ææææææææææææææææææææææææææææææ Copyright 2001 Federal News Service, Inc.ææææææææææææææææææææææææææææææææææææææææææ Federal News Serviceæ

æææææææææææææææææææææææææææææææææææææ June 21, 2001, Thursdayæ

SECTION: CAPITOL HILL HEARINGæ

LENGTH: 21352 wordsæ

HEADLINE: HEARING OF THE SENATE ARMED SERVICES COMMITTEEææææ SUBJECT: DEFENSE STRATEGY REVIEWææææ CHAIRED BY: SENATOR CARL LEVIN (D-MI)ææææ WITNESSES: SECRETARY OF DEFENSE DONALD RUMSFELD; JOINT CHIEFS OF STAFF CHAIRMAN GENERAL HUGH SHELTONææææ LOCATION: 216 HART SENATE OFFICE BUILDING, WASHINGTON, D.C.æ

BODY:æ SEN. LEVIN: The committee will come to order.æ

We meet this morning to receive testimony on the Defense Strategy Review from Secretary of Defense Donald Rumsfeld and the chairman of the Joint Chiefs of Staff, General Hugh Shelton. This is the first time that Secretary Rumsfeld has testified before Congress since his confirmation, and I just want to welcome you and Senator (sic) Shelton both to our committee.æ

Secretary Rumsfeld has indicated that his ongoing Defense Strategy Review is designed to think through the critical questions that shape our armed forces, including the types of threats that our military forces need to be prepared to face today and in the future, and how our military forces should be organized and equipped to meet those threats. He has stated that the results of this review will be folded into the Quadrennial Defense Review, the QDR, which will shape our national defense strategy as well as the administration's plans for force structure, force modernization and infrastructure. The QDR, in turn, will play a major role in shaping the administration's defense budget decisions beginning with fiscal year 2003.æ

I agree with the secretary's view that we need to engage our brains before we open our wallets. Our defense budget should surely be driven by a realistic strategy, and not the other way around.æ

Today we embark on a first step in our committee's dialogue with the secretary on the national defense strategy. The secretary has emphasized that his views remain preliminary at this point and that he is not yet ready to address all of the force structure, acquisition and infrastructure decisions that will eventually shape the administration's proposed defense budget. But nonetheless, there are important issues for us to discuss.æ

For some time, for instance, I have felt that the so-called two- major-theater war requirement was outdated.æ

Something is awfully wrong when that requirement results in an Army division being declared unready simply because it is engaged in a real-life peacekeeping mission in the Balkans.æ

I'm also concerned that we may not be putting enough emphasis on countering the most likely threats to our national security and to the security of our forces deployed around the world, those asymmetric threats, like terrorist attacks on the USS Cole, on our barracks and our embassies around the world, on the World Trade Center, including possible attacks with weapons of mass destruction and cyberthreats to our national security establishment and even to our economic infrastructure.æ

Two years ago, Senator Warner established a new subcommittee called the Subcommittee on Emerging Threats and Capabilities, to focus our attention on these new asymmetric threats and the ways to counter them. Senator Roberts, as then-chairman, and Senator Landrieu, as then-ranking member, have done an outstanding job with this subcommittee for the past two years, and I know that they will continue their good work with their roles reversed, as the new chair and the new ranking members of this important subcommittee.æ

Senator Warner and I have asked the General Accounting Office to conduct a review of the Quadrennial Defense Review in the coming months. And Mr. Secretary, I know that you and your staff will cooperate with the GAO in its effort to review the QDR process as it unfolds and to analyze the QDR product for the committee once it is concluded.æ

Finally, I just want to emphasize to you, Mr. Secretary, that it is critically important for the Defense Department to provide the budget documents for your FY 2002 budget amendment to Congress by June 27. I understand that this budget will not reflect the results of the Defense Strategy Review to any great extent, so I just see no reason for delay beyond that. If it gets here by June 27 and if, as hoped for, you testify on June 28, we will then have three months to mark up the national Defense Authorization Bill in committee, get it passed by the Senate, complete conference with the House and send it to the president before the end of the fiscal year.æ

Historically, it has taken us an average of almost five months just to get the bill past the Senate, so doing the entire process in three months will be a monumental task. It cannot be done without the cooperation of everyone involved.æ

I know that Senator Warner is on his way. He's been briefly delayed. I would ordinarily turn to him for his opening comments. And what I will do instead is now ask you, Secretary Rumsfeld, to open up, and then when Senator Warner gets here, we will turn to him for his opening statement.æ

Welcomeæ

SEC. RUMSFELD: Thank you very much Mr. Chairman. And I thank you and the committee for calling this hearing on what I consider to be a very important subject, indeed the driving aspect of defense policy, the strategy.æ

I would like to present a portion of my remarks and request that the entire testimony be made a part of the record.æ

SEN. LEVIN: It will be.æ

SEC. RUMSFELD: Since coming into office five months ago, I've been asking a great many questions, as you know, and discussing a number of key issues regarding how our armed forces might be best arranged to meet the new security challenges of the 21st century. And I do appreciate this opportunity to report on our progress.æ

Later this month, I will hope to be available to discuss the '02 budget amendment, but before we get to that budget, I do think today is best to discuss the larger strategic framework and our efforts to craft a defense strategy that's appropriate to the threats and challenges we surely will face in the period ahead.æ

As you know, we've conducted a number of studies, most of which have been briefed to you or the staff, including missile defense, space transformation, conventional forces and morale and quality of life. We've just completed about a month of consultations with our friends and allies around the world on the various security challenges we'll face.æ

We've also begun and interesting and somewhat unusual process within the Defense Department. Over the past several weeks, the chairman of the Joint Chiefs, General Shelton, here on my right, the vice chairman, each of the service chiefs, and the CINCs on occasion, plus the senior few civilian officials who are confirmed have held a series of meetings to discuss the subject of defense strategy.æ

We've met for about three or four weeks now, almost three or four times a week, for three or four hours a day, to produce a detailed strategy guidance or terms of reference for the congressionally mandate Quadrennial Defense Review. That senior group of military and civilian officials have come to some understandings and agreements that we are considering as a new strategy in a force-sizing approach. And over the next six to eight weeks, we will test those ideas through the QDR process against different scenarios and models and will discuss our ideas and findings with the members of the committee. And later this summer, or early fall, we'll know whether or not we believe we have something that we can confidently recommend to the president and the Congress, and which we could then use to help us prepare the 2003 budget in the fall.æ

