Everyone is coming to the new york worlds fair. Theyre coming from the four corners of the earth. And from five corners idaho. They come down from frisco and hamburg from nineveh, from aurora, illinois. Through 295 in the bronx. The wilsons got here last. Sphere. T unit they find a machine that playfully demonstrates law of averages. By chance, the to meet and join up sightseeing. The two meet and join up sightseeing. This weekend on American History tvs real america, the experience in 1964 new york worlds fair today at 4 00 p. M. Eastern on cspan three. For over 35 years, cspan brings Public Affairs events from washington directly to you, putting you in the room at congressional hearings, white house events, briefings and conferences, and offering complete gaveltogavel coverage of the u. S. House, all as a Public Service of private industry. We are cspan, created by the cable tv industry 35 years ago and brought to as a Public Service by your local cable or satellite provider. Watch us in hd, like us on facebook and follow us on twitter. Military chiefs testified on capitol hill. Testified. S of staff this is just over three hours. The Committee Meets this morning to review proposals relative to costs. We welcome the joint chiefs of staff to testify on these proposals, to explain why they support them. What the impact is on the force and their impact on other areas of the Defense Budget. Our witnesses on the first panel our general martin dempsey, admiral james when i felt, general ray odierno, admiral welshreener, general mark , anderal james amos general frank grass, chief of the National Guard bureau. We will have a second panel consisting of nongovernment witnesses which i will introduce later. It is not often that all the members of the joint chiefs of staff testified before us in a single hearing. That we have the opportunity to thank them as one group for the contributions that they and those that they lead make to the wellbeing of our nation. Thank you, gentlemen. Thank you for the service of you and yours. Distinguish nature of this panel reflects the importance of the questions before our committee this year. The nationalet Defense Authorization act for fiscal year 2015 later this month. The decisions that we make, the compensation, core structure and strength readiness and modernization will have a farreaching impact on the men and women of our armed forces and on the future of our military and our country. The departments 2015 budget request comes at a time of tremendous challenge and great answered before the nation and for the military. The department of defense faces a highly constrained fiscal. Nvironment in 2015 the 496 billion top line for the Department Remains the same from the funding levels in 14 andyears 2013 and remains more than 40 billion below funding provided to the department in fiscal years 2010, 2011 and 2012. Sequestration has already taken its toll on training, readiness and modernization. Sequestration threatens to return full blast next fiscal we act to mitigate its impact before then. These fiscal constraints of let the department to impose a number of measures to reduce future expenditures. The budget before us reposes forcantly lower Ground Forces in 2019. Including more than had been grievously planned in active duty army and strength the smaller reductions in the guard and reserve. As well as a reduction of over 16,000 in active Duty Air Force and strength this year alone. The budget calls for retiring the air forces a10 and u2 , deactivating half of the cruise fleet. Reducing the size of the helicopter fleet by 25 , and china made and terminating the Ground Combat vehicle program. Those are among other cuts. Remainbudget caps in law in effect in 2016 and beyond, the department has informed us that, among other cuts, it would reduce it would request wouldr instructions it retire the entire tanker fleet. Reduce purchases of joint strike ,ighters and unmanned vehicles and activation of additional ships and elimination of an Aircraft Carrier and air carrier air wing. The legislative proposals a we are considering this year include a number of measures relative to military pay and benefits. That is what we will be discussing here this morning. Paye include setting a raise for Service Members below the rate of inflation, freezing pay for general and flag officers, limiting increases in the Housing Allowance below the rate of inflation, reducing the subsidy to commissaries, and making changes to try care that would result in increased fees and costs shares for most nonactiveduty beneficiaries. In all, these pay and benefit proposals would result in savings to the department of over 2 billion in fiscal year 2015 area at than 31 billion s defenseuture year program. He recently wrote to the that allow us to enforce modernization and still enable us to recruit and retain americas best. That delayingt on adjustments to compensation would cause additional disproportionate cuts to readiness and modernization. We surely must do all we can to minimize the at fax the adverse results. As long as the budget caps remain in place, we do not have the option of simply rejecting the compensation proposals. Under the statutory budget caps, we would then have to make alternative cuts. I look forward, as we all do, to the testimony of eyewitnesses heard again, we thank you all for your Great Service to our country. Over the last decade, our nation has depended on the service and sacrifice of our servicemembers and their families. In return, we have steadily increased their pay and benefits , and rightly so. Should dotly what we for those who risk their lives to keep us safe. Priorities of the obama administrations and the runaway entitlement spending have forced massive cuts to National Security spending such as we have never seen before. These cuts have given our military into a readiness crisis. Squatters have been grounded, ships have been tied to peers, training rotations for Ground Forces have been canceled while