COLONEL JAMES HUTTON (Chief of Media Relations, Army Public Affairs): Good afternoon. I'm Colonel James Hutton from Army Public Affairs. Major General Phillip McGhee, director for the Army budget, and Ms. Barbara Bonessa, deputy director for the Army budget, will brief the Army FY 2013 budget overview. After their overview, a question-and-answer period will follow.

MAJOR GENERAL PHILLIP MCGHEE: Well, good afternoon, and thanks for the opportunity to brief the Army's FY '13 budget. This is going to be the first budget request that we've developed that addresses the reductions in the defense spending that's going to occur over the next 10 years, but takes into account and supports the new defense strategy and takes into account the Budget Control Act.

The major change for the Army is the active component end strength reduction -- and we know there are questions and there were discussions early on about it -- beginning this FY, with a portion of the initial 27,000 reduction announced in the FY '12 president's budget. Then it accelerates increases of the permanent end strength reduction until we get to the 57,000 by the end of FY '17. So both the Department of Defense and the Army leadership have directed the Army staff to go ahead and put a comprehensive review together and determine what is the right force structure for the Army. That's both in the operating force and the generating force.

So we're not able to provide you with any information on the force structure or stationing at this time until that work is done. And that will be a while.

So what we'd like to do now is turn to a presentation of the FY '13 PB [president's budget], and we're going to try and get through this as quickly as we can, so that there's as much time as possible for questions.

We'll go to the next slide, please.

This request really reflects the results of some very hard and difficult choices that we had. But I will tell you now that the Army will remain the best-led, the best-trained, the best-equipped ground force in the world. We are preparers of all the Army forces to win both the current fight and it maintains the readiness that we have.

It supports the all-volunteer force specifically, and cares for both our soldiers, our families and our civilian employees. We do invest wisely in the modernization programs, but I'll tell you, there are some terminations out there and there are some program restructures. And Ms. Bonessa will talk about that as we get into the investments themselves.

It fully funds operations and support for our forces in Afghanistan, and in addition to that, it will go ahead and does start to reset the force and the equipment that's redeployed from Iraq over a period of time, and those forces and equipment that's coming back now from Afghanistan.

It also improves stewardship of our resources -- and we'll talk about it later, about investing in a range of enterprise-wide initiatives.

If we can go to the next slide, please.

So we look at the Army's FY '13 budget request, it totals $184.6 billion; 134.6 [billion dollars] of that is in the base, and there's another 50 billion [dollars] that's in OCO. The Army is people. We've heard that over and over again. It is the largest cost driver that the Army has. So if I can draw your attention to that large pie on the top-right hand side, military personnel account for 42 percent of the Army's base budget.

It's followed by operations and maintenance at 35 percent and then our resource development and acquisition at 19 percent. And then we have about 4 percent in "other", and that includes MILCON, the Army family housing accounts and DEMIL [chemical demilitarization].

If we look at the smaller pie that's down there, that's the overseas contingency operations request. It is primarily for military operations and sustainment in support of Operation Enduring Freedom.

The major cost driver, as it always has been, has been the operations and maintenance, which takes up about 58 percent. We have the military personnel account, which takes up about 20 percent. We have pass-throughs, and those pass-throughs really are the JIEDDO [Joint Improvised Explosive Device Defeat Organization] accounts, Afghan security forces and the Afghan Infrastructure Fund at about 16 percent. And then we have our resource development acquisitions, about 6 percent.

Next we'll go ahead and take out the chart that compares to the FY '12 appropriation with the request. If I can draw your attention to column on -- the column on the far left, that is the Army's FY '12 enacted budget. It's $203 billion for FY '12. That's $135 billion that's in the base program, and then there's another $68 billion in OCO [overseas contingency operations].

And as we discussed earlier, on the earlier brief from Secretary Hale, Congress realigned significant -- and I mean significant -- FY '12 funding from the base to OCO -- which really reversed the efforts we had been working on them for a while to migrate enduring OCO over to the base program. But it's OK, because it did help the Army preserve its buying power for FY '12, even though it did exasperate [sic; exacerbate] the FY '12 to '13 growth that's out there.