In approaching these discussions, we began with the fact that at present we're enjoying the benefits of the unprecedented global economic expansion, but we really can't have a prosperous world unless we first have peaceful world. And the security and stability that the United States armed forces provide to the global economy is a critical underpinning of that peace and prosperity.æ

If we are to extend this period of peace and prosperity, we need to prepare now for the new and different threats that we'll face in the decades ahead and not wait until they fully emerge. Our challenge, it seems to me, in doing so is complicated by the fact that we really can't know precisely who will threaten us in the decades ahead. The only thing we know for certain is that it's unlikely that any of us know what is likely.æ

Consider the track record of my lifetime. Born in 1932, the Great Depression was underway, and the defense planning assumption of the '30s was no war for 10 years. By 1939, war was begun in Europe. And in 1941, the fleet that the United States constructed to deter war became the first target of the naval war of aggression in the Pacific. Airplanes did not exist at the start of the century, but by World War II, bombers, fighters, transports and other aircraft had become common military instruments that critically affected the outcome of the war. And in the Battle of Britain, a nation's fate was decided in the skies.æ

Soon thereafter, the atomic age shocked the world. It was a surprise. By the 1950s, our World War II ally, the Soviet Union, had become our Cold War adversary. And then, with little warning, we were, to our surprise, at war in Korea. In the early 1960s, few had focused on Vietnam, but by the end of the decade, the U.S. was embroiled in a long and costly war there.æ

In the mid-1970s, Iran was a key U.S. ally and a regional power. A few years later, Iran was in the throes of an anti-Western revolution and was the champion of Islamic fundamentalism. In March of 1989, when Vice President Cheney appeared before this committee for his confirmation hearings, not one person uttered the word "Iraq," and within a year, he was preparing for U.S. war in Iraq.æ

That recent history should make us humble. It certainly tells me that the world of 2015 will almost certainly be very little like today and, without doubt, notably different from what today's experts are confidently forecasting.æ

But while it's difficult to know precisely who will threaten us or where or when in the coming decades, it is less difficult to anticipate how we might be threatened. We know, for example, that our open borders and open societies make it very easy and inviting for terrorists to strike at our people where they live and work, as you suggested in your opening remarks. Our dependence on computer-based information networks today makes those networks attractive targets for new forms of cyberattack.æ

The ease with which potential adversaries can acquire advanced conventional weapons will present us with new challenges in conventional war and force projection, and may give them new capabilities to deny U.S. access to forward bases. Our lack of defenses against ballistic missiles creates incentives for missile proliferation, which, combined with the development of nuclear, chemical and biological weapons of mass destruction, could give future adversaries the incentive to try to hold our populations hostage to terror and blackmail.æ

There are some important facts which are not debatable. The number of countries that are developing nuclear, chemical and biological weapons of mass destruction is growing.æ

The number of ballistic missiles on the face of the Earth and the number of countries possessing them is growing as well.æ

Consider this: In 1972, the number of countries pursuing biological weapons was unknown. Today there are at least 13 that we know of, and there are most certainly some that we don't know of, and these programs are of increasing sophistication and lethality. In 1972, 10 countries had chemical programs that we knew of. Today there are 16. Four countries ended their chemical weapons programs, but 10 more jumped in to replace them. In 1972, we knew of only five countries that had nuclear weapons; today we know of 12. In '72, we assessed a total of nine countries as having ballistic missiles. Today we know of 28 countries that have them. And we know that those are only the cases we know of. There are dangerous capabilities being developed at this moment that we do not know about and may not know about for years, in some cases until after they are deployed.æ

What all this means is that soon, for the first time in history, individuals who have no structure around them to serve as a buffer on their decision-making, will possess nuclear, chemical, biological weapons and the means to deliver them. This presents a very different challenge from the Cold War. Even in the old Soviet Union, the general secretary of the Communist Party, dictator though he was, had a Politburo to provide some checks and balances that might have kept him from using those weapons at his whim alone. What checks and balances are there on a Saddam Hussein or a Kim Jung Il? None that we know of, and certainly none that we believe we can influence.æ

While this trend in proliferation is taking place, we're also seeing another trend unfold that's both negative and positive: the increasing power and range and sophistication of advanced conventional weapons. If harnessed by us, these advanced weapons can help us extend our current peace and security into the new century. If harnessed by our adversaries, however, those technologies could lead to unpleasant surprises in the years ahead and could allow hostile powers to undermine our current prosperity and peace.æ

Future adversaries may use advanced conventional capabilities to deny us access to distant theaters of operation, and as they gain access to a range of new weapons that allow them to expand the deadly zone to include our territory, infrastructure, space assets, population, friends, allies, we may find future conflicts are no longer restricted to the regions of origin. For all these reasons, a new approach to deterrence is needed. We are living in a unique period in history when the Cold War threats have receded but the dangerous new threats of the 21st century have not fully emerged.æ

We need to take advantage of this period to ensure that we're prepared for the challenges we will certainly face in the decades ahead. The new threats are on the horizon, and with the speed of change today, where technology is advancing not in decades but in months and years, we can't afford to wait until they have emerged before we prepare to meet them.æ

With this security situation in mind, our team at the Pentagon has been working to develop an appropriate defense strategy for the coming decade. Our goal was to provide clear strategic guidance and ideas for the congressionally mandated Quadrennial Defense Review. Working with the chairman of the Joint Chiefs of Staff, the vice chairman, the service chiefs, we've had extensive discussions and worked through complex issues. We've now provided guidance to test some preliminary conclusions over the next two months before making any recommendations to the president or the Congress.æ

One of the key questions before us is whether to keep the two nearly simultaneous major-theater war force-sizing construct. The two MTW approach was an innovation at the end of the Cold War. It was based on the proposition that the U.S. should prepare for the possibility that two regional conflicts could arise at the same time, and if the U.S. were engaged in a conflict in one theater, an adversary in a second theater might try to gain his objectives before the U.S. could react, and prudence dictated that the U.S. take this possibility into account.æ

The two MTW approach identified both Southwest Asia and Northeast Asia as areas of high national interest to the U.S. In both regions, regimes hostile to the U.S. and its allies and friends possessed the capabilities and had exhibited the intent to gain their objectives by threat or force.æ

