now, and I think General Schoomacker's whole
theory is based on having them here and getting them trained so
that they can deploy directly from domestic bases.
General Taylor. Madame Chairman, I think we're saying
exactly the same thing, it's just a matter of timing, and we
encourage the Congress to put the right amount of resources
into it to do it as quickly as we can, and as soon as that's
done, I think we'd be totally supportive of what you've said.
Senator Hutchison. Well, the other thing is, pouring money
into overseas bases that we know we're going to abandon has to
be looked at very carefully in this big picture, and the longer
we wait the more things can happen that cause us to lose that
focus. So, I think we are headed for the same goals, but I do
think we have a difference in emphasis for what should happen
when. From my standpoint, I know that others disagree with me,
so we will certainly want to hear from them as well, and also
the Department. My time is up, so I'm going to stop and go to
Senator Feinstein.
MOBILITY
Senator Feinstein. Thanks very much, Madame Chairman. I
wanted to ask you about your comments on mobility. The reason I
do this is because virtually wherever I go, and I talk
particularly to Navy commanders, the question always comes down
to strategic lift and our inabilities and deficiencies there,
and you write that adequate strategic sea lift, airlift and
pre-positioned equipment and stocks do not exist, and that
current Intra-theater airlift is overstressed. Aside from the
lift capability, the Commission is also concerned that the air
and sea ports, inter-nodal connectivities and other mobility-
enabling systems are not adequate to meet potential
contingencies. Nor is there a budgetary plan to do so. And I've
had this told to me by CINCs, by others, and I watch the
budgets and we never seem to come to grips with it.
Can you add, in any way, to what you've said, anybody who'd
like to comment?
Mr. Cornella. General Curtis, would you like to comment?
General Curtis. Senator Feinstein----
Senator Feinstein. Don't be shy, say what you think.
General Curtis. Senator Feinstein, I've watched the airlift
mobility issues since I was a Captain at headquarters back when
the C-5 was first introduced. It is always tough to find the
space within the budget for the adequate procurement of lift,
and every time we go through the mobility capability study, and
the associated budget requirements, fitting everything in, our
unconstrained requirement is difficult, and in my experience,
there are trade-offs made.
But clearly, as we become a more CONUS-based force, and we
re-do the Army, both up armor and more air mobile vehicles,
like the Stryker, we need to balance those things very
carefully with lift capability versus our other requirements
for modernization. And there are no easy answers to that,
nobody will be satisfied in the end, because there are never
enough dollars to go around, but everybody within the equation
that reaches a solution needs to understand that's a very
critical balance, and I'm sure you do.
COST
Senator Feinstein. Thank you. Could you expand on your
comments on funding, that the cost may be understated, and tell
us a little bit about the independent analysis that was
conducted for you that put the tab at $20 billion?
Mr. Cornella. Thank you, I will take that question.
I left that out of the shortened version of the statement,
and there's not necessarily a great deal of explanation in the
other statement we presented to you. There is in our long
report, quite a bit of information in regard to the cost, but
that assessment was done by a detailee from the Government
Accountability Office, and estimated at $20 billion, and I
think that information was validated on May 10th by a senior
member of the Department when they said they did agree with our
figures, but we had cast a wider net to draw those figures in.
And so we were looking at areas other than what they were
stating in the $10 to $20 billion, pardon me, the $9 to $11
billion. We also did have several--two to be exact--members of
the Department say that the cost could be closer to $25
billion, so we feel the $20 billion number is defensible.
STRYKER BRIGADE
Senator Feinstein. I understand your European concern, that
replacing our heavy forces with a Stryker Brigade before we've
developed the organic tank killing weapon system necessary.
What kind of response has there been to that recommendation so
far?
Mr. Cornella. Response from the Department?
Senator Feinstein. Right.
Mr. Cornella. Well, we've not discussed that specific
recommendation at length with the Department, we have had
conversations in our travels with Commanders that made that
suggestion to us, that they thought that that was a good idea
that that take place, and General Taylor, do you have anything
you want to add?
General Taylor. There is an initiative on the part of the
Army to have an offensive tank killing capability with the
Stryker variant, but so far it has not come to fruition, and so
our basic premise is that we definitely need to have an
offensive ground tank killing capability there as well as the
other issues that we mentioned, and we're not saying that that
Brigade should necessarily stay there forever, but until the
criteria that we mentioned are realized.
Senator Feinstein. In terms of deployment of bases, and
transitioning the military, what lessons do you think were
learned in Iraq and Afghanistan?
General Taylor. I would first state an opinion, primarily
about Iraq that, while initially we felt that we could do this
with much lighter forces, we're finding out more and more that
heavy forces, even in a city environment is very necessary. I
know of some people who fight in that area very well, and some
of them are parts of my family, and they would clearly rather
fight out of a tank as even an up-armored Humvee, and I think
the reports coming back from some of the recent efforts in Iraq
have been, and Baghdad, have shown that there is a place for
heavy force, although the Stryker variant up in Mosul has been
very valuable as well. So, I think we're still learning, I
think the decision on all of this is still out, but we haven't
lost the need for some of our heavy forces.
Senator Feinstein. Thank you, my time is up, Madame
Chairman.
Senator Hutchison. Senator Allard.
OVERSEAS SAVINGS
Senator Allard. Thank you, Madame Chairman.