So we look at the right-hand column now. The FY '13 request is about $18 billion less, or about 9 percent, than it was for FY '12. But again, that's driven by the OCO request; it reflects our complete drawdown from Iraq and then the beginning of our force drawdown in Afghanistan.

Can we go to the next slide, please?

This chart reflects the Army's funding levels since 2001, but it does not take into account inflation. You can see here that the highest funding level for the Army over this period was really in 2008.

That was the height of the surge in Iraq. And so it included significant OCO, which was then GWOT [Global War on Terrorism], both for the Iraqi surge and, if I remember, we were building the Army at that time. We were growing the Army, and so we were both growing and equipping all the additional brigade combat teams to meet those demands in the -- in theater.

So our current total request is down about 27 percent from that high mark in 2008, and OCO is down almost 59 percent from that high mark in 2008. And so if you look at the height of the military operations in 2008, OCO represented almost half of the Army's budget. Now, that's less than 25 percent as we continue to draw down.

Next slide, please.

On the military personnel appropriation, the budget request funds a total end strength of almost 1.1 million soldiers. That's 552,100 that are on active duty, and then there's another 563,200 that are in the reserve components. In FY '13, the active component end strength is going to be funded in three ways, and Mr. Hale had touched on those.

One is the enduring part: Four hundred ninety thousand will be paid for in the base. That is the 490,000 that we're going to end up with by the time we get to the end of FY '17.

We also have a nonenduring part of almost 49,700 that we're going to pay for in OCO as we do the drawdown.

We also have a new category for temporary end strength, and it's called a Temporary Army Endstrength Medical [sic; Temporary Endstrength Army Medical] or TEAM, and that will fund almost 12,400 soldiers who are processing through the integrated disability evaluation system. There is no end strength associated with the OCO temporary end-strength increase.

You remember TESI [temporary end-strength increase] from last year and the year prior for the deployments? That program will end, as scheduled, at the end of FY '13.

And for the RC [Reserve Component], the base request also includes about $83 million for additional training days to enhance the role of the Army National Guard and the Reserves as operational forces.

And OCO, the active component, will fund the pay allowances as it has been for the RC who are on active duty, and then the special pay is for all soldiers who are deployed in theater. And then the RC funds all the pre-deployment, all the post and all the post-MOB requirements that are out there.

Next slide, please.

Our next appropriation is the operations and maintenance appropriation. There is a decrease of $7 billion from FY '12 to '13. The net effect of the growth -- there's a net effect of a growth base of almost $6.3 billion. And then OCO is what's actually reduced by 13.7 billion [dollars] . So reduction in OCO of 13.7 [billion dollars] and increase of the base of 6.3 billion [dollars]. Half of that base increase is due to the understated FY '12 start point that included over $3 billion realigned by the Congress.

We have an additional 660 million [dollars] for price growth from inflation, fuel rates and our federal civilian pay raise, and then the balance of force, our number one objective of providing those trained and readied forces to win the current fight and sustain a high level of readiness. For example, funding for ground and air OPTEMPO increases by almost $3 billion across the compos [components]. That's to get at the readiness part of it. It also funds in additional training seats and a professional military education, because we have so many soldiers who are at a home station now and are available to train.

It sustains our commitments to care for our soldiers and our families. And we've put, as we did the last year and the year prior, another $1.7 billion into those family programs to reinforce holistic fitness, mitigate stress, and to build the resilience. And that includes the Comprehensive Soldier Fitness, sexual harassment -- sexual response program and the Army Substance Abuse Program.

It includes funding for recruitment, support and training and education, and that will continue to attract, develop and retain both our high-quality soldiers and our civilian workforce.

We are committed to improving our business practices and resource stewardship, and we have put money against both audit readiness, energy efficiencies and key information technology efforts.

Here we go -- next slide, please.

We also had the operations and maintenance OCO. Again, as I said earlier, it does fully fund our operations and sustainment and support of Operation Enduring Freedom in the theater.

Our planning numbers include force level decreases of 25.4 thousand for the Army personnel, 33,000 of all services, but 25.4 [thousand] for Army personnel into FY -- in FY '12, by September 2012.

