- DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 2013 AND THE FUTURE YEARS DEFENSE PROGRAM

[Senate Hearing 112-590, Part 6]
[From the U.S. Government Printing Office]

S. Hrg. 112-590, Pt. 6

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2013 AND THE FUTURE YEARS DEFENSE PROGRAM

=======================================================================

HEARINGS

before the

COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

S. 3254

TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2013 FOR MILITARY
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
PURPOSES

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PART 6

PERSONNEL

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MARCH 28; APRIL 25; JUNE 21, 2012

Printed for the use of the Committee on Armed Services

S. Hrg. 112-590 Pt. 6

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2013 AND THE FUTURE YEARS DEFENSE PROGRAM

=======================================================================

HEARINGS

before the

COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

S. 3254

__________

PART 6

PERSONNEL

__________

MARCH 28; APRIL 25; JUNE 21, 2012

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Printed for the use of the Committee on Armed Services

Available via the World Wide Web: http://www.fdsys.gov/

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COMMITTEE ON ARMED SERVICES

CARL LEVIN, Michigan, Chairman

JOSEPH I. LIEBERMAN, Connecticut JOHN McCAIN, Arizona
JACK REED, Rhode Island JAMES M. INHOFE, Oklahoma
DANIEL K. AKAKA, Hawaii JEFF SESSIONS, Alabama
E. BENJAMIN NELSON, Nebraska SAXBY CHAMBLISS, Georgia
JIM WEBB, Virginia ROGER F. WICKER, Mississippi
CLAIRE McCASKILL, Missouri SCOTT P. BROWN, Massachusetts
MARK UDALL, Colorado ROB PORTMAN, Ohio
KAY R. HAGAN, North Carolina KELLY AYOTTE, New Hampshire
MARK BEGICH, Alaska SUSAN M. COLLINS, Maine
JOE MANCHIN III, West Virginia LINDSEY GRAHAM, South Carolina
JEANNE SHAHEEN, New Hampshire JOHN CORNYN, Texas
KIRSTEN E. GILLIBRAND, New York DAVID VITTER, Louisiana
RICHARD BLUMENTHAL, Connecticut

Richard D. DeBobes, Staff Director

Ann E. Sauer, Minority Staff Director

______

Subcommittee on Personnel

JIM WEBB, Virginia, Chairman

JOSEPH I. LIEBERMAN, Connecticut LINDSEY GRAHAM, South Carolina
DANIEL K. AKAKA, Hawaii SAXBY CHAMBLISS, Georgia
CLAIRE McCASKILL, Missouri SCOTT P. BROWN, Massachusetts
KAY R. HAGAN, North Carolina KELLY AYOTTE, New Hampshire
MARK BEGICH, Alaska SUSAN M. COLLINS, Maine
RICHARD BLUMENTHAL, Connecticut DAVID VITTER, Louisiana

(ii)

C O N T E N T S

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CHRONOLOGICAL LIST OF WITNESSES
Active, Guard, Reserve, and Civilian Personnel Programs
march 28, 2012

Page

Rooney, Hon. Jo Ann, Acting Under Secretary of Defense for
Personnel and Readiness........................................ 4
Hale, Hon. Robert F., Under Secretary of Defense, Comptroller,
and Chief Financial Officer.................................... 34
Woodson, Hon. Jonathan, Assistant Secretary of Defense for Health
Affairs and Director of TRICARE Management Activity............ 39
McGinnis, David L., Acting Assistant Secretary of Defense for
Reserve Affairs................................................ 50
Appendix A....................................................... 113
Appendix B....................................................... 141
Appendix C....................................................... 166
Appendix D....................................................... 200
Appendix E....................................................... 206
Appendix F....................................................... 214

Continuation of Testimony on the Active, Guard, Reserve, and Civilian
Personnel Programs
april 25, 2012

Lamont, Hon. Thomas R., Assistant Secretary of the Army for
Manpower and Reserve Affairs; Accompanied by LTG Thomas P.
Bostick, USA, Deputy Chief of Staff G-1, U.S. Army............. 229
Garcia, Hon. Juan M., III, Assistant Secretary of the Navy for
Manpower and Reserve Affairs; Accompanied by VADM Scott R. Van
Buskirk, USN, Chief of Naval Personnel, U.S. Navy; and Lt.Gen.
Robert E. Milstead, Jr., USMC, Assistant Commandant for
Manpower and Reserve Affairs, U.S. Marine Corps................ 242
Ginsberg, Hon. Daniel B., Assistant Secretary of the Air Force
for Manpower and Reserve Affairs; Accompanied by Lt. Gen.
Darrell D. Jones, USAF, Deputy Chief of Staff for Manpower,
Personnel and Services, U.S. Air Force......................... 270
Appendix A....................................................... 305

Department of Defense Programs and Policies to Support Military
Families with Special Needs
june 21, 2012

Guice, Dr. Karen S., Principal Deputy Assistant Secretary of
Defense for Health Affairs and Principal Deputy Director,
TRICARE Management Activity.................................... 320

(iii)

Posante, Dr. Rebecca L., Deputy Director, Office of Community
Support for Military Families with Special Needs, Department of
Defense........................................................ 328
Tait, Dr. Vera F., Associate Executive Director, Department of
Community and Specialty Pediatrics, American Academy of
Pediatrics..................................................... 329
Hilton, Jeremy L., Military Spouse, Veteran, and Family Advocate. 333
Attachments A through I........................................ 341
Dawson, Dr. Geraldine, Chief Science Officer, Autism Speaks, and
Professor of Psychiatry, University of North Carolina at Chapel
Hill........................................................... 471
O'Brien, John, Director of Healthcare and Insurance, U.S. Office
of Personnel Management........................................ 475
Appendix A....................................................... 492
Appendix B....................................................... 500

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2013 AND THE FUTURE YEARS DEFENSE PROGRAM

----------

WEDNESDAY, MARCH 28, 2012

U.S. Senate,
Subcommittee on Personnel,
Committee on Armed Services,
Washington, DC.

ACTIVE, GUARD, RESERVE, AND CIVILIAN PERSONNEL PROGRAMS

The subcommittee met, pursuant to notice, at 2:03 p.m. in
room SR-232A, Russell Senate Office Building, Senator Jim Webb
(chairman of the subcommittee) presiding.
Committee members present: Senators Webb, Begich,
Blumenthal, Brown, Ayotte, and Graham.
Majority staff members present: Jonathan D. Clark, counsel;
Gabriella E. Fahrer, counsel; and Gerald J. Leeling, counsel.
Minority staff members present: Diana G. Tabler,
professional staff member; and Richard F. Walsh, minority
counsel.
Staff assistant present: Jennifer R. Knowles.
Committee members' assistants present: Gordon Peterson,
assistant to Senator Webb; Lindsay Kavanaugh, assistant to
Senator Begich; Ethan Saxon, assistant to Senator Blumenthal;
Charles Prosch, assistant to Senator Brown; Brad Bowman,
assistant to Senator Ayotte; and Sergio Sarkany, assistant to
Senator Graham.

OPENING STATEMENT OF SENATOR JIM WEBB, CHAIRMAN

Senator Webb. Good afternoon.
The subcommittee meets today to receive testimony from the
Department of Defense (DOD) on military and civilian personnel
programs contained in the administration's Defense
Authorization Request for Fiscal Year 2013 and the Future Years
Defense Program (FYDP).
I am pleased to have Senator Graham by my side again this
year as the subcommittee's ranking member.
With us today are senior DOD leaders with whom we will
discuss not only DOD personnel policy issues but specific
budget items in furtherance of our subcommittee's oversight
responsibilities, which I take very seriously. Our witnesses
are: the Honorable Jo Ann Rooney, Acting Under Secretary of
Defense for Personnel and Readiness; the Honorable Robert F.
Hale, Under Secretary of Defense, Comptroller, and Chief
Financial Officer (CFO) for DOD; Mr. David L. McGinnis, Acting
Assistant Secretary of Defense for Reserve Affairs; and the
Honorable Jonathan Woodson, Assistant Secretary of Defense for
Health Affairs and Director of TRICARE Management Activity.
Virtually every leader in DOD who testifies before the
Senate Armed Services Committee addresses the importance of
their personnel. In just the past few weeks, for example, we
heard: ``as we move forward, the Department is committed to our
most important asset, our sailors, marines, civilians, and
their families.'' ``The individual marine is our greatest
asset.'' ``The hallmark of our success as an Air Force has
always been and will always be our people.'' ``The strength of
our Army is our soldiers.''
We agree. Taking care of our military and civilian
personnel and their families is the priority for this
subcommittee. There are a number of military and civilian
personnel policy issues on our radar this year. They include
the administration's proposal to reduce military end strength
by more than 120,000 personnel by the end of fiscal year 2017.
Past experience tells us this cannot be accomplished through
attrition alone. Many servicemembers who have served multiple
combat tours will be asked to leave the military even though
they want to remain in the ranks. This subcommittee will seek
to provide the Services with the force management tools
necessary to reduce end strength in a responsible manner while
keeping faith with those who have sacrificed so much. We also
want to ensure that the Services have robust transition
programs to assist servicemembers and their families as they
leave the Active Duty military.
DOD has just released a proposed policy change that will
open more than 14,000 positions to women at the conclusion of
the congressionally required notification period in a few
months. We are encouraged that the Services are continuing to
explore the possibility of opening additional specialties and
positions to women.
This subcommittee will continue to monitor the
implementation of the Secretary of Defense's decision to
eliminate, reduce, or reallocate 140 general and flag officer
positions and 150 Senior Executive Service positions.
The subcommittee remains concerned about the number of
servicemember suicides and will continue to monitor Service
suicide prevention policies and programs.
Sexual assault prevention and response remains a priority
for this subcommittee. Last year we enacted a number of
legislative provisions to assist victims of sexual assault.
Secretary Panetta has announced that he will have additional
proposals this year, some of which will require legislation. We
stand ready to work with him on this important issue.
Our National Guard and Reserves are an integral part of the
military forces. As an operational reserve, the Reserve
component is an economical force multiplier, providing
flexibility and access to valuable capabilities resident in the
National Guard and Reserves. This subcommittee will continue
its effort to ensure that there is adequate legislative
authority for optimal use of the operational reserve.
The total force includes military personnel, DOD civilian
employees, and contractor personnel. This subcommittee will
continue to press the Services to include civilians and
contract personnel when addressing total force requirements.
The subcommittee remains committed to the care and
treatment of our wounded warriors and their families. We
believe that the Integrated Disability Evaluation System is an
improvement over the legacy disability evaluation system, but
it is still too bureaucratic and timeconsuming.
The subcommittee faces a very clear challenge this year as
we address the need to control the increasing costs of
personnel programs. As the Chief of Staff of the Air Force
stated during a recent hearing, ``among all the other
challenges facing us, the reality of fewer members of the Armed
Forces costing increasingly more to recruit, train, and retain
for promising careers is, `in his view,' the monumental defense
issue of our time.''
The total personnel-related base budget in DOD's fiscal
year 2013 request, including the costs of providing health care
to servicemembers, their families, and retirees, amounts to
$168 billion, or about 32 percent of the overall DOD base
budget. However, while we must achieve savings in our defense
programs, we must do this in a way that does not unfairly
impact military benefits for a force that is serving and has
served so well during more than 10 years of combat operations.
Our task is even more difficult this year because of the
funding limitations imposed by the Budget Control Act (BCA)
passed by Congress last year. To comply with this act, the
administration has proposed several major actions to reduce
military personnel costs, including end strength reductions of
more than 120,000 military personnel, limiting pay raises
beginning 2015, establishing a base realignment and closure
(BRAC)-like commission to conduct a comprehensive review of
military retirement, and increasing health care fees for
military retirees. Each of these proposals warrants careful
consideration.
There is no greater responsibility for Congress and
military leaders than to care and provide for our
servicemembers and their families. Our military--Active, Guard,
and Reserve--is still engaged in the longest sustained period
of major conflict in our Nation's history. We look forward to
learning more about the programs and priorities DOD has
emphasized to make certain that despite today's fiscal
challenges, our servicemembers, civilian personnel, retirees,
and their families will continue to receive the support and
benefits they have earned commensurate with their service.
I look forward to all of your testimony today on all of
these issues, and as always, I encourage you to express your
views candidly and to tell us what, in your view, is working
and to raise any concerns and issues you may want to bring to
the subcommittee's attention. Please let us know how we can
best assist our servicemembers and their families to ensure
that our military remains steadfast and strong.
Senator Graham.

STATEMENT OF SENATOR LINDSEY GRAHAM

Senator Graham. Thank you, Mr. Chairman. It has been a
pleasure working with you.
We have our work cut out for us. The BCA is going to
require some $400-plus billion in defense spending reductions
over the next decade. Sequestration--I hope in a bipartisan
fashion--we can stop that. That would be devastating according
to Secretary Panetta to do $600 billion on top of the $400-plus
billion. To get there, you are going to have to put everything
on the table like reducing the numbers of people we have in the
military, looking at benefits anew. But as the chairman just
mentioned, the number one priority of the Federal Government
from my point of view is to defend the Nation, and you can only
do that with people who are willing to serve, and taking care
of those who have served is the best way to recruit people in
the future.
The chairman has a unique background in terms of his
experience in the government and being a marine. So as we try
to find out solutions to hard problems, we will work together
the best we can. I look forward to hearing from each of you.
Senator Webb. Thank you, Senator Graham. As always, it has
been a pleasure working with you on this subcommittee and on
other issues as well.
We have received statements for the record from a number of
different military and veterans organizations. Rather than list
them all--I may be missing some here--all of those that will
have been submitted by close of business today will be included
at the end of this record, if there is no objection from anyone
on this subcommittee.
Senator Webb. We will now hear opening statements from our
witnesses. Their complete prepared statements will be included
in the record. I am going to make a point here because I really
got into trouble on a recent hearing--we are going to have 7-
minute rounds for questions from the subcommittee once the
testimony is over. Those of you here will recall that when we
had a panel full of lawyers and a subcommittee full of lawyers,
the conversations went on for about 2 hours. So we will do it 7
minutes at a turn here. I think everybody on this end of the
table is an attorney.
Welcome, Dr. Rooney, why do you not begin?

STATEMENT OF HON. JO ANN ROONEY, ACTING UNDER SECRETARY OF
DEFENSE FOR PERSONNEL AND READINESS

Dr. Rooney. Thank you. Chairman Webb, Senator Graham, and
distinguished members of the subcommittee, I appreciate the
opportunity to appear before you to discuss the personnel and
readiness programs in support of the President's budget request
for fiscal year 2013.
Thank you for your support of our Active and Reserve
military members, their families, and our government civilians
who have done everything we ask of them and more.
As you have heard from Secretary Panetta, the fiscal year
2013 budget request was the product of an intensive review of
our defense strategy necessitated by the critical turning point
of our country after a decade of war and substantial growth in
our budgets.
Today, I will describe how we can sustain the All-Volunteer
Force for generations to come, a force that has a proven record
of unprecedented success in operations around the world.
Accomplishing this will require DOD to make hard choices
regarding competing priorities for limited funding. This budget
plan is predicated on the assumption that the Services are
appropriately trained, resourced, and flexible enough to
rapidly adapt to emerging threats. Resourcing the reset of the
force while maintaining readiness will undoubtedly be one of
the most challenging issues of our time.
As the Acting Under Secretary of Defense for Personnel and
Readiness, my priorities focus on total force readiness,
improving the military health system, and total force support.
After 10 years of intensive operations, our forces are
among the most capable in our Nation's history. Our Active and
Reserve servicemembers and defense civilians are well-prepared
to execute current operations and respond to emergent needs.
They are experienced and proficient in a wide range of real-
world operations, including those that were not traditionally
within DOD's scope of responsibility. As we end today's wars
and adjust to new and changing missions, we find ourselves
naturally transitioning back toward a broader range of security
missions.
Although this transition is occurring in the midst of
unavoidable fiscal pressure, we have committed to maintaining a
ready, capable All-Volunteer Force.
The performance of our military medical system at a time of
war continues to set new standards. DOD strives to provide the
best health care in the world to our servicemembers, but the
current cost growth of the military health system is
unsustainable. DOD is pursuing a balanced, four-pronged
approach for improving the health of our population and the
fiscal stability of the health care system to ensure we can
continue to provide this benefit in the future. Our four
approaches include: moving from a system of health care to one
of health; continuing to improve our internal efficiencies;
implementing provider payment reform; and rebalancing cost
sharing.
Another key component of overall health and readiness of
the force is support to the families of our servicemembers. One
of the four overarching principles of the defense strategy
guidance is to preserve the quality of the All-Volunteer Force
and not break faith with our men and women in uniform or their
families. Despite difficult economic circumstances requiring
budget reductions across all levels of the Federal Government,
DOD remains committed to providing servicemembers and military
families with support programs and resources, empowering them
to address the unique challenges of military life.
Ensuring the needs of military families and servicemembers
are met contributes to the overall well-being of the total
force. This includes access to mental health care, providing
for the educational needs of servicemembers' children, support
of morale, welfare, and recreation programs, and maintaining
benefits at defense commissaries.
Secretary Panetta has directed that family programs
continue to be a priority for DOD and it remains my priority as
well.
Putting together this year's budget request in a balanced
package was a difficult undertaking and took the combined
effort of our senior military and civilian leadership.
Throughout that process, I believe we have developed the right
mix of programs and policies in place to shape the force we
need. Yes, we will reduce the rate of growth of manpower costs,
including reductions in the growth of compensation and health
care costs. But as we take these steps, we will do so in a way
that we continue to keep faith with those who serve.
During the past decade, the men and women who comprise the
All-Volunteer Force have demonstrated versatility,
adaptability, and commitment, enduring constant stress and
strain of fighting two overlapping conflicts. They have also
endured prolonged and repeated deployments. 47,775 have been
wounded, and 6,376 members of our Armed Forces have lost their
lives. As DOD reduces the size of the force, we will do so in a
way that respects and honors these sacrifices.
I look forward to continuing to work with you, Chairman
Webb, Senator Graham, and distinguished members of the
subcommittee, to support the men and women in our Nation's
Armed Forces.
Accompanying me today is the Under Secretary of Defense
Comptroller, Mr. Robert F. Hale, and two senior members of my
staff, Dr. Jonathan Woodson, Assistant Secretary of Defense for
Health Affairs and Director of TRICARE Management Activity, and
Mr. David L. McGinnis, Acting Assistant Secretary of Defense
for Reserve Affairs. All of us before you today look forward to
your questions.
[The prepared statement of Dr. Rooney follows:]
Prepared Statement by Hon. Jo Ann Rooney
introduction
Chairman Webb, Senator Graham, and distinguished members of the
subcommittee, I appreciate the opportunity to appear before you to
discuss Personnel and Readiness programs in support of the President's
budget request for fiscal year 2013. Thank you for your support of our
Active, Reserve component military members, their families, and our
government civilians who have done everything we have asked of them and
more.
As you have heard from Secretary Panetta, the fiscal year 2013
budget request was the product of an intensive review of our defense
strategy necessitated by the fact that our country is at a critical
turning point after a decade of war and substantial growth in our
budgets. Today, I will describe how we can sustain the All-Volunteer
Force for generations to come--a force that has a proven record of
unprecedented success in operations around the world. Accomplishing
this will require the Department to make hard choices regarding
competing priorities for limited funding. This plan is predicated on
the assumption that the Military Services are appropriately resourced,
experienced, and flexible enough to rapidly adapt to emerging threats.
Resourcing the reset of the force, while maintaining force readiness,
will undoubtedly be one of the most challenging issues of our time.
As the acting Under Secretary of Defense for Personnel and
Readiness my priorities focus on: Total Force Readiness, Improving the
Military Health System, and Total Force Support.
readiness
After 10 years of intensive operations our forces are among the
most capable in our Nation's history. Our Active and Reserve component
members and defense civilians are well prepared to execute current
operations and respond to emergent needs, and are experienced and
proficient in a wide range of real world operations. We have, by
necessity, mastered a host of specialized capabilities that depend
heavily on language and culture, governance, rule of law, development,
and other specialized skills; not all of which are within the
Department's traditional scope of responsibility. However, fully
preparing for these missions means that there have been fewer
capabilities available for large-scale, major combat operations. As we
end today's wars and adjust to new strategic guidance, we find
ourselves naturally transitioning back toward a broader range of
security missions.
The first sign of this transition is the return of full-spectrum
exercises that we have seen over the last year. Specifically, the
Marine Corps exercised its first large-scale amphibious assault in 10
years just a few weeks ago. Similarly, the Army is shifting to decisive
action training exercises at the Combat Training Centers. We will see
more of these exercises as forces return and reset from current
operations. In addition, the Army has begun to regionally align
maneuver and enabler forces to some combatant commands to conduct
security cooperation and security force assistance activities. These
forces will have appropriate language, culture, advisor training and
skills to enable expanded engagement with critical partners in the
region.
Although this transition is occurring in the midst of unavoidable
fiscal pressure, we have committed to maintaining a ready, capable All-
Volunteer Force. Program reductions were deliberately managed to
preserve operational flexibility and to keep faith with servicemembers
and their families who have made significant sacrifices. We realize
that sometimes, either due to unforeseen circumstances or a changing
world, even the most well-conceived plans must be revised. For this
reason, my office is maintaining its role of closely monitoring the
readiness of our forces for the dual purposes of identifying and
remediating critical deficiencies or unmet requirements.
End Strength
We know that multiple deployments to Iraq and Afghanistan, with
limited time at home for recovery, have stressed our military members
and their families. With the draw down in Iraq and Afghanistan, this
stress is fundamentally reduced. We have withdrawn 50,000 troops from
Iraq since 2010, and will have reduced Afghanistan troop levels by
30,000 at the end of this year. Barring unforeseen events, the
Secretary's goal of 2 or more years at home for every year deployed
will likely be met this coming year. The All-Volunteer Active and
Reserve Force is healthy, and our Services are achieving or exceeding
their recruiting and retention goals.
Today, our overall military end strength, which includes the base
force and overseas contingency operations, is at 2,269,700 in fiscal
year 2012. While the initial changes to force size are muted, a 1.4
percent reduction equating to a 31,300 person reduction in fiscal year
2012, ultimately the Department will be at 2,145,800 by fiscal year
2017. This 5.5 percent reduction equates to 123,900 fewer troops and
will be spread throughout the components of the force.

Army Active, Reserve, and Army National Guard (NG) end
strength in fiscal year 2013 is projected to be 1,115,300--0.9
percent less than fiscal year 2012. In fiscal year 2017 the end
strength will be 1,048,200, a 6.8 percent reduction from fiscal
year 2012.
Navy Active and Reserve end strength in fiscal year
2013 is projected to be 385,200--1.7 percent less than fiscal
year 2012. In fiscal year 2017, the end strength will be
376,600, a 3.9 percent reduction from fiscal year 2012.
Marine Corps Active and Reserve end strength in fiscal
year 2013 is projected to be 236,900-2.0 percent less than
fiscal year 2012. In fiscal year 2017 the end strength will be
221,700, an 8.3 percent reduction from fiscal year 2012.
Air Force Active, Reserve, and Air NG end strength in
fiscal year 2013 is projected to be 501,000--1.9 percent less
than fiscal year 2012. In fiscal year 2017, the end strength
will be 499,300, a 2.3 percent reduction from fiscal year 2012.

A force drawdown of this size has not been experienced since well
before September 11.
Total Force Management and Planning
The Department relies on a Total Force of Active and Reserve
military, government civilians, and contracted support to provide for
the Nation's defense and execute its core missions. We will face force
management challenges over the next several years which are far greater
than those we have experienced since September 11, 2001 and, therefore,
must balance the competing requirements for equipment reset,
modernization and support for our servicemembers and their families in
a climate of reduced budgets. Responsibly managing the required force
reduction, while ensuring we keep faith with those who have sacrificed
so much to secure our Nation's interests, and properly caring for our
military families as many servicemembers transition to veteran status
is a responsibility taken very seriously and one which my organization
is helping to facilitate. Congress aided this effort immeasurably by
recently enacting legislation that expanded voluntary separation
programs which provide appropriate recognition for significant military
service, such as the temporary early retirement authority (TERA) which
gives the military departments the flexibility to offer retirement to
servicemembers with more than 15 but less than 20 years of service. We
will continue to work with Congress to reinstate additional expired
authorities from previous drawdowns that would offer the Department the
ability to focus separations and avoid the loss of critical expertise.
The Department's Total Force of Active and Reserve military,
government civilians and contracted services represents a carefully
coordinated approach that balances operational needs, satisfies mission
requirements, and recognizes fiscal constraints. Our future plans will
seek to balance the capabilities and cost of all elements of the Total
Force. They cannot be managed in isolation if we are to avoid a hollow
force and unnecessary expense. Our plans recognize:

Decreased operational commitments and revised overseas
posture;
A Reserve Force that is an operational asset;
A highly skilled civilian workforce capable of
performing mission essential and inherently governmental tasks;
Contracted support that is cost effective and designed
to provide appropriate and complimentary support to our
operational needs;
Civilian decreases that have been carefully targeted
to deliver efficiencies initiated by Secretary Gates; and
Efficient management of our contracted support as part
of our Total Force mix and not as just an acquisition
management action.
Active Duty Recruiting
Recruiting for the All-Volunteer Force continues at unprecedented
levels. The Department closed out fiscal year 2011 with all active
Services meeting or exceeding recruiting objectives, both numerically
and by recruit quality. As shown in Table 1, we continue that record
pace into fiscal year 2012, with 44,414 new recruits against an
objective of 44,323 through January of this year. Recruit quality
remains considerably above Department benchmarks (or standards), with
98 percent of new recruits having a high school diploma (90 percent
benchmark) and 80 percent scoring above average in aptitude (60 percent
benchmark) on the Armed Forces Qualification Test (AFQT). Of particular
note is the fact that very few recruits accessed at or below the 30th
percentile on the AFQT through January of this year.

Table 1--Recruit Quality (Fiscal Year 2012 Through January) Active Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quantity Quality
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent Scoring at/ Percent Scoring at/
Percent High above 50th above 30th
AC Enlisted Recruiting Fiscal Accessions Goal Percent of Goal School Graduate: Percentile on Percentile on
Year 2012 (End of January) Benchmark=90 AFQT; Benchmark=60 AFQT; Benchmark=4
percent percent percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Army 17,123 17,050 100 G 95 G 64 G <1 G
Navy 9,289 9,289 100 G 99 G 93 G 0 G
Marine Corps 7,795 7,777 100 G 100 G 76 G 0 G
Air Force 10,207 10,207 100 G 100 G 99 G 0 G
-----------------------------------------------------------------------------------------------------------------------
DOD Total 44,414 44,323 100 98 80 <1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quantity Key: 100 percent or above goal; 90-99 percent of goal; below 90 percent of goal.
Quality Key: 100 percent or above benchmark; 90-99 percent of benchmark; below 90 percent of benchmark.