The approach identified the force packages that would be needed for the U.S. to achieve its wartime objectives, should two nearly simultaneous conflicts erupt. These force packages were based on an assessment of combat capabilities and likely operations of an adversary, on the one hand, and the capabilities and doctrine of U.S. forces, so recently displayed in Desert Storm, on the other hand.æ

The two MTW approach served well in that period. It provided a guidepost for reshaping and resizing the force from one oriented to global war with a nuclear superpower to a smaller force focused on smaller regional contingencies.æ

But when one examines that approach today, several things stand out. First, because we've underfunded and overused our forces, we find that to meet acceptable levels of risk, we're short a division. We're short of airlift. We have been underfunding aging infrastructure and facilities. We are short high-demand and low- density assets. The aircraft fleet is aging; it can -- and at growing cost to maintain. The Navy is declining in numbers, and we're steadily falling below acceptable readiness standards.æ

I have no doubt that should two nearly simultaneous conflicts occur, that we would prevail. But the erosion in the capability and the force means that the risks we would face today and tomorrow are notably higher than they would have been when the two MTW standard was established.æ

Second, during this period we have skimped on our people, doing harm to their trust and confidence, as well as to the stability of our force. Without the ability to attract and retain the best men and women, the United States Armed Forces will not be able to do their job.æ

Third, we have under-invested in dealing with future risks. We have failed to invest adequately in the advanced military technologies we will need to meet the emerging threats of the new century. Given the long lead times in development and deployment of new capabilities, waiting further into the 21st century to invest in those capabilities poses a risk.æ

Fourth, we have really not addressed the growing institutional risks, that is to say the way the Department of Defense operates. The waste, the inefficiency, the distrust that results from the way it functions will over time, I fear, erode public support to the detriment of the country.æ

And fifth, an approach that prepares for two major wars focuses military planners on the near term, to the detriment of preparing for the longer-term threats. Too much of today's military planning is dominated by what one scholar of Pearl Harbor called "a poverty of expectations; a routine obsession with a few dangers that may be familiar rather than likely." But the likely dangers of this new century may be quite different from the familiar dangers of the past century. A new construct may be appropriate to help us plan for the unfamiliar and increasingly likely threats that we believe we'll face in the decades ahead.æ

All of this led our team to the conclusion that we owed it to the president, to the country, to ask the question whether the two nearly simultaneous major regional theater war approach remains the best for the period ahead. So we set in motion a process that's not been tried before, knowing that any change would, unquestionably, require the military advice and the commitment of the chairman, the vice chairman, the service chiefs, the regional and functional CINCs. We asked them to see if together we couldn't fashion a proposal that we believed might better serve the country than the current two major theater war approach. The QDR process could then test that alternative against the two MTW approach to see whether or not we believed we'd found something that we might want to recommend to the president and to the Congress as a way ahead for the future.æ

The approach we will test will balance the current risks to the men and women in the armed forces; the risks to meeting current operational requirements and war plans; the risks of failing to invest for the future, by using this period of distinct U.S. advantage to, first, set us on a path to recover from the investment shortfalls in people, morale, infrastructure, equipment so we're able to attract and retain the people we need, and to invest in future capabilities that will be needed if the U.S. is to be able to reassure our allies and friends, and deter and defeat potential adversaries armed with advance technologies, vastly more lethal weapons, and a range of methods of threatening their use.æ

While doing so, the U.S. must assure its ability to do these following things:æ

First, defend the United States; second, maintain deployed forces forward to reassure our friends and allies, to pursue security cooperation, to deter conflict, and to be capable of defeating the efforts of any adversary to achieve its objectives by force or coercion, repelling attacks in a number of critical areas, and also be capable of conducting a limited number of smaller-scale contingencies while assuring the capability to win decisively against an adversary threatening U.S. vital interests anywhere in the world.æ

This approach, we think, takes account of the following:æ

Takes account of the threat. The threat to the U.S. has increased. Terrorism and attacks, including the use of nuclear, chemical, and biological weapons, is clearly a growing concern. Cyberattacks are increasing. The threat of ballistic and cruise missile attacks is increasing. Allied and friendly nations are also at increased risk. A new defense strategy would need to take this growing and increasingly complex threat into account.æ

Within the areas of critical concern to the U.S., the threat is evolving as well. Nations are arming themselves with a variety of advanced technology systems, from quiet submarines armed with high- speed torpedoes, cruise missiles to air defense radars to satellite- jamming capabilities. The development and integration of these capabilities are clearly designed to counter those military capabilities which provide the U.S. with its current military advantage.æ

Moreover, warfare is now conducted on shorter time-lines. Adversaries understand that their success may turn on the ability to achieve their objectives before the U.S. and its allies and friends can react.æ

Given these developments, we believe there's reason to explore enhancing the capabilities of our forward-deployed forces in different regions to defeat an adversary's military efforts with only minimal reinforcement. We believe this would pose a strong deterrent in peacetime, allow us to tailor forces for each region, and provide capability to engage and defeat adversaries' military objectives wherever and whenever they might challenge the interests of the U.S., our allies, and friends.æ

In the end, however, the U.S. must have the capacity to win decisively against an adversary. The U.S. must be able to impose terms on an adversary that assure regional peace and stability, including, if necessary, the occupation of an adversary's territory and change of its regime.æ

This strategy approach has been designed to ensure that we invest in the force for the future to assure that we have the margin of safety that we'll need in the future, while at the same time assuring the ability to deal with likely threats over the near term.æ

Because contending with uncertainty must be a centerpiece of U.S. defense planning, this strategy would combine both so-called threat- based as well as capability-based planning, using a threat-based planning to address nearer-term threats, while turning increasingly to capabilities-based approach to make certain that we develop forces prepared for the longer-term threats that are less easily understood.æ

Under such an approach, we would work to select, develop, and sustain a portfolio of U.S. military capabilities, capabilities that could not only help us prevail against current threats, but because we possess them, hopefully dissuade potential adversaries from developing dangerous new capabilities themselves. Some of the investment options we've discussed include, obviously, an investment in people; experimentation; intelligence; space, missile defense; information operations, pre-conflict management tools, which are not what they ought to be today, in my view; precision strike capability; rapidly deployable standing joint forces; unmanned systems; command control communications and information management; strategic mobility; research and development base; and infrastructure and logistics.æ