I noticed in your summary here that you hadn't talked in
detail as did Senator Feinstein, as to some of the costs. I
wonder if you could give us just some bottom line figures, if
possible, has the Department of Defense conducted an estimate
as to how much money would be saved by reducing their basing
overseas?
Mr. Cornella. I'm not sure if we were provided with that
number. Now it's logical to assume that if bases are reduced
overseas, there will be some savings, and they may be
significant. At the same time, those facilities may have to be
replicated within the United States; and also, I'm not sure
that those figures that are being put forth include any
mobility that might be required in order to surge out of the
continental United States. And I can't address that--those will
be good questions for the Department in the next panel.
Senator Allard. Did you try and conduct any kind of
estimate?
Mr. Cornella. I would have to ask staff about that; we will
provide you with that information.
Senator Allard. Okay. Is it correct to say that you do not
recommend the Department of Defense go back and do its re-
basing strategy?
Mr. Cornella. I think that I would turn to my other
Commissioners, but I don't think that we mean to indicate that
they do that.
General Taylor. Again, Senator, it's a timing issue, and a
synchronization issue, not the fact that they shouldn't do it.
Unfortunately, it's not 100 percent clear, at least up to the
point when we completed most of our reports, exactly what the
timing was, that was still a developing process. Remember, this
was prior to the release of the BRAC report, so exactly where
they were going, or that the Department was recommending they
were going was not available to us at that time. Now, some of
that at least portions of that information is available to us,
and that will help as we complete our report and look at where
they might be going here in the United States.
FORWARD OPERATING SITES
Senator Allard. It seems to me like in one of the hearings
on the Armed Services Committee, they talked about forward
basing, maybe in the Balkan states where we don't have now,
that you would end up basically with an air field with
utilities, and if you put in temporary tents, they would be
basically two by fours in tent structure, and then when your
mission was done, you would move out, does that seem like a
reasonable approach to you?
General Taylor. You're talking about both the security
locations and the forward operating sites? Yes, and our only
question about those is whether or not we have consummated the
agreements with the host countries that we should have in place
before we go too much farther, and that's being worked by both
the Department and others, but the concept is valid and we have
no problem with that.
Senator Allard. And do you have any reason to believe that
those host countries wouldn't cooperate with us? The last time
I talked to most of them they were thrilled to death to be part
of NATO, and even be part of the forward deployment effort.
General Taylor. I would suggest that would be a question to
ask the next panel. I'm sure they can enlighten you. We did not
have verifiable information that these agreements have been
consummated, but I'm sure the next panel can respond to that
better.
BRAC
Senator Allard. Okay. To what extent do you believe the
Department of Defense used its IGPBS to formulate its
recommendations for base closure and realignment? The Secretary
of Defense admitted his recommendations for base closures and
realignments to Congress and BRAC and it was in May, and the
question is, to what extent do you believe that the Department
of Defense used the IGPBS to formulate its recommendations for
base closure and realignments, did you look at that?
Mr. Cornella. Yes, and I think it had a great deal to do
with the recommendations to the BRAC Commission. The numbers of
returning troops from overseas impacted Army bases most
significantly.
Senator Allard. And the follow up, then, do you see any
reason why the BRAC process should not go forward?
Mr. Cornella. Or as we say in our report, we see no reason
why that should not go forward. I just would like to add one
thing to your previous question about the Nations where we
might have lily pads, or CSLs or whatever you might like to
call them. We have seen instances most recently, without
mentioning the names of any countries, one where access to an
Air Force base was either restricted or denied within the last
few months. We also have seen instances during the Iraq War
where certain Nations did not allow access. These are the types
of things that we're talking about in regard to making sure
that those agreements are in place before you establish those
locations in those countries.
Senator Allard. Thank you, Madame Chairman, I see my time
has expired.
COST
Senator Hutchison. Thank you, Senator Landrieu?
Senator Landrieu. Thank you. Let me just see if I can
summarize a couple of these questions, because I think the work
you have done is extremely important, and we appreciate how
difficult it can be sometimes to really give an independent
view, and we want to be sure that we have our ears open and are
willing to hear the independent view, so let me just ask
again--one of the bottom lines of your report, which is all
documented here, Mr. Cornella, is that the cost associated with
moving our troops back could be twice as much as what is
currently estimated? Is that correct?
Mr. Cornella. Yes, Senator.
TIMING
Senator Landrieu. Is it also correct that you are
suggesting that the time frame that is being adopted as we
speak is probably too aggressive to accomplish the goal?
Mr. Cornella. Well, I think again, it's a timing issue. If
all of this could be timed properly, and we had, maybe, an
infinite pot of money, there probably would not be a problem,
but there are a lot of things that are taking place, and I
cited many of those in my opening statement.
Senator Landrieu. But in your estimation of the summary of
your report, there is a time frame that has been proposed, and
you reviewed it and in your professional judgment, you all are
saying that it is unlikely that the time frame can be met?
Mr. Cornella. We have addressed it, we have talked to
commanders in the field, and we feel it's probably ambitious.
Senator Landrieu. Would it be fair to say, then, that you
have some serious concerns about meeting that time frame?
Mr. Cornella. Well, I think we do in the sense that a lot
of the moves are already taking place, and have started in
regard to the Pacific, probably, without mentioning names of
countries, more than have taken place in Europe, but I would
agree with your statement, Senator.
Senator Landrieu. Again, I'm not trying to put words in
anybody's mouth, I'm just trying to clarify for the record what
I think. The goal of this hearing is, is to really hear what
you are saying about your view, and if it is that we've
underestimated the cost, we need to hear.