For FY '13, we're planning on a steady state of 41,000 soldiers -- 68,000 of all the services. There are going to be no changes in the nine BCTs that we're planning for and budgeting for, for the program.

Our major cost drivers for OCO have been and continue to be LOGCAP [Logistics Civil Augmentation Program], transportation, reset and intel.

Also, we look at RC O&M continues to fund all the premob [premobilization] training that's going on, all the personnel readiness and all the post-deployment and the reintegration of the soldier with the family and his work.

What we'd like to do now is turn our attention over to investments.

Ms. Bonessa.

BARBARA BONESSA: Thank you, General McGhee.

As we turn to investments, I'd like to first note that, as you know, and as General McGhee has already alluded to, the Army, as did our sister services, all had to make a lot of tough choices about how to continue to sustain the readiness of our force, the capability of our force while facing this era of declining resources.

What I'd like to start with is telling you about the programs that are not included in this budget.

We are announcing eight program terminations with this budget. Many of these, I think, are already -- have already been addressed in the media, but I'm just going to mention a few key ones that have major savings over the program years. We're estimating just under $5 billion in total.

That includes the EMARSS [Enhanced Medium Altitude Reconnaissance and Surveillance System] reconnaissance aircraft, which will generate a cost avoidance or savings of about 1.2 billion [dollars], the base-funded Humvee recap program -- we will continue to support Humvee recap in the OCO request, but the -- what you know as the MECV, the Medium [sic; Modernized] Expanded Capacity Vehicle program, is being terminated with this budget.

The Family of Medium Tactical Vehicles, FMTV, will generate about 1.4 billion [dollars] in cost avoidance or savings over these five years. It's actually being significantly restructured this year, with termination in FY '14. The Mounted Soldier System is being terminated for savings of about 500 million [dollars], and the Joint Precision Approach and Landing System will generate another $400 million over the five-year program.

There are a significant number of programs that have been restructured as part of this build. There are some accelerations out of about the hundred or so that we can count as having been restructured, but by far the majority of them are programs that we're changing the requirements, changing the scope or, in many cases, extending or spreading out the procurement over multiple years, a longer period of time, in order to generate savings.

That includes most of our major airframes, although those remain critical to us, and I'll talk about that in just a moment. The Joint Air-to-Ground Missile, Stryker new procurement and Stryker mods [modifications], the MRAP [Mine Resistant Ambush Protected] and our Joint Light -- Joint Light Tactical Vehicle, one of our modernization priorities, have also been restructured.

We recognize that there is some potential risk to the industrial base with these terminations and restructuring. We believe at this point that it's manageable, but those are business decisions that will rest with the private sector. And we won't be able to address any of them with certainty right now.

Now I'd like to talk about what's included in the budget, beginning overall with our procurement appropriations. And on this summary page, which totals $19.6 billion in procurement in combined base and OCO, that's down about 1.9 billion [dollars] from our FY '12 request. You see some of our key systems highlighted on this page. But as we turn to the individual appropriations, we'll show you for all the key systems in that each appropriation the dollars invested by system and the quantities invested by system. And I'll just highlight a few of them as we go through, in the interest of time.

So turning to aircraft procurement, aircraft procurement request is 6.3 billion [dollars] in total for FY '13. That is only down 158 million [dollars] from FY '12, and that reflects the tremendous demand on aviation assets, which is greater now than it has been since -- anytime since 2001. We remain committed to our aircraft modernization, and I'll highlight three of our key aviation platforms in which we have major investments.

We have $1.4 billion for the CH-47 Chinook. It is now, in FY '12, in the last year of a five-year multiyear procurement program. We are requesting the authority for a new five-year procurement program beginning in FY '13. That will provide for 25 new and 19 remanufactured airframes.

We're asking for $1.2 billion for the Black Hawk, which is in a new multiyear program this year. Sorry, if I said Chinook was, Chinook ends a multiyear program in '12. We begin a new one in '13. The Black Hawk's multiyear procurement program did begin a new one in '12, so we are in the second year of that one. We're asking for 59 new Black Hawk aircraft associated with that.

We're also asking for $1.2 billion for Apache procurement.