The portfolio of capabilities, in combination with a new strategy, could help us meet four important defense policy goals. First, to assure our friends and allies that we can respond to unexpected dangers and the emergence of new threats and that we will meet our commitments to them, and that it is both safe and beneficial to cooperate with the United States; second, to the extent possible, dissuade potential adversaries from developing threatening capabilities by developing and deploying capabilities that reduce their incentives to compete; third, to deter potential adversaries from hostile acts and counter coercion against the U.S., its forces or allies; and fourth, should deterrence and dissuasion fail, defend the United States, our forces abroad, our friends and allies, against any adversary and, if so instructive, decisively win at a time, place and manner of our choosing.æ

These are some of the issues we've put to the QDR process to examine and test. As the process moves forward, we'll continue to consult with Congress and expect by late summer to make some recommendations to the president.æ

Let me underscore that we have not decided on a new strategy. We are considering and testing this concept and variants of that strategy against the current one. We will continue to consult with you as the QDR process approaches completion in September and we will then come to conclusions about the desirability of the possible new defense strategy. I must add, however, that the current strategy can't be said to be working, because of the shortfalls which I described, so it seems to me we owe it to ourselves to ask the question what might be better.æ

Preparing for the 21st century will not require immediately transforming the United States military; just a portion, a fraction of the force. As has been said, the blitzkrieg was an enormous success, but it was accomplished by only a 10 or 15 percent transformed German army. Change is difficult, but the greatest threat to our position today, I would summit, is complacency. Thankfully, Americans no longer wake up each morning and fret about the possibility of a thermonuclear exchange with the old Soviet Union. The Soviet Union is gone. They look at the world and they see peace, prosperity and opportunity.æ

We need the wisdom and sense of history and humility to recognize that while America does have capabilities, we are not invulnerable, and our current situation is not a permanent condition. If we don't act now, new threats will emerge to surprise us, as they have repeatedly in the past. The difference is that today's weapons are vastly more powerful.æ

My hope is to work with you, Mr. Chairman, and the members of the House and Senate; that's why I am here today, to discuss these matters. That's why we have undertaken these consultations with our allies and the intensive discussions with our senior military leaders. But let's begin with the understanding that the task is worth doing, a window of opportunity is open, but the world is changing. And unless we change, we will find ourselves facing new and daunting threats we did not expect and which we will be unprepared to meet.æ

Thank you.æ

SEN. LEVIN: Thank you, Mr. Secretary. The secretary has to leave shortly after 11:00. We're going to need to limit each member to five minutes so that every senator has an opportunity to ask questions.æ

I'm not going to call at this point on General Shelton to see if he has an opening statement, but rather I'm going to call on Senator Byrd, who, as chairman of the Appropriations Committee, has a commitment that requires him to be -- not to be able to return after our vote, which has just started. So I'm going to yield to Senator Byrd at this time, and then I think we will recess for 10 minutes.æ

SEN. ROBERT C. BYRD (D-WV): I thank you, Mr. Chairman, for your courtesy. And I thank you, Secretary Rumsfeld, for your statement, and I thank you, General Shelton, for appearing her today.æ

The General Accounting Office -- let me say parenthetically once again that I favor the strategic review. I, of course, don't what the results will be, nor do any of the others of us. The General Accounting Office released a report on Monday, June 11, on the Pentagon's use of $1.1 billion that was earmarked in the FY 1999 Supplemental Appropriations Act to address the critical shortage of spare parts for the military. The GAO found that 8 percent of that money, or $88 million, was used by the Navy to purchase spare parts. The remaining 92 percent of the appropriations was transferred to the Operations and Maintenance accounts of the military services and thus became indistinguishable from other Operations and Maintenance funds used for activities that include mobilization and training and administration.æ

While funds in the Operations and Maintenance accounts can be used to purchase spare parts, the GAO report states that the military services, quote, "could not readily provide information to show how these funds were used," close quote, therefore confounding the GAO's attempt to verify that the funds were actually used to purchase the spare parts that were urgently needed.æ

Now Mr. Secretary, the reason I can't come back here today is because I'm chairing the markup of the Appropriations Committee on the 2001 Supplemental Appropriations Bill. So this question comes at a very important time. I find it shocking that the Pentagon requested funds to meet an urgent need and then is unable to show Congress that it used those funds to address the problem.æ

Now, while you're not responsible for the department's use of appropriations before you assumed your current position, the FY 2001 Supplemental Appropriations Bill that was submitted to Congress contains $2.9 billion that will go to the same Operations and Maintenance accounts that lost track of the $1 billion that was appropriated two years ago.æ

Now, how can Congress, how can my Appropriations Committee, how can this committee here have any confidence that these funds that are being requested in the Supplemental Appropriations Bill which we're making up today will be used as Congress intends them to be?æ

SEC. RUMSFELD: Senator Byrd, you know better than most anybody that the financial reporting systems of the Department of Defense are in disarray; that is to say, they are perfectly capable of reporting certain things, but they're not capable of providing the kinds of financial management information that any large organization would normally have.æ

At your suggestion in my confirmation hearing, we have asked -- we had a team of people take a look at the financial reporting systems. They've reported to the new comptroller general, Dr. Dov Zakheim. He has begun the process of finding ways to see that the ability to track transactions is improved.æ

The problem here -- and, of course, needless to say, I don't know about the specific instance you're describing. But the problem, insofar as it's been characterized to me, is not that the money is necessarily going to something other than it should be, it is that the financial systems don't enable one to track the transaction sufficiently that we can go to the Congress and say in fact of certain knowledge they went where the Congress indicated they should go.æ

SEN. BYRD: Yes. Now, Mr. Secretary, I know that you're working on this, we've discussed this before in this committee. But here we have a request today before the Senate Appropriations Committee -- I'm the chairman, and I'm going to follow this. And as I say, you can't be held accountable for what has happened before your watch began, but your watch is beginning. Now, we're being requested for, as I say, over $2 billion -- $2.9 billion, to go to the same O&M accounts that lost track of the $1 billion that was appropriated two years ago.æ