Generally, a slow economy makes recruiting less challenging, and
operates to the advantage of those who are hiring, including the U.S.
military; clearly, the current state of our economy has been one of the
drivers of this recruiting success. As we see signs of economic
improvement, we will remain vigilant and continue to monitor the impact
of that improvement on our recruiting efforts. Despite the positive
effect of the economy on recruiting, there remain other factors
counterbalancing our ability to attract bright, young Americans into
the Armed Forces--the lower likelihood of influencers of youth (e.g.,
parents and teachers) to recommend service, a large and growing
proportion of youth who are ineligible to serve in the military, higher
numbers of youth going to college directly from high school, and
continuing concerns about the prolonged worldwide, irregular campaign
with its concomitant high operations tempo. Therefore, we are in
uncharted waters with significant factors directly affecting military
recruiting in both positive and negative ways.
Due to these direct effects on recruiting, and as the Nation faces
a demographic shift, it is important that the Department align its
recruiting assets to tap emerging markets. Leveraging the diverse
perspectives, and cultural, language and regional competencies present
in our force ensures we encourage innovation and optimize mission
success with respect to evolving challenges we will face well into the
21st century. We are carefully reviewing recruiting programs to align
funding and policies with current realities as we recognize the
necessity of current and future budget constraints. We will strive to
ensure the resources dedicated to recruiting are reasonable and remain
at levels that will not compromise success. The Services will decide
where best to take those cuts and any realignments undertaken will be
done carefully and their effects closely monitored.
Recruit Quality: The Department generally reports recruit quality
along two dimensions--aptitude and education. Both are important, but
for different reasons.
Aptitude is an indicator of trainability and job performance. All
recruits take an enlistment test called the Armed Services Vocational
Aptitude Battery (ASVAB). One component of the ASVAB, the Armed Forces
Qualification Test (AFQT), measures math and verbal skills. Those who
score at or above average on the AFQT are in Categories I-IIIA, while
those who score between the 10th and 49th percentile are placed in
Categories IIIB and IV. Applicants scoring below the 10th percentile
are ineligible to enlist. We value higher-aptitude recruits because
their training and job performance are superior to those who score in
the lower categories.
The Department's educational enlistment policy groups education
credentials into three tiers--Tier 1, consists primarily of traditional
high school diploma graduates; Tier 2 consists of alternate credential
holders, to include home-school and virtual/correspondence schools; and
Tier 3 is nongraduates. Education credential is used not to measure the
quality of education or the intelligence of the applicant, but rather
the applicant's likelihood of completing his or her enlistment term.
Years of research and experience indicate about three-quarters of
recruits with a high school diploma complete their first 3 years of
service, whereas only about half of those without a high school
credential will complete 3 years. The attrition rates of those holding
an alternative credential (e.g., GED) fall between these extremes. The
Department's benchmark is that 90 percent of new recruits are high
school diploma graduates.
As a result of the evolving methods of education delivery across
the Nation, the National Defense Authorization Act (NDAA) for Fiscal
Year 2012 required restructuring of the education credential tiers we
use to determine enlistment priority. Specifically, the act expanded
Tier 1, ``High School Diploma Graduate,'' to include graduates of
alternative educational delivery methods. From past experience, we find
these individuals, on average, have significantly higher attrition
rates--the current first-term attrition rate for high school diploma
holders is 28 percent; alternate credential holders average a 38
percent rate. We remain concerned about the long-term impacts of this
policy change as it costs the Services approximately $55,000 to replace
(recruit, train, equip, pay) each individual who fails to complete his
or her initial term of service. Nevertheless, the new policy will be in
place by July of this year as directed, and we will monitor the
attrition behavior of these recruits. Additionally, as encouraged in
the legislation, we will continue to develop new methods of identifying
those who are qualified for recruitment and enlistment. These methods
may include use of a non-cognitive test, adaptive personality
assessment, or other operational attrition screening tools to predict
performance, behaviors, and attitudes of potential recruits which
influence attrition and ability to adaptively perform the required
missions.
Active Component Retention:
Similar to our recruitment numbers, the Army, Air Force, Navy, and
Marine Corps all exhibit strong retention numbers for the first 4
months of fiscal year 2012 continuing a trend from the previous year
(Table 2). The resilience of the All-Volunteer Force through two wars
continues to prove the tremendous dedication and patriotism of the men
and women serving our great Nation. I am humbled by their willingness
to place themselves in harm's way and do their Nation's bidding.
That said, I also recognize we will face new challenges as the
economy improves, conflicts subside, and uncertainty rises over the
drawdown of the force. The Department must ensure meaningful missions,
support for our military families, and complete transparency regarding
our reduction efforts. Despite budget pressures we are committed to
careful and deliberate reviews of servicemember and family programs
with an eye on retention. We can ill afford to arrive at the end of the
drawdown with a force that does not match the capabilities the Nation
requires and without the resources necessary to make adjustments.
Towards this end, I am encouraged by the plans offered by the Services
as they make difficult force reduction decisions. For example, the
Services are limiting reductions in accessions to ensure we meet future
requirements, and they are offering voluntary separation programs to
servicemembers prior to taking involuntary separation actions whenever
possible. We also intend to extend to Congress our commitment of
transparency in these efforts. Together I am convinced we can create an
environment that avoids the pitfalls experienced throughout history by
most post-conflict militaries. While this will undoubtedly prove
extraordinarily challenging, I believe you will agree we owe it to our
Nation and to the soldiers, sailors, airmen, and marines who will
continue to stand watch for the generations to come.

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Women in the Service
The Department has recently completed a review of how we assign
women in the Service. As requested by Congress, the Department, in
coordination with the military departments, reviewed laws, policies,
and regulations, including our co-location policy, to determine if any
changes were needed to ensure female members have an equitable
opportunity to compete and excel in the Armed Forces. We took a hard
look at the current restrictions on women, and recommend changes within
the report to Congress (available to the public online http://
www.defense.gov/news/WISR--Report--to--Congress.pdf). Pending
expiration of the congressionally-required notification period, the
Department will implement a change to policy that eliminates gender-
based assignment restrictions to units and positions that are
doctrinally required to physically co-locate and remain with direct
ground combat units that are closed to women. These recommendations
will open over 14,000 positions to women, including 6 Army occupational
specialties. The Department is not stopping with the policy changes set
forth in the report. The Services will continue to evaluate these
recommendations to inform future policy revisions in addition to
developing gender-neutral standards for physically demanding
occupations. Secretary Panetta directed the Secretaries of the Military
Departments and Chiefs of Military Services to report their progress on
the development of gender-neutral standards, assessment of newly opened
positions and recommendations for any further positions that can be
opened, 6 months after implementing these changes. We continue to
reiterate our commitment to removing all barriers that would prevent
servicemembers from rising to the highest level of responsibility that
their talents and capabilities warrant.
Implementation of the Repeal of ``Don't Ask, Don't Tell''
Since September 20, 2011, the effective date of repeal, the
Services report there have been no significant issues related to the
implementation of the repeal of ``Don't Ask, Don't Tell.'' By all
accounts, implementation is going smoothly across the force. We
attribute this success to our comprehensive pre-repeal training
programs, combined with the discipline of our servicemembers and
continued close monitoring and enforcement of standards by our military
leaders at all levels. Prior to repeal, the Department saw a
preponderance of the force, 2.25 million servicemembers, trained
regarding the necessary policy and regulation changes that went into
effect on ``Repeal Day.''
The Department and the Services remain engaged in ongoing
implementation efforts. A formal monitoring process ensures continual
assessment and reporting to the Secretary of Defense. Elements of this
monitoring process include regular Service assessment reports and
periodic surveys of servicemembers. Through this feedback mechanism,
the most common question we hear from the field is about benefits--
specifically, whether or not benefits will be extended to same-sex
partners. The Department is engaged in a comprehensive review of the
possibility of extending eligibility for additional benefits, when
legally permitted, to same-sex partners, and our goal is to complete
this review by the end of the fiscal year. With leadership,
professionalism, discipline, and respect, the Department and our
servicemembers remain fully committed to the implementation effort,
consistent with our standards of military readiness, effectiveness,
unit cohesion, and recruiting and retention for the Armed Forces.
General, Flag Officer, and Civilian Senior Executive/Equivalent
Efficiencies
In 2011, the Secretary of Defense made the decision to eliminate,
reduce, or reallocate 140 general or flag officer (GFO) positions and a
minimum of 150 Civilian Senior Executive/Equivalent (CSE) positions.
The Department designated 102 GFO positions for elimination (complete
removal from structure or downgrade of a position to a grade of O-6 or
below) and 211 CSE positions for elimination. By the end of the year,
we had eliminated 29 GFO positions and reduced 20 positions to a lower
grade of GFO. We are moving forward to implement the remaining
efficiencies gradually over the next several years as conditions allow,
not adversely affecting missions or forcing readiness. Three years ago,
Congress' authorization of the Joint Pool created the foundation for
increased flexibility for the Department in the management of
positions. This latest efficiency effort will take those policies to
the next level and will create flexibility for each of the Military
Departments to ensure their readiness to respond to any emerging
threat. CSE reductions are being implemented based on a 2-year
strategy. To date, 93 Senior Executive Service, Senior Level or Senior
Technical (SES/SL/ST) positions, and 57 Defense Intelligence Senior
Executive and Defense Intelligence Senior Level (DISES/DISL) positions
have been reduced. The remaining CSE efficiencies will be completed by
March 2013.
Growing Language and Culture Capabilities
The President directed the Department to sustain U.S. global
leadership as we transition from a long-term engagement in two wars
toward a more global presence focused on the Asia-Pacific and the
Middle East. Though Service end strengths will decrease, the demand for
language skills, regional expertise, and cultural awareness will
increase, as these capabilities are essential not only to our mission
readiness but to achieving national security, building partner
capacity, and strengthening alliances. Currently, 9 percent of military
personnel have tested or self-professed foreign language skills at any
level of proficiency and 5 percent have skills that meet the
Department's need for limited working language proficiency or above.
Increasing the language capabilities of the Department depends on
recruiting policies, training, assignment policies, retention, overall
career management, and the U.S. educational system. We have efforts
underway to coordinate national and Departmental language capabilities,
as well as initiatives for long-term sustainment. The goal is to ensure
a spectrum of programs that include pre-accession, and in-service
military and civilian training, while establishing new career paths for
personnel with language and culture skills. These efforts include
increasing the foreign language skills of the Department's military and
civilian personnel, as well as outreach to our Nation's schools and
universities to promote the teaching of critical languages. All these
efforts are essential to achieving a force, a Nation, and a citizenry
capable of facing the threats, opportunities, and challenges we will
confront in the 21st century.
Drug Demand Reduction
The abuse of illicit and prescription drugs in the U.S. military
has substantial implications on force readiness and safety. The goal of
the Drug Demand Reduction (DDR) Program is to protect readiness and the
well-being of our civilian and military personnel by detecting and
deterring drug abuse. Toward that end, the Department and Services have
recently expanded the existing panel of tested drugs to include
frequently abused prescription medications, such as Vicodin and Valium.
The Department's minimum random drug testing goal is 100 percent with a
positive rate below 2 percent. Overall, drug positive rates for active
duty military personnel across all Services have continued to decline
and the current rate of positive specimens is below 1 percent, the
lowest in the program's history. As with many programs, the DDR Program
incurred a reduction in budget which will require additional
efficiencies in collection, outreach, and educational programs. This
will also require increased targeted random drug testing.
Suicide Prevention
Every person within the Department of Defense is a valuable team
member and each loss to suicide is a preventable tragedy. For this
reason, we are taking aggressive steps to address suicide by enacting
policies, providing supportive services and assistance, implementing
training initiatives and publishing education materials, and conducting
data surveillance and research to support servicemembers and their
families. For example, the Department increased behavioral health
providers from 6,590 to 8,898 total providers, a 35 percent increase
over the past 3 years, adding mental health providers in primary care
settings and embedding them with front-line units. We have also
partnered with the Department of Veterans Affairs (VA) to build a
continuum of support for transitioning members. This partnership will
not only provide more service options for our members, it will allow us
to compile more complete data that could lead to better predictive and
preventative measures.
We are building and shaping resiliency and coping skills through
realistic and interactive training to ensure every servicemember can
recognize the warning signs of suicide and encompass the skills and
knowledge necessary to purposely intervene. We are also committed to
further research on understanding and preventing suicide as with the
Army Study to Assess Risk and Resilience in servicemembers (ARMY
STARRS), which is the largest study of mental health risk and
resilience factors ever conducted among military personnel. Conceived
by scientists at the National Institute of Health's National Institute
of Mental Health (NIMH), ARMY STARRS was formalized through a
memorandum of agreement that authorized NIMH to conduct an extensive
investigation with Army funding. The ARMY STARRS program is led by an
interdisciplinary team of Army, Academic, and NIH investigators.
Though we have been able to arrest the increasing rate of suicides
over the past 3 years, the Department continues to work hard to reduce
these tragedies. We have established a Defense Suicide Prevention
Office to serve as the focal point for developing and overseeing
suicide prevention policy, training, and programs across the
Department. This office will also collaborate with Military Departments
to implement the recommendations of the Department of Defense Task
Force on the Prevention of Suicide, and serve as our lead with the VA
and nongovernment organizations to identify and institute a continuum
of suicide prevention efforts for personnel leaving the Department.
Sexual Assault Prevention and Response
As Secretary Panetta has stated, this Department has a zero-
tolerance policy against sexual assault and this is a leadership issue
first and foremost. We have received the final numbers from the
Services and the Department had 3,192 reports of sexual assault in
fiscal year 2011; because of underreporting, estimates are closer to
19,000 (per a fiscal year 2010 Defense Manpower Data Center survey).
This is in stark contrast to the first sample survey in 2006, when the
estimate was 34,000. Since 2006, more victims are stepping forward to
report assaults and the percentage of alleged sexual assault offenders
facing court-martial proceedings has increased.
In this past year alone, we have made significant strides. We
recently published a revised Directive expanding our support to assault
victims to include military spouses and adult military dependents, the
Department's civilians stationed abroad and the Department's U.S.
citizen contractors in combat areas. In addition, two new policies
address expedited transfers and the retention of law enforcement
records for 50 years. To ensure national standards for victim services,
we are establishing a sexual assault advocate certification program
and, we established the DOD Safe Helpline which provides anonymous and
confidential, 24/7 hotline and texting support to victims anywhere in
the world. We are collaborating with the VA and Department of Labor
(DoL) to establish a continuum of care for victims of sexual assault
transitioning from military to civilian life and will use the DOD Safe
Helpline as a vehicle to help these transitioning servicemembers.
To improve the tracking of reports, the Defense Sexual Assault
Incident Database will be implemented by March 31 and be fully
operational by August 31st. Because sexual assault cases are some of
the toughest cases to investigate and to prosecute, the Department has
committed funding through fiscal year 2017 to provide sexual assault
specific training for judge advocates and criminal investigators and we
are assessing the Sexual Assault Prevention and Response training for
commanding officers and senior enlisted leaders. We will continue to
hold the perpetrators appropriately accountable and all military
servicemembers will live up to the high standards set.
Compensation
Senior leaders in the Department place a high value on the
willingness of America's military personnel to serve their country. We
understand our compensation system must be competitive, recognize the
demands of military service, and always provide sufficient compensation
to attract and retain qualified personnel. The 9th Quadrennial Review
of Military Compensation shows that servicemembers need to be paid
equal to or better than 70 percent of their civilian counterparts.
Through the work of Congress, our servicemembers received generous
military pay raises over the past decade and, as a result, military
compensation has increased and significantly exceeds that 70th
percentile. Additionally, over the past decade, the Department and
Congress addressed a host of challenges ensuring military compensation
remained competitive, and this has allowed the Department to continue
to succeed in recruiting and retaining the high-quality, All-Volunteer
Force required by the Nation, despite nearly a decade at war.
As we reset following the end to combat operations in Iraq, the
beginnings of force reductions in Afghanistan, and in light of the
Nation's economic crisis and our expected manpower reductions, slowing
the future growth of military compensation will be important. As
mentioned earlier, we expect challenges in recruiting and retention to
grow over the next few years as both the economy and labor market
continue to improve. The current, competitive military compensation
package makes the Department well suited to respond to those
challenges, even during this time of war. As a result, we have
requested full pay raises for fiscal year 2013 and fiscal year 2014,
and more limited pay raises beginning in fiscal year 2015. For fiscal
year 2013, this would provide an increase in military basic pay for all
servicemembers of 1.7 percent, which is in line with earnings increases
seen in the private sector as measured by the annual change in the
Employment Cost Index.
The Department also understands current fiscal pressures demand
change, and that the costs of military compensation are significant.
Some cost savings will be achieved through proposing more limited pay
raises beginning in fiscal year 2015. However, in the continuing search
for budget cuts and efficiencies, we are evaluating the military
compensation system, focusing first on military retirement. As I stated
before the subcommittee in October of last year, we have been
conducting a vigorous, internal review, and are working diligently to
identify and evaluate retirement alternatives. In addition to this
ongoing review, the Department recommends Congress establish an
independent commission to review military retirement, as requested by
the administration. We fully support formation of such a commission,
and if enacted, we will provide significant input. Most importantly,
our review is performing critical and rigorous modeling and analysis of
various alternatives. While many in the private sector, and elsewhere,
have suggested alternatives to the current military retirement system,
few have undergone rigorous modeling or analysis. We are committed to
ensure any proposal we develop is sound and does not harm the
Department's ability to recruit and retain the future force. Secretary
Panetta has also made clear that current members will be grandfathered;
for those who serve today, there will be no changes in retirement
benefits. Following the review of military retirement, we plan to
continue our comprehensive, broad-based review of military compensation
in search of additional efficiencies and savings.
Reserve Component
The fiscal year 2013 budget supports the increased utilization of
the Reserve components (RC) as called for in the National Defense
Strategy and will enable the RCs to continue to fulfill their vital
national security role. The Department's Ready Reserve totaling about
1.1 million members contributes 43 percent of total military end
strength at a cost of 9 percent of the total base budget. The National
Guard (NG) and Reserve provide trained, ready, and cost-effective
forces that can be employed on a regular operational basis, while also
ensuring strategic depth for large-scale contingencies or other
unanticipated national crises.
Prior to 2001, the RCs were primarily a strategic reserve with
occasional operational missions as needed to augment active forces.
Since 2001, RC units and individuals have been heavily employed across
the full spectrum of military operations and have demonstrated their
readiness and criticality. Our current NG and Reserve is, arguably, the
most combat seasoned reserve force ever, and we plan to capitalize on
this significant investment to provide needed military capacity during
current austere economic times.
The fiscal year 2013 budget anticipates the Department will
continue to use the Guard and Reserve as a vital part of the
operational force and--where it makes sense--as a force of first
choice. Today's Citizen Warriors have made a conscious decision to
serve, with full knowledge that their decisions mean periodic recalls
to active duty under arduous and hazardous conditions. In approximate
numbers, as of December 31, 2011, the Ready Reserve currently consists
of:

Selected Reserve: 844,400
Individual Ready Reserve: 220,000
Inactive NG: 3,700

Reserve Component Utilization
The Reserve component has become an integral part of the Nation's
military force participating in nearly every mission worldwide for the
past two decades. As this practice continues, the Department has
emphasized prudent and judicious management and use of the RC to help
mitigate stress on the Total Force. Total Reserve component usage in
support of Contingency Operations since September 11, 2001 is 835,689
(809,913 Selected Reserve and 25,776 Individual Ready Reserve). Of
those, 80 percent have deployed in the U.S. Central Command area of
responsibility. On December 31, 2011, there were 86,213 Reserve
component members activated in support of Operation Noble Eagle (ONE)
and Operation Enduring Freedom; of those, 35,361 were deployed in the
Central Command theater.
Realigning Capabilities
The Reserve component is well suited for use as a source of
strategic depth as well as in a wide variety of operational roles,
including providing: (1) rotating operational units deployed in
response to Combatant Commander needs and Service requirements; (2)
units and teams deployed in support of Theater Security Cooperation and
Building Partner Capacity activities around the globe; (3) individual
augmentees who can be deployed in response to Combatant Commander,
Defense agency, or Service needs; (4) units, teams, and individuals to
support core Unified Command Plan missions such as Homeland Defense and
Defense Support of Civil Authorities, as well as to support Governors
in state security; and (5) units, teams, and individuals assigned to
support Department or Service institutional needs. Reserve component
forces are well-suited for missions and tasks in support of Theater
Security Cooperation and Building Partner Capacity activities and
specialty missions requiring unique skills, particularly when the RC
units have an enduring relationship with a supported command.
Individual and Medical Readiness
One of the key aspects of maintaining a viable, operational RC is
to ensure that our military members and our civilian employees maintain
the highest level of individual readiness. We must focus on maintaining
the appropriate physical fitness levels for a force that has a higher
average age than the Active component. Similarly, ensuring that our RC
members are medically and dentally ready to serve is of the utmost
importance.
Employing the RC as operational force requires modifications to
training schedules and funding requirements. Before we operationalized
the RC, normal minimum training profiles consisted of training 2 days
per month plus 14-15 days of active duty for training annually. During
that training time, RC personnel were required to meet the same
standards as their Active counterparts. While that training profile
remains in-place for some types of units, for those with planned
deployments, training days prior to mobilization increases. This
training profile, with more training pre-deployment and less post-
deployment, minimizes mobilized time away from families and civilian
jobs. Increasing individual readiness by modifying training profiles
with resources and policies is a major focus area that will allow the
Guard and Reserve to capitalize on the gains made during the last
decade and enable sustained use of the RC as an operational force.
We continue to monitor Individual Medical Readiness of the NG and
Reserve to ensure availability of ready RC members for deployment, as
it is a priority for the Department. By the fourth quarter of fiscal
year 2011, the RC had increased its Fully and Partially Medically Ready
(FMR/PMR) rate 5 percent over first quarter fiscal year 2011 rates, and
reduced the Indeterminate population by 6 percent. Most notably, the
Marine Corps Reserves improved their FMR status by 16 percent and
reduced the PMR rate by 14 percent--over half of the fiscal year 2011
first quarter rates. The Coast Guard Reserve also made great
improvements increasing their FMR rate by 9 percent, and reducing their
Indeterminate and Not Medically Ready population by 4 and 6 percent
respectively. While we continue to face challenges with Dental
Readiness, all Services are over the 75 percent goal except Army
Reserve and Army NG which are at 71 and 73 percent respectively. We are
working diligently to improve access to medical and dental services for
RC members. For example, the Army Reserve now budgets additional
medical and dental services into their Readiness Accounts for RC
members if needed.
Yellow Ribbon Reintegration Program (YRRP)
The YRRP is a Congressionally-mandated program whereby the Services
provide RC servicemembers and their families with critical support,
information, services, and referrals throughout the entire deployment
cycle focused primarily on local community resources to maximize
successful servicemember reintegration back into their civilian lives.
During the past 3 years, the YRRP has evolved into a successful,
forward-leaning program providing essential readiness and resiliency
training and resources to over 800,000 servicemembers and designees. In
fiscal year 2011, Congress appropriated $16 million to the YRRP for
enhanced outreach and reintegration employment activities which allowed
the Department to support various State-led initiatives. YRRP's fiscal
year 2012 funding is entirely dedicated to supporting its legislatively
mandated core activities. To support the use of the operational reserve
in the future, we will ensure funding for Service YRRPs is moved to
their base line budgets.
Transition to Veterans Affairs
Today's Veterans face a number of challenges in making the
transition to civilian life, and among these is embarking on a
productive post-military career. For every success story of a Veteran
who has turned skills developed in the military into success in the
civilian workplace, there are, as President Obama has said, stories of
Veterans who come home and ``struggle to find a job worthy of their
experience and worthy of their talent.'' We see these struggles most
clearly in high unemployment rates for Veterans. Making this situation
more urgent is that, as we draw down from the wars in Iraq and
Afghanistan and we make difficult decisions about our future force
structure in light of the fiscal challenges the Nation faces, the
number of servicemembers--particularly young servicemembers--departing
the military over the next several years will increase.
Making a firm commitment to employ America's Veterans, in August
2011, the President called for the creation of a Task Force led by the
DOD and VA with and other agencies including the DoL, Department of
Education (DoE), Department of Commerce, Small Business Administration,
and the Office of Personnel Management, to develop proposals to
maximize the career readiness of all servicemembers. In coordination
with our VA, DoL, and DoE partners, DOD's role involves implementing
and sustaining a comprehensive plan to ensure that all transitioning
servicemembers have the support they need and deserve when they leave
the military. This includes working with other agencies in developing a
clear path to civilian employment; admission into and success in an
academic or technical training program; or successful start-up of an
independent business entity or nonprofit organization. The effort is
fully aligned with the VOW to Hire Heroes Act of 2011 and is consistent
with DOD's commitment for keeping faith with all of our military
members and their families, providing them a comprehensive set of
transition tools and support mechanisms as they complete their service
to our Nation.
Civilian Personnel
The Department continues to hold, with limited exceptions, the
civilian workforce to authorized fiscal year 2010 levels. This
continues the direction from last year's efficiency initiative and was
implemented in conjunction with organizational assessments and mission/
function prioritization. This direction reflects the Department's
commitment to challenge workload demand; more appropriately size our
workforce to meet our most pressing and critical priorities; and
focuses on reducing administrative functions associated with
headquarters staff while realigning resources to warfighting
capability, recapitalization, and unit readiness. As Secretary Panetta
has testified, our spending choices must be based on sound strategy and
policy. and reductions in the civilian workforce reflect changes in the
Department's strategy, overseas presence, and force structure.
Despite the overall decreases to the Department's civilian
workforce, there have been areas where mission workload, requirements,
and fiscal considerations warranted growth and exceptions. Growth and
increases to the civilian workforce have continued in critical areas
such as acquisition, cyber, and intelligence. Targeted exceptions to
fiscal year 2010 levels have also been approved for shipyard and
security guard workforces in the Navy; the test and evaluation
workforce in the Army and Air Force; joint basing requirements for the
Navy and Air Force; and in-sourcing of contracted services at some
combatant commands and defense agencies.
Reductions in the Department's civilian workforce are being
executed very deliberately to minimize adverse impacts to our dedicated
civilian service workforce and to avoid unintended consequences, such
as:

``borrowing'' or ``repurposing'' military personnel
for non-military tasks, which would risk hollowing the force;
potentially paying more for contracted services or
inappropriately realigning work to the private sector; and
jeopardizing our ability to sustain and develop
mission critical skills and competencies.