That is one of our procurement programs that we are stretching out over a longer period of time. But we remain completely committed to that very critical heavy-lift asset. We're asking for 10 new and 40 remanufactured Block III Apaches -- sorry, combat aircraft.

We're asking for $518 million for procurement of 19 addition Gray Eagle unmanned systems with support equipment that will enable us to equip two more companies. That will give us a total of 17 companies in the Army, 15 in the active component and two in our special operating forces.

And then we're asking for 486 million [dollars] in OCO for replacement of two Apaches, six Chinooks and 16 Kiowa Warriors. And those are aircraft that have been lost or significantly damaged in the current war effort.

Turning now to missiles and ammunition procurement, the total of those two appropriations is 3.4 billion [dollars], down about 230 million [dollars] from the FY '12 enacted in missiles. Almost half of our request is for continued investment in the PAC-3 [Patriot Advanced Capability -- 3]. We're asking for $650 million for 84 missiles and 38 launchers. We're also continuing investment in our other key missile programs, including Patriot mods, the GMLRS [Multiple Launch Rocket System], TOW 2 [Tube-launched, Optically-tracked, Wire command-link guided] missiles and the Javelin.

Turning to ammo, one thing I would like to highlight is that the request for production modernization and quality work environment enhancements is for our ammunition plants at Holston, Tennessee; Lake City, Missouri; Radford, Virginia; Iowa; and Scranton, Pennsylvania. There is $400 million included in the request in OCO, and that's for replenishment of ammunition and missiles expended in the current war fight.

For weapons in tracked combat vehicles, our request in FY '13 is 1.5 billion [dollars]. That's down significantly, 590 million [dollars], from our FY '12 request.

Our major WTC [Weapons and Tracked Combat vehicle] investment is almost $380 million for the initial procurement of the Stryker NBC [Nuclear, Biological, and Chemical] Recon Vehicle with associated C4ISR [Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance] equipment. That vehicle is intended to replace the Fox recon vehicle.

Paladin Integrated Management, the program you know as PIM, is one of our most critical modernization efforts. This budget asks for $206 million for 17 self-propelled howitzers and 17 carriers. The Paladin PIM addresses some significant capability gaps and allows us to -- will allow us to keep pace with -- sorry -- Abrams tank and the Bradley fighting vehicle on the battlefield. The Bradley request of 184 million [dollars] funds engineering change proposals for continued improvement of that vehicle, and it also allows for fielding the ODS-SA variant to the Army National Guard.

There's only a very small request included in OCO. It's just $15 million, and that's for approximately 51,000 improved weapons cleaning kits for the M-16.

Turning to other procurement, our request for FY '13 is 8.3 billion [dollars], down 960 million [dollars] from the FY '12 request. And I want to highlight, first of all, the network -- which I know you've heard from our leaders, our senior army leaders, is the Army's number-one investment priority. It's major components are outlined on the chart before you. I want to highlight the $893 million request for the Warfighter Information Network-Tactical. That's for increment two full-rate production for seven brigade combat teams. When combined with the FY '12 low-rate initial production, that will allow us to field to a total of 13 BCTs.

The Joint Tactical Radio System, which is our mobile communication on the battlefield, the $556 million requested includes 5,900 rifleman radios, 4,600 two-channel Manpack radios and 110 Airborne and Maritime Fixed Station or AMF radios to support our ongoing network modernization.

Looking next at tactical wheeled vehicles, 374 million [dollars] is included for FMTV. And as I mentioned, that is going to be terminated. This is our last planned investment in the FMTV, pending, at least, the outcome of our ongoing force structure review. And as I also mentioned, the funding for HMMWV [High Mobility Multipurpose Wheeled Vehicle] recap is only in OCO. It's 271 million [dollars], and it's to provide for continued upgrading of equipment that's being returned from both Iraq and we're now beginning to return systems from Afghanistan as well.

Now, looking to the future, to our research, development, test and evaluation appropriation, 8.9 billion [dollars] in the request, that's actually a very slight increase over the FY '12 appropriated level of about $200 million. And in the interest of time, I'm just going to highlight a couple of key priorities.