Now, if we appropriate that money in the appropriations bill which I'm reporting out -- and I'm adding language in the committee report to tighten the screws on the Defense Department in this respect. If we put that bill out with that money in it, what assurance can this committee have, and what assurance can the Appropriations Committee have that that money is going to be trackable and that the money that's being asked for spare parts will be used for spare parts and that we can follow the tracks, that the GAO can follow those tracks, because, Mr. Secretary, you're going to come back next year and want more money. Now, what assurance can I have?æ

SEC. RUMSFELD: Well, I tend to like to under-promise and over- deliver, if I can. So I'm going to be just brutally frank. I am told by the experts that it will take years to get the financial systems revised and adjusted to a point where they will be able to track in a real-time basis each of the transactions that takes place in the department.æ

So the assurance -- I can't give you assurance that the financial systems will be fixed in five minutes or a year or two years because the estimates are multiple years.æ

SEN. BYRD: Yeah, I understand that.æ

SEC. RUMSFELD: What I can assure you is that in terms of this administration, what we will do is do everything humanly possible to be absolutely certain that the instructions are very clear as to where funds should be spent, and to the extent there's going to be any shifting or reprogramming, that we come to the Congress, under the law, and seek appropriate approval.æ

SEN. BYRD: I have every confidence that you're going to do that. But specifically now, specifically with respect to the spare parts -- this is what I'm talking about -- where $1.1 billion was earmarked last year for spare parts -- or two years ago, in the FY 1999 supplemental appropriation, GAO found that 92 percent of those funds were transferred to O&M accounts. What assurance do we have that the $2.9 billion that are being requested in today's supplemental appropriations are going to be trackable?æ

I know you're undergoing this systems review. I have great respect for your efforts and I know that's what you intend to do. But I am specifically upset because of the earmarking that went on here with respect to spare parts; the General Accounting Office is not able to track those. Now, what's going to happen with the $2.9 billion that I'm going to mark up for your department today -- or may not -- what's going to happen?æ

I want some assurance that there be some way to track this item, because I think we're --æ

Mr. Secretary, you spoke about the erosion of confidence by the American people, and you're exactly right. But there's going to be an erosion of confidence in the Appropriations Committee. As I say, I don't expect you to be accountable for previous administrations, but we're being asked for $2.9 billion here. And I want to be responsible to my constituents, and I want to hold the department responsible for this money that is being asked for today, or else our confidence is going to erode pretty fast.æ

SEC. RUMSFELD: Well, what I'll do is I'll look into what happened in the past and see if it's possible to see if there was some sort of a reprogramming authority that was presented to the Congress; I just simply don't know. And if there was, I'll be happy to have you briefed as to exactly what took place.æ

As to the future, to the extent that we are asking for funds for a specific purpose, I can assure you they'll either be spent for that purpose, or we will come before the Congress and say that the circumstances changed, which happens in life, and that we request permission to spend those funds for some other purpose according to the law.æ

SEN. BYRD: Well, I thank you for that assurance, Mr. Secretary. Let me assure you that I'm going to be watching this. I think it's indefensible for the agency not to be able to show the General Accounting Office, which is the arm of the Congress, what happened to this money that we appropriated specifically and earmarked specifically for spare parts. We're being asked for similar monies again, as I say. Now, we need to know that this problem, whether or not it's going to take years to solve. But I understand you to say -- on this specific area, we're going to watch that closely. Am I correct?æ

SEC. RUMSFELD: You are.æ

SEN. BYRD: I hope, Mr. Secretary, that you'll be able to do that. I am confident that you intend to keep that promise. And the promise has to be kept, because we're going to -- if I'm still living a year from now -- and that's up to the Good Lord. The people of West Virginia have already signed my contract, five years -- I'll be back. And you'll want more money next year. And I don't mean to be pointing my finger at you personally. But this -- I ought not be asking this question. We need in the Congress to mean it when we say it, and the department needs to mean it when it says it needs that money and will spend that money for spare parts.æ

I hope, General Shelton, that you'll have something for the record on this, because I have to go answer this roll call.æ

GEN. SHELTON: Well, thank you, Senator Byrd, and let me say that I have not seen the report. However, I certainly agree that this is an extremely important issue. And I would want to have all the facts laid out and make sure that we responded to your question in as accurate and timely a manner as we could. I also would say that we need to be able to track. We need to be able to make sure that the funds that have been allocated are, in fact, accounted for in the proper manner.æ

The one thing that I do see that indicates that -- I could believe the funds went to the intended purpose, has been in the readiness rate since '99, where they have been -- a lot of our readiness rates were suffering drastically.æ

That was particularly true in some of our aviation --æ

SEN. BYRD: Well, I'm complaining about that. If the O&M accounts are suffering badly, tell us about it, but don't tell us that this money will be spent for spare parts when it ends up that the General Accounting Office can only track 8 percent of the $1.1 billion for spare parts.æ

GEN. SHELTON: Yes, sir. As you indicated, Senator Byrd, in your statement, the funds in the O&M account actually do provide for spare parts on the day-to-day basis, and I think that the readiness rates that we have seen turn around would indicate that a large amount of that money went to its -- if not all of it -- went to its intended purpose.æ

SEN. BYRD: The question isn't about that at all. We can go around and around on the head of a pin all day, but this ought not to happen.æ

GEN. SHELTON: Yes, sir. I agree.æ

SEN. BYRD: If Congress is going to be asked for monies for spare parts and we earmark it for that purpose, then it ought to be used for that purpose, and the department ought to be able to show that it was used for that purpose.æ

Now, we're up against a very tight budget here and our domestic needs are being -- are not being met. And the president's budget, for the most part, the supplemental is going to be defense. And not one thin dime is being added, as far as I'm concerned, in that appropriations bill today, not one thin dime is being added to the president's request. And I'm going to do everything I can to help him get that money, but there's got to be a responsibility here. And I'll guarantee you're going to be asked the questions when you come here, if you don't follow these earmarks for defense, when the agency requests this money -- I didn't request it -- for spare parts. There has to be better bookkeeping and better accounting.æ

So if the president's going to narrow his budget down to where he's going to ask for about 7 percent increase for defense and less than 4 percent for non-defense, then I want the president and the administration to be sure it does its bookkeeping right. I want to help the Defense Department. I'm as interested in the security of this country as anybody else, but we've got to have better accountability. Whether it's Democrat or Republican doesn't bother me. We're all in this together.æ