To support these goals, I reconstituted the Defense Human Resources
Board (DHRB) on December 8, 2011. The DHRB is my primary advisory body
for Total Force management across the Department. Specifically, the
DHRB serves to promote and facilitate improved Department-wide Total
Force management, both current and future, through the improved
alignment of statutes, policy, business practices, information
technology, and resources.
It is imperative we improve the management of our Total Force of
Active and Reserve military, government civilians, and contracted
services. To do so, leaders and managers throughout the Department must
be provided the information, tools, and flexibility necessary to make
sound and well-reasoned decisions. To that end, there are a number of
specific areas that we have focused attention on.
In October 2011, the Office of Federal Procurement Policy (OFPP)
issued its policy letter regarding inherently governmental (IG) and
other work Reserved for government performance. The Department was an
active participant in developing that policy letter, and my staff is
currently working to ensure its implementation and application across
the Department. The identification of IG functions, work that is
closely associated with IG, and workload critical to the Department's
ability to execute its mission are fundamental processes in our Total
Force management strategy.
Ensuring the Department's workforce is sufficiently sized and
comprised of the appropriate mix of personnel is critical to maintain
readiness and capabilities in our constrained fiscal environment. The
Department's ``sourcing'' of necessary functions and work between
military, civilian, and contracted services must be consistent with
workload requirements, funding availability, readiness and management
needs, and applicable laws. In particular, workforces must be
structured to not use military personnel outside of their primary
specialty to perform functions or tasks that would limit their
availability to mobilize and perform the operational mission, support
and maintain necessary states of readiness, or impede their training
and career progression requirements. As planned military end strength
reductions happen, the Department will continue to focus on the proper
mix of personnel.
Inventory of Contracts for Services (ICS)
Contracted services remain the largest element of the Total Force.
The Department remains committed to meeting its statutory obligations
under title 10 to annually review its contracted services. After 6
months of working with the more than 40 components that comprise the
Department, we delivered, on November 22, 2011, a consolidated plan to
the congressional defense committees that identified both short- and
long-term actions that will improve the ICS, make it a more reliable
and complete data set, and improve visibility and accountability in the
area of contracted services. Consistent with changes to the statute,
this plan, and subsequent guidance issued on December 29, 2011,
specifically addresses how the Department will:

measure contracted support level of effort using
direct labor hours and associated cost data collected from
contractors;
assess the type of work being performed by the private
sector and for whom based on standardized taxonomies and
portfolio groups;
strengthen the relationship between the ICS and annual
budget justification materials; and
ensure the ICS supports strategic workforce planning
and an appropriately balanced, effective, and efficient
workforce.

The actions being taken will improve the long-term utility of the
ICS, beginning with the next submission this summer, and will enable us
to more accurately and holistically assess contracted workload. Coupled
with an improved IG&CA Inventory, the ICS will help us achieve the
right balance in our workforce, aligning inherently governmental
activities to military and civilian workforces, and commercial
activities to the most cost effective service provider.
In-sourcing
The Department greatly values the support provided by private
sector firms and recognizes the private sector is a vital source of
expertise, innovation, and support to the Department's Total Force.
However, in-sourcing continues to be a necessary workforce shaping tool
to reduce excessive or inappropriate reliance on contract support;
appropriately align inherently governmental activities; and protect the
public's interest while providing the best value for taxpayers.
Therefore, we are continuing to in-source contracted services that are
closely associated with inherently governmental work; that provide
unauthorized personal services; or that may otherwise be exempted from
private sector performance (to mitigate risk, ensure continuity of
operations, build internal capability, and to meet and maintain
readiness requirements). While some contracted services may be
identified for in-sourcing, some services may no longer be required, or
be of lower priority, and therefore reduced in scope or eliminated.
Contracted services that meet the necessary criteria (i.e. consistent
with statutes, policies, and regulations) will be in-sourced by:

absorbing work into existing government positions by
refining duties or requirements;
establishing new positions to perform contracted
services by eliminating or shifting equivalent existing
manpower resources (personnel) from lower priority activities;
and
as appropriate or necessary, requesting an exception
to the civilian levels currently reflected in the budget.

Our in-sourcing efforts are focused on rebalancing the workforce,
rebuilding critical internal capabilities (including the acquisition
workforce), and reducing operational risks.
OMB Circular A-76
Consistent with statutory changes that restrict the ``direct''
conversion of work currently performed (or designated for performance)
by any number of civilian personnel to private sector (contract)
performance, I issued guidance to the Department on December 1, 2011.
In it, I urged vigilance to prevent the inappropriate conversion of
work to contract performance, as we adapt to declining budgets and
operating in a constrained fiscal environment. We are also preparing
guidance that reiterates the current statutory moratoriums on public-
private competitions.
As noted earlier, contract support is critical to the Department's
operations. Last summer, we submitted a report on our public-private
competition policy and procedures under OMB Circular A-76, making
recommendations to improve the end-to-end competition process. The
public-private competition process can be a useful tool for our
commanders and managers to validate an organization's manpower and
other requirements; drive a more consistent delivery of mission support
and services to our servicemembers and families; improve business
process; and deliver readiness while minimizing fiscal opportunity
costs to meet the compelling needs of the Department. Congress, in the
NDAA for Fiscal Year 2012, accepted many of our recommendations and
made changes to the governing statute for public-private competitions.
We are committed to making improvements to ensure the process is more
equitable, less time consuming, and minimizes disruptions to incumbent
workforces. Together with improvements to the ICS that will enable us
to more accurately gauge the extent of private sector reliance, we look
forward to providing an improved A-76 process to our decision makers in
the future. In summary, we must shape an efficient, effective, and
viable Total Force aligned to strategy and is supported by robust
analysis. The fiscal year 2013 budget and our associated plans reflect
our best judgment today.
Strategic Human Capital Management and Competency Management
The Department is making progress toward developing a more
systematic approach and enterprise tools for strategic human capital
planning that covers over 750,000 civilian employees in over 600
occupations. In fiscal year 2012, we developed initiatives to meet
statutory civilian strategic workforce planning requirements by fiscal
year 2015. First, the Department expanded its functional community
construct to cover all major occupations in the civilian workforce.
Previously, only mission critical occupations, which made up less than
40 percent of the workforce, were covered in the DOD Strategic
Workforce Plan. Second, the Department updated criteria for designating
mission critical occupations following a more structured process
defined by the Federal-wide Strategic Human Capital Management High
Risk Initiative. Third, an Enterprise Competency Management Framework
has been designed that includes phased development of Department-wide
occupational competency models and deployment of a tool for competency
assessments. An Army system is now being updated for Department-wide
use to replace multiple competency tools with a single enterprise
system. That system, the Defense Competency Assessment Tool is
scheduled for deployment in fiscal year 2013; and through it, we will
be able to assess workforce competencies and develop strategies to
reduce critical skill gaps that may impact mission accomplishment by
fiscal year 2015.
The Department continues to focus on life-cycle management of the
civilian workforce by integrating strategic workforce planning,
competency management, hiring process improvements, and workforce
development initiatives to ensure that plans support the recruitment,
retention, and development of a ready civilian workforce that is
responsive to swiftly changing mission demands and complex challenges.
These are multi-year initiatives to improve the Department's ability to
rapidly grow, contract, and shift the workforce in response to emerging
mission requirements.
Hiring Reform
The Department has made great strides in reforming the hiring
process by reducing hiring timelines, streamlining the process, and
focusing on efficient practices. Prior to implementing the May 2010
Presidential Memorandum for Improving the Federal Recruitment and
Hiring Process, measurement of all hiring practices was inconsistent
and lacked input from individual components and servicing agencies. In
2010, we adopted standard measurement practices that enabled our
leadership to analyze and measure hiring timelines across multiple
dimensions, and to drive mission-critical changes.
In 2011, we continued to make positive and meaningful progress
toward reforming civilian hiring practices. We reduced the number of
days it takes to hire an employee by developing a common business
process, deployed tools to automate key steps in the hiring process,
and provided manager and human resources specialist training and job
aids. In addition, our arsenal of hiring-related metrics and
measurements has grown, thereby enabling transparency and targeted
improvements to the hiring process. In fiscal year 2011, the Department
reduced its external hiring timeline by 31 percent, from the fiscal
year 2010 baseline of 116 days to 91 days. As a result of progress made
in the early part of fiscal year 2011, the Department's external hiring
timeline target was adjusted downward to 95 days from the original 101
day target. Our goal for external hiring in fiscal year 2012 is 80
days, with quarterly goals established to monitor progress. The overall
reduction in hiring timeline for external hires contributed to an
overall time to fill for all hiring actions, both internal and
external, of 75 days for fiscal year 2011 and 63 days for fiscal year
2012 year-to-date. Another area of improvement is the automation of our
hiring process. We procured an automated staffing tool (USA Staffing)
in fiscal year 2010 and successfully deployed it to over 70 percent of
the Department in fiscal year 2011, and are aggressively working toward
completing deployment this year.
The Department continues to partner with the Office of Personnel
Management (OPM) on the re-engineering of USAJOBS, the job posting
portal used by the Federal Government. The USAJOBS 3.0 project is a
high visibility project and DOD is the largest consumer of USAJOBS'
services. The deployment of USA Staffing and improvements to USAJOBS
are critical initiatives; however, without participation and engagement
from our Hiring Managers and Human Resource (HR) Professionals, the
benefit of these initiatives cannot be fully realized. As a result, a
primary objective is to foster and encourage strong partnerships
between these key stakeholders. To assist, the Hiring Reform Website
(http://www.cpms.osd.mil/HiringReform/) provides a Hiring Managers
Toolkit containing 24 guides, and a Webinar series is now available
that provides content based on the four phases of the hiring process.
The initiatives outlined represent the Department's continued
approach to hiring reform implementation, an approach aligned with the
Department's overall mission, and with its Strategic Workforce Planning
objectives. A key success criterion is the involvement of senior
leadership. We continue to solicit and use our cadre of senior leaders
to guide our efforts, communicate and campaign for process
improvements, and provide direction throughout each hiring reform
effort. We will continue to monitor these efforts closely.
Termination of the National Security Personnel System (NSPS)/New
DOD-wide Performance Management System, Redesigned Hiring, and
Workforce Incentives
The NDAA for Fiscal Year 2010 repealed the statutory authority for
NSPS, mandating all employees transition from NSPS no not later than
January 1, 2012. The Department successfully completed the termination
of NSPS and the transition of all employees and positions from NSPS to
the appropriate successor statutory pay and personnel system in
December 2011. No employees or positions remained under NSPS on the
statutory deadline of January 1, 2012.
In September 2010, we launched our ``New Beginnings'' effort to
involve labor representatives in design of a new performance management
system and hiring processes. New Beginnings was an evolving effort and
included labor and management planning sessions, conferences, and
design team working meetings for more than 18 months, which culminated
in over 100 pre-decisional proposals developed by labor and management
employees for leadership consideration. The pre-decisional process
culminated in a comprehensive report from the design teams that
captures their research, conclusions, and proposals, and Department
leadership has considered the report's recommendations. We will
continue to involve employees through their labor representatives as we
move forward on particular recommendations and decisions about the new
authorities and practices.
Civilian Leadership Development
The Defense Civilian Emerging Leaders Program (DCELP), as
authorized by the NDAA for Fiscal Year 2010, fills a critical need by
focusing on a corporate scale on developing civilian leaders at the
entry and mid-level. We recognize the need for an improved model to
attract, retain, and develop civilian leaders to support pipeline
readiness and enhance bench strength. We conducted a gap analysis
between existing programs and requirements, and designed a framework to
create a new program to recruit and develop new civilian leaders, using
proven models such as the Presidential Management Fellows program.
Recognizing the financial environment and to ensure we have a sound
programmatic framework, we implemented a DCELP pilot in September 2011
with 103 participants at the General Schedule (GS) 7 through 11 level
from the Acquisition, Financial Management, and Human Resources career
fields. A second cohort, which expands our intake to 180 participants,
will begin before the end of 2012.
This new DCELP is additive to the Department's current leadership
programs, which include the Executive Leadership Development Program
(ELDP) and the Department of Defense Senior Leader Development Program
(DSLDP). DSLDP was established in 2008 to meet emergent leadership
needs and provides a competency-based approach to the deliberate
development of senior civilian leaders (GS 14 or 15 and equivalent
grades) with the enterprise-wide perspective needed to lead
organizations and programs and achieve results in the joint,
interagency, and multi-national environments. We are pleased to report
that DSLDP is soon graduating its second cohort and just commenced its
fourth cohort. DSLDP is a critical feeder pipeline for executive
talent. Established in 1985, ELDP provides mid-level civilians (GS-12
through GS-14 and equivalent grades) with an extensive exposure to the
roles and mission of the Department and our Interagency partners and,
an increased understanding of, and appreciation for, today's
warfighters through intensive hands-on field experiences. Both programs
are aligned with the 21st century competency framework and designed to
ensure application of critical leader competencies and have garnered
success for their target senior grade populations. These highly
competitive Department-wide programs will serve as building blocks for
the new leader development framework.
In addition to the programs just mentioned, another critical
building block in this arena is training managers and supervisors.
Pursuant to the NDAA for Fiscal Year 2010, the Department has
established a holistic training curriculum and baseline learning
objectives for each training topic. We have piloted and launched our
first course, focusing on new supervisors. Our attention has turned to
developing the curriculum for refresher training, which the NDAA
requires occur at least every 3 years. The refresher pilot will take
place in May 2012. Following that, we will develop and then launch for
Departmental use training for managers--those who supervise other
supervisors. All courses will be launched this year. Also, we are
partnering with OPM and vendors to design assessment and developmental
tools that will help predict interest and success for aspiring and
current supervisors. Those assessment tools are planned for use by May
2012.
Senior Mentors/Highly Qualified Experts
In April 2010, in response to media and congressional concern, the
Secretary issued policy guidance regarding how the Department may
acquire certain advisory services from retired senior officials--the
so-called senior mentor (SM) policy. The guidance prohibits contracting
for mentoring services and directs that senior mentors must be employed
as Federal officials under the specific Highly qualified Expert (HQE)
appointing authority, which subjects them to certain Federal ethics
rules and salary limits. The NDAA for Fiscal Year 2011 formalized the
requirement that senior mentors be hired as HQEs, and comply with all
applicable Federal laws and regulations on personnel and ethics
matters.
In November 2010, the Deputy Secretary of Defense issued a
memorandum directing all HQE-SMs position descriptions be revised
within 30 days, requiring all HQE-SMs complete the public disclosure
forms. In addition, all HQE-SMs were to submit completed public
disclosure forms within 30 days of the position description being
updated, but no later than January 12, 2011. Accordingly, all HQE-SM
either separated or completed the public financial disclosure form as
of January 12, 2011. Currently, the Department has 34 HQE-SMs on board,
and approximately 164 HQEs total while Congress has authorized 2,500,
and the number of HQEs has declined by 8 percent since December of last
year. As a result of ongoing efficiency initiatives, the total number
of HQEs will change as functions are discontinued.
To further ensure SM services are acquired in strict compliance
with Department policies, the Defense Federal Acquisition Regulation
Supplement (DFARS) incorporated the prohibition on contracting for SM
services in DFARS 237.102-72 issued on November 24, 2010. After a
Department-wide audit, the Department of Defense's Inspector General
reported on October 31, 2011, that the Department complied with these
new policies for hiring senior mentors as HQEs.
As a result of these changes, the Department has successfully
balanced the critical need for SM services with the public's need for
confidence in the integrity of the program. We are committed to
ensuring consistency and transparency in the use of SM across the
Department. Further, as we greatly value the contributions of our SM to
the training and professional development of our current and future
Joint and Service commanders, we believe this policy provides the
rigorous oversight required for the proper employment of these experts.
Civilian Expeditionary Workforce
The Department is working to better employ the talents of our
civilian workforce to meet expeditionary mission challenges, including
those not directly related to war fighting. Global security challenges
require adequate civilian capacity to conduct complex operations,
including those missions that require close military-civilian planning
and cooperation in theater. Since 2001, approximately 50,000 Department
civilians have been involved in contingency operations around the
globe. Currently, approximately 4,800 civilian employees are serving in
the CENTCOM theater.
The Department institutionalized the Civilian Expeditionary
Workforce (CEW) to provide deployable civilian experts to support
military operations, contingencies, emergency operations, humanitarian
missions, disaster relief, and stabilization and reconstruction
operations. The CEW is designed to enhance the Department's ability to
work alongside and help build the capacity of partner defense
ministries and provide surge support where needed. Since June 2010, CEW
deployments have increased by 56 percent, from 171 deployed civilians
to 388 as of the end of February 2012. Civilians deployed under the CEW
receive general and theatre-specific, urban training, and are eligible
for the same health care benefits in-theatre as deployed military
personnel, including medical evacuation and access to hospital
services.
With the support of Congress, we have obtained important incentives
and benefits to help compensate for the inherent risks of deployment.
The Department continues to identify pertinent issues and propose fully
integrated solutions to ensure force health protection, surveillance,
deployment benefits, and medical care for civilians who have been
injured, wounded, or have contracted diseases while deployed in support
of contingency operations. We have worked in partnership with OPM, the
Department of State, and the DoL to ensure all similarly-situated
Federal civilians receive consistent and equitable benefits
commensurate with the risks of deployment. In this endeavor, working
with our partner agencies, we developed proposed legislation to provide
a standard benefits package for all Federal employees.
More work is underway to transform the CEW program mission.
Consistent with the Department's strategic direction, the goal is to
implement an enduring solution which will enable the CEW to achieve a
rapid response capability in support of all Combatant Commands. The
transformation will include consolidation of four key functions across
the Department, including:

Policy formulation that enables standard, DOD-level
instructions for the deployment of civilians that will allow
sufficient flexibility to meet future demand and ensure
personnel are identified for potential deployment in any event;
HR Servicing that provides end-to-end lifecycle
support, from recruitment to separation;
Management support for arranging travel; performing
audience targeted training; conducting final medical screening
and vaccinations; providing passport services and travel
voucher training; issuing travel orders, uniforms, and
equipment; tracking time and attendance during deployment; and
providing redeployment services; and
Payroll support allowing for a centralized payroll
function to ensure standardized policies and administration.

These efforts will help transform the capability of the CEW to
efficiently support future contingency staffing needs to unify and
improve the efficiencies in support of operations.
Workforce Shaping
The Department has long experience managing a civilian workforce in
transition. Beginning with the first installation closures in the mid-
1960s, our predecessors formulated a strategy for maintaining a
relatively stable workforce despite the instability that is inherent in
major downsizing and restructuring. The centerpiece of that strategy
was, and continues to be, the Priority Placement Program (PPP). Through
this vital program, we have retained the skills of more than 258,000
transitioning civilian employees by matching them with Department job
vacancies. During the last 25 years, which have been largely defined by
five Base Realignment and Closure rounds and a workforce reduction of
30 percent \1\, our overall objective has been to reshape the
Department as efficiently and humanely as possible. By maintaining
constant focus on this goal, we have been able to develop a broad-based
career transition assistance program to complement the PPP.
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\1\ This represents an overall reduction from 1,070,000 in 1987 to
751,000 in 2012.
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In view of the efficiency initiatives implemented by former
Secretary Gates, ongoing efforts by Secretary Panetta to further
streamline, and the specter of even deeper spending cuts, it is very
unlikely that involuntary separations can be avoided in fiscal years
2012 and 2013. Although the scope of involuntary separations is
uncertain at this time, we will fully exploit all available tools and
resources to minimize the human impact of force restructuring while
maintaining mission readiness. Under our current plan, the civilian
workforce will decrease in size from about 764,300 full-time
equivalents (FTEs) to 756, 800 in fiscal year 2013. This represents a
reduction of about 1 percent, and is approximately 2 percent lower than
our fiscal year 2011 actual execution of 771, 300. Absent additional
constraints, the workforce will gradually decrease to 738,000 FTEs by
fiscal year 2017.
Federal agencies are required to use standard reduction-in-force
(RIF) procedures when reorganization, lack of work, shortage of funds,
or insufficient personnel ceilings necessitate separating or demoting
civilian employees. When RIF becomes necessary, employees compete for
retention based on several factors established by law and regulation.
These factors include tenure, veterans' preference, length of service,
and performance ratings. Together, these factors determine each
employee's RIF retention standing.
During periods of force reductions, the Department's policy is to
use voluntary separation programs to the maximum extent possible prior
to imposing any involuntary actions. The most familiar and publicized
of these are Voluntary Separation Incentive Pay (VSIP) and the
Voluntary Early Retirement Authority (VERA). The Secretary has
independent authority to allow up to 25,000 VSIP buyouts annually. This
figure, which does not include incentives paid in conjunction with Base
Realignment and Closure (BRAC), has thus far been sufficient to meet
our needs. Although there is no limit on the number of VERAs, the use
of this authority can be constrained by the VSIP limit, since employees
who elect VERA frequently also take VSIP.
The Department also partners with the DoL to provide downsizing and
restructuring installations outplacement assistance under the Workforce
Investment System (WIS). The WIS is administered through the various
State One-Stop Career Centers, and includes assistance such as
retraining, career counseling, testing, and job placement assistance.
While working constantly to refine and enhance existing force shaping
tools, the Department will continue to seek regulatory and legislative
changes to further assist affected civilian employees in transitioning
to other positions, careers, or to private life.
health affairs
The Military Health System provides extraordinary care on the
battlefield to our servicemembers--both preventing illness and injury
to those in harm's way, and rapidly treating those who are wounded. The
performance of our military medical system in a time of war continues
to set new standards for battlefield survival rates, the reintegration
of many who are wounded back into their units and for returning those
who need additional care back to the United States.
In addition to these successes, the military health system provides
access to care for over 9.6 million beneficiaries, no matter where they
live. We provide this access through our direct health care system and
through our managed care support contracts. This health care benefit is
justifiably one of the finest in the county and is an appropriate
benefit for those who serve our county. However, the costs of providing
this care continue to increase more rapidly than overall inflation. For
a number of years, and through several administrations, there have been
continuous, incremental steps taken to reduce the rate of growth in the
costs of healthcare.
The Department is pursuing a balanced, four-pronged approach by
which all stakeholders share responsibility for improving the health of
our population and the financial stability of the system of care. Our
four approaches--moving from a system of healthcare to one of health;
continuing to improve our internal efficiencies; implementing provider
payment reform; and rebalancing cost-sharing--are further described
below. In some instances, they reflect efforts already underway, or new
initiatives that the Department is implementing within existing
legislative and regulatory authorities.
Moving from Healthcare to Health
The Department of Defense's military medical leaders are leading a
strategic effort to move our system to one that promotes and sustains
the optimal health of those we serve, while providing world class
healthcare when and where it is needed. Central to this effort are the
Department's investments in initiatives that keep our people well; that
promote healthy lifestyles; and that reduce inappropriate emergency
room visits and unnecessary hospitalizations.
Over the last 2 years, the Department introduced the Patient-
Centered Medical Home and over 2.2 million are currently enrolled. We
are beginning to see the benefits of this new model of care with
decreases in emergency room visits; increased compliance with provider
directions and drug prescriptions; and increased patient satisfaction
for those enrolled. We've also placed behavioral health staff within
these medical homes, improving access with reduced stigma, for our
patients needing the support of mental health providers. A valued
component of the medical home is the introduction of secure patient-
provider email communications, allowing our patients to directly
communicate with their medical providers without the need for a
physical visit to the clinic. In 2013, we will continue to expand this
model to all of our primary care clinics in the military health system,
and increase the tools available to patients to help manage their own
care.
Aligned with that initiative is the introduction of a 24/7 nurse
advice line for all stateside beneficiaries based on our effective use
of this approach for our military beneficiaries in Europe. This will
provide beneficiaries with around-the-clock access to toll-free nurse
advice services. When the caller requires follow-up care, this service
will provide direct appointing services for beneficiaries enrolled to
TRICARE Prime in our military treatment facilities. We will implement
this added service this year.
In moving from healthcare to health, we have also engaged the
broader DOD community--line leaders, commissaries, dining facilities,
schools and child development centers. By changing menus, promoting
better food choices and healthy lifestyles we will encourage healthy
lifestyle changes. The First Lady, Michelle Obama, recently visited one
of our leading installations, Little Rock Air Force Base, to highlight
the progress we have made.
Finally, we have taken a number of steps to support preventive
services. Our TRICARE beneficiaries--whether enrolled to TRICARE Prime
or in TRICARE Standard--have no copayments for recommended preventive
services, such as influenza immunizations.
The ``Healthcare to Health'' element of our strategy will not
produce immediate cost savings. Nonetheless, based on early results
from our efforts, as well as experience in the private sector, we are
confident that these, and other ongoing enhancements to the TRICARE
program, will produce improvements to health that also ``bend the cost
curve.'' In the longer term, it is the strategy most likely to produce
the greatest amount of savings to our system.
Internal Efficiencies
Over the last 24 months, we have reduced internal costs by
decreasing headquarters administrative overhead, reviewing more cost-
effective governance models, jointly purchasing medical supplies and
equipment, and directing patients to lower cost venues for medications.
Last year, the Secretary of Defense directed specific efficiency
targets across the Department. As a result, over the last 11 months we
have reduced or eliminated contractor support in the Office of the
Assistant Secretary of Defense (Health Affairs) and the TRICARE
Management Activity (TMA). Overall savings from internal efficiencies
are projected to provide $259 million in savings for fiscal year 2013.
In June 2011, the Deputy Secretary of Defense established a Task
Force on Military Health System (MHS) Governance, with the purpose of
evaluating options for the long-term governance of the MHS as a whole;
governance in those areas where more than one Service operates medical
treatment facilities--referred to as multi-Service markets, and
governance for the National Capital Region (NCR). In late September,
the Task Force provided their recommendations, after which senior
Department leaders including Chairman of the Joint Chiefs of Staff
began review of the Task Force recommendations.
Implementation of any organizational efficiencies resulting from
this Task Force has been placed on hold at the direction of Congress,
subject to a review by the Comptroller General and Congress. We will
provide congressional committees with the information requested
regarding the Task Force work, and will develop more detailed cost and
savings estimates for any eventual governance model. The Deputy
Secretary of Defense approved and released a ``way ahead,'' on March 2,
and while we are still awaiting the Government Accountability Office
(GAO) report, we are prepared to answer any additional questions you
may have.
The Department has accelerated tri-service processes to standardize
and jointly acquire medical supplies and equipment. We project savings
that grow from $31 million in fiscal year 2012 to more than $69 million
in fiscal year 2017. We have also engaged with our beneficiaries who
have chronic medical conditions and high utilization of prescription
drugs. Through a targeted outreach campaign, we have redirected a
significant number of our patients from retail network pharmacies (our
most expensive outlet) to home delivery--an option that is more
economical for the government and the beneficiary, and has been shown
to increase drug compliance.
Provider Payment Reform
We are committed to identifying greater efficiencies and cost
savings in all areas of our operations. In addition to internal
efficiencies we can achieve through reorganization and consolidation,
we are also seeing significant savings through a number of initiatives
we have introduced in the last several years. These include the
implementation of the outpatient prospective payment system; further
use of Federal ceiling prices for acquisition of pharmaceutical
products; a redirection of patients to our TRICARE mail order
pharmacy--where prescription drugs are less expensive to both the
government and patients, and is shown to increase patient adherence to
their medication regimen; and the policy changes we made for
reimbursement to select hospitals and health plans in the TRICARE
network.
The Department has undertaken a broad-based, multi-year effort to
ensure all aspects of our provider payments for care purchased from the
civilian sector are aligned with best practices in Medicare and in
private sector health plans. The most notable efforts have included
implementation of changes to the outpatient prospective payment system
(OPPS) and reform of payment to Sole Community Hospitals.
OPPS is modeled after the payment process that Medicare uses for
similar health care services--setting a fixed fee per procedure,
inclusive of provider and institutional charges for care. To allow
medical facilities to transition to this new method of payment, TRICARE
phased in the reimbursement levels over 4 years, with the full
implementation of this policy set to occur in 2013. In fiscal year
2012, we project $840 million in savings, and $5.5 billion over the
fiscal years 2012-2017.
Our provider payment reform for Sole Community Hospitals was
approved by Congress in the NDAA for Fiscal Year 2012. This reform is
also phased-in over time, producing a projected $31 million in savings
in fiscal year 2012, but growing to more than $108 million in savings
by 2017.
In the area of purchasing prescription drugs, in 2009 we instituted
a process for obtaining discounts on drugs distributed through retail
network pharmacies. Known as Federal Ceiling Prices (FCP),
prescriptions purchased under FCP are at least 24 percent less than
non-Federal Average Manufacturer prices. In 2012, the FCP program will
save the Department over $1.6 billion, and will grow to almost $2
billion in savings by 2017.
Beneficiary Cost-Shares
In addition to the focus on internal and external efficiencies, our
proposed budget introduces changes to the health care out-of-pocket
costs for our beneficiaries.
I want to make three critical points related to these proposals.
First, even accounting for these proposed fee changes, the TRICARE
benefit will remain one of the finest health benefits available in the
country, with among the lowest beneficiary out-of-pocket costs
available to anyone--and certainly lower than costs by other Federal
Government employees. We believe that is appropriate and properly
recognizes the special sacrifices of our men and women in uniform, past
and present.
Second, these proposals were developed within the Department, and
represent the input and consensus of our uniformed leadership. They
have endorsed these proposals, and believe that we have appropriately
balanced the need for a superb benefit that assists with both
recruitment and retention of an All-Volunteer Force with our need to
sustain a cost-effective approach for the long-term.
Third, we recognize that some beneficiary groups should be
insulated from increases in out-of-pocket costs. We propose to exempt
those servicemembers, and their families, who were medically retired
from military service, as well as the families of servicemembers who
died on active duty. We also propose to establish cost-sharing tiers,
with lower increases for retirees based on their retirement rank. More
junior enlisted retirees, for example, will experience the lowest
dollar increases in out-of-pocket costs. Finally, we have also avoided
any changes in cost-sharing for active duty families with the exception
of prescription drug copayments obtained outside of our medical
treatment facilities (MTFs). Prescription drugs distributed within MTFs
will continue to be free of charge for all beneficiaries.
For over 15 years, patient out-of-pocket costs were either frozen
or decreased. This was true for all beneficiary categories--active duty
families; retirees under age 65 and their families; and retirees and
their families who are Medicare-eligible. Last year, we introduced very
modest changes in one segment of our population--increasing TRICARE
Prime enrollment fees for retiree families by $5/month. We further
recommended that these enrollment fees be indexed so that future
increases continue to be modest and beneficiaries can plan for them. We
greatly appreciate Congress' support for these proposals in the fiscal
year 2012 budget, and have implemented those fee changes in the current
year.
For fiscal year 2013, we propose additional changes to fees across
a broader set of programs. Although last year's changes were a
necessary step, the Federal budget crisis and the need to balance cost
reduction efforts throughout the Department necessitate these actions
begin in 2013, with most changes phased in over time. The following
sections provide a high-level overview of the proposed changes in
beneficiary out-of-pocket costs, and Table 3 summarizes the proposed
phased-in fees through 2017, followed by the estimated indexing of the
proposed fees through 2022.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Fee increases for TRICARE programs. The following proposed changes
represent increases from existing patient out-of-pocket costs:

TRICARE Prime Enrollment Fees. We propose to raise the
enrollment fees in 2013 for retired servicemembers and their
families between $80-$300 per year, based on the retirement pay
of the servicemember, and continue to provide similar increases
through 2017.
TRICARE Deductibles. We propose to increase
deductibles for the TRICARE Standard program for retired
servicemembers and their families beginning in fiscal year
2013. TRICARE deductibles have not been changed since before
the TRICARE program was introduced, having last been adjusted
over 20 years ago.
TRICARE Pharmacy Copays. We propose to increase
pharmacy copayments for generic, brand name, and non-formulary
prescriptions in both the retail and mail order settings,
although we will continue to offer significant incentives for
beneficiaries to elect mail order over retail pharmacy
networks. This change is proposed for all non-active duty
beneficiaries, to include active duty family members.
Prescription drugs obtained in military hospitals and clinics
will continue to be provided without copay for any
beneficiaries.

New fees for TRICARE programs. Our proposed budget also calls for
the introduction of new fees not previously part of the TRICARE
program.

TRICARE Standard/Extra Enrollment Fee. We propose to
introduce an annual enrollment fee in TRICARE Standard/Extra
for retired servicemembers and their families. This enrollment
action will require beneficiaries to elect their preferred
primary benefit coverage--TRICARE Prime, TRICARE Standard, or
other health insurance offered through an employer. The
proposed fee for 2013 will be $40/year for an individual
retired beneficiary, or $140 per retired family.
TRICARE For Life (TFL) Enrollment Fee. When TFL was
introduced in 2002, there was no enrollment fee in the program,
only a requirement that beneficiaries be enrolled in Medicare
Part B to enjoy their TFL benefit. Medicare Part B was always a
step that we recommended our retirees elect, and prior to 2002,
over 95 percent of eligible military retirees were enrolled in
Medicare Part B. The TFL benefit has reduced beneficiary out-
of-pocket costs by thousands of dollars per year in copayments
or Medicare supplemental health insurance plan payments. The
proposed TFL enrollment fees, similar to the TRICARE Prime
enrollment fees, are tiered, based on an individual's
retirement pay--and range from $35 to $115 per beneficiary per
year.
Exclusion of Enrollment Fees from the Catastrophic
Cap. We propose that enrollment fees, which had previously
accumulated toward a retiree's catastrophic cap limit, will not
be counted toward the cap beginning in 2013.
Indexing all fees beginning in 2014. In addition to
the indexing of the TRICARE Prime enrollment fee, which is
already indexed, we propose to index other beneficiary out-of-
pocket costs identified in this set of proposals, to include
the TRICARE Standard deductible, TRICARE Standard enrollment
fee, TFL enrollment fees, pharmacy copayments, and catastrophic
caps.

These proposed changes continue to be modest by historic standards
of cost-sharing in the TRICARE program. In 1994, when TRICARE was
originally created, a working age retiree's family of three contributed
approximately 27 percent towards the total cost of their care; today
that percentage has dropped to 10 percent. Even with these proposed
changes, the percentage would still remain below the percentage
originally set by Congress, averaging approximately 14 percent of range
of overall health care costs in 2017--and stabilizing at that level for
the out-years.
These adjustments are an important step to setting the TRICARE
benefit on a more sustainable path that maintains the quality of the
medical benefit for future generations. Moreover, the overwhelming
majority of these adjustments will be phased in over a 4- to 10-year
period and will be appropriately indexed to ensure future
sustainability and guarantee transparency. These proposals--one element
of a four-pronged effort at cost control--will help shift us toward
more effective and cost-efficient processes that will allow us to
provide better care while meeting our obligations to help reduce our
budgets.
Wounded Warriors
The 2007 revelations regarding Walter Reed were a stark wakeup call
for us all. In the nearly 5 years since, the Department has worked in
tandem with VA to improve policies, procedures, and legislation that
impacts the care of our wounded warriors. As a result of efforts in
both Departments and in Congress, we have reached important milestones
in improving care for our wounded warriors. These milestones include a
new disability evaluation system and improved case management that are
the result of a programmatic cohesion with the VA that is better than
ever before. More so than at any time in our Nation's history,
separating servicemembers are greeted by more comprehensive mental and
physical care; by greater opportunity for education, and by a deeper
societal commitment to ensuring their welfare.
Disability Evaluation System/Integrated Disability Evaluation
System
The genesis of the Disability Evaluation System (DES) was the
Career Compensation Act of 1949. The DES remained relatively unchanged
until November of 2007 when, as a result of public concern and
congressional interest, the joint DOD and VA Senior Oversight Committee
(SOC) chartered a DES Pilot designed to create a ``servicemember-
centric'' seamless and transparent DES, administered jointly by the DOD
and VA.
The Pilot launched at the three major military treatment facilities
(Walter Reed, Bethesda, Naval Medical Center, and Malcolm Grow) in the
NCR on November 21, 2007 and successfully created a seamless process
that delivers DOD benefits to wounded, ill and injured servicemembers
and VA benefits to servicemembers as soon as possible following release
from duty. We found the DES Pilot to be a faster, fairer, more
efficient system; and, as a result, in July 2010, the SOC co-chairs
(Deputy Secretary of Defense and Deputy Secretary of Veterans Affairs)
directed worldwide implementation to start in October 2010 and to
complete in September 2011. On December 31, 2010, the first Integrated
Disability Evaluation System (IDES) site became operational, which
marked the end of the pilot, and the name was formally changed to the
IDES.
The IDES, similar to the pilot, streamlines the DES process so that
the member receives a single set of physical disability examinations
conducted according to VA examination protocols, proposed disability
ratings prepared by VA that both DOD and VA can use, and processing by
both Departments to ensure the earliest possible delivery of disability
benefits. Both Departments use the VA protocols for disability
examination and the proposed VA disability rating to make their
respective determinations. DOD determines fitness for duty and
compensates for unfitting conditions incurred in the line of duty
(title 10), while VA compensates for all disabilities incurred or
aggravated in line of duty during active military, naval, or air
service for which a disability rating of 10 percent or higher is
awarded, and also determines eligibility for other VA benefits and
services (title 38). The IDES permits both Departments to provide
disability benefits at the earliest point allowed under both titles.
servicemembers who separate or retire (non-disability) may still apply
to the VA for service-connected disability compensation.
In summary, the IDES features a servicemember-centric design, a
simplified process, more consistent evaluations and compensation, a
single medical exam and disability rating, seamless transition to
Veteran status, case management advocacy, and establishment of a
servicemember relationship with the VA prior to separation. It also
provides increased transparency through better information flow to
servicemembers and their families and a reduced gap between separation/
retirement from Service to receipt of VA benefits. As of January, IDES
enrollment is 23,602 servicemembers (66 percent Army, 14 percent
Marines, 10 percent Navy, 10 percent Air Force). Since November 2007,
cumulative enrollment has been 40,911, with 12,640 completing the queue
and receiving benefits. Including return to duty cases in the process,
Active component member IDES completion time averages 380 days as of
January 2012, RC members average 441 days, and the Guard averages 371
days. These averages are above our targeted goals but still are
significantly lower than the 1940-era legacy system it replaced which
averaged an estimated 540 days by combining DOD and VA systems.
This past year, the Department partnered closely with the VA to
implement the IDES at all 139 sites worldwide; however, we recognize
the need to do better in the areas of timeliness to complete the
process. This year our focus will be on such timeliness improvements.
We have made significant policy adjustment to remove efficiency
impediments, made procedural improvements, enhanced oversight and
assistance to the Military Departments, and added resources that should
improve Military Department performance in this area. We will enhance
our emphasis on leadership, execution, and resourcing the IDES to
handle increased volume while decreasing the time spent in the process.
In addition, the Departments are looking closely at the stages of
the system that are outside of timeliness tolerances and are developing
other options to bring these stages within goal. We are committed to
working closely with Congress to explore new initiatives to further
advance the efficiency and effectiveness of the disability evaluation
process.
Recovery Coordination Program
The Recovery Coordination Program (RCP) was established by the NDAA
for Fiscal Year 2008 , and was further defined by the Department of
Defense Instruction (DODI) 1300.24, entitled ``Recovery Coordination
Program.'' Together these provide a comprehensive policy on the care
and management of recovering servicemembers, including the assignment
of a Recovery Care Coordinator (RCC) to help wounded, ill, and injured
servicemembers and families through the phases of recovery,
rehabilitation and reintegration. The policy also provides for
standardized training, and a caseload ratio of not more than 40
recovering servicemembers per RCC.
Currently, there are 171 RCCs in 84 locations worldwide, placed
within the Army, Navy, Marines, Air Force, U.S. Special Operations
Command, and Army Reserves. More than 3,800 servicemembers and families
have the assistance of an RCC, whose responsibilities include ensuring
the servicemember's non-medical needs are met, and assisting in the
development and implementation of the Comprehensive Recovery Plan
(CRP). Each RCC receives more than 40 hours of Department-sponsored
standardized training, including information on roles and
responsibilities and concepts for developing the CRP. Additionally, we
are now beginning to train Army ``Advocates'' in order to bring their
program into compliance with the legislative mandate that every
recovering servicemember be provided a DOD-trained RCC. RCC training is
continually enhanced based on feedback from participants. After the
October 2011 training, 90 percent of students rated the instruction and
course materials as ``excellent.''
Over the past 5 years, we have added $26.953 million, resulting in
increased numbers of RCCs available to provide care coordination to our
recovering servicemembers. Looking ahead, each Military Service will
continue to identify and resource their requirements for additional
RCCs. In addition to standardized training for RCCs, the CRP has
expanded to include several other portfolios, many of them identified
as key priorities for the non-medical care management of recovering
servicemembers during a Wounded Warrior Care Coordination Summit held
in March 2011.
The Wounded Warrior Education and Employment Initiative (E2I)
operates on a regional basis and engages recovering servicemembers
early in the recovery process to identify skills they have, career
opportunities that match those skills, and any additional skills they
might need to be successful. The process is overseen by Regional
Managers currently located in five regions across the United States.
The E2I process also relies on collaboration with the VA, which is
governed by a Memorandum of Understanding to provide VA's vocational
rehabilitation services earlier in the recovery process than ever
before.
The Operation Warfighter program (OWF) also supports this White
House priority by placing wounded, ill, and injured servicemembers in
Federal internship opportunities that positively impact their
rehabilitation and augment career readiness by building resumes,
exploring employment interests, obtaining formal on-the-job training,
and gaining valuable Federal Government work experience. There are
currently more than 500 OWF interns working in approximately 75 Federal
agencies and subcomponents around the country, with a total of more
than 2,500 placements in 105 agencies and subcomponents since the
inception of the program. The program is also supported by five
Regional Coordinators placed across the country. Going forward, the
Regional Coordinators will continue to focus on local and regional
outreach to strengthen relationships with Federal agencies to improve
and enhance internship and employment opportunities for wounded, ill
and injured servicemembers.
The Warrior Athletic Reconditioning Program (WARP) engages wounded,
ill and injured servicemembers early in individualized physical
activities outside of traditional therapy settings, inspiring recovery
and encouraging new opportunities for growth and achievement. This new
initiative will be implemented throughout the Department. WARP partners
include the Service chiefs from each branch of the Military, as well as
the United States Olympic Committee. WARP goals include increasing
awareness and participation in adaptive sports at the Service-level, as
well as preparing athletes for participation in competitive events such
as the Warrior Games.
These measures when taken together, substantially and materially
affect the life experience of our men and women in uniform and the
families who support them. Our work to improve the care of wounded
warriors, especially as they transition from DOD to VA, is the core of
our efforts to provide those who have sacrificed so much with the care
and benefits they deserve. Despite the significant achievements, we
should not underestimate what remains to be done as we care for a new
generation of veterans who have served under very difficult
circumstances for sustained periods. We will continue to work with our
colleagues at VA and throughout the government to provide our
servicemembers with the highest quality care and treatment. Taking care
of our wounded, ill and injured servicemembers is one of the highest
priorities for the Department, the Service Secretaries, and the Service
Chiefs.
total force support
Military Family Policy
One of the four overarching principles of the Defense strategy is
to preserve the quality of the All-Volunteer Force and not break faith
with our men and women in uniform or their families. Despite difficult
economic circumstances necessitating budget reductions across all
levels of government, the Department remains committed to providing
military families with support programs and resources that empower them
to address the unique challenges of military life. To this end, the
Secretary of Defense has directed that Family Programs and Mental
Health Care be maintained as a priority for the Department.
The Department conducted a Front End Assessment of family programs
and non-medical mental health care. The purpose of the review was to
ensure that mission critical needs would be met for family programs or
mental health care during the next 5 years. To ensure efficiency of
programs, without redundancy, programs were reviewed with the intent of
identifying, comparing and contrasting methods of program delivery.
These efficiencies did not cut programs for servicemembers or their
families but resulted in a more cost-effective approach to program
delivery. The review identified the following efficiencies.

Maximized use of military family life consultants
(MFLC) and Military OneSource counselors;
Limited number of full-time rotational personal MFLC
financial counselors due to identified overlaps with Services'
programs, while allowing the capability for surge support
through the MFLC program; and,
Right-sized MyCAA program based on new eligibility
criteria, which reduced the number of eligible spouses.

Some key programs and initiatives are:

Spouse Education and Career Opportunities: The DOD
Spouse Education and Career Opportunities (SECO) program is a
holistic, spouse-centric initiative designed to meet the needs
of all military spouses as they explore portable career
interests and strive to overcome common barriers to their
education and career goals. One of the components of SECO is
the My Career Advancement Account (MyCAA) that provides
eligible military spouses with tuition assistance as they
pursue requirements for a portable career. The Department has
also expanded upon the Army's Spouse Employment Partnership
program model. A significant number of ``Fortune 500 Plus''
employers now participate in the Military Spouse Employment
Partnership (MSEP), with over 150,000 jobs posted on the
www.MSEPJobs.com web portal and 15,000 spouses hired by MSEP
employers. We are expanding the portal to include a new
function which automatically matches posted spouse resumes to
posted employer job openings. We are also instituting an
electronic MSEP partner application and streamlining the
vetting and approval process. These enhancements will allow
companies to become partner employers more quickly. Webinars
and online training resources are helping new schools and
employers to improve their understanding and support for
military spouse employees who seek employment continuity and
upward career growth as they relocate to new duty stations.
Voluntary Education Opportunities: During fiscal year
2011, our Voluntary Education program helped fund 866,788
enrollments by over 300,000 servicemembers, which resulted in
44,692 diplomas and 528 certifications/licensures.
servicemembers are ``blending'' their course work, taking both
traditional and online courses, with approximately 73 percent
of servicemembers taking some courses online. Due to this, we
now require all post-secondary institutions participating in
the DOD Tuition Assistance program to follow certain standards
of conduct; we are tracking compliance and monitoring to ensure
there is continuous quality improvement.
Family Readiness Programs: With budget and personnel
reductions we can expect an increase in stress-related demand
for support from our military families and we are prepared to
meet that demand using the wide range of family support
programs and partnerships. This includes developing virtual
applications for the delivery of what has traditionally been
in-person support, and providing surge capability. The
Department is working closely with the Services to reduce
redundancy and increase efficiency. For instance, we are in the
process of developing a new community capacity-building toolkit
and online professional development modules to streamline the
training and development of our family support staff, and
improve capacity. The last Military Family Readiness Council
meeting was held in December 2011. We are identifying new
members and working in coordination with the military Services
to select spouses and/or parents to represent their Services.
The next MFRC is projected to be during the third quarter of
fiscal year 2012.
Non-Medical Counseling: Demand for non-medical
counseling continues to increase, and access to non-medical
counseling is a Department focus area. We continue to enhance
confidential non-medical counseling via two delivery systems,
the Military Family Life Consultants (MFLC) and the Military
One Source (MOS) Program. Non-Medical Counseling augments the
military support programs currently in place, and is designed
to help servicemembers and families cope with normal reactions
to the stressful situations created by deployments, family
separations, war, and reintegration.. MOS non-medical
counseling is offered by licensed clinicians who have private
practices in the local community. The MFLC program began as a
pilot in 2004, and today, more than 1,100 MFLCs provide
confidential non-medical counseling support on 229
installations throughout the world. In fiscal year 2011, the
program provided face-to-face counseling sessions to
approximately 6.6 million people. At a commander's request,
additional MFLCs may also be mobilized and deployed to provide
``surge'' counseling support. Non-medical counseling is
provided by licensed clinicians who are deployed to
installations and are assigned to work at the family centers,
child development centers, youth centers, schools, and are
embedded into brigades.
Military OneSource (MOS): MOS provides call center and
web-based information, referral, counseling, and educational
materials. Services are available worldwide, 24 hours a day, at
no cost to the user. In fiscal year 2011, MOS responded to
almost a million telephone calls, received 3.6 million online
visits and assisted servicemembers and families with over
200,000 Federal and State tax filings. Other MOS services
include relocation assistance, document translation, child care
and education resources, special needs consultation, elder care
consultation, on-line library resources, and health and
wellness coaching. Accessed via MOS, the Wounded Warrior
Resource Center (WWRC) provides immediate assistance to
wounded, ill, and injured servicemembers, their families, and
caregivers. In 2011, WWRC resolved 3,056 cases for wounded
warriors, an increase from 2010.
Family Advocacy Programs (FAP): The FAP addresses
physical, sexual, and emotional abuse and neglect involving
Active component military personnel and family members either
as victims or abusers. We evaluate the effectiveness of FAP
through rates of child abuse and neglect and spouse/intimate
partner abuseand outcome measures for prevention and treatment.
Through 10 years of high stresses on our families due to
wartime deployments, our rates of such family maltreatment have
remained relatively stable; however, we continue to monitor
this carefully. For 2 consecutive years, 85 percent of those
who participated in our New Parent Support Program for at least
6 months had no substantiated child abuse or neglect the
following year, and 90 percent of substantiated spouse abusers
who completed FAP treatment had no substantiated spouse abuse
the following year.
Child Care: The Department continues to expand child
care capacity that supports RC families while the servicemember
is deployed, geographically-dispersed active duty military
families, and servicemembers living in areas in the continental
United States where on-installation military child care is
unavailable. Ongoing efforts are focused on ensuring the
availability of child care options that meet quality standards,
including health and safety standards and standards for
developmentally-appropriate practices.
Youth Programs: Faced with their own unique
challenges, military youth aged 6-18 can turn to a number of
quality programs serving more than 600,000 military youth
around the world designed to prepare young people to meet the
challenges of military life, adolescence, and adulthood. We
have developed relationships with other Federal agencies and
nationally-recognized organizations such as the Boys and Girls
Clubs of America and the USDA's 4-H Youth Development Program.
Through these relationships, we offer more than 300 camp
opportunities each year for military youth, and are a vital
component of our support to geographically-dispersed youth of
the NG and RCs.
Special Needs
The Department and the Military Services continue to provide
support to military families with special needs. During the last 2
years, 120 additional family support personnel have been hired and
deployed to installations worldwide; we now have a total of over 400
providers who provide information, referral and education to families
with special needs. The Exceptional Family Member Program (EFMP) family
support component also provides non-clinical case management to those
families who need additional assistance with accessing services on the
installation and in their local communities. The Office of Community
Support for Military Families with Special Needs developed a mobile
website, accessible from smart phones; that website provides military
families with information on the EFMP and contact information for
enrollment and family support providers. The mobile website also
provides podcasts and links to other materials available to military
families with special needs.
The Department engages with military families with special needs by
participating in the Congressional Military Family Caucus sessions and
reviewing input from families during focus groups and online. We also
established an EFMP family panel composed of ten families who represent
all military Services, active duty, and RCs, and ranks. Family members
with special needs are of all ages (children through adults) and with a
wide variety of disabilities. Their issues range from access to medical
care, availability of comparable services in the public schools, and
lengthy waiting lists for Federal and State programs.
To address the needs of this population, the Office of Special
Needs has partnered with the DOD children and youth programs to provide
training through Kids Included Together on the inclusion of children
with special needs into children and youth programs. They have also
partnered with the TRICARE Management Activity to communicate better
with families about their benefits and accessing care, and to support
them with portability of care during moves.
DOD-State Initiatives
The Department continues to work with State governments to educate
policymakers on the life-challenges faced by servicemembers and their
families, and to ensure that State-level policies do not disadvantage
military families due to their transient life style. States have
addressed several key quality of life issues, to include the impact of
frequent school transitions experienced by military children, the loss
of income by spouses as a result of military moves, and enforcement of
the Congressionally-mandated DOD predatory lending regulation. The
State responses have affirmed their commitment to the well-being of the
Nation's fighting force. For example, 39 States have approved the
Interstate Compact on Educational Opportunity for Military Children, 39
States (plus DC) now provide eligibility for unemployment compensation
to military spouses, and 34 States (plus DC) enforce the DOD predatory
lending regulation. The Department is continuing this effort in the
2012 State legislative sessions with strong emphasis on support of
military families through the issues listed above. We are also
promoting expedited occupational licensure processes to allow military
spouses to resume their work faster in a new State, and provisions for
separating servicemembers to receive credit for their military
education, training and experience toward a State occupational license
or an academic degree. The Department is continuing to partner with the
Uniform Law Commission to inform State legislators of the Uniform
Military and Overseas Voters Act which simplifies the absentee voting
process by making it more uniform, convenient and efficient. This year
we are advocating for States to consider establishing Veterans
Treatment Courts for servicemembers and Veterans in the criminal
justice system who are suffering substance abuse and mental health
issues.
MWR Support to Troops in Combat:
Support is critical to allow servicemembers to communicate with
family and friends, stay physically and mentally fit, and reduce
stress. The Department now funds over 514 free MWR Internet Cafes in
Iraq and Afghanistan and 135 portable satellite units (known as
Cheetahs) to support remote locations. The DOD MWR Online Library
offers free downloads of audio and e-books, and access to up-to-date
recreation, education and career transition support databases.
The ability of injured servicemembers to engage in recreation and
sports is a very important component of rehabilitation and
reintegration. Under a contract with Penn State University, MWR
specialists are trained to work with medical personnel, wounded warrior
units, and community and non-profit organizations to ensure inclusive
and adaptive sports and recreation are included in recreation programs.
The DOD Paralympics Program continues to provide rehabilitation support
and mentoring to injured servicemembers and veterans who have sustained
various types of injuries.
We remain fully committed to supporting the All-Volunteer Force and
their families, particularly in light of the unprecedented demands that
have been placed on them in recent years.
The Department continues to pursue innovations, initiatives, and
efficiencies that improve the quality of life of its military members
and their families. With your continued support, our military force
will remain ready, willing and able to serve this Nation with
distinction.
Military Voting
The Department is well positioned for the 2012 election, building
on its considerable success in the 2010 election efforts. Through
direct-to-the-voter outreach programs, easy and quick online voting
assistance tools, and aggressive communications and marketing programs,
we experienced a 21 percent increase in military voter participation
rates between 2006 and 2010. The Department is refining and expanding
those programs for the 2012 election, as well as providing direct
support to State and local election jurisdiction which deploy online
ballot delivery systems, reducing ballot delivery time from 20 to 30
days to 20 to 30 milliseconds.
Department of Defense Education Activity
Ensuring excellence in the education of military children is a top
priority for Secretary Panetta and the entire Department. A quality
education is both a stabilizing influence in the lives of our children
and their families and an overall recruitment, retention and morale
element in the readiness of our Force. There are 1.2 million school-
aged children with a parent serving in the military. Nearly 86,000 of
these children attend one of the schools operated by the Department of
Defense Education Activity (DODEA). Not unlike other parents, military
families frequently say that the quality of their children's education
is one of the most important criteria when selecting a place to live.
The demands of extended conflict and frequent relocations add to the
challenges faced by military families. While they are often described
as a resilient group, the cumulative effects of multiple moves and
significant parental absences can erode this resilience and, as the
research suggests, diminish academic performance in school.
The DODEA schools offer a 21st century, student-centered learning
environment that is tailored to meet the needs of military families. To
this end, DODEA is leaning forward and providing military-connected
children an educational experience that challenges each student to
maximize his or her potential and prepares them to be successful,
productive and contributing citizens in today's global economy. DODEA
also is mobilizing its knowledge, expertise, and resources to support
military-connected children in the U.S. public schools.
The Department has made a number of sweeping commitments to
improving the educational experience for military children. Some of
these far-reaching commitments are highlighted below:

DODEA has joined 46 States in the adoption of the
Common Core State Standards. Today, the differences between
State educational standards, including variances in graduation
requirements, can and have negatively impacted achievement for
military children. The Common Core State Standards will help
mitigate this academic disruption and provide greater
continuity in the educational experiences of our highly mobile
children.
DODEA has launched a vibrant Virtual Learning program
which includes the use of tele-presence equipment in
classrooms, to expand course offerings for students. No longer
will small enrollments and limited course offerings at one
DODEA school significantly drive the educational experience of
students. Student interests and needs now have considerable
influence. Through virtual learning, students have access to
courses such as Advanced Placement, foreign language, and STEM-
related courses that simply would not be possible in some
locations.
DODEA is adopting a 21st century teaching and learning
framework, where technology is leveraged to improve the
educational experience of children. Ten middle and high schools
will be using a digital instruction platform on a pilot basis.
As we leverage technology in our learning environments, we will
need to make a significant investment in the professional
development of our teachers and leaders.
DODEA is modernizing and replacing school facilities
to ensure that military children have school facilities that
are safe, secure, in good repair and provide an optimal
learning environment that supports current and future
educational requirements. In fiscal year 2013, DODEA requested
$657 million for 11 school Military Construction projects.
DODEA has ramped up its outreach to U.S. public
schools to improve the educational experience for students in
non-DODEA schools. Since 2008, DODEA has provided 146 grants
totaling $167 million to school districts, in over 900 schools.
All grants focus on enhancing student learning opportunities,
social-emotional support, and educator professional
development.