Again, going to the network, we have 546 million [dollars] included in our request for the WIN-T [Warfighter Information Network-Tactical]under the network. I'm sorry, 546 million [dollars] in total for the network, of which 278 million [dollars] is for WIN-T. That funds increment two, which gives the force on the move command and control capability. Also included is the Distributed Common Ground System-Army, $41 million. That's the Army component of the DOD-wide family of ISR systems. For the Army, that let's us take a number of independent systems, I think nine independent systems, and collapse them into one.

I want to mention just briefly the Network Integration Evaluations. I think many of you are familiar with them already, but this has been a tremendous success story for the Army and a good use of resources and a true key to our modernization strategy. We're doing two per year. And what we do in the NIEs -- and it's attributable to the way information technology makes general leaps much more quickly than the defense acquisition process tends to move.

So what we're able to do in the NIEs, in partnership with our industry partners, we're able to concurrently test integration of capabilities before we begin to invest in significant procurement. We've had some tremendous savings in WIN-T. We've had an acceleration. We've saved a significant amount from Net Warrior, and we're very, very proud of the outcomes that are associated with our network integration evaluation.

Under vehicle development, we have 954 million [dollars] invested -- or requested for RDT&E [Research Development Test & Evaluation]. By far the largest point of that is 600 more -- 40 million dollars [sic; $640 million] for one of our key modernization priorities, and that's the Ground Combat Vehicle. We have a three- pronged R&D approach outlined for the GCV. That includes the analysis of alternatives, assessment of nondevelopmental vehicles, and then I think you know we have two technology development contracts that are out there now.

We have another 72 million [dollars] requested for the Joint Light Tactical Vehicle, which is the centerpiece of both the Army and the Marine Corps tactical wheeled vehicle modernization strategy.

There's only a very small amount of OCO included, again, and that is to continue the very successful efforts of the Rapid Equipping Force to use off-the-shelf technologies to get force protection and other capabilities into the hands of our deployed force very, very quickly.

Turning now to facilities -- and Secretary Hale alluded to this during his presentation -- our request of 3.5 billion [dollars] FY '13 is down significantly from FY '12, about a billion and a half [dollars] less. Of that 3 1/2 billion [dollars], active-component MILCON [military construction] represents 1.9 billion [dollars]. That is about a third less than last year. And the reason for that, as you can imagine, is that until the Army has determined the outcome of our force structure reductions, our revised brigade combat team structure, enabling force structure and the associated stationing impacts, we're deferring those projects, projects that might otherwise have gone to some of those brigades.

We hope to reinvest those dollars in the '14 and '15 president's budget when the outcome of our force structure determinations is resolved.

Our active component MILCON does include 400 million [dollars] for eight barracks projects at seven installations; 173 million [dollars] to complete Army Modularity Force [Structure], and that includes modular battalions and aviation end structure. We're asking for 232 million [dollars] for 17 test and range and testing -- range and training facility projects, a direct contribution to readiness. And then finally we're asking for 165 million [dollars] for eight new force structure projects, seven of which are associated with our new Gray Eagle UAS companies ?

And then finally the pass-through accounts. It's not a very sophisticated name, but it's -- to us, it's the money passes through us; the organizations don't really belong to or report to the United States Army. We're the financial management executive agent. For chemical demilitarization, we have 1.5 billion [dollars] included in this request for ongoing demolition of ammunition and munitions.

And the OCO request -- and this also came up quite a bit in the presentation with Secretary Hale -- the OCO request of $7.8 billion is a dramatic decrease over the last two fiscal years, and that reflects two things: It reflects the final FY '11 investment in the -- Iraq's -- '12 investment in the Iraq Security Forces Fund, and it's a decrease of $6 billion to just 5.7 [billion dollars], and that did come up earlier in the Afghanistan Security Forces Fund. There's also a small amount, 400 million [dollars], included in the Afghan Infrastructure Fund, and that -- what that does is fund larger projects outside of the scope of Commander's Emergency Response Program projects to help with economic and physical infrastructure with our presence in Afghanistan.

So, finally, the FY -- the Army's FY '13 budget request -- it does begin to take into account the discretionary spending caps, but it does so without any risk to continuing to support our essential roles.