And I thank you very much. Thank you, Mr. Secretary.æ

Mr. Warner, I'm going to go vote. Did you vote before you --æ

SEN. WARNER: Yes, my good friend and neighbor state, I did vote early and so that I could carry on in this hearing, and therefore I'd utilize our time with these two very valuable witnesses.æ

SEN. BYRD: Yes. Thank you very much.æ

SEN. WARNER: I thank my colleague from West Virginia.æ

SEN. BYRD: Thank you, Mr. Secretary.æ

SEN. WARNER: I welcome, Mr. Secretary, the opportunity to visit with you again this morning. And General Shelton, I apologize I wasn't here earlier. I had a long-standing engagement to address Mothers Against Drunk Driving. And I tell you, I don't know of any organization that's trying harder to remedy a problem which indeed, unfortunately, afflicts those in uniform all throughout this country.æ

Mr. Secretary, I love the military history, as do you. We've talked many times together about days in the past that we have shared, and I want to read you a quote of I think one of our great heroes that we respect greatly, and that's General Eisenhower. He was asked shortly after World War II the following question about warfare. He was asked about when we might expect another engagement of some magnitude, right on the heels of World War II, and he replied as following: "I hope there will be no more warfare, but if and when such a tragedy as war visits us again, it is always going to happen under circumstances, at places and under conditions different from those you expect or plan for," end quote.æ

You're trying, in my judgment, to do the right thing, and that is make a very intensive review of this nation's strategy, match it to our current force structure, and -- I think quite properly -- take, I think you might say, drastic moves to restructure those forces to meet future contingencies. And you're doing so with the advice and counsel of the chairman of the Joint Chiefs of Staff and the other chiefs and other military leaders.æ

You're embarked on a very courageous mission, my friend. We've known each other these many years, beginning with our service under a previous administration almost a quarter of a century ago.æ

But in the 23 years I've been on this committee, and I've had the privilege of hearing from and learning from many secretaries of Defense, I think you've tackled the most arduous program of any that I've been privileged to know and work with during these years.æ

So I wish you luck, and you're going to have my support.æ

SEC. RUMSFELD: Thank you, Senator.æ

SEN. WARNER: But I think we should come to this question of -- and I think it's proper to address the two major-theater wars standard, and sizing U.S. military forces has been a vigorous debate for many years. But underlying -- as I've listened to military experts in and out of uniform during these many years, the underlying predicate of that standard has been it acted as a deterrence throughout the world.æ

Now that we acknowledge that our force structure's going to change, have we lessened that underlying power of deterrence that has projected -- been projected by the United States for these many years?æ

SEC. RUMSFELD: Senator Warner, I thank you for your generous comment.æ

I would respond to that very important and difficult question this way. Sometimes when people use the word "deterrence," what comes to mind is mutually assured destruction, in a narrow sense -- that is to say, the ability of the United States and the Soviet Union to destroy each other through the use of nuclear weapons.æ

But of course, when you use it, you mean something much deeper and broader. You're looking at deterrence across the spectrum, and there are lots of things that deter.æ

There's no question having the capability to conduct two major regional conflicts has had a healthy deterrent effect. However, it is also true that investing for the future and developing capabilities to deal with emerging threats has a deterrent effect -- a deterrent effect in two respects. It can have a deterrent effect in persuading people that it's not in their interest to use capabilities against us, because we have capabilities. It also in some cases can dissuade them from even developing those capabilities, because it becomes clear to them that they'd be throwing good money after bad.æ

Second, there are -- as we looked at this process, the group, it became very clear that there are more than simply operational risks and deterrents because of forces. We've been doing a great many smaller-scale contingencies, for example. A presence around the world. That also contributes to the deterrent.æ

I was given a list from General Shelton. I don't know quite where it is here, but it's called a series of vignettes, and they are just a host of things that -- here it is -- that we do besides prepare for two major regional conflicts. I'll just zip through them.æ

Opposed interventions.æ

SEN. WARNER: I'll interrupt to just state we'll put that in the record at this spot in its entirety, together with my more lengthy opening statement. And I thank you.æ

SEC. RUMSFELD: Good. Good.æ

Humanitarian interventions. Peace accord implementations. Follow-on peace operations. Interpositional peacekeeping. Foreign humanitarian assistance. Domestic disaster relief. Consequence management. No-fly zone. Maritime intercept operations. Counterdrug. Noncombatant evacuations. Shows of forces and strikes. Now, that's what we've been doing, and those things, too, I think, in a way contribute to deterrence.æ

SEN. WARNER: Well, that comes to the follow-on question. I think it's the desire of our president -- and you will implement that -- to cut back on the volume of such participation. Now we read this morning about Macedonia, and I think that's a correct decision on behalf of our government to be a partner in that. And by the way, they applied an entirely new name to that type of intervention we're going to have over there. At least I hadn't seen it before.æ

So I'm just asking again, this deterrence, are we not going to cut back on some of those as a matter of policy?æ

SEC. RUMSFELD: I think that as a practical matter, because we have not been organized and arranged to deal with these type of things, they have been very stressing on the force. And possibly General Shelton would want to comment on that. We do them, and we do them well, but there has to be a limit to the number of things one can do.æ

GEN. SHELTON: As the secretary has indicated, Senator Warner, I think that the most important thing to come out of this QDR -- and the stage has been set now by the terms of reference that the secretary has referred to - is that we get the strategy and force structure in balance that we have today. We've got too much strategy, too little force structure, as the secretary has indicated, through the number of things that we have been doing. As a part of the review -æ

SEN. WARNER: And that imbalance has been for some period of time, has it not?æ

GEN. SHELTON: It has been for some period of time, but it has gotten in many cases progressive -- as you recall, back in '97 when we started the downsizing of the force out of the '97 QDR, which is where our Shape, Respond, Prepare strategy came -- the force as it started coming down, certain elements of that force in particular started moving into the category of low-density/high-demand types of force structure. We have more of that now than we had back in '97, for sure, some 32 types of units or capabilities.æ

And so part of the Quadrennial Defense Review is going to be to make sure we get the balance back, that we have a strategy that can be carried out by whatever force structure it is we decide that we want, and an iterative process that makes sure that when we decide what our strategy should be for the future, as the secretary has talked about, that we have the force structure in balance with --æ