As we move forward with Force structure changes, DODEA will
continue to work with the Military Services to right-size schools in
the affected communities, will keep students in the forefront, and will
stay focused on delivering an excellent education and supporting our
families. DODEA will ensure a ``warm-hand off'' to the U.S. public
schools who may be receiving an influx of military-connected students.
Further, we will leverage our civilian workforce shaping tools to
provide continuity of employment for all those who wish to continue
with their Federal careers.
The Department is charged with the responsibility and privilege of
educating the children of our Nation's military. We know full-well the
toll that war, conflict and frequent movements have exacted from our
servicemembers and their families. The Department is committed to
ensuring that the education of the children of servicemembers will not
be among the many sacrifices our families must make to defend our great
Nation.
Defense Commissaries
The commissary continues to be one of the most popular benefits
with military members and families and is an efficient provider of non-
pay compensation to our military personnel. Operated by the Defense
Commissary Agency (DeCA), this integral element of the total
compensation package significantly contributes to the financial
readiness of our military families. An average family of four that
consistently shops at the commissary will save nearly $4,500 per year
by taking advantage of the 32 percent savings on their overall
purchases. The commissary further enhances financial readiness as a
major employer of military spouses and family members. Last fiscal
year, 39 percent of DeCA employees in the United States were military
spouses or other family members; and the total rises to 63 percent when
including military retirees, other veterans, and members of the Guard
and Reserve. While enhancing military families' quality of life, the
commissary also provides an excellent return on investment. Last fiscal
year, the commissary provided direct savings to commissary customers of
$2.8 billion for a taxpayer cost of $1.4 billion, a 2-for-1 return.
DeCA implemented efficiency reductions in fiscal year 2012 and there
are no plans for additional budget reductions at this time.
conclusion
Putting together this year's budget request in a balanced package
was a difficult undertaking, but I believe we have the right mix of
programs and policies in place to shape the force we need in support of
the strategic guidance. We will reduce the rate of growth of manpower
costs, to include reductions in the growth of compensation and health
care costs. But as we take those steps, we will continue to keep faith
with those who serve.
During the past decade, the men and women who comprise the All-
Volunteer Force have shown versatility, adaptability, and commitment,
enduring the constant stress and strain of fighting two overlapping
conflicts. They have also endured prolonged and repeated deployments.
Some--more than 46,000 men and women--have been wounded, and still
others--more than 6,200 members of the Armed Forces--have lost their
lives. As the Department reduces the size of the force, we will do so
in a way that respects and honors these sacrifices.

Senator Webb. Thank you very much, Dr. Rooney.
Secretary Hale, welcome.

STATEMENT OF HON. ROBERT F. HALE, UNDER SECRETARY OF DEFENSE,
COMPTROLLER, AND CHIEF FINANCIAL OFFICER

Mr. Hale. Thank you, Mr. Chairman, Senator Graham, members
of the subcommittee. Let me underscore Dr. Rooney's thanks to
all of you for the support of our men and women in uniform and
the civilians who support them.
I am going to focus on some budget aspects of the personnel
budget with just a few overall numbers.
We have asked Congress for $525.4 billion of discretionary
budget authority in fiscal year 2013. If you adjust that for
inflation, it is a 2.5 percent real decline, the third
consecutive year of real decline in the defense budget. As you
look beyond fiscal year 2013, the budget is basically flat in
real terms or slightly up.
To get to this request while also remaining consistent with
title I, the non-sequestered title of the BCA, we reduced
overall defense spending by $259 billion in the next 5 years,
our budget period 2013 to 2017, compared to the last year's
plan. We took three steps to reduce our plan funding.
First, more disciplined use of defense dollars by
eliminating lower priority programs and through efficiencies,
including some cutbacks in contractor workforce.
Second, we propose force structure changes to carry out a
new defense strategy, particularly important to this
subcommittee. For example, our military will be smaller and
leaner, especially our ground forces which will no longer be
sized to carry out large, prolonged operations such as the one
we undertook in Iraq. On the investment side, we made a number
of decisions to fund high priority programs, cyber, special
operations, for example, but also restructured and reduced
investments for many weapons systems.
Third, and I know of particular importance to this
subcommittee, the budget continues to fully support America's
All-Volunteer Force even in the face of the BCA. We fully
funded personnel, took a number of steps, funded family support
programs fully.
But we also carefully reviewed and slowed the growth in
military pay and benefits.
Let me expand on just two aspects of this budget in my oral
statement.
The new 5-year budget plan calls for a reduction in end
strength, Active end strength of about 100,000 and 20,000 in
the Reserve components, mostly in our ground forces. To achieve
these substantial end strengths, the Army will eliminate at
least eight brigade combat teams; the Marine Corps, six
battalions, four tactical air squadrons. There will be
significantly smaller cuts in the Navy and the Air Force.
Altogether these force structure reductions will save us about
$9 billion in fiscal year 2013 compared to last year's plan,
$53 billion over the FYDP, so we are about 20 percent with
those on the way toward being consistent with the BCA.
We made substantial changes in investment--the cuts in this
budget were disproportionately on the investment side--and
pushed for more disciplined use of resources through
streamlining and efficiencies. But it did not get us to where
we needed to be.
In the end--and it was in the end--we made a decision to
address military pay and benefits issues to avoid what we
viewed as overly large cuts in force structure and investment.
Our assessment took note of important trends in military pay
and benefits. Pay and benefits, defined as military personnel
and health care and some others, are up over 87 percent since
2001, 30 percent more than inflation, while the Active Duty end
strength grew by only 3 percent during that period.
While we strongly believe that changes are needed in
military pay and benefits, we also believe they must take into
account some vital principles. The military compensation system
has to recognize the unique stress of military life. We cannot
simply copy the civilian system. It must enable us to recruit
and retain needed personnel. We judged that it should be
disproportionately small in terms of the amount of the savings.
So our total savings were about 10 percent of the target we
were working toward under the BCA, military pay and benefits
more than a third of our budget. No one's pay can be cut.
Growth can be slowed, but no pay cuts, no freezes.
Now, statements by other witnesses have described the
proposals to reduce the size of our out-year pay raises,
increase fees and deductibles for retirees, and raise pharmacy
copays in ways that increase incentive to buy by mail order and
to use generic drugs. I am not going to go over those again.
But I would like to do a couple of things, and I would like
to correct first a misimpression we created. I am sorry Senator
Ayotte is not here because I did not do a very good job. I did
not have a chance really when I testified before the Senate
Budget Committee, and she asked a question about what we were
doing for fees of our civilian personnel--health care fees.
While the President's budget does not propose changes in
the mechanism for fees charged to Federal civilian employees
and retirees, those fees are tied to private sector insurance
costs. Those fees have increased substantially over recent
years, more than doubling for some large cuts over the last
decade, and they are almost certain to continue to grow.
Moreover, even when our proposed increases in military fees are
fully in place, the military fees will remain substantially
less than the ones charged to Federal civilian employees and
retirees. So this budget does require increases for Federal
civilian personnel and substantial ones.
Perhaps the most important point regarding our military
compensation proposals is this, the proposals have the full
support of our military leaders and that includes all the
members of the Joint Chiefs, the senior enlisted, and advisors,
and they have indicated that support in a formal letter sent to
Congress earlier this year.
Several of our proposed compensation changes require
legislative authority. None can be put into effect without your
support. We fully recognize that. But if that support is not
forthcoming--and you asked me to be candid, Mr. Chairman, so I
will be--what keeps the CFO up at night--further cuts in forces
and investment will be required of us to remain consistent with
the targets of the BCA. Even if somehow we fit in changes in
2013, I have to worry about 2014 through 2018, and those cuts
get bigger in that period.
If, for example, Congress turned down all of our
compensation proposals and we offset that hole in our budget
with additional force cuts, we would have to cut roughly
another 60,000 troops by 2017. We might look at other ways and
we probably would. But just to give you an idea of the
magnitude, these additional cuts would surely jeopardize the
new defense strategy that we have just recently put in place.
As this point suggests, our budget is a balanced,
interconnected whole. I very much ask that you consider it as
such.
Mr. Chairman, thank you again for your support of our
troops and to all the subcommittee members for support of our
troops and for the opportunity to testify today. When the
witnesses are done, I welcome your questions.
[The prepared statement of Dr. Hale follows:]
Prepared Statement by Hon. Robert F. Hale
Mr. Chairman, Senator Graham, members of the subcommittee, thank
you for the opportunity to join you this afternoon. I will not repeat
the thorough statements presented by the Department's other witnesses.
I would like to discuss selected personnel and readiness issues in the
context of the Department's budget request for fiscal year 2013.
The fiscal year 2013 budget for the Department of Defense (DOD)
responds to two broad factors. First, to be consistent with Title I of
the Budget Control Act of 2011, it reduces defense funding for fiscal
year 2013 to fiscal year 2017 by $259 billion compared with last year's
plans. We started by culling $45 billion from our spending plans in
fiscal year 2013, resulting in a request for $525.4 billion in
discretionary budget authority. Adjusted for inflation, that is a
reduction of 2.5 percent compared to the enacted budget for fiscal year
2012--the third consecutive year of real decline in the Defense budget.
Second, our proposed budget for fiscal year 2013 reflects the new
defense strategy that we announced in January. That strategy has been
documented in a white paper issued in January. The budget implements
this new strategy in four key ways:

We seek to make more disciplined use of defense
dollars. Key changes include streamlining in the Office of the
Secretary of Defense and defense agencies, rephasing of
military construction projects in view of force structure
changes, further IT consolidations, efforts to improve our
purchasing activities, and continued efforts to improve
financial management and achieve audit readiness.
Our budget proposes force structure and investment
changes that are consistent with the new strategy. Our military
will be smaller and leaner, but also ready and agile. We
continue to invest in high priority areas such as Special
Operations Forces, cyber, and unmanned aerial vehicles.
However, reflecting strategy and good management along with
budgetary limits, we propose to restructure and reduce
investments in programs including the Joint Strike Fighter,
shipbuilding programs, the Army Ground Combat Vehicle program,
and the SSBN-X submarine program. We terminate six weapon
programs in this budget proposal.
We continue full support for America's All-Volunteer
Force, which is the very foundation of our military strength.
But we carefully review and slow the growth in military pay and
benefits.
Finally, we provide full support for our warfighters
in combat through our request for funding for Overseas
Contingency Operations.

Our budget proposal for fiscal year 2013 needs to be considered as
a whole. It proposes changes that are balanced in order to be
consistent with both our new strategy and good management. We hope that
Congress will be cautious in making changes lest the revised version
fail to fully support our new strategy or the current budgetary limits.
Finally, while this budget is consistent with Title I of the Budget
Control Act, it does not accommodate the sequestration that could occur
under Title III of that Act. Sequestration could have devastating
effects on defense activities. It would force us to revisit our
strategy and could lead to involuntary separations of personnel,
reductions in readiness, and the disruption of numerous investment
programs. We still have time to avert sequestration, and the
President's fiscal year 2013 budget represents a path to doing so. We
urge Congress to enact a large, balanced program of deficit reductions
and then enact legislation to halt the sequestration.
In addition to this brief overview of our fiscal year 2013 request,
I want to mention three specific considerations as they relate to
personnel and readiness.
budgetary importance of force structure cuts
The first of these involves force structure changes. Consistent
with our strategy and budgetary limits, we assume there will be force
structure cuts, primarily in ground forces. Our strategy envisions a
force that is smaller and leaner and that no longer maintains forces
sized for large, prolonged stability operations.
Specifically, the new 5-year budget plan calls for an end strength
reduction of about 72,000 Army soldiers and about 20,000 marines by
fiscal year 2017. This will result in an Army of 490,000 soldiers and a
Marine Corps of 182,100 marines. To accommodate these reductions, the
Army will eliminate a minimum of eight brigade combat teams, and the
marines will disestablish six battalions and four tactical aircraft
squadrons.
There will be smaller cuts in the Navy and Air Force. The Navy will
be retiring 11 older vessels, and the Air Force will cut 7 TACAIR
squadrons. By fiscal year 2017, the Navy's Active-Duty end strength
will be reduced by 6,200 to a force of 319,500 sailors, and the Air
Force will lose 4,200 airmen, to bring their total to 328,600.
We will also be reducing end strength in the Reserve components by
21,500 by fiscal year 2017. This will result in a total Reserve Force
of 825,600, with Navy Reserve, Air Force National Guard, and Army
National Guard components experiencing the greatest force reductions.
There will be no reduction to the Marine Corps Reserve.
Altogether, compared to last year's plans, force structure
reductions will save about $53 billion over the FYDP and $9 billion in
fiscal year 2013 alone. Most of these savings reflect reduced operating
costs but there are some investments savings as well.
These force structure changes mean that we need to consolidate our
infrastructure. The President will ask Congress to authorize the Base
Realignment and Closure (BRAC) process for 2013 and 2015. We recognize
the political difficulty associated with the BRAC process, but it is
the only effective way to achieve needed infrastructure savings.
budgetary importance of pay and benefit changes
The second item I want to mention is the budgetary importance of
pay and benefit changes. Since 2001, the cost of military pay and
benefits has grown by over 87 percent (30 percent more than inflation),
while Active Duty end strength has grown by about 3 percent. We felt we
had to review pay and benefits to avoid overly large reductions in
forces and investments.
As my colleagues have noted, the military and civilian leadership
considered changes in pay and benefits based on several guiding
principles. To begin with, the military compensation system must take
into account the unique stress of military life. It should not simply
be a copy of civilian systems. The system must also enable us to
recruit and retain needed personnel. We must keep faith with our
military personnel. That means changes to the system of pay and
benefits that do not cut anyone's pay. We propose to slow the rate of
growth, not to institute pay freezes or pay cuts.
Changes affecting pay and compensation were designed to be
disproportionately small when compared to the changes in forces and
investments. While pay and benefits account for about one-third of the
Defense budget, savings from the initiatives we are proposing will
amount to about $29 billion over the FYDP, which is slightly more than
10 percent of our savings target.
As our acting Under Secretary for Personnel and Readiness
indicated, we plan military pay raises in fiscal years 2013 and 2014
consistent with the Employment Cost Index. In later years increases
will be lower, but by then servicemembers and their families will have
had time to plan. Over the 5 years of the FYDP, this approach will
realize total savings of about $16.5 billion.
We have also proposed changes in the cost-sharing formula for
health care. This will mostly affect retirees and, especially, retirees
who are under the age of 65 and are still in their working years. We
have exempted those who are medically retired and survivors of those
killed on Active Duty. Our proposed changes save about $12.9 billion
over the next 5 years. Dr. Rooney's statement expands on these changes,
and I will not repeat them here.
However, I do want to emphasize one very important point that Dr.
Rooney has made. Changes in cost sharing represent only one of the key
steps that we are taking to improve health care and to hold down cost
growth. We are also working to improve overall health care--moving from
health care to health. We are reducing internal costs by cutting
administrative overhead at headquarters and buying more effectively. We
have significantly reduced payments to our civilian providers in order
to slow the growth in health care costs.
I also want to note that, while our budget does not change the
formula for enrollment fees for Federal civilian employees or civilian
retirees, those fees have and are increasing. Fees for civilian
employees and retirees are tied to private-sector plans and increase
with increases in health care costs. It is important to note that fees
paid by civilian employees and retirees will remain substantially
higher than those paid by military retirees even after all of the
changes proposed for military retirees have taken effect.
Our health care proposals, and all of our proposals for military
compensation, have the full support of our military leaders--including
both officer and enlisted leaders. These leaders have supported these
changes in a letter to each of our oversight committees.
Several of our proposed changes in pay and benefits will require
legislative authority. For instance, we need authority to exempt
survivors of members who die while on Active Duty or military
disability retirees and their families; to establish an annual TRICARE
Standard enrollment fee for most retirees and their families; and to
introduce an annual enrollment fee for TRICARE For Life beneficiaries.
While these particular proposals require legislation, we need your
support for all of these important changes.
If Congress does not provide us with needed support, we will face a
major problem that would jeopardize our defense strategy. Without
needed authority, we will face further cuts in forces and investment to
be consistent with the Budget Control Act. Because our budget proposal
already makes substantial reductions in the investment accounts,
further cuts might fall mostly on forces. If, for example, Congress did
not support any of our proposed changes to pay raises and health care,
and we elected not to make further cuts in investment, we would be
required to increase the size of our force reductions by roughly half.
That could mean cutting roughly another 60,000 Active Duty and Reserve
Forces by fiscal year 2017. Additional force cuts of this magnitude
would jeopardize our ability to pursue the new defense strategy.
readiness
The third and final concern that I would raise today is the matter
of readiness. Our strategy calls for a force that is leaner and
smaller, but also agile and ready.
Readiness is a complex topic. There is no single part of the budget
that we could characterize as the ``readiness'' budget. That said,
Operation and Maintenance (O&M) is the title most often associated with
readiness. I would point out that O&M is the only title that would
increase in the President's budget. Total O&M increases by 6 percent
between fiscal year 2012 and fiscal year 2013 while the overall budget
declines by 1 percent. We believe that we have made budgetary decisions
designed to protect the readiness of our military forces.
When making our force structure decisions, we also favored the
forces that are especially agile. Special Ops forces are a case in
point. These forces, designed to be agile, continue to increase under
this budget proposal. We also preferentially retained forces that can
self-deploy. Accordingly, we maintained funding for a fleet with long-
term level of 11 aircraft carriers and 10 air wings. We also maintained
funding for the bomber force.
conclusion
In conclusion, I would emphasize again that our budget is an
interconnected whole, and we ask that Congress consider it as such.
Thank you again for the opportunity to testify this afternoon. As
always, thank you for the support of our men and women in uniform, and
the civilian employees who support them. I welcome your questions.

Senator Webb. Thank you very much, Secretary Hale.
Secretary Woodson, welcome.

STATEMENT OF HON. JONATHAN WOODSON, ASSISTANT SECRETARY OF
DEFENSE FOR HEALTH AFFAIRS AND DIRECTOR OF TRICARE MANAGEMENT
ACTIVITY

Dr. Woodson. Thank you, Mr. Chairman, Senator Graham,
members of the subcommittee. Thank you for the opportunity to
appear before you today to discuss the future of the military
health system and in particular, our priorities for this coming
year.
Over the last 10 years, the men and women serving in the
military health system have performed with great skill and
undeniable courage in combat. Their contributions to advancing
military and American medicine are immense. The military health
system's ability to perform this mission and be able to respond
to humanitarian crises around the world is unique among all
military or non-military organizations on this globe. I am
committed to sustaining this indispensable instrument of
national security.
One of the most critical elements of our strategy is to
ensure the medical readiness of the men and women in our Armed
Forces. We are using every tool at our disposal to assess our
servicemembers' health--before, during, and following
deployment to the combat theaters. For those who return with
injuries and illnesses, we continue to provide comprehensive
treatment and rehabilitation services supported by medical
research and development portfolios appropriately focused on
the visible and invisible wounds of war.
Concurrent with our mission of maintaining a medically
ready force, this ready medical force concept has many
interdependent parts. It requires our entire medical team to be
well-trained. It requires development of our physicians in
active, accredited, graduate medical education programs. It
requires our military hospitals and clinics to be operating at
near-optimal capacity, and for our beneficiaries, it requires
an active decision to choose military medicine as their
preferred source of care.
To meet these readiness imperatives means we need to
compete with the rest of American medicine to recruit and
retain top talent, to provide state-of-the-art medical
facilities that attract both patients and medical staff, and to
sustain a high quality system of care.
The budget we propose provides the resources we need to
sustain the system. As we maintain our readiness, we also must
be responsible stewards of the taxpayers' dollars. The 2011 BCA
required DOD to identify $487 billion in budget reductions over
the next 10 years. Health care costs could not be exempt from
this analysis.
The military health system is undertaking four simultaneous
actions to reduce costs: one, internal efficiencies to better
organize our decisionmaking and execution arm; two, a
continuation of our efforts to appropriately pay private sector
providers; three, initiatives to promote health, and reduce
illness, injury, and hospitalization; and four, propose changes
to beneficiary costsharing under the TRICARE program.
The military and civilian leaders in DOD developed these
proposals and have publicly communicated their support for
these proposals to you in writing and in person.
I want to identify the core principles to which we adhered
when developing these proposals. We believe the TRICARE benefit
has been one of the most comprehensive and generous health
benefits in this country and our proposals keep it that way. In
1996, military retirees were responsible for about 27 percent
of overall TRICARE costs. In 2012, the percentage share of
costs borne by the beneficiary has dropped to about 10 percent
of overall costs. If these proposals we have put forward are
accepted, beneficiary out-of-pocket costs will rise to 14
percent of costs by 2017. This is about half of what
beneficiaries paid in 1996.
Second, we have exempted the most vulnerable populations
from our costsharing proposals. Medically retired
servicemembers and families of servicemembers who have died on
Active Duty are protected under this principle.
Additionally, we have introduced costsharing tiers based
upon retirement pay, reducing the increases for those with
lower retirement pensions. I would mention that that was led by
the uniformed line leadership.
Mr. Chairman, we recognize the concerns of the members of
this subcommittee and the beneficiary organizations have voiced
regarding these proposals. I want to emphasize that these
proposals are targeted to mitigate the burden on any one
particular group of beneficiaries while simultaneously meeting
our congressionally-mandated costsaving responsibilities under
the BCA. We have recently submitted to Congress the Secretary's
recommended path forward for how to organize the military
health system. We have learned a great deal from our joint
medical operations over the last 10 years. We recognize that
there is much opportunity for introducing an even more agile
headquarters operation that shares common services and
institutes common clinical and business practices across the
system of care.
The budget we have put forward for 2013 is a responsible
path forward to sustaining the military health system in a
changing world and recognizes that the fiscal health of the
country is a vital element in our national security.
I am proud to be here with you today to represent the men
and women who comprise the military health system. I look
forward to your questions.
[The prepared statement of Dr. Woodson follows:]
Prepared Statement by Hon. Jonathan Woodson
Mr. Chairman and distinguished members of the subcommittee, thank
you for the opportunity to appear before you today on behalf of the men
and women who comprise the Military Health System (MHS) and address our
strategic priorities for the coming year.
We enter 2012 now having over 10 years of experience in preparing
for and responding to the consequences of war. We have seen the end of
one major conflict and the implementation of a concrete timeline for
the drawdown of the other. Yet, even with these milestones in our
sights, we have many challenges to address in the coming year, both
operational and fiscal.
I am proud of the performance of our military medical personnel on
the battlefield and here at home. Last year, I provided this committee
with some of the accomplishments achieved in combat--the lowest levels
of disease, non battle injury (DNBI) rates in warfare; the highest
survival from wounds rate; the safety and speed of an aeromedical
evacuation system that has no peer; and the treatment and
rehabilitation of wounded warriors that is allowing ever greater
numbers of our severely wounded to return to their units, or to pursue
careers in the civilian sector.
These accomplishments bear repeating. I do this not simply to honor
the men and women who made them happen, but also to point out that the
actions and lessons that led to these outcomes are now being replicated
in trauma centers, surgical suites, and rehabilitation centers around
the country and around the world. The MHS is transferring our medical
knowledge gained from battlefield medicine to the rest of society.
As we share our experiences with our colleagues in American
medicine, we are also mindful of the need to look internally and assess
what lessons we have learned--and consider how we should be organized
to meet our future missions. In June 2011, the Deputy Secretary of
Defense established an internal task force to study this issue. We have
now also shared the task force report and the Deputy Secretary's
planned reorganization with Congress, consistent with Section 716 of
the National Defense Authorization Act for Fiscal Year 2012. The plan
we developed increases unity of effort, agility, and the opportunity
for cost savings both through reduced overhead and, more importantly,
through the implementation of common clinical and business practices
across the enterprise. Our ability to implement this model will enhance
virtually all of the programmatic issues we discuss in the MHS today.
The Department has proposed a $32.5 billion Defense Health Program
(DHP) appropriation (Figure 1), reflecting a small increase from the
fiscal year 2012 enacted budget.