As has been said, and I will add my foot-stomp to it, the Army is the best-led, best-trained, and best-equipped ground force in the world, and there is nothing that our leaders or this department would allow to happen -- to do anything to preclude that.

So we're continuing to meet our commitments in Afghanistan and around the world. We're developing the Army for the future. We're continuing to care for soldiers and families -- that is one of the most important commitments we could possibly have -- commensurate with their sacrifice and service.

We're beginning to reduce our active component end strength, hopefully in a measured way and with solid attention to how to restructure our force to be an even more capable force than it was before -- before we grew the Army and before the drawdown began. We're supporting the transition by using base-budget dollars, for the first time, of the reserve component -- active -- Army National Guard, and the United States Army Reserve -- into an operational force.

And we are supporting, as I hope I've described, Army modernization and systems. And with that, General McGhee and I would welcome your questions.

Q: A question about the network. You're putting $103 million into Net Warrior. Among the things that have been tested out during the NIEs are the incorporation of commercially available smartphones to see if they can get in the network.

With all this money going into Net Warrior -- which, being smart but not a phone, replicates some of those functions -- should we read this, especially given the reductions that are coming in the future, as moving away from experimenting with smartphones, and Net Warrior is really going to be the end-user device of choice for the network?

MS. BONESSA: I don't believe that's the case. I think we're going to be staying with that -- with the technology. The reduction for Net Warrior reflects the economies and efficiencies that we were able to identify during the NIE. But I don't think it suggests any moving away from that technology.

Q: On the Abrams tank, does the Army still maintain that it's going to be cheaper to shut down the production line for three years starting in FY '14 and build it back again after that, as opposed to minimally funding it during the -- that period?

MS. BONESSA: Yes, we do.

Q: Yes, Mrs. Bonessa, you said that there were eight program cancellations, but you only said -- listed five. What are the other three?

MS. BONESSA: Oh, I -- yes, I only listed the largest ones. Let me flip back to -- let's see, I listed EMARSS, HMMWV recap, FMTV, managed soldier system, JPALS [Joint Precision Approach and Landing System] -- Davis?

MR. DAVIS : Long-range LRAS 3 [Long-Range Advance Scout Surveillance System] and --

Q: You'll have to repeat that.

MR. DAVIS : LRAS 3. Ms. Bonessa?

GEN. MCGHEE: : Long-Range Advance Scout Surveillance Systems.

STAFF : And Knight Under Armor.

MS. BONESSA: There we go, thank you.

GEN. MCGHEE: : The Knight Targeting Under Armor for 300 million [dollars].

MS. BONESSA: Thank you.

Q: You had mentioned on those programs -- I just want to clarify, it was $5 billion in savings. Is that over the FYDP [Future Years Defense Program] or --

MS. BONESSA: Over the FYDP.

Q: OK.

MS. BONESSA: That 4.7 [billion dollars] is the number we're projecting right now.

Q: And then I just had a separate question on the force structure review. You said it was going to take awhile. Any idea on the time frame? And will that feed into, you know, what's going on with BRAC at this point?

GEN. MCGHEE: We still don't have a time frame, and it could be several months. Again, I mean, it's -- the Army staff has a lot of work to do because, again, we are looking at not only the -- when you start to look at the force structure and you look at the basing part of it, but when you start to take that force structure down, what type of brigades are they going to be?

Is it going to be an IBCT, an HBCT, a Stryker [BCT]? When you do that and when you start taking them down, there are different skill sets in there, and so -- and different grade sets in there as you compare. So it's going to be a very complicated and long process as we go through it.

MS. BONESSA: I would just follow on to that, because you asked about BRAC as well, we -- the Army benefited tremendously from the last BRAC round on the active component, and we don't see a significant change in the Army's footprint that's going to result from the force structure drawdown. So right now we don't see a link. But as General McGhee has said, until we know what our brigades are going to look like, our enabling forces and the stationing, we can't say that for sure.

Q: Excuse me. So basically, if I get -- understand right, everything above 490,000 personnel is now being counted sort of contingency, and personnel that's being carried on OCO, not in the base budget -- how much is that saving you -- you know, it's obvious I'm going to say this -- how much is that taking from one pocket to the other, from the base to the -- budget to OCO over the FYDP in this budget particularly?