SEN. WARNER: Let me quickly -- my time. In working with -- and I shall not name any specifically -- the chiefs, but -- (aside) I didn't give an opening statement, so I just might take a little additional time -- (returning) I found reluctance in years past to acknowledge what this secretary and president is bringing to the forefront, that mismatch, and not only acknowledge it, but put it in as a reality, an enunciation by this country of a new strategy.æ

Now, walk us through a little bit of the discussions in the tank on this issue, because it's been my recollection that the tank -- I use that respectfully, that term -- has vigorously adhered to keeping the prior public enunciation of our capabilities, even though there was a mismatch. What changed this time among the chiefs to now support the secretary's change?æ

GEN. SHELTON: Well I think, Senator Warner, that we may be getting the cart in front of the horse a little bit in that the terms of reference, as they are laid out right now, have within the terms certain types of military capabilities that this nation would need to have.æ

SEN. WARNER: "Need to have"?æ

GEN. SHELTON: Would potentially need to have.æ

SEN. WARNER: Do not have now, but must get?æ

GEN. SHELTON: Or that we have a capability that we want to try to preserve as a part of the future, for the future. That will emerge as the strategy. And as the secretary said, something that he would come back to you on. As a part of that strategy, we need to make sure -- part of the QDR, that we look at the types of structure we have and that we can carry it out. Let me give you one example.æ

As you know, we have a -- as we've talked about before with this committee, our major theater war capabilities are really only one in the area of strategic lift. We can move forces into one area, but in order to fight in a second one, we also have to have the capability to swing forces back in the other direction. How much force structure you have to have ultimately can be determined by what you envision as the end state in either one of those two regions and, therefore, that will determine the amount of risk you've got with your force to be able to do more than one thing at one time.æ

For example, if you just wanted, as we were able to do -- or as we did in Desert Storm, to restore the Kuwaiti border, that takes one set of forces. If you want to be able to defend in place on the Kuwaiti border, that's another set. If you want to have to go beyond that, it gets to be substantially more.æ

SEN. WARNER: General, I've got to go to a second question.æ

Let's talk a little bit about missile defense, Mr. Secretary. Again, I think our president, together with your support, has taken the right initiatives to explore technologies, a range of technologies beyond what previous presidents have explored, staying within the parameters of the ABM Treaty.æ

My specific question is as follows: I think our president is undertaking, personally, in his last visit to Europe, as well as prior thereto with emissaries from State and Defense, to consult with our allies and lay a foundation for eventual negotiations with Russia that, hopefully, will enable us to devise a new framework, whether it's amendments to the ABM Treaty or an entirely new framework, such that we can move ahead with a wider range of technologies to provide for the limited missile defense which I believe, and the president believes, is essential to this country.æ

Now, we're at the juncture where you're going to send up the '02 budget amendment with specifics. In my judgment, we cannot get out ahead in any way of the existing terms of the ABM Treaty until the president has, hopefully successfully, worked out with Russia amendments and a new framework. Could you advise us as to how the '02 is going to address the president's initiatives to expand the type of systems to address the limited missile defense threat and at the same time have Congress act on '02? But in my view, we will act on '02 before finalization, in all probability, of the negotiations between our government and Russia.æ

SEC. RUMSFELD: Yes, sir. The president, as you know, in his visit to Europe, in his meeting with President Putin indicated that the ABM Treaty in its present form restricts the kind of research and development that he believes is desirable and appropriate for this country if we are to avoid a situation where the Saddam Husseins or Kim Jong Ils of the world can hold our population senators -- centers hostage.æ

What the '02 budget will have is some money for missile defense research and development and testing. It is not clear which piece of those various research projects will move forward at what pace. There are legal disagreements among the lawyers as to what extent the treaty constrains certain types of things. I'm not a lawyer; my attitude about it is we need to get with the Russians, let them know that we plan to establish a new framework with them, we need to move beyond the treaty, and we need to be free to perform certain kinds of research and development activities. The president told President Putin that, and he asked Secretary Powell and the foreign minister of Russia, and he asked me and the defense minister of Russia to begin some meetings to discuss those and get up on the table the elements of a conceivable new framework. And we're at the very beginning stages of that.æ

SEN. WARNER: Well, does it come out of phase with the need for Congress to act on the '02? In other words, it seems to me we've got to go ahead and act on the '02 within the parameters of the Cochran statute, which is the '99 controlling law --æ

SEC. RUMSFELD: Sure.æ

SEN. WARNER: -- and that in all probability the progress that this administration hopefully will make on a new framework can only be addressed in the '03.æ

SEC. RUMSFELD: No. I would think the '02 budget with its -- some portion for missile defense ought not to be a problem in that regard and that it can be acted on by the Congress with the understanding that we're in discussions, which is the second part of that Cochran statute, as I recall --æ

SEN. WARNER: Right.æ

SEC. RUMSFELD: -- that we're in discussions with the Russians about how we can establish a different framework and free ourselves of unnecessary restrictions with respect to the testing issues.æ

SEN. WARNER: I see my time's up. Thank you.æ

SEN. LEVIN: I gave Senator Warner some additional time because he did not have an opening statement as ranking member, but I did announce we're going to have to abide by a five-minute rule because the secretary has to leave a few minutes after 11:00.æ

On the missile defense issue, which Senator Warner just raised with you, I want to be real clear here on what you're telling us, because I think it is the same thing that General Kadish told us last week, but I want to be doubly sure, because this is really an important issue.æ

What General Kadish told us last week, he's -- as you know, but perhaps those who are listening may not all know that he's the director of the Ballistic Missile Defense Organization. What he told us is, relative to the program that he is going to recommend for this year and his assessment of the various parts of the national missile defense program, he said that if all of his recommendations for missile defense are adopted and implemented for the year 2002 that there would be no violation of the ABM Treaty by those actions. Is that your understanding?æ

SEC. RUMSFELD: I have not heard him say that, nor has he briefed that to me.æ

SEN. LEVIN: Do you have any understanding on that issue?æ

SEC. RUMSFELD: No, I don't. My understanding is exactly what I said to Senator Warner.æ