Mr. Cornella. Two thousand eleven sounds like a long way
off, it's really not that far, and I guess my point was that a
lot of the moves are already taking place as we rotate forces
through Iraq and Afghanistan, and I think the plan is to bring
the forces back from those rotations after they pick up their
families in Germany and other locations, so the bulk of the
moves may take place sooner rather than later, they may take
place sooner, rather than towards the end of that 2011 time
frame.
Senator Landrieu. General Curtis, then I think Mr. Martin
had something to add.
General Curtis. Yes, Senator, there are three numbers down
here in the report, and they really measure three different
things, as our numbers often do in government. And, the $4
billion is the number specifically tailored to this move within
the palm through 2011. The $9 to $12 billion, as I understand
it from the material being given by the DOD is an estimate
which includes other things of the total cost of this move, and
some of this money, I'm given to understand, would come out of
the general O&M accounts within the services, not specifically
be identified within the POM itself.
Finally, the $20 billion number is a life cycle number
beyond the POM, so it isn't directly comparable to either one
of the two previous numbers. The concerns I have after watching
the process, how we execute our financial processes is that the
moves with either be slipped because of an insufficiency of
funding to do it right, we will move without doing it right, or
we will take money out of the O&M accounts to pay for the move,
and not know what we didn't buy, what we gave up in terms of
readiness or something else by forcing the Services to fund
parts of the move internally. They're three different numbers
that all mean the same thing, but they could drive unforeseen
consequences if we insist on meeting the schedule without fully
funding it with identifiable funds, and that's one of our big
concerns.
Senator Landrieu. Mr. Martin.
Mr. Martin. Thank you very much, Senator, Madame Chairman.
In perspective, this is the most sweeping transformation and
repositioning of U.S. forces since the late 1940's, the Defense
Reorganization Act of 1947. United States forces, the
repositioning thereof, it should be positive for our national
security and our national defense. The Department's plan is a
good plan, if fully coordinated, synchronized, it can and will
enhance the Nation's security and defense interests. But it
should be and must be positive for our service men and women to
the maximum extent possible. The bottom line of what we said on
the quality of life is we shouldn't be moving soldiers,
sailors, airmen and Marines any faster than we can build the
new housing, the new medical facilities, new schools and
training facilities as General Taylor pointed out, and
certainly no faster than we can provide the air lift, sea lift
and pre-positioned stockage to move them from their United
States, now CONUS-based homes, to potential points of influence
and engagement. We have an opportunity right now because of the
Secretary's vision to do the right thing, we need to do it the
right way. It is an opportunity, and we believe, a
responsibility, because if we don't take care of the force we
have now, we could face a future, and the enemies and threats
of tomorrow with forces we won't have, and options we don't
like.
Senator Landrieu. Thank you.
Senator Hutchison. Are there any other questions of this
panel? If not, thank you very much for all of the effort that
you made. We appreciate it and look forward to looking at it
further, and now I would like to call the second panel from the
Department of Defense forward. Thank you very much.
Mr. Cornella. Thank you, Senator.
Department of Defense
STATEMENT OF HONORABLE RYAN HENRY, PRINCIPAL DEPUTY
UNDER SECRETARY OF DEFENSE FOR
INSTALLATIONS AND ENVIRONMENT
ACCOMPANIED BY:
PHILLIP GRONE, DEPUTY UNDER SECRETARY OF DEFENSE FOR
INSTALLATION AND ENVIRONMENT
ROSE LIKINS, ACTING ASSISTANT SECRETARY OF STATE, BUREAU OF
POLITICAL-MILITARY AFFAIRS
Senator Hutchison. The next panel is Mr. Phillip Grone,
Deputy Under Secretary of Defense for Installations and
Environment, the Honorable Ryan Henry, Principal Deputy Under
Secretary of Defense for Policy, and Ambassador Rose Likins,
Acting Assistant Secretary of State, in the Bureau of Political
and Military Affairs.
STATEMENT OF RYAN HENRY
Mr. Henry. Thank you, Madame Chairman, Senator Feinstein,
members of the subcommittee, thank you for the opportunity for
appearing before you today, along with the Overseas Basing
Commission and Chairman Cornella. Joining me today as you
mentioned are Acting Assistant Secretary of State, Rose Likins,
and Deputy Under Secretary, Phil Grone. And I want to say I
appreciate the insightfulness of your opening remarks today. I
would like now, if I may, to submit my full statement for the
record, and make just a few brief remarks at this time.
GLOBAL DEFENSE STRATEGY AND PROCESS
Madame Chairman, the Administration's plan to strengthen
America's Global Defense Posture will result in the most
profound re-ordering of military forces overseas since the end
of World War II. The September 11 attacks clarified our
understanding of the key security issues that we will face
during the beginning of the 21st century. Simultaneously, we
realize that much of our in-place force posture still reflected
a Cold War structure. We had forward garrison forces configured
to fight near and where they were based. Unlike the past
century, today we no longer can predict where, when, or in what
manner our forces may be called on to fight, therefore our
forces need to be able to rapidly project power into theatres
far from where they may be based. Through our Global Defense
Posture Realignment, we have aimed to strengthen our ability,
fulfill our international commitments to ensure that our future
alliances are capable, affordable, sustainable and relevant.
Then to focus on capabilities, and not just numbers. The
Defense Department conducted our Global Defense Posture Review
thoroughly and deliberately. We've collaborated with our inter-
agency partners through broad and sustained deliberations.