MS. BONESSA: We haven't done it over the FYDP because it's -- we only do OCO a year at a time, so we're counting on continued funding of whatever subset of that 49,700 is left. But it's about 4.1 billion that we moved into OCO for FY '13.

Q: And there's also a Reserve Component reduction?

MS. BONESSA: Very small and not in FY '13.

Q: OK, there's this 4.1 billion that's affected by that --

MS. BONESSA: -- and any --

Q: -- is transferred from base to OCO.

MS. BONESSA: In the active-component MILPERS [Military Personnel] appropriation, yes.

Q: Viola Gienger from Bloomberg News. I wanted to ask about the personnel -- the force structure review, if I understand you correctly, that the result of that might be additional reductions in the overall end strength levels in some of the out-years.

And also, have you done any calculations, any projections, ballparks about what proportion of the currently projected reductions might require involuntary separation?

GEN. MCGHEE: I want to first make sure that I did not mis-speak. And it's not additional. At the end of the day it's -- we're going to -- we're ramping down to the 57,000. And really, for the Army leadership, what's most important is not the 490[,000], but it's the ramp-down, to make sure that we do not put ripples in the force and that we have the ability and that we have reversibility, that if something happens between now and the next five or six years as we do this ramp-down, that we have the capability to reverse that and bring that back up.

And so there are many things that we can do for it. And so we can start to put a lot of our midgrades, majors and lieutenant colonels, back into the generating force and so that if we need to go in and pull them -- to pull them out to do that reversibility, we can do so. So it's just the amount of risk that the Army leadership is going to want to take as we start to do the planning for this.

Q: And the involuntary separation, ballpark, what proportion you might require that?

GEN. MCGHEE: Well, I wouldn't -- I would probably not even estimate, because again, it's -- you're going to have retirements. I mean, there are so many tools in the toolkit. I mean, we can do retirements; you can do early retirements; you can -- you can assess -- you can assess less; you can -- you can extend promotion -- promotion lists, or -- there are so many things we can do.

But at the key is we really want to put that minimum stress on the force as we do the ramp-down. And that's the reason the Army leadership is so -- believes it's so important to make sure that we get the ramp correct. And so we -- they will not be rushed in that.

Q: In the last QDR [Quadrennial Defense Review], the -- it called for the Army to build a 12th and 13th combat aviation brigade. Is the Army still moving ahead with those plans for both brigades?

MS. BANESSA: Yes, the 12th -- the 12th is fielded. And the 13th will be fielded next year?

STAFF : They are resourcing to it now.

MS. BANESSA: Resourcing the 13th now.

Q: Amy Butler with Aviation Week, I'd like to ask you two detailed questions about the post-Comanche aviation plan from way back when.

One is the termination of EMARSS. EMARSS was the rebirth of ACS [Aerial Common Sensor]. Can you tell us how you plan to accomplish that mission without EMARSS? Does that involve extending the lives of ARL [Airborne Reconnaissance Low], Guardrail? Are you going to embark on a new program at some future point?

And then, on the other end, for the Scout helicopter, birthing out of the failed ARH [Army Reconnaissance Helicopter] program, can you talk to us about what your plans are? How this budget supports -- supporting that mission after this fiscal '12 demo that's supposed to be done this spring?

MS. BANESSA: I'll take them backwards.

On the Armed Aerial Scout -- phase one of the analysis of alternatives is complete. The next step is going to be an RFI [Request for Information] proposing a -- I call it a "fly off" -- I don't think that's the technical name -- but a flying demonstration this summer, I think is the time line. And then the determination will be made about the way ahead on that.

Q: But is that -- that's FY '12 money though. What is -- is there a wedge in FY '13 and beyond to support something to come after that?

MS. BANESSA: There is not.

STAFF : There is not.

MS. BANESSA: For -- there is not. Uh-huh. (Negative.)

STAFF : There is money for CASUP [Cockpit And Sensor Upgrade Program], and then based on the analysis of the fly off and the AOA [analysis of alternatives], they can divert CASUP money to Armed Aerial Scout.