SEN. LEVIN: Which doesn't relate then to the issue that I just raised? If General Kadish is the general who is in charge of the program and he is fashioning and developing a new research and development approach to missile defense to test and evaluate different approaches that had not been considered previously, if he says that he sees nothing in the immediate future that is going to be a problem with respect to the treaty, that is the kind of information I then would take to the lawyers who know an awful lot more about the treaty than I do, and I suspect even more than General Kadish, and --æ

SEC. RUMSFELD: I think he's already taken that to the lawyers.æ

SEN. LEVIN: Has he?æ

SEC. RUMSFELD: And I would have to get advice and counsel on that. I personally -- I mean, I don't think the '02 budget is a problem, but I think --æ

SEN. LEVIN: In that regard.æ

SEC. RUMSFELD: In that regard. What I think is that we need to be moving ahead with the research and development necessary to understand what we are going to be capable of doing to deploy a limited missile defense system, as Senator Warner said. Simultaneously, we need to be working with the Russians and establishing a framework that will permit -- that will get us beyond a treaty that is against missile defense. If you want to --æ

SEN. LEVIN: The key issue -- the key issue here, though, is that it's very possible, even pursuing your approach, that there is no conflict at least for a year between those two paths.æ

SEN. WARNER: That's why I said '03.æ

SEN. LEVIN: And that is why Senator Warner said '03, and I thought you were answering Senator Warner, but -- I just want to be real clear on this. General Kadish says there is no conflict in 2002 with his recommendations, following the advice of the lawyers. I just want to -- you do not yet have that analysis, and that's your answer?æ

SEC. RUMSFELD: That's correct.æ

SEN. LEVIN: Okay. Now, after the summit meeting, President Putin indicated that if the -- the Russian president indicated that if the United States proceeded unilaterally to deploy a national missile defense system, that Russia would eventually add multiple warheads to its ICBMs, something which we worked very hard to eliminate in the START II Treaty.æ

Do you believe that if that in fact occurred, if Russia in response to a unilateral decision on our part to move out of the ABM Treaty -- if they in response to that said, "Well, then we're going to do the multiple warheads on those missiles," do you believe that that would be something that would not be good for our national interest?æ

SEC. RUMSFELD: Mr. Chairman, it seems to me that President Putin and various Russian officials have said a lot of things over a period of --æ

SEN. LEVIN: Assuming what he said is true, do you think that's in our national interest, that they MIRV their warheads?æ

SEC. RUMSFELD: Could I walk into that with a preface?æ

SEN. LEVIN: Yeah.æ

SEC. RUMSFELD: They've said a lot of things, and it's part of this negotiation process. Where they will end up, I don't know.æ

I think it's a mistake to take out a single element like that in isolation and examine it and say that it's good, bad, or indifferent. And the reason I feel that way is because if they simultaneously did something else -- that is to say, reduce substantially other warheads -- and ended up feeling that it was more efficient or cost-efficient to do that, and the net aggregate number was lower, one might say, "Is that bad?" I don't know. I have to look at the total picture of it, and I think anyone looking at it would have to answer that way.æ

I would add that the whole construct is a Cold War construct. It's -- the Cold War is over. Those treaties were between two hostile nations.æ

SEN. LEVIN: But it's still in our interest that they reduce the number of nuclear warheads, is it not?æ

SEC. RUMSFELD: That I can say yes --æ

SEN. LEVIN: It's still in our interest that they not MIRV their missiles. Is that not correct, generally?æ

SEC. RUMSFELD: Generally, the reduction of total numbers of warheads -- what the mix might be is a separate issue --æ

SEN. LEVIN: All right.æ

SEC. RUMSFELD: -- but the total number, I would agree with you.æ

SEN. LEVIN: And is it relevant to us what their response would be to a unilateral withdrawal from the ABM Treaty on our part? Is it at least relevant for us to consider what their response would be?æ

SEC. RUMSFELD: Well, that's why these discussions and negotiations and meetings have been taking place.æ

SEN. LEVIN: All right. Because -- would you agree it's possible, at least, that they could respond in a way to a unilateral withdrawal which would not be in our interest, that would make us less secure? Is at least that a possibility worth considering?æ

SEC. RUMSFELD: I think every possibility's worth considering, Senator. But I think -- I don't yet understand what it means when I read that someone says that a treaty that is 20 years old -- 30 years old and prohibits missile defense is the centerpiece of an entire fabric of arrangements from the Cold War between two hostile states in the year 2001. It is not -- the Cold War is over. We're not hostile states. They are going to be reducing their nuclear weapons regardless of what we do. We're going to be reducing our nuclear weapons to some level, regardless of what they do. And it just seems to me that we've still got our heads wrapped around the Cold War language and rhetoric, and it's a mistake.æ

SEN. LEVIN: I think it would be useful for you to at least attempt to understand why the response is that way. Whether you agree with it or not, I think --æ

SEC. RUMSFELD: Sure, absolutely. And you would in those discussions.æ

SEN. LEVIN: Yeah. Very good.æ

Senator Sessions?æ

SEN. JEFF SESSIONS (R-AL): Thank you, Mr. Chairman.æ

And Mr. Secretary, I appreciate very much your commitment to reviewing carefully our entire defense strategy, to ask where we are, what our threat is today, what it will likely be tomorrow and in the years to come. It's time for us to do that.æ

I know that it makes everyone nervous. I know those in industry, in Defense Department, or in committees in Congress, all of which have special fiefdoms and interests, get very nervous. But it's time to do that.æ

I hope to be able to support you. Perhaps I won't agree with everything that your committee and the president suggests, but I hope to be able to support that. And I do affirm that you're on the right course. And it makes me feel particularly good to know that when you come here and ask for a policy for the next decades, that you have thought it through, you sought the advice and the best people that you can get, and given it extensive review. If this had been a short, cursory review, I could not have the same confidence that I expect to have in your conclusions in the future. And I do think it's time for us to change.æ

War is, unfortunately, just around the corner. It's always a potential threat for us. And we've got to think about where we are in the future.æ

You talked a good bit about missile defense, and you chaired the commission on that, the bipartisan commission that unanimously recommended that we move forward to deploy a national missile defense system. And we have made extraordinary progress. The PAC-3, the Patriot missiles are exceedingly effective. And I don't think anyone denies that they can direct hit collision, destroy incoming missiles. The theater missile, the THAAD, is proving its mettle, and national missile defense I'm confident it's just a matter of moving forward and bringing forth this technology that we now have into a practical combination of programs to make it wo