Figure 1: Fiscal Year 2013 Defense Health Program (DHP) Summary
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal Fiscal Fiscal
Year 2011 Price Program Year 2012 Price Program Year 2013
Appropriation Summary \1\ Growth Growth \2\ Growth Growth \3\
Actual Enacted Estimate
----------------------------------------------------------------------------------------------------------------
Operation & Maintenance............ 29,953.5 721.7 ^89.0 30,586.2 859.6 ^96.6 31,349.3
RDT&E.............................. 1,205.8 22.9 38.1 1,266.8 22.8 ^616.6 673.0
Procurement........................ 546.7 12.4 73.4 632.5 14.2 ^140.2 506.5
----------------------------------------------------------------------------
Total, DHP....................... 31,706.0 757.0 22.5 32,485.5 896.4 ^853.4 32,528.7
----------------------------------------------------------------------------------------------------------------
MERHCF Receipts \4\................ 8,600.0 9,470.6 9,727.1
----------- ----------- ----------
Total Health Care Costs.......... 40,306.0 41,956.1 42,255.8
----------------------------------------------------------------------------------------------------------------
Numbers may not add due to rounding
\1\ Fiscal year 2011 actuals include Operation and Maintenance (O&M) funding of $1,394.0 million and Research
and Development funding of $24.0 million from the fiscal year 2011 Overseas Contingency Operations (OCO),
Title IX, Public Law 112-10.
\2\ Fiscal year 2012 enacted (base), excludes O&M funding of $1,215.3 million of OCO.
\3\ Fiscal year 2013 estimate excludes O&M funding of $993.9 million for OCO. The Department of Defense projects
$135.6 million O&M funding should transfer in fiscal year 2012, and $139.2 million in fiscal year 2013 to the
Joint Department of Defense-Department of Veterans Affairs Medical Facility Demonstration Fund established by
section 1704 of Public Law 111-84 (National Defense Authorization Act for Fiscal Year 2011).
\4\ Reflects Departmental DOD Medicare-Eligible Retiree Health Care Fund (MERHCF) for fiscal year 2011, fiscal
year 2012, and fiscal year 2013 (O&M).

Our proposal includes realistic cost growth for pharmacy, TRICARE
contracts and other services provided both in our medical treatment
facilities (MTFs) and care purchased from the private sector; as well
as sustained investment in medical research and development.
I will outline the major elements of our strategy for 2013, using
the Quadruple Aim--the MHS strategic framework--to discuss our
initiatives. This framework captures the core mission requirements of
the MHS: Assure Readiness; Improve Population Health; Enhance the
Patient Experience of Care; and Responsibly Manage the Cost of Care.
assuring readiness
The MHS continues to closely monitor the health and medical
readiness of the military force. We have consistently witnessed
improvements in the medical preparedness of our servicemembers, both
Active and Reserve component.
We have ensured that our medical forces are also ready through
sustained investments in our enlisted and officer training programs,
through our comprehensive Graduate Medical Education (GME) programs
conducted at a number of our MTF training platforms throughout the MHS
and with select civilian partners; at the Medical Education and
Training Center (METC) in San Antonio, TX, in our military medical
school, the Uniformed Services University of the Health Sciences.
We also assess the health of the force upon their return from
deployment. In our continued commitment to ensuring the mental health
of our servicemembers, the Department has issued policy that
servicemembers deployed in connection with a contingency operation
receive a person-to-person, privately-administered mental health
assessment before deployment, and three times after return from
deployment. These person-to-person assessments are conducted by
licensed mental health professionals or by designated individuals
trained and certified to perform the assessments.
As part of our monitoring of the medical readiness of the force, we
also assess our performance in ensuring that those servicemembers who
are identified as needing behavioral health services receive a referral
and seek treatment. In this area, we have also witnessed improvement
each year in both the referral for behavioral health services, and the
rate at which servicemembers seek ongoing treatment.
Senior leaders, both officer and enlisted, have led the effort to
reduce the stigma associated with seeking mental health care. A DOD
Mental Health Advisory Team (MHAT) survey from February 2011 showed
that Marines who screened positive for mental health issues, had a
substantial (and statistically significant) decrease in behavioral
health stigma levels from 2006. The percent of marines who agreed that
seeking mental health care would harm their career dropped by more than
50 percent. Responses by the Marines on whether seeking mental health
care would cause members of their unit to have less confidence in them,
cause unit leaders to treat them differently, cause unit leaders to
blame them for the problem, or cause the Marine to be seen as weak,
also saw similar statistically significant decreases.
Together with the Department of Veterans Affairs (VA), we have
developed an integrated Mental Health Strategy that has 28 discrete
strategic actions designed to strengthen access to clinical services,
improve continuity of care across the Departments, streamline the
adoption and implementation of evidence-based practices and ensure our
mental health providers are delivering state-of-the-art care.
We have increased the number of behavioral health care providers
over the past 3 years and embedded more in frontline units. Along with
providing care, we have undertaken the largest study of mental health
risk and resilience ever conducted among military personnel. This study
will identify risk and protective factors as well as moderators of
suicide-related behaviors by 2014. The Department continues to improve
access to behavioral health services through a number of initiatives.
In fiscal year 2012, we have begun the process of embedding, over a 4-
year period, over 400 behavioral health providers into our patient-
centered medical homes. We enhanced confidential, non-medical
counseling through the Military Family Life Consultants (MFLC) and
Military OneSource (MOS) programs, to include surge support--for both
deployment/reintegration points in time, as well as other crises that
emerge on a short-notice basis, such as the Ft Hood shooting and the
Japanese earthquake/tsunami/nuclear incident. Recent legislation now
permits mobile VA Readjustment Counseling Services to provide outreach
and readjustment counseling to active duty servicemembers.
We have also made efforts to ensure continuity of behavioral health
care for members in transition--to a new installation, from active to
Reserve status, or to the VA. We offer a diverse set of services to
reach those military members seeking greater support. One notable
program--``inTransition''--was developed in response to the Mental
Health Task Force recommendation to ``maintain continuity of care
across transitions for servicemembers and veterans,'' and offers a
voluntary telephonic coaching program designed to facilitate a smooth
transition to a new source of care. Afterdeployment.org is another
program, serving over 5,000 users monthly, that provides servicemembers
and their families with behavioral health information in a setting that
preserves anonymity, and offers tools to help them recognize
problematic behavioral health issues early and how to address these
challenges. Recently, the VA has been using the site's interactive
workshops in their walk-in clinics.
Just as the Department has established a comprehensive approach to
its mental health destigmatization efforts, we have employed the same
model for our suicide prevention programs. The Deputy assistant
Secretary of Defense for Readiness is standing up the Defense Suicide
Prevention Office that will be staffed and resourced to develop,
implement, integrate, and evaluate suicide prevention policies,
procedures, and surveillance activities across the Department. This
action specifically addresses a key recommendation contained in the DOD
Task Force Report on Suicide Prevention and will greatly facilitate the
timely implementation of additional recommendations contained in the
report.
The Department of Defense has made great strides in implementing
early identification and treatment programs for traumatic brain
injuries (TBIs). Through the work of the Defense Centers of Excellence
for Psychological Health and Traumatic Brain Injury (DCoE), the DOD in-
theater concussion policy has significantly improved the early
detection of servicemembers with concussion by providing clear and
specific guidelines for the management of acute concussions. The
Department's focus on TBI treatment has resulted in the standardization
of 62 TBI programs at military treatment facilities (MTFs) in the
nondeployed setting and the cultivation of 11 concussion restoration/
care centers in the deployed setting. We have also helped update the
behavioral health curriculum for all medical technicians and corpsmen
at our Medical Education and Training Center (METC) to ensure our
knowledge base is advanced throughout the MHS.
Our fiscal year 2013 program sustains the significant investments
we have made in all of our medical research and development programs,
and in particular in the area of TBI and Post-Traumatic Stress (PTS).
The Center for Neuroscience and Regenerative Medicine (CNRM) is a
collaborative intramural Federal program that bridges DOD and the
National Institutes of Health (NIH) in order to catalyze innovative
approaches to TBI research, and emphasizes research that is relevant to
military populations. Our other focus areas for the Defense Medical
Research and Development Program include polytrauma and blast injury;
operational health and performance; regenerative medicine;
rehabilitation; psychological health and well-being for military
personnel and families; and military medical training systems and
health information technology applications.
Within the readiness area, the health of our servicemembers is also
protected through sound occupational health practices. This past fall,
the Institute of Medicine (IOM) concluded its independent study of the
long-term health consequences of exposure to burn pits in Iraq and
Afghanistan. The IOM was unable to identify any long-term health risks
from these exposures. Nonetheless, DOD and the VA are continuing to
monitor of the health of deployed servicemembers and veterans and
provide for a longer period of post-exposure health assessments to
ensure these initial findings are sustained over time.
Finally, at the core of our medical readiness posture is our
people. Our recruitment of medical professionals--physicians, dentists,
nurses, ancillary professionals and administrators--remains high. With
the support of Congress, through the use of flexible bonuses and
special salary rates, we have been able to meet most of our recruiting
goals. Yet we recognize that competition for medical professionals will
grow in the coming years, amidst a growing shortage of primary care
providers and nurses. We will continue to work with Congress on
potential new flexibilities to ensure we remain competitive in this
environment.
improving population health
Closely linked with our readiness mission are our efforts to
improve the health of the entire MHS population. We are going to engage
in a multi-year effort on two of the greatest contributors to ill
health--tobacco use and obesity in our population.
Our servicemembers use tobacco and tobacco products at a much
higher rate than their peers; we have started to reduce tobacco use,
but we plan to do more. In addition to the existing suite of smoking
cessation pharmaceuticals available at MTFs, and counseling services,
we will soon offer the pharmaceutical benefit through our mail order
program, and allow for a 24/7 smoking cessation line with counseling
services over the phone.
In the area of obesity and overweight persons, in some
circumstances we reflect what is occurring within the larger society.
Our active-duty servicemembers--as you would expect--do well in
maintaining their weight and their fitness, and exceptionally well when
compared to their peers. However, the influence of nutritional habits
in the larger society is having effects on the military population and
particularly on entry-level candidates. When those in uniform leave
active service, too many reverse the physical fitness habits and
discipline of military service. There is a financial cost to this; one
DOD study found that $1.4 billion could be attributed to overweight and
obesity-related medical problems and services. But, more importantly,
the quality of life for our overweight and obese beneficiary population
is often far worse than it should be as many are affected by obesity-
related disease, such as diabetes and heart disease.
We have worked across the Services to develop and launch both adult
and childhood obesity management and prevention guidelines, emphasizing
the provider's role and positive steps to take in assisting and
advising patients. We have also implemented a demonstration project to
determine whether monetary incentives can be used to improve the
overall health and wellness of the MHS population. We do not yet have
the results of this demonstration project, but will report interim
findings to Congress this year. Finally, we have joined with a broader
set of partners in DOD, that includes bringing together everyone on a
military installation--commanders, senior enlisted advisors, the
military family program leaders and medical personnel--in a set of
initiatives aimed at further improving the fitness of our entire
community. Our military dining halls, schools and child development
centers are offering healthier food choices--both here and in
Afghanistan; our commissaries and exchanges will help identify better
nutritional choices; and we're redesigning our military communities in
ways that will increase exercise and fitness.
enhancing the patient experience of care
As the MHS moves into 2012, we will re-evaluate our efforts and
mission through the lens of enhancing the patient experience of care by
focusing on maximizing the value we provide to our beneficiaries.
The MHS is continuing the implementation of the Patient-Centered
Medical Home (PCMH), a program with the principle focus of developing a
cohesive relationship between the patient and the provider team. The
PCMH is a transformative effort within our system, with the potential
to positively affect all aspects of our strategic focus--readiness,
population health, patient experience and per member cost. Begun in
2009 as a strategic initiative, the MHS has formalized through
directive and accreditation our PCMH program. In 2011, 44 of our
facilities were formally recognized by the National Committee on
Quality Assurance (NCQA), with 93 percent recognized as Level 3 PCMHs
(as compared to a private sector rate of 60 percent with Level 3
recognition). Our more mature PCMHs--at facilities throughout the Army,
Navy and Air Force, and representing more than 25 percent of our
medical homes--are achieving the outcomes we sought: improved access to
care (increased percentage of the enrolled population getting an acute
appointment within 24 hours, and a routine appointment in 72 hours);
improved continuity with the same team of providers (increased
percentage receiving care from their assigned primary care manager);
and reduced emergency room utilization. In fiscal year 2012, we will
further augment our medical homes with a 24/7 nurse advice line to
offer both enrollees (and all beneficiaries) access to essential health
information. This nurse advice line will be linked with MTF appointing
to further improve access to care, and reduce bureaucratic hurdles for
our patients.
The Department has long been a national leader in developing and
deploying a global, electronic health record (EHR). Our first EHR was
put into the field in the late 1980s. We are now on the cusp of
developing our third generation EHR--and the first to be co-developed
with the Department of Veterans Affairs--the integrated Electronic
Health Record (iEHR). Both DOD and the VA are encouraged by the
progress that our interagency teams have made in refining or developing
the IPO charter, and the principles, strategies and architectural
framework for the iEHR as we embark upon this landmark effort.
The DOD/VA Interagency Program Office has been rechartered to give
them more responsibility and authority as the program execution office
for the iEHR. In addition, the VA has signed an agreement with the
Defense Information Systems Agency to move the data centers for two of
VA's regions into DOD data centers. Most recently, this week we
announced the selection for the Director of the Interagency Program
Office.
As we expand the amount of health care information that we collect
and share, we remain vigilant about the security of this sensitive
health information. In the last year, a DOD contractor responsible for
the maintenance of aspects of our electronic health record experienced
a serious security breach in which 4.9 million medical records were
potentially compromised. In the wake of that incident, we have
conducted a critical review of the contractor's performance, as well as
a review of our existing policies and procedures, and we have
strengthened our guidance and future contract requirements for a number
of security and encryption standards.
Our work with the VA on the iEHR is only one element of a
comprehensive strategy to further partner with the Department of
Veterans Affairs. We have successful joint ventures or fully integrated
operations at ten locations in the United States, and, in addition, we
are pursuing other opportunities for joint purchasing, shared education
and training opportunities, and joint construction, where feasible.
The Military Construction (MILCON) program continues to
recapitalize our inventory of MTFs. Our current investment program was
substantially increased 5 years ago and has been essential in
facilitating the BRAC transition and continued improvement of our MTFs.
Both the Walter Reed National Military Medical Center in Bethesda, MD,
and the Fort Belvoir Community Hospital in Fort Belvoir, VA, have
opened their doors, showcasing the investments made, using evidence-
based design standards. Construction and renovation of medical
facilities in San Antonio is also complete. Along with other military
medical facility projects in the United States over the last 7 years,
with the support of Congress we have just completed one of the most
transformative periods in the history of our military medicine
infrastructure.
As budgets and force structure are reduced in the Department, we
recognize that there is a need to reassess the size and scope of major
construction projects, as we are currently doing with the Landstuhl
Regional Medical Center in Germany. We will, however, sustain our
commitment to the operational mission, patient-centered design and
clinical quality, even if sizing issues are reconsidered. The
recapitalization of military medical facilities is essential to our
efforts to recapture health care that has migrated to the civilian
sector.
responsibly managing cost
We are proud of our achievements in combat and peacetime medicine.
We offer a superb benefit to our 9.7 million beneficiaries, no matter
where they live, through our direct health care system and through our
managed care support contracts. This health care benefit is justifiably
one of the finest and most generous in the county and is an appropriate
benefit for those who serve our country. However, the costs of
providing this care continue to increase more rapidly than overall
inflation. For a number of years, and through several administrations,
there have been continuous, incremental steps taken to reduce the rate
of growth in the costs of healthcare.
In addition, the requirements of the Budget Control Act of 2011
compelled the Department to identify $487 billion in budget reductions
over the next 10 years. The process of identifying these budget cuts
was developed by the senior civilian, military officer and enlisted
leadership from throughout the Department. Difficult choices were made.
Over 90 percent of the cost reductions were external to personnel
compensation and benefits. Still, health care was not exempt from this
process. The proposals being put forward in this budget appropriately
balance the need for a superb benefit that assists with both
recruitment and retention of an All-Volunteer Force with our need to
sustain a cost-effective approach for the long-term.
This administration is pursuing a four-pronged approach by which
all stakeholders share responsibility for improving the health of our
population and the financial stability of the system of care.
Our four approaches--moving from a system of healthcare to one of
health; continuing to improve our internal efficiencies; implementing
provider payment reform; and rebalancing cost-sharing--are further
described below. In some instances, they reflect efforts already
underway, or new initiatives that the Department is implementing within
existing legislative and regulatory authorities.
Moving from Healthcare to Health
The Department of Defense's military medical leaders are leading a
strategic effort to move our system to one that promotes and sustains
the optimal health of those we serve, while providing world-class
healthcare when and where it is needed.
Central to this effort are the Department's investments in
initiatives that keep our people well; that promote healthy lifestyles;
and that reduce inappropriate emergency room visits and unnecessary
hospitalizations. These initiatives have been addressed in earlier
parts of my testimony and include the Patient-Centered Medical Home
(PCMH) initiative; the embedding of behavioral health staff within
these medical homes; the introduction of a 24/7 nurse advice line; and
our many population health initiatives. We have also taken a number of
steps to support preventive services. Our TRICARE beneficiaries--
whether enrolled to TRICARE Prime or in TRICARE Standard--have no
copayments for recommended preventive services, such as influenza
immunizations.
The ``Healthcare to Health'' element of our strategy will not
produce immediate cost savings. Nonetheless, based on knowledge of
well-constructed wellness programs in the private sector, we are
confident that these, and other ongoing enhancements to the TRICARE
program, will produce improvements to health that also ``bend the cost
curve.'' In the longer term, it is the strategy most likely to produce
the greatest amount of savings to our system.
Internal Efficiencies
The Department has instituted internal cost reduction efforts by
decreasing headquarters administrative overhead; jointly purchasing
medical supplies and equipment; and directing patients to lower cost
venues for medications. The cumulative savings from all of these
internal efforts for fiscal year 2013 are estimated at $259 million.
I have also previously noted the proposed reorganization of the
MHS, following the work of the Task Force on Military Health System
(MHS) Governance, which evaluated options for the long-term governance
of the MHS as a whole; governance in those areas where more than one
Service operates medical treatment facilities--referred to as multi-
service markets, and governance for the National Capital Region (NCR).
Implementation of any organizational efficiencies resulting from
this Task Force has been placed on hold at the direction of Congress,
subject to a review by Congress and by the Comptroller General. We will
provide congressional committees with the information requested
regarding the Task Force work and will develop more detailed cost and
savings estimates for any eventual governance model. After the Deputy
Secretary of Defense approves the ``way ahead,'' we will be prepared to
answer any additional questions that you have. We believe that further
integration of health services across the Services and with the TMA are
needed in order to provide a continued high quality of care in an
environment of diminishing resources while ensuring the preservation of
the health benefit for future generations.
Provider Payment Reform
We are committed to identifying greater efficiencies and cost
savings in all areas of our operations. In addition to internal
efficiencies, we are also seeing significant savings through a number
of provider payment reforms that we have introduced in the last several
years. These include the implementation of the outpatient prospective
payment system; the policy changes we made for reimbursement to select
hospitals and health plans in the TRICARE network; and further use of
Federal ceiling prices for acquisition of pharmaceuticals.
The Department has undertaken a broad-based, multi-year effort to
ensure all aspects of our provider payments for care purchased from the
civilian sector are aligned with best practices in Medicare and in
private sector health plans. The most notable efforts have included
implementation of changes to the outpatient prospective payment system
(OPPS) and reform of payment to Sole Community Hospitals.
OPPS is modeled after the payment process that Medicare uses for
similar health care services--setting a fixed fee per procedure,
inclusive of provider and institutional charges for care. In order to
allow medical facilities to transition to this new method of payment,
TRICARE phased in the reimbursement levels over 4 years, with the full
implementation of this policy set to occur in 2013. In fiscal year
2012, we project $840 million in savings, and $5.5 billion over the
fiscal years 2012-2017.
Our provider payment reform for Sole Community Hospitals (SCH) was
also phased-in over time, and will provide a projected $31 million in
savings in the first year, and will grow to about $100 million in
savings through 2017.
In the area of purchasing prescription drugs, in 2009 we instituted
a process for obtaining discounts on drugs distributed through retail
network pharmacies, pursuant to authority provided in the 2008 National
Defense Authorization Act. Known as Federal Ceiling Prices (FCP),
prescriptions purchased under FCP are at least 24 percent less than
non-Federal Average Manufacturer prices. In 2012, the FCP program will
save the Department over $1.6 billion, and will grow to over $2 billion
in savings by 2017.
Beneficiary Cost-Shares
In addition to the focus on internal and external efficiencies, our
proposed budget introduces changes to the health care out-of-pocket
costs for our beneficiaries.
I want to make three critical points related to these proposals.
First, even accounting for these proposed fee changes, the TRICARE
benefit will remain one of the finest and most generous health benefits
available in the country, with among the lowest beneficiary out-of-
pocket costs available to anyone--and certainly lower than costs by
other Federal Government employees. We believe that is appropriate and
properly recognizes the special sacrifices of our men and women in
uniform, past and present.
Second, as mentioned earlier in my testimony, these proposals were
developed within the Department, and represent the input and consensus
of our uniformed leadership, both officer and enlisted.
Third, we recognize that some beneficiary groups should be
insulated from increases in out-of-pocket costs. We propose to exempt
those servicemembers, and their families, who were medically retired
from military service, as well as the families of servicemembers who
died on active duty. We also propose to establish cost-sharing tiers,
with lower increases for retirees based on their military retirement
pay. More junior enlisted retirees, for example, will experience the
lowest dollar increases in out-of-pocket costs. Finally, we have also
avoided any changes in cost-sharing for active duty families with the
exception of prescription drug copayments obtained outside of our MTFs.
Prescription drugs distributed within MTFs will continue to be free of
charge for all beneficiaries.
For over 15 years, the Department had not increased patient out-of-
pocket costs for any beneficiary. In fact, the TRICARE benefit was
enhanced in many ways, and a number of out-of-pocket costs were
decreased. A few of these enhancements include: active duty family
members enrolled in TRICARE Prime had their copays eliminated; retirees
and their families using TRICARE Prime had their catastrophic cap
reduced from $7,500 to $3,000 per year; Medicare-eligible retirees and
their families received TRICARE For Life coverage, and a TRICARE
pharmacy benefit. Last year, we introduced very modest changes in one
segment of our population--increasing TRICARE Prime enrollment fees for
retiree families by $5/month, and indexed these fees so that future
increases continue to be modest and beneficiaries can plan for them. We
greatly appreciate Congress' support for these proposals in the fiscal
year 2012 budget, and have implemented those fee changes in the current
year.
Although last year's changes were a necessary step, the Department
has proposed further cost reduction efforts in 2013 as an element of
our strategy to meet the requirements of the 2011 Budget Control Act.
All of these changes are phased in over time. For select fees the
Department has proposed ``tiers'' of copays based on the retirement pay
of the beneficiary. Fee changes are distributed across the various
TRICARE programs, so that no one beneficiary group bears the entire
burden for these changes in cost-sharing. Retirees in TRICARE Prime,
TRICARE Standard and TRICARE For Life each have a share of the
increases; all beneficiaries (except uniformed personnel) have
additional costs for prescription drugs outside of MTFs. The following
sections provide a high-level overview of the proposed changes in
beneficiary out-of-pocket costs. Figure 2 summarizes the proposed fees:

Fee increases for TRICARE programs. The following
proposed changes represent increases from existing patient out-
of-pocket costs.

TRICARE Prime Enrollment Fees. We propose to
raise the enrollment fees in 2013 for retired
servicemembers and their families from between $80-$300
per year, based on the retirement pay of the
servicemember, and continue to provide similar
increases through 2016.
TRICARE Deductibles. We propose to increase
deductibles for the TRICARE Standard program for
retired servicemembers and their families beginning in
fiscal year 2013. TRICARE deductibles have not been
changed since before the TRICARE program was
introduced, having last been adjusted over 20 years
ago.
TRICARE Pharmacy Copays. We propose to
increase pharmacy copayments for generic, brand name
and non-formulary prescriptions in both the retail and
mail order settings, although we will continue to offer
significant incentives for beneficiaries to elect mail
order over retail pharmacy networks. Additionally, non-
formulary prescription drugs will no longer be
available in the retail network. These changes are
proposed for all non-active duty beneficiaries, to
include active duty family members. Prescription drugs
obtained in military hospitals and clinics will
continue to be provided without copay for any
beneficiaries.

New fees for TRICARE programs. Our proposed budget
also calls for the introduction of new fees not previously part
of the TRICARE program.

TRICARE Standard/Extra Enrollment Fee. We
propose to introduce an annual enrollment fee in
TRICARE Standard for retired servicemembers and their
families. The proposed fee for 2013 will be $70/year
for an individual retired beneficiary, or $140 per
retired family.
TRICARE For Life (TFL) Enrollment Fee. When
TFL was introduced in 2002, there was no enrollment fee
in the program, only a requirement that beneficiaries
be enrolled in Medicare Part B to enjoy their TFL
benefit. Medicare Part B was always a step that we
recommended our retirees elect, and prior to 2002, over
95 percent of eligible military retirees were enrolled
in Medicare Part B. The TFL benefit has reduced
beneficiary out-of-pocket costs by thousands of dollars
per year in copayments or Medicare supplemental health
insurance plan payments. The proposed TFL enrollment
fees, similar to the TRICARE Prime enrollment fees, are
tiered, based on an individual's retirement pay--and
range from $35 to $115 per beneficiary per year in
fiscal year 2013.
Exclusion of Enrollment Fees from the
Catastrophic Cap. We propose that enrollment fees,
which had previously accumulated toward a retiree's
catastrophic cap limit, will not be counted toward the
cap beginning in 2013.
In addition to the indexing of the TRICARE
Prime enrollment fee, which is already indexed, we
propose to index other beneficiary out-of-pocket costs
identified in this set of proposals, to include the
TRICARE Standard deductible, TRICARE Standard
enrollment fee, TRICARE For Life enrollment fees,
pharmacy copayments, and catastrophic caps.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

These proposed changes continue to be modest by historic standards
of cost-sharing in the TRICARE program. In 1996, when TRICARE was
implemented, a working age retiree's family of three contributed
approximately 27 percent towards the total cost of their care; today
that percentage has dropped to just over 10 percent. Even with these
proposed changes, the percentage would still remain below the
percentage originally set by Congress, averaging approximately 14
percent of range of overall health care costs in 2017--and stabilizing
at that level for the out-years.
These adjustments are an important step to setting the TRICARE
benefit on a more sustainable path that maintains the quality of the
medical benefit for future generations. Moreover, the overwhelming
majority of these adjustments will be phased in over a 4- to 10-year
period and will be appropriately indexed to ensure future
sustainability and guarantee transparency. These proposals--one element
of a four-pronged effort at cost control--will help shift us toward
more effective and cost-efficient processes that will allow us to
provide better care while meeting our obligations to help reduce our
budgets.
We are cognizant of the strains placed on our economy and the
government by Federal budget deficits and long-term debt. We recognize
that the Department of Defense must shoulder its share of
responsibility and that we must tighten our belts just as so many
Americans have been forced to do in recent years. We have not taken any
proposed change lightly. The health benefit exemplifies the
Department's gratitude to veterans for their service and acts as an
integral part of recruiting, retaining, and maintaining a healthy
force. We worked to ensure that cost changes would be minimized and
that any reforms would not degrade the quality of the benefit. We are
confident that this is the case.
I am honored to represent the men and women of the Military Health
System before you today, and I look forward to answering any questions
you may have.