We've also consulted extensively with our allies and our
partners to incorporate their views. The Department of Defense
and the Department of State have held joint consultations with
relevant international partners, in over 20 foreign capitals,
beginning in December 2003, and continuing on a sustained basis
since then. We also have communicated with Congress, and
personal and Committee staff members throughout the review.
We've provided a detailed report to Congress in September of
2004, followed by the submission of detailed overseas master
plans from each of the regional Combatant Commanders in
February 2005. And over 40 times the Secretary of Defense, the
Combatant Commanders, the members of the Joint Staff, and the
Office of the Secretary of Defense have traveled here to
Capitol Hill to consult with Congressional Committees and
Members.
Finally, as mentioned by Chairman Cornella, we have worked
closely with the Overseas Basing Commission in its efforts to
provide Congress with an assessment of a global presence,
basing and infrastructure needs.
A COMPLEX UNDERTAKING
Madame Chairman, as members of the Overseas Basing
Commission have expressed, the United States Global Defense
Posture is incredibly complex. It is a multidimensional field
involving numerous areas; strategic analysis of geopolitical
and military factors, facilities and infrastructure analysis,
diplomatic and legal negotiations and arrangements, acquisition
policies and transportation issues, operational plans and
synchronization with the Base Realignment Commission, the QDR,
the Army Modularity Transformation, the Mobility Capabilities
Study, and the Navy's Fleet Response Plan. We, in the
Department, have thousands of people working on this complex
endeavor, full-time in the military services and the combatant
command, on the joint staff, in the acquisition community and
other areas, all overseen by senior military and civilian
officials and managed by Secretary Rumsfeld.
Madame Chairman, we stressed in our discussions with the
Commission that posture is more than just our footprint of
facilities, it also includes the presence, force management,
our surge capability and the pre-positioning of stocks among
these building blocks of global posture. Quality of life
concerns related to force management merit particular
attention. Changing the way in which we posture our forces was
driven in large part by the President and the Secretary's
desire to relieve stress on our military forces and their
families by providing more security at home, with fewer
overseas moves and less disruptions. Specifically, posture
changes will help reduce double separations, those caused when
accompanying dependents are separated from both the service
member and the their loved ones in the United States.
Additionally, our posture changes are phased over several
years to help ensure quality of life is sustained. Equally
important, the plan changes to our posture directly support
service initiatives aimed at keeping pace with our military
personnel, such as the Army's Modularity and Unit Location
concepts, the Navy's Fleet Response concept, and the Air
Force's ongoing Force Management Improvement.
Madame Chairman, of particular importance in this complex
undertaking has been our sustained effort to inject the Global
Defense Posture into other ongoing defense transformation
initiatives, specifically, the BRAC and the 2005 QDR. I welcome
the Commission's statement of support for the U.S. Global
Defense Posture as important and necessary. The Commission's
report reflects their earnest effort to assess military
facilities, and structure of the U.S. overseas facilities. The
Commission fundamentally agrees with many of the aspects of the
President's posture plan, and it recognizes the importance of
changing of posture to meet the 21st century's security
challenges.
Madame Chairman, thank you for this opportunity to speak to
you, and I look forward to answering your questions. And, if we
may, Ambassador Likins would also like to have an opening
statement.
Senator Hutchison. Madame Ambassador.
STATEMENT OF AMBASSADOR ROSE LIKINS
Ambassador Likins. Thank you, Madame Chairman, and Senator
Feinstein. I appreciate the opportunity to be here and to offer
a few brief remarks.
Since late 2003, the Department of State has been working
closely with the Department of Defense and the National
Security Council on reviewing and strengthening the U.S. Global
Defense Posture. The Department has played an active role in
the shaping and implementation of our future defense posture.
We have been both participants in the inter-agency process, and
have been spearheading the diplomatic talks and initiatives
necessary to obtain the understanding and agreement of our
friends and allies for this important initiative. The
Department has and will continue to provide its frank
assessment of these proposals, and to provide our views as to
the best way forward. We've had a very good working
relationship with our DOD colleagues on this issue, conducting
all consultations together and jointly briefing Congress on
several occasions.
While the initial planning for the IGPBS was undertaken by
the combatant commanders in the individual services, these
plans were presented to the inter-agency for a full and
thorough examination before their submission to the President.
The Department has made its foreign policy views known on many
occasions and will continue to do so. We firmly believe that we
are taking the appropriate time to get this right, we continue
to rigorously review proposals with our DOD colleagues,
thoroughly examine the many facets of these plans, including
the necessary legal arrangements, and have conducted numerous
consultations with friends and allies around the world.
While consultations in some parts of the world are quite
advanced, others have not even begun, indicative of the fact
that we will take whatever time is necessary to ensure that our
plans are logical, workable, and that our engagement strategy
makes sense. Consultations are proceeding carefully and
deliberately to ensure that the arrangements put in place to
host our forces are enduring and beneficial to a wide range of
United States interests. Through the consultation process,
we've received valuable feedback that has enabled us to adjust
proposals and calibrate our expectations. We have gained
valuable insights throughout the process, and in many ways, the
consultation process is one of the many mechanisms for re-
thinking, and adjusting our defense posture plans.