muchneeded modernization programs have been delayed. We all know this. Retired Navy Admiral John harvey recently said that we are sending the wrong signal to the force that is serving today as the one that fought two wars in the last decade. Of course, we are dependent upon them to reenlist tomorrow. We are telling them they just cost us too much, that they constituted ticking time bomb, and that their sacrifice is eating us alive. We are telling them that were looking for a way out of fulfilling our commitments to them. This is not the right signal to tod those who volunteer serve in time of war. I think the chairman did a good job of enlisting the systems we have that are no longer the effect of these cuts are undermining the military ability to protect the nation. Because of misguided fiscal priorities, we are now being forced to make false choices andeen paying our troops their families what they deserve and giving them the training and capabilities required to copper summation and return home safely to their loved ones. This is an irresponsible and reckless choice. Think wouldwhat i be necessary and National Security, we would not be in the mess were in today. I look forward to hearing from our witnesses. Chairman, thank you. Other distinguish members of the panel. You are right, chairman. We dont often appear as a group before you. Particularly with our senior enlisted leaders right behind us. What i would like to do at the beginning here it is, since it is unlikely we will see as a group in your role as chairman between now and the end of the year, at least i hope not. We would like to thank you very and for your steadfast passionate support of Americas Armed forces, the men and women who serve, and their families. Thank you very much. You all for thank the opportunity to discuss military pay and compensation. As you mentioned, this is only one part of a much broader effort to bundle reforms in order to keep ourselves in ,alance. This particular issue paying compensation and health care, is a deeply important issue for our servicemembers and their families. We are working to make sure that the joint force is in the right balance to preserve military options for the nation in the face of a changing security environment and a declining budget. We have been tasked to reduce the Defense Budget by up to 1 trillion over 10 years, while upholding our sacred obligation to properly train, equip and prepare the force. This requires carefully allocating resources across the accounts, restoring the readiness we have already lost, and continuing to make responsible investments in our nations defense. As i have testified before, this requires certainty, time and flexibility. Well we have a degree of certainty in our budget for the still dontrs, we have a predictable funding stream nor the flexibility in time we need to reset the force for the challenges ahead. We cant do this alone. Our recommendations have lacked congressional support. To require requests Weapons Systems we no longer need and cannot afford. Were cutting further into modernization. Risks to the performance of omission and risks are those who serve continues to grow. As one part of a broader institutional reform, the joint and select midgrade level leaders have examined paying compensation options for more than a year. We support the three department rebalanceipals to military competition. First, we are not advocating direct thats too troops pay. Rather, this package slows the growth of basic a and housing reducings while commissary subsidies and modernizing our health care system. Second, we will ensure that our compensation package allows us to continue to attract and retain the quality people we need. , wee step up on this path will watch where the force reacts. If it does, well be back to his recommendations on how to adjust. We have to take that step. Third, the savings will be reinvested into readiness and modernization. In all cases, we will continue to prioritize our separate set our efforts that focused on wounded vets. We are awaiting recommendations from theilitary military compensation and Retirement Modernization Commission expected in february of 2015. You be clear, and two restated, we do support grandfathering any future changes to the retirement program. 31 billioning dollars of savings and pay compensation and health care over the future year defense program. If we dont get it, we will have to take 31 billion out of readiness, modernization and for structure over that same. Delaying the decision until next year will likely cause a twoyear delay in implementation , which would force us to restore approximately 18 billion in lost savings. In short, we have submitted a balance package that needs that meets budgetary limits and allows us to recruit and retain the Exceptional Talent that we need. Our people are our greatest strength in the do deserve the best support we can provide. As leaders, we must all exercise proper stewardship over the resources entrusted to the department. We have enough information to make these changes now. We remain committed to partnering with congress to make these and other difficult choices facing us. Thank you. Thank you very much, general. Admiral . Theistinguish members of committee, thank you for the opportunity to appear today. I would like to add some additional context to chairman dempseys introduction. I think it is important to recall that in the 1990s, military compensation had fallen to deeply unsatisfactory level relative to the rest of the working population in america. With the help of the congress, we kenexa close at cap, which involved raising the trajectory of our compensation well above inflation. Those increases worked. In 2001, u. S. Median annual Household Income equate to the dreck. An average e seven. Today, it is roughly equal to the direct pay of the average e five and trending towards he ever g4. It now surpasses the u. S. Median Household Income. Educational benefits well surpass the civilian sector. This e