MS. BANESSA: We don't have anything to cost until we see what happens with the phase two of the a.

Q: No, no, no, the -- (put up the money ?) --

MS. BANESSA: Yeah, I think the answer is all of the above to what you said. We are continuing the investment, I think, in everything that you mentioned -- and I can't really speak to anything further on recon aircraft.

Do you have anything to add?

GEN. MCGHEE: I'll get back to you .

MS. BONESSA: Yeah. But we'd be happy to get back with you if we have something.

Q: Thank you. If the Army believes it's better to shut down the Abrams production plant, why request 129 million [dollars] for it in FY '13?

MS. BONESSA: Oh, that's for Abrams upgrades, not new production.

Q: It has nothing to do with that? OK. And then a quick follow-up on the HMMWV recap. How much -- I understand there is some money left over from previous years in that account. Do you have that number handy, by chance?

MS. BONESSA: We received a very, very large -- almost a billion dollars for HMMWV recap very late in '11. As you'll remember, a year ago we were talking about the challenges of a continuing -- many continuing resolutions.

I don't know the -- how much of that almost a billion we've expended to date, but that's going to carry us for a while. And we can get back to you on that.

Q: There was something in here about leased family housing? I take it there's a reduction in that. Where is that coming from? Can you talk about that a little bit more? Leases for the --

(Cross talk.)

GEN. MCGHEE: We have about 7,500 leases that are out there. I mean, we have -- we have government-owned, we have RCI [Residential Communities Initiative]housing. But there's also housing out there where there is no RCI and there's just no Army quarters available and we do the leasing of those. We have done those for years and years and years. And we try -- we try and bring them down as we continue with the RCI.

Q: But where are they?

GEN. MCGHEE: Most of those are in Europe.

MS. BONESSA: Yeah. Which will not transition to RCI.

GEN. MCGHEE: Right.

COL. HUTTON: I'm sorry, I think this is going to have to be the last question.

Q: Yeah, I have questions about two of your slides that mentioned things that are kind of small, I suspect, in your budget, but very large in the amount of attention they get from the public. One is page 15, on the facilities slide, that is not -- there's a whole line on there that is not included in our copy of your thing. And the first thing that's mentioned is Arlington National Cemetery.

Can you give me any numbers on how much is going to be -- the Army's going to spend on Arlington National Cemetery and whether that's going to be an increase or a decrease over the FY '12 enacted or the FY '11 actual spending?

And my other question is about -- page seven, there's a brief mention of suicides -- prevention. Do you have any numbers on how that spending is going to go?

MS. BONESSA: I'll take the Arlington question. We have -- 48 million [dollars] was enacted in FY '12. We're asking for -- I think this is -- and this is something new for us. I do want to mention that. This is our -- Army's effort to support the improvement and expansion efforts at Arlington National Cemetery. We're planning $84 million for site surveys, expansion efforts, and then $19 million, for a total of 103 million [dollars], for planning and development for -- planning and design -- pardon me -- for future efforts. So it's about double what we got last year.

GEN. MCGHEE: And then for the health promotion, risk reduction and suicide prevention, we'll just go back just a little bit. FY '11 was 23.4 [million dollars], FY '12 was 23.5 [million dollars], and then FY '13 is sitting at 22.1 [million dollars].

Q: So, basically soldier health and suicide prevention is going down by roughly 14 -- is that million or billion? Million, I would assume. Right?

GEN. MCGHEE: Well, it's -- no -- actually, if you look at the program -- a particular program, the answer would be yes on that one. If you look at it wholistically, the answer is no. So for FY '12, if we look at comprehensive soldier fitness, suicide prevention, sexual harassment and assault response, for FY '12 it was 81.6 [million dollars], for FY '13 it's 101.1 million [dollars].

And so it's gone up dramatically. It's just where the -- of those four programs, where those dollars are being put.

And a lot of it -- or some of it has to do with the efficiencies and whether we can get more efficient as we go through it. But much more money being spent: almost 20 million [dollars] more in [fiscal year] '13 on those four programs than was spent in FY '12.

COL. HUTTON: Thank you very much.

MS. BONESSA: Thank you all.

GEN. MCGHEE: Thank you.