To use just one example, during the consultation process,
we learned that the government of Germany was undertaking its
own base realignment and closure process. This prompted us to
accelerate the sharing of details with German officials related
to our proposed posture changes in Germany and to undertake
some additional coordination on our two initiatives. I want to
assure you that we will not rush into a location where there
are not adequate legal protections and guarantees for our
forces, and for their freedom of action. We believe that proper
legal arrangements are a fundamental requirement for any
defense posture changes. The State Department believes these
negotiations and DOD have substantially been involved in all
talks. We have dedicated legal experts and a special negotiator
working to ensure that the best legal arrangements are secure.
We support the OBS's view that their long-term strategic
national objectives, beyond simply military objectives,
somewhat to reassure you that our efforts on this issue are
focused on results that make sense from both the defense and
strategic foreign policy perspective. Thank you very much.
Senator Hutchison. Thank you, Madame Ambassador. We're
going to just have about 10 minutes of questions because we
have two votes called, and I don't want to keep you waiting any
longer.
Let me say, first of all, I'm very pleased that both the
Department of State and the Department of Defense are
represented on this panel because I wanted to make sure, and I
think it is very important, that the Department of State is a
part of this process as we are looking at closing of bases, or
forward deploying somewhere else, that we have both Defense and
State involved.
Mr. Henry, one of the Commission report findings says, ``If
unforeseen threats arise in either the near term or the mid-
term, we could be caught in mid-stride, unable to meet them.''
This is part of the reason they wanted to delay some of these
moves. My understanding is that the entire reason for
transforming our posture is because we're not currently
positioned to meet unforeseen threats, and we need to have the
capability to meet them as soon as possible. I would just like
to ask your comments on that part of the report, and if you
think speeding up the process will cause transformation to
occur better, or slowing it down would.
Mr. Henry. Yes, Madame Chairman, I would agree with your
statement, and as I mentioned in my opening statement,
uncertainty is part of the strategic landscape which we have in
a post-9/11 world. We no longer have the comfort or the
certainty that we had during the Cold War when we had a single
enemy and we could predict where we would probably have to meet
him. In a world we live in today, we might need to use our
forces through large expanses of the Earth's globe, therefore,
in the places we have our forces, we have to be able to move
them quickly to where they might be needed to be employed.
That's a fundamental feature of the transformation, and our
capability to meet it. We just can't predict how we will have
to fight with our forces, where or when.
As far as your question regarding transformation, this is a
part of an integrated approach to transformation. The Secretary
of Defense has published his National Defense Strategy which
supports National Security Strategy, and from which the Base
Realignment Commission, the Global Defense Posture, the
Quadrennial Defense Review, all of the major movements that
we're making in the Defense Department stem from. This is key
to transformation, all of these things supported simultaneously
to move forward in a networked fashion.
Senator Hutchison. Mr. Henry, in the previous panel there
was concern raised, and also in the report, about our lift
capacity. Do you think that we have a better capability for
lift where we need to go by basing more of our troops in the
United States, or do you think we have a lift problem that
requires troops to stay in Germany and Korea?
Mr. Henry. One of the analyses we did post-the Iraqi major
combat operations, was to look at the amount of lift that was
needed to move forces from Europe and around to where they had
to go, and to try to determine the amount of lift and the speed
of lift with which to get into the theatre, and if it would
make a difference coming from Europe or from the continental
United States, and depending on how we might position ourselves
as a part of the Base Realignment Commission, in some
instances, we could actually move quicker from the United
States. That was one of the considerations that drove the
Global Defense Posture, as was spoken by the previous panel,
combatant commanders and operators will never have as much lift
as they would like to, to feel comfortable, it is a matter of
adjudicating the risk overall of the contingencies that we
might have to face. As was mentioned by the panel, we are also
in the process of a Mobility Capabilities Study, something we
do approximately every 5 years to look at the total lift
requirements, and how we're going to meet them. As this has
been dovetailed into the Base Realignment work that we have
been doing, they have first done one using the old structure
and analysis. Now they're looking and finishing up their
analysis, using as a baseline the Global Defense Posture. As we
presented the committee in our report back in September of
2004, and it looks like the impact will not be significant in
roughly, in the same area that we would have had with the other
structure. The details are still to be concluded on that, and
we await the conclusion of the study, which will be integrated
in the QDR.
Senator Hutchison. Thank you. Senator Feinstein.
Senator Feinstein. When troops are moved back to the United
States, will they be accommodated in permanent or temporary
facilities.
Mr. Grone. Depending upon the unit and depending upon the
location and depending upon the time, there will be a mix of
permanent or temporary, in the main it will be permanent. The
discussion about whether or not facilities would be available
for returning forces is a phased plan over a 4-year period, 5
years if you count the troops coming back from Korea this
summer to Fort Carson between fiscal year 2005 and fiscal year
2009. We are working, particularly with the Army, on
standardizing our facilities design so that they can be sited
to any location to use commercial construction standards, all
of which is designed to make permanent facilities more quickly
and more readily available to returning forces.
Senator Feinstein. So, you will not be coming to this
subcommittee or any other subcommittee to look for additional
dollars for temporary housing?
Mr. Grone. There may be occasions where, depending upon the
unit, there may be some temporary billeting for single enlisted
personnel that is required, but in the main we are planning to
move out aggressively to provide permanent facilities as
quickly as we can.
Senator Feinstein. If you do that, then what type of
coordination is being done with local school districts to
mitigate the impact of thousands of soldiers coming back with
many children?
Mr. Grone. Well, we have, the Army in particular, since the
bulk of the returning forces are Army, are engaged in a series
of intensive consultations with local school districts and
State and local government on transportation, schools and other
issues that might be affected by forces returning from abroad.