five has moved from being in the 50th percentile of civilians with comparable education and experience in 2000 two being around the 90th percentile today. I dont think any of us at this table would say our people are overpaid, and we would love to be a will to maintain that level of compensation. Sized,joint forces to be modernized and kept ready to fight, we will have to place compensation on a more sustainable trajectory. We dont want to return to the 1990s. We are only asking for gradual adjustments to ensure we can recruit and retain the best our nation has to offer while doing Everything Else it is required to fulfill our obligation to protect United States within the means we are given. These changes would only account for about 10 of our planned cuts within an area that accounts for fully one third of our budget. The other 90 of our cuts are going to come out of the other two thirds of our budget that buys things. We carefully thought through every one of these recommendations over the course of many meetings, even though they are fair and gradual, there is still some information some disinformation out there. For example, some say were cutting pay. That is not true, as chairman dempsey says. Other say we are trying to renege on promised healthcare benefits, again, not true. Trying toually simplify a bewildering system while incentivizing our people to help us contain costs. Provide theinue to same high quality healthcare to our troops and our retirees and it will continue to be free to those on active duty. Percenthers say a one pay raise is not fair when the cost indexes going up by eight percent. Just beenvilians have through three years of no pay increases and they just received one percent this year. Finally some are also suggesting that we want to close all stateside commissaries. We have never considered that in any meeting that i have ever attended. In fact we believe our commissaries are important parts of the benefits we offer our families, but we want those stores to have to work as hard as our unsubsidized exchanges in providing a good deal for our people. Find at least the first year savings through increasing efficiencies, since we exempted them from the 20 staff cuts that everyone else is facing. Re is the prohibited theres a prohibition on selling generic set our commissaries which takes money out of our peoples pockets. I recently bought something which is not a generic at a 73 savings over the brand name that the commissary is required to carry right next door. Couldencies and generics offer the savings we could ask 2014, savings that are warriors count on us to provide. To make just the easy choices but the hard ones to, choices that have only gotten harder since the budget cuts and we need your support. My Service College will not describe what will happen if we supporteceive that and we have to ask our young men and women to fight with 31 dollars billion less of readiness. We want to hear your views in your questions. Thank you. Thank you. General lodi aaron out. Make you, all the other committee members. It is always a member a pleasure to be here. I have witnessed firsthand the cell service, dedication, and sacrifice. Have performed admirably during the longest conflicts in our nations history, but we need to talk about an appropriate level of compensation not only to recognize the sacrifice of our soldiers and their families, and to ensure these are sustain from our all volunteer forces. Paying composition benefits must remain competitive in order for us to recruit and retain the very best for our army and the joint force. However a in compensation must be balanced along with readiness and modernization of our force. It is necessary that we take a look at every aspect of our budget. Partnersndorse these of defense proposals that do not directly cut our soldiers pay but slows the rate of growth for many allowances that are simply on the sustainable. Simply unsustainable. We need more efficiencies in our ,ommissaries in our healthcare particularly tricare. I believe the proposals the sacrifices of our soldiers and their families while letting is balance for readiness nation and composition. Taking care of soldiers not just about providing them competitive pay and compensation benefits. Having theabout right capacity in order to sustain reasonable personnel moderninvest in the most equipment, and maintain the highest levels of training, readiness, and that the army , we not get the savings will have to look at a further reduction in infrastructure. Our overall readiness posture, slow even further our current modernization programs. It is my opinion that it understood is not approve our compensation recommendations, then you must and sequestration now and increase our topline. We must keep in mind that it is not a matter of it but when we will deploy our joint force to defend this great nation. We have done it at every decade since world war ii. It is incumbent on all of us to ensure that our soldiers are highly trained, equipped, and organized. We must balance our resources effectively to do that. If we do not, our soldiers will bear the heavy burden of our miscalculation on the battlefield. I am proud to wear this uniform and represent all the soldiers of the United States army. Their sacrifices have been unprecedented over the last 13 years. We must ensure we divide them with necessary resources for their success in the future. Thank you, mr. Chairman. Thank you very much. Thanksks, and and many for you and barbara for your services. Distinguished members of the committee, i am proud to andesent 633,080 sailors, and especially the 50,000 sailors the void around the globe today along with their fellow marines. Resilienceation and continue to inspire me and our citizens can take great pride in the daily contributions of their sons and daughters in places that really matter. When i appear before you in march, i testify that we were compelled to make some difficult choices in our submission. 90 of the reductio