Certainly, with regard to housing, our preference is to rely,
as is our standard housing policy, on the community first, and
based on what we know, particularly for the three locations,
whether we have the bulk of the forces returning from abroad,
Fort Carson, Fort Riley and Fort Bliss, based on that 5 year
window between 2005 and 2009 that we have people coming back,
based on our assessment of the market's ability, the local
market's ability to adapt based on our existing housing
privatization efforts at all three of those locations. We
believe that there is sufficient market availability there to
accommodate returning forces, and a phase-in for families as we
have laid it out over the course of that 5 year period, so we
are intentionally engaged with school systems, and with local
governments. We'll continue that consultation through the
summer, so that when we get to the school year, 2006, next
year, that we will be as integrated as we can be. That is not
to say there won't be challenges, there will. But we believe
that we will have a quality of life piece well in hand, and we
look forward to continuing to consult with the subcommittee as
we move forward to make sure that you're comfortable with the
plans as we lay them out.
Senator Feinstein. I would really appreciate that, because
I know in California, we have schools that are really
overcrowded at present, and I think there needs to be some real
planning done in that regard, but thank you. Let me ask you,
Mr. Henry, because I'm really concerned with what I see as lift
deficiencies, and everything I've heard from the field doesn't
jive with what you say. Would you be willing to share with our
subcommittee your projected plans for specific lift--in other
words, how many C-17s, new C-17s, et cetera, that kind of
thing--because everything I read is that the lift capability of
our country is severely stressed.
Mr. Henry. Yes, we would be glad to share that, one thing
it will be part of the QDR that we'll be reporting to the
Congress, but we'll be glad to come up here in the interim as
the data becomes available and then as decisions are made as to
how we're going to proceed, we'd be glad to share that with the
committee.
Senator Feinstein. I would certainly appreciate knowing
what you're planning is. I mean, in the next 10 years, how many
C-17s will there be, for example?
Mr. Henry. Yes, Senator, and as those decisions are still
awaiting the final report out of the Mobility Capabilities
Study, as mentioned earlier, and so specific decisions still
await the final analysis and data.
Senator Feinstein. Thank you very much, Madame Chairman, I
think that does it for me. I would just like to conclude by
saying, I know DOD doesn't like helpful suggestions, or any
suggestion, but I really think this is a good report, and I
really ask you to review it with an open mind. I think they've
raised some very good points, and these are all people who have
served, who have been there, done that, I think they know what
they're talking about, period.
Senator Hutchison. Thank you, I think they acknowledged
that they will.
Senator Feinstein. Not quite, but it was a nod, which is
the best DOD ever does.
Mr. Henry. Senator, we've read the report with great
interest and we look forward, hopefully, to being able to
discuss with the Commission their conclusions prior, and we
think that we can help them with information and analysis and
insights that would make the final report even better. Perhaps
correct inaccuracies and some assumptions that we think that we
could help them with.
Senator Hutchison. I would just say that the biggest
concern I have about the report is the slowing it down. I
really believe that when you make a decision like this, that in
order to be the most efficient, to use our taxpayer's dollars
wisely and to bring people home where they know it's going to
be permanent, it should be done quickly and not drug out. Now,
obviously we do want to have the accommodations, we want the
housing, and I think the public/private partnerships make that
much more able to be done than if we were just building them
through MILCON. Certainly coordination with the school
districts and health care facilities in a community will be
very important, and I think that is valid, but I would rather
see us gear up to do it quickly, than to slow down and have
buildings in Germany and buildings in America that are
duplicative.
Mr. Grone. In that regard, Madame Chairman, the most
important potential impediment we have to implementation is not
full authorization and appropriation of the budget requests to
support the round, so if we had the resources available, we
could certainly accelerate, and we will move out as
expeditiously as you desire to ensure we have facilities in
place for our people.
CONCLUSION OF HEARINGS
Senator Hutchison. We'll work with you on that. Thank you
very much, we're going to go to our vote now. Thank you.
[Whereupon, at 5:30 p.m., Tuesday, June 28, the hearings
were concluded, and the subcommittee was recessed, to reconvene
subject to the call of the Chair.]
LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS
----------
Page
Allard, Senator Wayne, U.S. Senator From Colorado:
Prepared Statement of........................................ 186
Questions Submitted by....................................... 176
Statements of...........................................4, 140, 185
Burns, Senator Conrad, U.S. Senator From Montana, Prepared
Statement of................................................... 142
Byrd, Senator Robert C., U.S. Senator From West Virginia:
Questions Submitted by....................................... 134
Statement of................................................. 91
Cooper, Hon. Vice Admiral Daniel L., (USN Ret.), Under Secretary
for Benefits, Veterans Benefits Administration, Department of
Veterans Affairs............................................... 89
Cornella, Hon. Al, Chairman, Overseas Basing Commission.......... 183
Prepared Statement of........................................ 193
Statement of................................................. 189
Craig, Senator Larry, U.S. Senator From Idaho:
Questions Submitted by....................................... 119
Statement of................................................. 92
Curtis, Major General Lew E., III, United States Air Force
(Ret.), Department of Defense.................................. 183
Feinstein, Senator Dianne, U.S. Senator From California:
Questions Submitted by...........................123, 163, 177, 180
Statements of............................................3, 90, 184
Fox, Major General L. Dean, Air Force Civil Engineer, Deputy
Chief of Staff for Installations and Logistics, Department of
the Air Force, Department of Defense........................... 165
Prepared Statement of........................................ 166
Questions Submitted to....................................... 179
Grone, Philip W., Deputy Under Secretary of Defense, Installation
and Environment, Department of Defense.........................1, 205
Prepared Statement of........................................ 8
Summary Statement of......................................... 6
Henry, Hon. Ryan, Principal Deputy Under Secretary of Defense for
Installations and Environment, Department of Defense........... 205
Hutchison, Senator Kay Bailey, U.S. Senator From Texas:
Opening Statements of...............................1, 89, 139, 183
Questions Submitted by................................114, 175, 179
Johnson, Senator Tim, U.S. Senator From South Dakota:
Prepared Statement of........................................ 188
Questions Submitted by....................................... 129
Statement of................................................. 187
Jonas, Hon. Tina W., Under Secretary of Defense, Comptroller,
Department of Defense.......................................... 1
Prepared Statement of........................................ 5
Summary Statement of......................................... 4
Kuhn, Fred W., Deputy Assistant Secretary of the Air Force
Installations, Department of the Air Force, Department of
Defense........................................................ 165
Prepared Statement of........................................ 166
Questions Submitted to....................................... 175
Landrieu, Senator Mary L., U.S. Senator From Louisiana:
Prepared Statements of......................................24, 187
Questions Submitted by....................................... 131
Statements of...............................................23, 186
Less, Vice Admiral Anthony A., United States Navy (Ret.),
Department of Defense.......................................... 183
Likins, Rose, Acting Assistant Secretary of State, Bureau of
Political-Military Affairs, Department of Defense.............. 205
Statement of................................................. 207
Martin, Brigadier General Keith, Pennsylvania Army National Guard
(Ret.), Department of Defense.................................. 183
McClain, Hon. Tim, General Counsel, Office of the Secretary,
Department of Veterans Affairs................................. 89
Miller, Major General Geoffrey D., Assistant Chief of Staff,
Installation Management, Department of the Army, Department of
Defense........................................................ 139
Murray, Senator Patty, U.S. Senator From Washington:
Questions Submitted by....................................... 136
Statement of................................................. 91
Nicholson, Hon. R. James, Secretary, Office of the Secretary,
Department of Veterans Affairs................................. 89
Prepared Statement of........................................ 96
Statement of................................................. 93
Penn, Hon. B.J., Assistant Secretary of the Navy, Installations
and Environment, Department of the Navy, Department of Defense. 69
Prepared Statement of........................................ 70
Perlin, Jonathan B., M.D., Ph.D., MSHA, FACP, Acting Under
Secretary for Health, Veterans Health Administration,
Department of Veterans Affairs................................. 89
Profit, Brigadier General Gary M., Deputy Chief, Army Reserve,
Department of the Army, Department of Defense.................. 139
Prosch, Geoffrey G., Principal Deputy Assistant Secretary of the
Army for Installations and Environment, Department of the Army,
Department of Defense.......................................... 139
Prepared Statement of........................................ 144
Statement of................................................. 143
Pudlowski, Major General Walter F., Special Assistant to the
Director, Army National Guard, Department of the Army,
Department of Defense.......................................... 139
Reed, Rita A., Deputy Assistant Secretary for Budget, Office of
the Secretary, Department of Veterans Affairs.................. 89
Shear, Rear Admiral Wayne ``Greg'', Jr., Deputy Director, Ashore
Readiness Division, United States Navy, Department of Defense.. 69
Taylor, Lieutenant General H.G., United States Army (Ret.),
Department of Defense.......................................... 183
Wannemacher, Richard A., Acting Under Secretary for Memorial
Affairs, National Cemetery Administration, Department of
Veterans Affairs............................................... 89
Williams, Brigadier General Willie, Assistant Deputy Commandant,
Installations and Logistics (Facilities), U.S. Marine Corps,
Department of Defense.......................................... 69
SUBJECT INDEX
----------
DEPARTMENT OF DEFENSE
Page
A Complex Undertaking............................................ 206
Army Military Construction....................................... 27
Base Realignment and Closure Overview............................ 31
BRAC 2005........................................................ 34
Budget Summary................................................... 34
Buffer Area Around Fort Carson, Colorado......................... 22
Business Transformation.......................................... 15
Chemical Weapons Demilitarization................................ 19
DOD Base Realignment and Closure................................. 31
Environmental Management......................................... 14
Facilities and Family Housing.................................... 5
Fiscal Year:
2005 Supplemental Appropriations............................. 6
2006 BRAC Funding............................................ 30
Global Defense Strategy and Process.............................. 205
Homeowners Assistance Program.................................... 54
Keeping Military Families Together............................... 26
Managing Infrastructure.......................................... 9
Marine Corps Restructuring....................................... 29
Military Compensation and Health Care............................ 5
More Specificity for BRAC Funding................................ 17
Perchlorate Contamination........................................ 61
Permanent Construction at Guantanamo Bay......................... 64
Proceeds From Sales of Closed Facilities......................... 18
Renewable Energy Assessment of DOD Bases......................... 61
Restructuring U.S. Basing........................................ 5
Revenue From the Sale of Land and Facilities..................... 54
Selling Excess Properties and Applying the Proceeds.............. 60
Status of Global Rebasing........................................ 60
Taking Into Account Other Federal Agencies in BRAC Analysis...... 25
Department of the Air Force
Accommodate New Missions......................................... 169
Additional Committee Questions................................... 175
Budget Overview.................................................. 175
Continue Demolition of Excess, Obsolete Facilities............... 168
Family Housing................................................... 175
Foreign Currency Exchange........................................ 180
Goodfellow Air Force Base, Texas................................. 174
Housing Privatization............................................ 170
Invest in Quality of Life Improvements........................... 168
Joint Funding/Joint Basing....................................... 175
Lowry Air Force Base:
Hazardous Waste.............................................. 176
Privatization Initiative..................................... 177
NATO Precautionary Prefinance Statement.......................... 173
Optimize Use of Public and Private Resources..................... 170
Recapitalization Rate............................................ 179
Spangdahlem Air Base, Germany.................................... 172
Supplemental Request/Kuwaiti Aerial Port......................... 177
Sustain, Restore, and Modernize Our Infrastructure............... 168
Sustainment/Base Operations Support (BOS)........................ 179
Vandenberg AFB/McClellan AFB..................................... 180
Department of the Army
Additional Committee Questions................................... 162
Army:
Family Housing:
Construction (AFHC)...................................... 148
Operations (AFHO)........................................ 149
Installation Strategies...................................... 146
Modularity................................................... 163
Barracks......................................................... 162
Base Realignment and Closure (BRAC).............................. 149
Environmental................................................ 163
Decreased Budget Request......................................... 153
Defense Installations Strategic Plan............................. 145
Easements to Prevent Urban Encroachment.......................... 151
Fiscal Year 2005 Supplemental Budget Request..................... 150
Fort Ord Burn--Remediation Funding............................... 154
Global Restationing Funding...................................... 156
Guantanamo Prison................................................ 163
Homeowners Assistance Fund, Defense.............................. 150
Joint:
Basing--Ellingston Field..................................... 159
Facilities................................................... 160
Milcon Projects in Supplemental.................................. 161
Military Construction Army....................................... 147
National Guard (MCNG)........................................ 148
Reserve (MCAR)............................................... 148
Modular Facilities............................................... 161
Operation and Maintenance........................................ 149
Overhead:
And Compartment Protection Locations......................... 157
Cover Locations--Iraq........................................ 158
Overview......................................................... 144
RCI Program...................................................... 153
Reserves Training--California.................................... 155
Restationing Facility Requirements--Fort Carson.................. 152
Supplemental Funding............................................. 156
The Way Ahead.................................................... 145
Weapons of Mass Destruction Civil Support Teams Funding.......... 155
Department of the Navy
BRAC 2005........................................................ 80
Efficiencies..................................................... 77
El Toro Land Auction............................................. 84
Facilities....................................................... 76
Family Housing................................................... 83
Fiscal Year 2006 Budget Overview................................. 71
Housing.......................................................... 72
Joint Reserve Center............................................. 84
Marine Corps Force Restructuring................................. 85
Military Construction............................................ 75
Outlying Landing Field........................................... 86
Prior BRAC Cleanup and Property Disposal......................... 79
Second Infantry Battalion........................................ 86
VXX.............................................................. 76
OVERSEAS BASING COMMISSION
BRAC............................................................. 202
Cost...........................................................200, 202
Forward Operating Sites.......................................... 201
Geopolitical Considerations...................................... 192
Mobility......................................................... 199
Overseas Savings................................................. 201
Overview......................................................... 190
Quality of Life.................................................. 191
Stryker Brigade.................................................. 200
Timing........................................................... 203
And Synchronization.......................................... 191
Of Implementation............................................ 197
Troop:
Levels....................................................... 192
Movement..................................................... 198
DEPARTMENT OF VETERANS AFFAIRS
Office of the Secretary
Additional Committee Questions................................... 113
Burial........................................................... 102
Capital Asset Realignment for Enhanced Services (CARES).......... 100
Colorectal Cancer................................................ 128
Dallas VA Medical Center......................................... 111
Enrollment Fees.................................................. 126
Grants for State Extended Care Facilities........................ 106
Homelessness..................................................... 117
Increased Costs For Middle-Income Vets/Ban On Priority 8s........ 137
Major Challenges and Goals....................................... 114
Management:
Efficiencies................................................. 117
Improvements................................................. 103
Medical:
And Prosthetic Research...............................100, 110, 124
Care......................................................... 97
Programs................................................. 124
Health Care.................................................. 129
Mefloquine (Lariam) Use.......................................... 125
Per Diem Payment Policy to State Homes........................... 108
Pharmacy Co-pay Increase......................................... 126
Prescription Drugs............................................... 122
Priority 7 and 8 Veterans........................................ 117
Proposed Beckley VA Medical Center Nursing Home.................. 134
Real:
Effects of Increasing Out-of-Pocket Costs.................... 137
Health Care Increase......................................... 136
Returning Troops................................................. 126
Services......................................................... 119
State:
Extended Care Facilities Grants Program...................... 123
Home:
Construction............................................. 118
Per Diem Proposals....................................... 122
Veterans Homes: On the Chopping Block........................ 138
Third Party Collections.......................................... 104
Transitional Pharmacy Benefit Pilot Program...................... 109
VA-DOD Collaboration............................................. 119
VA Nursing Homes: Also On the Chopping Block..................... 138
Veterans:
Benefits..................................................... 101
Returning From Iraq and Afghanistan.......................... 114
VISN Structure................................................... 118
Waco and Big Spring, Texas Sites................................. 112
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