Senator Webb. Thank you very much, Secretary Woodson.
Secretary McGinnis, welcome.

STATEMENT OF DAVID L. McGINNIS, ACTING ASSISTANT SECRETARY OF
DEFENSE FOR RESERVE AFFAIRS

Mr. McGinnis. Chairman Webb, Senator Graham, distinguished
members of the subcommittee, thank you for the opportunity to
appear before you today and discuss the Reserve and our
National Guard.
Today, I can report to you that we have over 72,000 members
of the Guard and Reserve on involuntary orders for mobilization
supporting operations in U.S. Central Command (CENTCOM). In
addition, we have another 86,000 on a snapshot. At the end of
the month, we provided to the Secretary, 86,000 guardsmen and
reservists deployed on 6 continents supporting our regional
commanders in various duty statuses from annual training to
mobilization. This is reflective of the emerging new role of
our Reserve components described by many as the operational
reserve.
The President's fiscal year 2013 budget supports this
operational reserve providing funding and programmatic support
to three key readiness imperatives: training, equipping, and
recruiting and retention.
Training is focused on, first of all, maintaining
capability and capacity identified within DOD for the
particular organizations and leveraging available training
technologies so we can make the maximum use of available time
of our guardsmen and reservists when they are in training. We
are focused on developing a common readiness standard across
the components of each Service so we have standardized
expectations on what we are looking for the Guard and Reserve
to do.
Equipping within my office first focuses on transparency.
That is a bumper sticker for assuring that the equipment that
you authorize for the Reserve components gets to those Reserve
components you expected in a timely manner. We have also
expanded this program to now develop a life cycle view of that
equipment and track it throughout the system.
We are also working very hard to ensure that the Guard and
Reserve organizations have the right equipment to train with,
including command and control and communications equipment, so
they can integrate within the Total Force.
Recruiting and retention are obviously an essential element
of a ready force, and our recruit quality remains high. We
expect some shifts in that as we move forward with individuals
leaving the Active component, as we mentioned earlier, and we
are working very strongly to come up with ways to integrate
them into the Reserve components as they leave Active service.
Retention currently is very solid, and we know that while
we recruit the servicemember, we must maintain the family and
retain the family. The Yellow Ribbon Reintegration Program
(YRRP) is a wonderful tool that you provided us, that helps us
do that. The use of the Reserve components in an operational
role is necessitating that we begin to move the YRRP, or at
least portions of it, into the base budget. With Secretary
Hale's help and the help of others, we have started to do that
in 2013, and we are working on doing that as we develop the
future defense program.
Continuing evolving requirements now also include
employment programs, employment assistance, and training. We
are working very hard at that. I will talk about that in a
minute.
As we learned from our members and their families on
multiple deployments, we are finding that the tension to pre-
enduring deployment activities within the YRRP really enhances
the post-deployment period. We are putting a lot of emphasis on
that.
Hero2Hired (H2H) is a joint initiative between the YRRP and
the National Committee on Employer Support to the Guard and
Reserve which is focused on unemployment and under-employment
of this distinct category of servicemembers within the Reserve
components.
Second, this focuses on the reality that is really,
unemployment of our guardsmen and reservists is a key element
of individual military readiness. Successful guardsmen and
reservists are established in the community and have good jobs.
We know that.
Finally, sir, I could not appear before you without
highlighting the 20-year history of the building of enduring
international partnerships with the National Guard State
Partnership Program. We currently have a total of 63
partnerships, but I would like to focus on the 22 in Eastern
Europe and the 5 in CENTCOM. The 22 in Eastern Europe have
helped us build the North Atlantic Treaty Organization (NATO)
and expand NATO and also account today, as we speak, for about
9,500 Eastern European military members as part of the
International Security Assistance Force (ISAF); and the 5
CENTCOM programs give us expanded access and understanding of
the CENTCOM theater.
I thank you very much again. I look forward to your
questions.
[The prepared statement of Mr. McGinnis follows:]
Prepared Statement by David L. McGinnis
introduction
Chairman Webb, Ranking Member Graham, and members of the
subcommittee; I thank you for your invitation to participate in this
hearing. I welcome the opportunity to give you an overview of the
issues we are addressing in the Reserve components.
The fiscal year 2013 budget supports the National Defense Strategy
and will enable our Reserve components to continue to fulfill their
vital national security role. The budget provides funding and
programmatic support for the training, equipping, recruiting and
retaining of the Guard and Reserve.
The Department's Ready Reserve totaling about 1.1 million members
contributes 43 percent of total military end strength at a cost of 9
percent of the total base budget. The National Guard and Reserve
provide trained, ready and cost-effective forces that can be employed
on a regular operational basis, while also ensuring strategic depth for
large-scale contingencies or other unanticipated national crises.
Reserve component forces can:

Provide critical capabilities for meeting national
defense objectives
Enable mitigation of strategic risk at lower cost than
a large standing full-time force
Provide cost effective returns on significant
Department of Defense (DOD) investment
Reduce stress on the Total Force
Provide the capability to rapidly ``reverse'' given a
change in our national strategic objectives

Prior to 2001, the Reserve components were primarily a strategic
reserve with occasional operational missions as needed to augment
Active Forces. Since 2001, Reserve component units and individuals have
been heavily employed across the full spectrum of military operations
ranging from combat missions overseas, to homeland emergencies, to
National Special Security Events and have demonstrated their readiness
and utility. The current National Guard and Reserve is, arguably, the
most combat seasoned Reserve Force ever, and the Department seeks to
capitalize on this significant investment to provide needed military
capacity during current austere economic times.
To ensure the Reserve component can continue to provide both
operational and strategic forces, the Department included funding and
programs in its fiscal year 2013 budget request for their training,
equipping, recruiting and retention.
training and utilization opportunities for the military departments
After a decade of sustained engagement in combat operations, the
Reserve components of our Armed Forces continue to transform into a
dependable operational force that provides full-spectrum capability to
the Nation. As of 31 December 2011, 835,689 Reserve component members
(809,913 Selected Reserve and 25,776 Individual Ready Reserve) have
served in support of contingency operations since September 11, 2001
and 80 percent of those service men and women have deployed in the U.S.
Central Command area of responsibility. Today there are over 85,000
National Guard and Reserve men and women on active duty around the
world and at home, serving in missions ranging from combat in
Afghanistan to defending the air space here in Washington and our
borders in the southwest.
RC Utilization
The contribution of the Reserve components has increased
dramatically in the last two decades, and during that time the Reserve
component has become an integral part of the Nation's military force
participating in nearly every mission worldwide. The increased
utilization of the Reserve components supports the recent Strategic
Guidance, and the Department has managed the use of the Reserve
component to help mitigate the stress on the Total Force.

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Today's Reserve component is a force multiplier which provides
access and flexibility at an incredible value allowing the Services to
utilize full capabilities in an operational capacity while retaining
strategic depth. An optimal Active component/Reserve component force
mix will allow the department to not only preserve previous investments
in readiness, capability, and capacity, but also protect the
operational expertise of the force for future use while ensuring a
rapidly expandable, trained, and ready military.
Innovative Readiness Training
The Innovative Readiness Training (IRT) Program is an outstanding
volunteer training opportunity for our National Guard and Reserve.
IRT's focus is to provide a varied and challenging menu of training
opportunities that exercise the Mission Essential Task List (METL)
requirements of combat support and combat service support units and
individuals. Each year, new training opportunities are presented by
Federal, State, or local government agencies or nonprofit organizations
to the Services for their selection. Military units are provided METL
training in a realistic, hands-on setting while providing quality
services to communities throughout the United States and U.S.
territories.
Examples of IRT activities include infrastructure development,
constructing rural roads and runways, small building and warehouse
construction and providing medical and dental care to medically
underserved communities. These opportunities result in interoperability
and readiness training ensuring our Nation always has a fully capable
National Guard and Reserve. Historically, this office's IRT program
budgets for, and executes a $20 million fiscal year training program.
Cyber Workforce
Operating effectively in Cyberspace is vital to DOD and the Nation.
``Cyber'' as a Warfare Domain is newly organized and rapidly expanding.
The need for personnel with cyber skills, the limited number of workers
with those skills, and increasing competition within U.S. Government
and the private sector for the same set of skills require a long-term
and robust cyber workforce strategy. The Secretary of Defense has
stressed the need for a flexible approach to attract, develop, and
retain Cyber, and specifically Cybersecurity, professionals along with
endorsing innovative use of the Reserve component for cyber missions.
Innovative use of the Reserve component as proposed by the
Secretary is well underway, with forces assigned to the National
Security Agency, U.S. Cyber Command (CYBERCOM), the Defense Information
Systems Agency and to each of the four Service component commands
supporting CYBERCOM. There are multiple Air and Army Guard units
engaged in the cyberspace mission and Computer Network Defense teams
are authorized in all 54 States and territories. The Reserve component
offers very highly qualified individuals from the private sectors whose
civilian skills may be maximized when supporting DOD.
State Partnership Program
The National Guard State Partnership Program (SPP) mission is to
establish and sustain enduring relationships with partner nations of
strategic value in conjunction with the National Security Strategy,
National Military Strategy, Department of State and Combatant Command
Theater Security Cooperation guidance to promote national objectives,
stability, partner capacity, better understanding and trust.
Program partners engage in security cooperation activities to
include homeland defense and security, disaster response/mitigation,
consequence/crisis management, interagency cooperation, border/port/
aviation security, combat medical, fellowship-style internships, and
bilateral familiarization events that create training and exercise
opportunities. SPP provides the ability to focus a part of DOD, a
State's National Guard, with a single country or region in support of
U.S. and partner country objectives. Currently, 48 States, 2
territories, and the District of Columbia are partnered with 63
countries around the world.
This program directly supports the Secretary's strategic goal of
building innovative partnerships. The program has been funded at $13.36
million for fiscal year 2012 and the President's fiscal year 2013
budget includes a request for $16.5 million. Many of these partnerships
have resulted in collaborative working relationships through police and
military operational mentoring and liaison teams with our new NATO
partners who are part of the effort in Afghanistan.
equipping the reserve components
Equipment Procurement
There currently is no specific appropriation that provides
equipment directly to the Reserve components. The Reserve component
relies on the active procurement account to meet equipment requirements
and provide adequate capabilities. Congress has been generous in
providing additional support through the National Guard and Reserve
Equipment Appropriation ($1 billion for fiscal year 2012), which
provides funding for Reserve component equipment modernization and
critical dual-use equipment.
P-1R
We thank Congress for their continued generous support of the Guard
and Reserve equipping (P1R fiscal year 2012 - $4.6 billion/fiscal year
2013 - $3 billion). The current challenge is that the P-1R has
historically been treated as a non-binding projected subset of the
Procurement Programs (P-1). In my view it is time to make the National
Guard and Reserve equipment a sub-line within the P-1 and eliminate the
P-1R. This will better ensure that Guard and Reserve component
equipment is part of the Service plans throughout the entire
procurement process.
Resetting
Currently, funding for reset of equipment returning from theatre
for the Guard and Reserve comes from overseas contingency operations
appropriations. As we prepare to move away from reliance on these
supplemental funds, it is important to have a continued source of
funding built into the base budget for Reserve component equipment
reset. It is critical that the Guard and Reserves are able to continue
to train on high quality equipment for which funds have already been
allocated.
RC Equipment Transparency
Full transparency and accountability can only be achieved through a
full life cycle, enterprise approach to reserve equipping. The life
cycle includes requirements determination, budget requests,
appropriation, purchase, and delivery of hundreds of thousands of
pieces of equipment. The importance of transparency doesn't stop when
an item is delivered to a Reserve component unit; the value of
transparency in the life cycle approach to equipping continues beyond
delivery. Plans to return borrowed Reserve component equipment are
included as key deliverables in this process.
Military Construction
The fiscal year 2013 Reserve component budget includes $1.02
billion, $21 million less than fiscal year 2012, for military
construction which will meet both current and new mission requirements
for Reserve component operations, readiness, and training facilities.
The budget also funds sustainment, which is essential to maintaining
facilities at a level that supports readiness and preserves the
substantial investment the country has made in infrastructure. However,
with urgent Reserve component facilities deficiencies and funding
constraints, we must work to exploit opportunities to utilize existing
DOD facilities and continue to pursue the efficiencies of joint use
construction opportunities. The benefits of doing this go far beyond
cost savings by promoting cooperation, building trust, and providing
opportunities for joint training.
Regional Integrated Training Environment
The Regional Integrated Training Environment (RITE) concept is a
joint effort that identifies and matches Services' training
requirements to a vast network of local training facilities and
resources. The purpose of the RITE initiative is to help sustain the
total force readiness posture and surge capability as determined by
service rotational readiness models while reducing overhead training
costs through innovative management of facilities, training assets,
advance simulators and Joint Live Virtual and Constructive capability,
pooled, shared equipment, and coordinated through a web-based
scheduling/visibility program. As the concept matures, collaboration
will expand with key internal and external DOD stakeholders.
recruiting and retaining the reserve component force
In approximate numbers, as of December 31, 2011, the Ready Reserve
currently consists of the following end-strengths:

Selected Reserve: 844,400
Individual Ready Reserve: 220,000
Inactive National Guard: 3,700

Continuum of Service, End Strength and Readiness Management
Meeting Reserve component end strength objectives is a priority of
the Department. The following table depicts the current prescribed and
actual end strengths for the Reserve components as of December 2011.
The Department's Continuum of Service efforts have contributed to all
six DOD Reserve components remaining within the variance allowed for
their congressionally-mandated end strength objective. The Services
have implemented recruiting, retention, and force shaping policies and
programs to achieve end strengths for fiscal year 2012. We appreciate
the congressional support of the fiscal year 2012 end strength levels
and the legislative initiatives that assist in recruiting and retaining
Reserve component servicemembers. Fiscal year 2013 end strength levels
will provide the Reserve components with the forces necessary to meet
strategic and operational demands while maintaining a dwell consistent
with Departmental policy.

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Recruit Operational Ready Reserve Strength
Thus far, for 2012, Reserve recruiting efforts show continued
success. Through January, five of the six Reserve Services are within
tolerance for recruit quantity objectives. Also, all Reserve components
have met recruit quality objectives. The Reserve components continue to
exceed the DOD Benchmark of 90 percent of new recruits being High
School Diploma Graduates, with 97 percent of Reserve component recruits
holding that credential.

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It is important that we have a military that reflects the society
it defends, both in the enlisted ranks and our commissioned officers.
This is particularly important as less than 1 percent of the American
public serves in uniform.
We continually review our recruiting programs to align funding and
policies with current realities. Each of the Services has made
significant adjustments to recruiting programs in light of our austere
fiscal environment and draw-downs, and continues to look for additional
cost savings but we must be cautious and resist the temptation to cut
too deeply and too fast. Stable adequate investments in recruiting
resources are necessary to maintain long-term success. Although
enlistment incentives can be adjusted quickly to meet market
fluctuations and force management needs, history has shown that the
time required to redeploy advertising/marketing campaigns and/or
qualified recruiters is significant.
Acknowledging and understanding these factors and the need to
expand our recruiting areas for the Reserve components, we continue to
enhance DOD influence in underserved communities by working with local
school administrators, specifically from Title I school districts, and
implementing programs like the DOD STARBASE Program that have potential
long-term impacts on students' on-time high school graduation; college
enrollment; and interest in learning science, technology, engineering
and mathematics. DOD STARBASE is an outreach and educational program
that focuses on science, technology, engineering, and mathematics
(STEM). STARBASE provides students underrepresented in the STEM areas
of study and careers with 25 hours of instruction through an inquiry-
based curriculum with ``hands-on, minds-on'' experiential activities
and exposing them to military's technological environment to solidify
their attachment to and engagement with learning. The program's
influence has resulted in former DOD STARBASE students being invited to
attend and participate in the White House Science Fairs for the last 2
years.
My staff and I have been working with the Office of Management and
Budget to challenge States, industries, and nonprofits to invest in
intervention programs like the National Guard Youth Challenge Program.
I am also working with General McKinley, Chief of the National Guard
Bureau, to provide oversight and management of the Program by
collaborating with Governors to eliminate State resident issues; and to
ensure every qualified high school dropout has an opportunity to attend
the program. The Challenge program is currently operating in 27 States
and Puerto Rico. Its goal is to improve the education, life skills and
employment potential of America's high school dropouts. We provide
quasi-military based training, supervised work experience to advance
the program's core components. The core components include obtaining a
high school diploma or equivalent, developing leadership, citizenship,
life coping and job skills and improving physical fitness, health and
hygiene. Since the program's inception over 100,000 students have
successfully graduated from the program. The average cost per Challenge
student is approximately $16,000. The fiscal year 2013 budget will
support increasing annual enrollment and/or start up new programs in
States that have the fiscal resources to match the cost-share funding
requirements and to sustain the program's viability in States that have
budget limitations.
These two successful DOD youth outreach programs provide the
Department a unique connection to the American public and working with
our most valued resource--our young people.
The Montgomery GI Bill-Selected Reserve (MGIB-SR) has been a
cornerstone of our military recruiting efforts since 1985, and a major
contributor to the success of the All-Volunteer Force. The new Post-9/
11 GI Bill appears to enhance our recruiting efforts even more
especially after signing the Post-9/11 Veterans Educational Assistance
Improvements Act of 2010--providing additional benefit options that
include the eligibility of National Guard and Reserve members who were
inadvertently omitted from the original Bill, vocational and other non-
college degree training, and living stipends for those enrolled in
distance learning programs.
Individual Readiness
We understand that maintaining the highest level of individual
readiness for our military manpower and civilian employees is a
requirement for continuing to be utilized as a viable part of the
operational force. Employing the Reserve components as operational
forces requires modifications to training schedules and funding
requirements. Ancillary training must be properly managed and
prioritized in order to allow our members to focus on training for the
skills that will be required of them when deployed or activated. Before
DOD operationalized the Reserve component, the normal minimum training
profiles consisted of training 2 days per month plus 14-15 days of
active duty for training annually. While that training profile remains
in-place for some types of units, current Department policy states that
for those with planned deployments, training days prior to mobilization
increases. This training profile, with more training pre-deployment and
less post-deployment, minimizes mobilized time away from families and
civilian. Increasing individual readiness by modifying training
profiles with resources and policies is a major focus area that will
allow the Guard and Reserve to capitalize on the gains made during the
last decade and enable the continued use of the Reserve component as an
operational force.
Individual Medical Readiness
The Individual Medical Readiness of the National Guard and Reserve
continues to be a priority for the Department to ensure availability of
Ready Reserve component members for deployment. As of the fourth
quarter of fiscal year 2011, the Reserve component has increased its
Fully and Partially Medically Ready rate 5 percent over first quarter
fiscal year 2011 rates, and reduced the Indeterminate population by 6
percent. Most notably, the Marine Corps Reserves improved their Fully
Medically Ready status by 16 percent and reduced the Partially Medical
Ready rate by 14 percent, over half of the fiscal year 2011 first
quarter rates. The U.S. Coast Guard Reserve also made great
improvements increasing their Fully Medically Ready rate by 9 percent,
and reducing their Indeterminate and Not Medically Ready population by
4 percent and 6 percent respectively. While we continue to face
challenges with Dental Readiness, all Services are over the 75 percent
goal except Army Reserve and Army National Guard which are at 71
percent and 73 percent respectively. My office is working within P&R
and across the Services to improve access to medical and dental
services for Reserve component members. For example, the Army Reserve
now budgets additional medical and dental services into their readiness
accounts for Reserve component members.
TRICARE for the Reserve Components
The Department offers various health and dental coverage options to
eligible members of the Reserve components and their families. Members
of the Selected Reserve (SELRES) who actively participate in the
Reserve component may purchase individual or family TRICARE Standard/
Extra coverage under TRICARE Reserve Select (TRS). Members pay premiums
that reflect 28 percent of the total cost of the coverage and incur
cost shares after meeting an annual deductible (a government subsidy
covers 72 percent of premium cost).
For Reserve component members who have been activated in support of
a contingency operation, premium-free TRICARE coverage may begin up to
180 days before the member is activated (Early Identification) and
continues for 180 days after the member is deactivated (Transitional
Assistance Management Program (TAMP)) for the member and his/her
family. After this period, qualified SELRES members may re-enroll and
purchase TRS coverage again if desired. As of December 2011, there were
a total of 81,465 TRS plans in effect: 29,204 TRS member-only plans and
52,261 TRS member and family plans with a total of 215,545
beneficiaries covered by TRS. Additionally, the Continued Health Care
Benefit Program (CHCBP) is a premium-based health care program that
offers temporary transitional health coverage for 18-36 months after
TRICARE eligibility ends. CHCBP acts as a bridge between military
health benefits and civilian health plans. Qualified members may
purchase CHCBP within 60 days of loss of eligibility for either regular
TRICARE or TAMP coverage.
TRICARE Retired Reserve (TRR) is a full cost (no government
subsidy) premium-based, worldwide health plan that qualified retired
Reserve members and survivors may purchase. TRR offers comprehensive
health coverage from any TRICARE-authorized network or non-network
provider. TRR members may receive care in military treatment facilities
on a space-available basis. TRICARE Young Adult is a premium-based
health care plan that qualified dependents may purchase. TRICARE Young
Adult provides medical and pharmacy benefits, but dental coverage is
excluded. TRICARE Young Adult allows dependent adult children to
purchase TRICARE coverage after eligibility for ``regular'' TRICARE
coverage ends at age 21 (or 23 if enrolled in a full course of study at
an approved institution of higher learning) and are not yet age 26.
Collectively, these options for health care coverage provide a
comprehensive and affordable health care plan for Reserve component
servicemembers and their families. TRICARE insurance has provided
servicemembers the opportunity to maintain their individual medical
readiness requirements, increasing the overall readiness of our Reserve
component units.
Yellow Ribbon Reintegration Program
The Yellow Ribbon Reintegration Program (YRRP) is a statutorily
created, joint effort to support the Services in providing National
Guard and Reserve servicemembers and their families with critical
support, information, services, and referrals throughout the entire
deployment cycle (pre, during, and post) to maximize successful
transitions as servicemembers move between their military and civilian
roles and to create strong, resilient military families. The YRRP is
also responsible for providing Reserve component members and those who
support them with training in suicide prevention and community healing.
In fiscal year 2013, the YRRP will continue collaborating with suicide
prevention experts to develop a strategic approach in identifying
promising practices, strengths, challenges and gaps. We in Reserve
Affairs continue to work with the Services as well as the newly created
Defense Suicide Protection Office within the Office of the Under
Secretary of Defense for Personnel and Readiness to address this
important issue. The Services, along with Reserve Affairs, have taken
current suicide rates very seriously and have committed resources to
significantly reduce this trend.
Guard and Reserve, Federal and State employees, volunteers and
nonprofit organizations have worked tirelessly to ensure our
servicemembers and those who support them have access to resources as
they transition back into their communities. During the past 3 years,
the YRRP has evolved into a successful, forward-leaning program
providing essential readiness and resiliency training and resources to
over 800,000 servicemembers and designees through direct-contact YRRP
events. In fiscal year 2011, the Services conducted a total of 2,151
YRRP events across the country, providing vital information and
resources to 309,753 servicemembers, their families and/or designated
representatives. To support the use of the operational reserve in the
future, we need to work towards YRRP funding in the base budgets to
ensure continuation of these important programs.
In fiscal year 2011, Congress appropriated an additional $16
million to the YRRP for enhanced outreach and reintegration activities
which allowed the department to provide one-time support to various
State led initiatives. Our Center of Excellence is working to collect
data and metrics from these various programs to ensure we are funding
the most effective outreach.
Employer Support of the Guard and Reserve (ESGR)
Employer Support of the Guard and Reserve engagement has grown
significantly in recent years. The vision is ``to develop and promote a
culture in which all American employers support and value the military
service of their employees with ESGR as the principal advocate within
DOD.'' ESGR has a footprint in all 50 States, U.S. Territories, and DC
with over 4,800 volunteers assisting employers and servicemembers on a
daily basis. The support of employers and families has never been more
critical to our national defense. Through its network ESGR accomplished
the following during the past year:

Through Employer Outreach, ESGR volunteers briefed
153,062 employers regarding their rights and responsibilities
in accordance with Uniformed Services Employment and
Reemployment Rights Act (USERRA). Also, ESGR attained 45,140
Statements of Support. Employers signing a Statement of Support
pledged support for their employees serving in the Guard and
Reserve, while also focusing on opportunities to hire
guardsmen, reservists, and veterans.
Through Military Outreach efforts, ESGR volunteers
briefed 473,891 servicemembers regarding their rights and
responsibilities under USERRA. In turn, servicemembers
recognized supportive employers with 4,049 nominations for the
2011 Secretary of Defense Employer Support Freedom Award and
acknowledged 16,559 supervisors with ESGR's Patriot Award.
ESGR's Ombudsman services are supported by over 600
trained USERRA experts spread across the country and by a
National Customer Service Center. Together, the Ombudsmen
fielded 29,727 USERRA inquiries and handled 2,884 cases. ESGR
Ombudsmen provided free, neutral mediation to resolve nearly 80
percent of all cases, in less than 9 calendar days. For cases
that cannot be resolved by the Ombudsman, servicemembers are
informed of their option to file a complaint with the
Department of Labor, where a formal investigation will be
conducted as to the merits of the complaint.
Reserve Component Unemployment and Underemployment
The Department knows that civilian employment is an important piece
of a Reserve component servicemember's readiness, and the current high
unemployment rate is a clear threat to the readiness of our force. The
Bureau of Labor Statistics January 2012 report showed that the
unemployment rate for all Veterans (including Guardsmen and reservists
who previously served on active duty) was 7.5 percent nationwide. The
unemployment rate among Gulf War era II veterans (those serving since
September 11) was 9.1 percent. For reservists and guardsmen, the
January 2011 Status of Forces Survey of Reserve Component Members shows
a self-reported 23 percent unemployment rate among junior enlisted
members in the grades of E-1 to E-4.
As a result of these unemployment rates, ESGR and YRRP launched an
Employment Initiatives Program (EIP) in January 2011. Under the Office
of the Assistant Secretary of Defense for Reserve Affairs (OASD (RA))
our ESGR volunteers increased their focused activities to address the
unique unemployment needs of Reserve component servicemembers. Our ESGR
Committees, representing the 54 States, Territories. and District,
began focused efforts such as employment assistance workshops, job
fairs, employment summits, and many other local community programs.
ESGR conducted numerous workshops whereby servicemembers were trained
on how to create civilian resumes, undergo mock interviews, dress for
success, and received career counseling.
Beginning in March 2011, ESGR volunteers assisted the U.S. Chamber
of Commerce in the launch of their mega-hiring fairs around the
country. As of the latest Chamber report, there have been 88 events,
connecting more than 84,000 Veterans, Reserve component members and
military spouses, to over 4,300 different employers. As a result of the
combined effort, the National Chamber reports that more than 7,300
veterans, servicemembers, military spouses, and 50 wounded warriors
have gained employment.
This past December 2011, our office launched a comprehensive,
multi-faceted program called ``Hero2Hired'', better known as H2H, using
lessons learned from our own efforts this past year and from the U.S.
Army Reserve Employer Partnership of the Armed Forces program, H2H was
developed to address the gap in employment assistance services and
support for Reserve component servicemembers who are not considered
veterans in law and so are ineligible for VA employment programs. H2H
focuses on helping Reserve component servicemembers connect to and find
jobs with military-friendly companies that seek employees with specific
training and skills. H2H is a powerful, comprehensive employment
program with a powerful job search site (www.H2H.jobs) and online
community that is made available at no cost to servicemembers and
employers. It contains all the tools a job seeker needs to find a job:
job listings, career exploration tools, education and training
resources, advice and tips, hiring events, virtual career fairs, mobile
phone app, and networking opportunities. In 2012, H2H is sponsoring and
participating with the U.S. Chamber of Commerce in 40 job fairs in high
Reserve component unemployment areas. H2H booths will be available and
staffed by H2H, YRRP, and ESGR State Committee volunteers.
Together, YRRP and ESGR are delivering meaningful services to
assist Reserve component servicemembers to transition and reintegrate
into their civilian community through full spectrum assistance with
employment and by promoting positive employer relations through USERRA
education.
Individual and Family Support Policy (IFSP) is participating in DOD
studies on Child Care Subsidy, Military Family Life Consultants,
Effectiveness Tracking, Resilience Programs, Websites and Help-lines,
State Liaisons, and Communication with Families. OSD Reserve Affairs
will continue to be an active partner in the DOD process to ensure that
as family support resources are realigned, the 1.1 million National
Guard and Reserve members and their families are considered in the
decisionmaking process and that family support functions at a level
that sustains full mission readiness.
conclusion
Secretary Panetta has recently testified on the need to maintain
the tremendous expertise that has been developed in the Reserve
components during the last decade of sustained engagement. The
Department's recently released strategic guidance highlights the need
for our National Guard and Reserves' continued capabilities and
contributions as an agile, flexible and ready force in our national
security. It is wise to build on the success and capitalize on these
investments as we continue to develop the Reserve components to provide
full-spectrum capability to the Nation. The Quadrennial Defense Review
directed Comprehensive Review of the Future Role of the Reserve
Component, released last year, provides a foundation upon which to
build a cohesive execution strategy that preserves current Total Force
competencies, efficiently integrates multiple capabilities, and
leverages Reserve component value.
Additionally, the 2012 National Defense Authorization Act requires
an assessment of Reserve component force structure and end strengths in
total force structure, and we are working within the Department to
complete this requirement. These analyses and others that are ongoing
will support the Department's strategic guidance to examine the mix of
Active component and Reserve component elements best suited to support
the strategy while maintaining a balance between the available
resources and our security needs for the next decade.
The fiscal year 2013 budget anticipates the Department will
continue to use the Guard and Reserve as a vital part of the
operational force, and where it makes sense, as a force of first
choice. Today's Citizen Warriors have made a conscious decision to
serve since September 11, with full knowledge that their decisions mean
periodic recalls to active duty under arduous and hazardous conditions.
To keep faith with their commitment, we will need your continued
support of the funding requested for their training, equipping,
recruiting, and retention. Thank you again for allowing me an
opportunity to give you an overview of the issues we are addressing in
the Reserve components.

Senator Webb. Thank you, Secretary McGinnis.
I will start and I will also adhere to the 7-minute rule
that I asked everyone else to adhere to at the beginning of my
statement.
Actually, Secretary McGinnis, I would like to start with
just where you ended up because when we look at the
unemployment figures for those who served, we essentially, in
my view, have three different groupings of people who have
served. We have the one-term or non-career enlistees, which I
think a lot of people up here misunderstand in terms of the
size of that group. We tend to think if you have an all-
volunteer system, you have an all-career system, and in truth
and particularly in the Marine Corps and the Army, the majority
of people leave before they enter their first enlistment. That
group has one set of challenges in order to reassimilate into
the civilian society.
Then we have the Guard and Reserve as a particularly
difficult problem right now, and I want to get back to it.
Then third, we have the retirees who have another different
set of circumstances when they leave.
But with respect to the Guard and Reserve, I had the
position that you are acting in right now for 3 years and
responsibility for the oversight of these programs. We never
could have comprehended the rate that they are being called to
Active Duty and the percentage of their professional career
that they are actually spending in uniform. We are seeing some
really disturbing data in terms of the unemployment rates. I
understand there are a lot of complexities that go into the
fact that the employment numbers are down, but could you give
us a better description of what the challenges are?
Mr. McGinnis. Yes, sir. The first challenge is the group
that has the biggest unemployment, going as high as 24 to 26
percent, depending on when you measured it, and that is junior
enlisted personnel. We have increased the number of non-prior
service enlistments over the last decade in the Guard and
Reserves, especially Army components, and of course the Marine
Corps has always had a high percentage. But in the Guard and
Reserve, particularly in the Army Guard and Army Reserve, the
numbers are now up to about 55 percent or more. They used to be
lower than that by about 10 or 15 percent. We used to rely a
lot more on prior service before stop-loss.
A lot of those individuals enlisted directly out of high
school, came into the Guard, and went through their initial
entry training and then deployed. Now they are coming back, and
they have never been in the workforce before. So that is one
unique group we are focusing on. That is why I mentioned in my
opening statement that this is a unique group that we have to
segment, as you explained, because then we have the individuals
coming back who, because of the economy and other reasons, may
have lost their jobs for reasons that their employer could not
help and that number is running about 12 percent.
So we are working with the Employer Support Committee in
each State and their 4,800 volunteers with the Chamber and
their effort and with H2H, which we have joined with the Army
and the Army Reserve to focus on both of these groups in
different ways. So we are getting a lot of momentum, and we
have been working on it for about 18 months.
The initial problem we looked at was under-employment. We
had some momentum working on under-employment for people coming
back who were looking for better jobs based on their experience
in theater. We did have some momentum.
But those are the two areas that we are focused on and they
are two distinct areas.
Senator Webb. Do you see any indication of a resistance in
the employer community because of the deployment cycles?
Mr. McGinnis. No, sir. We have just completed a survey
which is now being assessed of employers. The Employers Support
Committee did that, and when it is available, we will make it
available to you. But initial indications are while if you look
at the groups who have to support us, the individual
themselves, the families, the employers, the employers have the
lowest level of support, but it is not below 50 percent. The
employers on par have been very patriotic and very supportive
of the efforts. We do not see a reluctance to hire. In fact, we
see people who are coming to us who want to hire. The biggest
issue we have--and it has been the issue since the program
started--is the small employer and in some cases the medium
employer. We need to continue to work with them. Hopefully from
the survey we will figure out some ways that we can bring to
you on how we can help them. But that is a large group of
employers.
Senator Webb. Secretary Hale, you mentioned the cross
section of the Total Force when it comes to the reductions that
we are looking at. Could you give us a comparative examination
or a statement on the civilian employees and contractor
employment?
Mr. Hale. The civilians are down slightly, roughly similar
to the military from 2012 to 2013, down about 2 percent. In the
out-years, our civilian employment drops not very much, just a
couple more percent. In fact, we are looking at that now. I
believe what happened is we were pretty busy in the last
program budget review, and, I think, we did not have a chance
to look at support personnel as much as we could or should
beyond 2013. So I know it will be an issue as we look at the
2014 to 2018 program.
Regarding contractors, we struggle with good information.
They are down in dollar terms from 2012 to 2013. Frankly, in
the out-years, we do not have reliable data on contractors
because we just do not formulate it in the same way. We are
working to do that and I hope we will have better information,
but they are down slightly from 2012 to 2013.
Does that answer your question?
Senator Webb. Roughly, what would the percentages look like
compared to the Active Force?
Mr. Hale. Similar. From 2012 to 2013, down 1 to 2 percent
for both Active and civilians. Let me correct the details for
the record. Similar for contractors in dollar terms, which is
the best data I have.
Senator Webb. Are the out-years the same?
Mr. Hale. Well, no. For Active Duty personnel, including
Guard and Reserve together, about 5 percent over the FYDP
period. More like 2 for civilians. As I said, I think we need
to relook at that issue. I do not have contractor data beyond
2013. We keep track of how much we are going to spend in
operation and maintenance buckets. We do not in the
contractors, and we are trying to do a better job, but we are
not there.
Senator Webb. We may ask you a follow-on question on that.
Senator Graham.
Senator Graham. Thank you, Mr. Chairman.
Just to pick up with where the chairman left off, I think
it is very important before we make a decision how to get to
$87 billion, that the civilian workforce, if it is going to be
reduced just a fraction of the Active-Duty Forces and Reserve
folks who wear the uniform, I would like to know more about how
we could maybe shift some of this reduction, look at the
civilian side a little bit harder, and make sure that we get to
$87 billion with as many people that are available to go to war
if we have to have a war. So I just want to echo what the
chairman said there.
Dr. Woodson, in 1996, I think you said the amount of money
collected from people on the program through premiums for
TRICARE was about 26 percent?
Dr. Woodson. Sir, the cost share was about 27 percent.
Senator Graham. 27 percent. So 27 cents of every dollar of
cost came from the people on the program, right?
Dr. Woodson. Correct.
Senator Graham. It is down to 10 now. Is that right?
Dr. Woodson. Correct.
Senator Graham. Is that just because we have never adjusted
the premiums and the costs have gone up?
Dr. Woodson. Correct, and also remember we have added
substantial benefits to the program over the last decade.
Senator Graham. So what you are proposing is to try to get
the premium cost share up to 14 percent?
Dr. Woodson. Correct, on average.
Senator Graham. Based on retirement benefits reschedules,
based on how much money you make in retirement?
Dr. Woodson. Correct.
Senator Graham. In terms of overall budget, if it continues
on the course that it is now, what percentage of DOD's budget
would be consumed by health care?
Dr. Woodson. Sir, that is a great question, Senator. If you
look at the numbers right now and you look at a base budget of
$525 billion, our unified medical plan this year was $53
billion. So we are at 10 percent now. If you look at the issue
of a modest 5.3 percent growth in health care--and you can do
the calculations--particularly the top line of DOD comes down.
The implications of this, of course, are that health care will
consume a greater percentage of the DOD budget, but it also
produces a palpable tension, if you will, between providing
health care and training, manning, and equipping the force. I
think that is what Secretary Hale was alluding to before.
Senator Graham. I would just like to be on the record
saying I would like to work with the administration to find
some way to change this dynamic because the BCA requires $87
billion. I do not know if that is set in stone. If we can
change that number, I would be willing to. But we have to
balance the budget. We are $15 trillion in debt. Everything has
to be on the table.
When it comes to the Guard and Reserve, Mr. McGinnis, the
Air Guard seems to get hit pretty hard here. Are you familiar
with the proposed cuts in the Air Guard?
Mr. McGinnis. Yes, sir. The Secretary of the Air Force is
in the process of reorganizing his force and has presented this
to DOD. I have made my recommendations to the Secretary, and
the Secretary is in the process of reviewing that now.
Senator Graham. I appreciate it.
Mr. McGinnis. Secretary Hale is very much a part of that,
and hopefully in the near future, we will have a decision.
Senator Graham. Secretary Rooney, if you allowed people who
were 50 percent disabled to access commissaries and exchanges,
could you get back to us later on and see what impact that
would have? Because I think the rule is now that only 100
percent disabled people have commissary and exchange
privileges. Is that correct?
Dr. Rooney. I believe you are correct, sir.
Senator Graham. Okay, if you could look at that. What I am
getting at is our commissaries and exchanges are good deals for
the members and their families, and we want to make it
sustainable. If we are going to draw down the force, then you
lose customers, and this might be one way of getting a larger
customer base and reward people who have sacrificed for the
country. I just want you to look at that and I will talk with
Senator Webb about it.
Thank you all for your service, and we will see what we can
do to work through this.
Mr. Hale. Senator Graham, could I add briefly to your
opening, underscoring the chairman's point on civilian
personnel? I agree we need to look at them. We need to look at
contractors as well. But we need to remember that civilians run
our acquisition, they run logistics, they run finance, they fix
our ships and planes. We cannot fight effectively without them.
So we need to be a little careful, in my view, about damning
our civilian workforce which we sometimes, I think, lean toward
doing. We just cannot work without them.
Senator Graham. They are a very valuable part of the team,
cannot do the job without them. But again, we are going to have
to set our priorities in this country and figure out where we
go.
Mr. Hale. We need to be careful.
Senator Webb. Before I call on Senator Blumenthal, just let
me first of all say I am looking for data here when it comes to
civilian numbers and Active numbers. There is a reality that I
think we all acknowledge that when you end a long period of
sustained ground combat, you reduce your ground forces. So, it
is not necessarily an apples-to-apples comparison when you look
at the civilian side. But my question really was to get the
numbers.
Another thing, just from my own experience, Senator Graham,
I was talking to staff on your question as to the percentage
disability being able to use commissary and exchanges.
Senator Graham. Am I wrong?
Senator Webb. If you are medically retired from the
military, it is 30 percent or above where you can use
commissary and exchange. There is a different system if you go
to the VA for a percentage. But I wanted to clarify that if you
are retired, which is 30 percent or higher, then you are able
to use those benefits.
Dr. Rooney. Correct.
Senator Webb. Senator Blumenthal?
Senator Blumenthal. Thank you, Mr. Chairman, and thank you
for your leadership and Senator Graham's on this subcommittee.
Thank you to the witnesses for the excellent work that you are
doing in a very difficult time, perhaps more difficult than any
within recent memory.
Many of the issues that have been raised both by my
colleagues and by you in your testimony are of very great
interest to me. I want to focus on one, though, that may not be
directly related to the budget. I know the budget consumes a
lot of time. You have discussed in your testimony, Secretary
Rooney, the issue of sexual assault, which I know troubles you
and the Secretary greatly, a great concern to you, and there is
a zero tolerance policy. It is a leadership issue.
You say in your testimony that the estimates now are about
19,000 sexual assaults a year, which is down from the estimate
of 34,000 in 2006. Are you suggesting that the rates or numbers
of sexual assaults have been reduced over the last 6 years?
Dr. Rooney. Sir, the way we get to that number is we look
at the number of reported sexual assaults as a percentage of
the overall force and then actually multiply it. The number
appears to come down, but quite frankly, as you indicated, our
concern is that there are any at all. 19,000 are 19,000 too
many, or whatever the exact number is, because again, that was
extrapolated from actual reported numbers. So while we believe
that the attention being focused, the programs being put in
place, and frankly the leadership taking this on as such a
critical area to be able to address because it goes right to
the heart of what our military believes in terms of their work
and their respect for each other, that that number will come
down. But we realize we have a great deal of work to do, sir.
Senator Blumenthal. But it may not have come down in the
last 6 years. Obviously, your objective is to make it come
down. But I am just asking whether you have confidence in that
number because, quite honestly, I am not sure that I do.
Dr. Rooney. I believe that number indicates that we have a
substantial problem. But again, it is not a specific number. It
is extrapolated from those reports we have.
Senator Blumenthal. Of the defendants who are reported--and
in those incidents, 3,192 in fiscal year 2011--what percentage
faced court martial?
Dr. Rooney. Sir, I will take that question for the record
and get back to you on the specifics.
Senator Blumenthal. The information I have is fewer than 21
percent.
Dr. Rooney. That percentage is correct.
Senator Blumenthal. What is the reason that they are not
brought to court martial?
Dr. Rooney. Often, sir, it is many of the same challenges
that we see on the civilian side, which is in order to go
through the court martial, obviously, we need to be able to get
the evidence and make sure that our folks are trained to be
able to take and prosecute those particular cases. Those are
specific areas we are working on now to make sure people are
trained in the specific areas of how to be able to not only get
the evidence, but to present that forward. That is often the
roadblock.
Senator Blumenthal. So you are upgrading the procedures for
collection of evidence, and what about retention of evidence?
Dr. Rooney. Yes, sir. We actually are retaining the
evidence at this point, if it is an unrestricted report, for 50
years.
Senator Blumenthal. Are you making efforts to speed up the
process? In one instance that has been reported to me--and I
can get you the name and perhaps you can get me more details--
there was a 3-year gap. By the way, I am very familiar with the
defects in the civilian area since I was involved in it.
Dr. Rooney. I know you are, sir.
Senator Blumenthal. So this is by no means to say that you
should use it as a model necessarily, but I know the military
sets its own standards for what excellence is and you have your
own goals.
But that 3-year gap makes evidence, even if it is
collected--that is, the eyewitness testimony that may be
provided--more difficult to get. I just wonder what steps are
being taken to make sure that these cases are brought to court
martial and brought, in effect, to trial more quickly.
Dr. Rooney. Actually, we are working directly with the
Services on this, and the Joint Chiefs have been actively
involved in looking at how do we not only streamline the actual
court process, but also streamline from the point of reporting,
we have such things in place as expedited transfers. So all
through the process, making sure that we are able to still
protect due process, if you will, for the accused, but move
that through the system from the first report through. So that
is something we are actually engaged, right now, with the
Services to do.
Senator Blumenthal. Do you have numbers as to the median or
average length of time it has taken and what percentage involve
eventual findings of guilt, culpability, and also what the
eventual penalties are in those cases?
Dr. Rooney. Sir, we do have those numbers, but if I could
take that for the record and give them to you as opposed to
trying to get them from memory, we do have them. I have seen
them, sir.
Senator Blumenthal. I would appreciate that.
Dr. Rooney. We will.
[The information referred to follows:]

The length of time for the investigation and adjudication of sexual
assault reports varies greatly with the facts of each case. Of the
2,439 Unrestricted Reports opened and investigated in fiscal year 2011,
66 percent (1,612) of investigations were completed by the end of the
fiscal year. Based on past case flow, we would expect that the
investigations and subject dispositions for over 90 percent of the
remaining 827 Unrestricted Reports received in fiscal year 2011 should
be completed in time for reporting in the fiscal year 2012 Annual
Report on Sexual Assault in the Military.
In fiscal year 2011, 1,518 subjects investigated for sexual assault
were military servicemembers. However, legal factors sometimes prevent
disciplinary action from being taken against some subjects. For
example, commanders were precluded from taking disciplinary action
against 482 of these military subjects because there was insufficient
evidence of an offense to prosecute, the victim declined to participate
in the military justice process, or the statute of limitations had
expired. These factors do not fall under the discretion of a military
commander to remedy and precluded these military subjects from
receiving disciplinary action. Commanders declined taking action
against 47 military subjects because they determined the sexual assault
allegations against those subjects were unfounded.
Of the 1,518 subjects investigated, commanders had sufficient
evidence and the legal authority to support some form of disciplinary
action against 989 subjects. Of the 989 subjects, 791 subjects had
command actions taken against them for sexual assault: 62 percent (489
subjects) had courts-martial charges preferred (initiated) against
them, 24 percent (187 subjects) received nonjudicial punishment under
Article 15 of the UCMJ, and 14 percent (115 subjects) received a
discharge or another adverse administrative action. For 198 subjects,
evidence supported command action for other misconduct that came to
light during the sexual assault investigation (such as making a false
official statement, adultery, and other crimes under the UCMJ) but not
a sexual assault offense. Of these, another 198 military: 9 percent (17
subjects) had court-martial charges preferred against them; 46 percent
(92 subjects) received nonjudicial punishment; and 43 percent (85
subjects) received some form of adverse administrative action or
discharge (no data was available for the remaining 2 percent of
subjects).
As noted previously, of the 791 military subjects who had
disciplinary action initiated on a sexual assault offense, 489 had
court-martial charges preferred against them. The dispositions and the
sentences imposed by courts-martial are for those subjects with at
least one sexual assault charge adjudicated in fiscal year 2011. Of the
489 subjects who had courts-martial charges preferred against them in
fiscal year 2011, 370 subjects' court-martial outcomes were completed
by the end of the fiscal year. Of the 240 subjects whose cases
proceeded to trial, 80 percent were convicted, and most convicted
servicemembers received at least four kinds of punishment: confinement,
reduction in rank, fines or forfeitures, and discharge (enlisted) or
dismissal (officers) from service. Thirty-nine subjects were allowed to
resign or were discharged instead of court-martial. Court-martial
charges were dismissed against 91 subjects. However, commanders used
evidence gathered during the sexual assault investigation to take
nonjudicial punishment against 25 of the 91 subjects. Most of the 25
subjects who received nonjudicial punishment received three kinds of
punishment: reductions in rank, fines or forfeitures, and restrictions
on liberty.
Of the 791 military subjects who received disciplinary action on a
sexual assault offense, 187 received nonjudicial punishment. Of the 168
subjects whose nonjudicial punishments were completed in fiscal year
2011, 93 percent of subjects were found guilty by the commander. Most
subjects who received nonjudicial punishment received at least three
kinds of punishment: reduction in grade, a fine or forfeiture of pay,
and restriction of their liberty for a period of time. In addition,
almost half of these subjects received extra duty or hard labor as part
of their punishment. For 6 percent of subjects, the nonjudicial
punishment served as ground for a subsequent administrative discharge.
Commanders administratively discharged 48 subjects investigated for
a sexual assault offense. There are three types of administrative
discharges: Honorable, General, and Under Other Than Honorable
Conditions (UOTHC). Most of these 48 subjects received either a General
or a UOTHC discharge.
In fiscal year 2011, commanders took adverse administrative actions
against 67 subjects investigated for a sexual assault offense. These
actions may consist of Letters of Reprimand, Letters of Admonishment,
and Letters of Counseling. These actions may also include but are not
limited to denial of reenlistment, the cancellation of a promotion, and
the cancellation of new assignment orders. Adverse administrative
actions are typically used when the misconduct alleged is of a lesser
degree or when available evidence does not support more serious
disciplinary action.
The sexual assault investigations conducted by the Military
Criminal Investigative Organizations sometimes do not find sufficient
evidence to support disciplinary action against the subject on a sexual
assault charge. However, the investigations sometimes uncover other
forms of chargeable misconduct. When this occurs, DOD holds those
servicemembers who have committed other misconduct appropriately
accountable based on the available evidence.
DOD released the fiscal year 2011 Annual Report on Sexual Assault
in the Military on April 13, 2012. The preceding information and
supplementary charts and graphs detailing the subject case dispositions
and punishments imposed are available on pages 42 through 49. The
report is available at: http://www.sapr.mil.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Senator Blumenthal. Can you also provide percentages as to
what numbers or in what rate you give defendants the option of
a discharge or a resignation in lieu of court martial?
Dr. Rooney. I will get the information as to what the
eventual resolution was as to whether that was a negotiated
plea or something in that regard. That will be a little harder,
but I can certainly tell you article 15 and various steps of
penalties.
[The information referred to follows:]

Of the 370 military subjects whose courts-martial action was
completed in fiscal year 2011, 39 subjects (or 10.5 percent) were
discharged (enlisted) or allowed to resign (officer) in lieu of court-
martial. In cases in which a resignation or discharge in lieu of court-
martial is requested and approved, the characterization of the
discharge is usually Under Other Than Honorable Conditions, unless a
higher characterization is justified.

Senator Blumenthal. Finally on this subject, can you tell
me when Secretary Panetta is going to be releasing the
recommendations he is going to be having both administrative
and legislative? Do you know?
Dr. Rooney. Actually, we have been working on the possible
legislative proposals as recently as today. So I am expecting
those to be coming up soon, and within the next 3 to 6 months,
we will also have some additional ways forward on specific
recommendations coming out from the Services, as well as
follow-up on the ones we mentioned with the expedited transfer
and the document retention.
Senator Blumenthal. Thank you.
On the issue--and you raise it in your testimony--
concerning suicides, can you talk a little bit about what steps
are being taken to address this issue more effectively?
Dr. Rooney. Absolutely, and you are right that the numbers
right now, despite many of our efforts, have not shown a
significant decrease. But what we have done, in fact, is taken
the task force that had their report forward. One of the
recommendations was to create a specific suicide prevention
office, which we have done in the last few months. The purpose
of that office is not to create yet another layer, but it is to
look across all of the Services and actually be the conduit for
what are best practices, where are we missing some potential
opportunities, getting rid of the redundancies. That has at
this point a temporary staff, but in the fiscal year 2013
budget, we have the full appropriations we are requesting on
that to have that staff stand up.
In addition to that, we are working directly with the
Services in each of their component areas to see what practices
they have in place.
The next thing--and I think you have seen it also from the
medical side--is we are embedding behavioral health not only
within the units but also making it available to the families
through a number of our family programs. Again, we are
continuing to monitor what has been the outreach and where have
we seen some successes or not as it were.
Those are the steps at this point with many more coming
forward.
Also, collecting data has been a big challenge that we have
had, contemporaneous data. So we are working closely with the
Department of Veterans Affairs (VA) in particular at this point
to share information not only from the DOD side but also what
the VA is getting. We are doing a lot of joint work with them.
So we are getting data that is within 30 to 60 days old as
opposed to a year or 2, which is what we had been getting, as
the way the States are gathering it, and sharing that
information and trying to trend directly with the VA.
Senator Blumenthal. Thank you, thank you very much. My time
has expired.
Thank you, Mr. Chairman.
We hear a lot and I profoundly agree with the statement
that we have heard again and again that our most important
asset is our people, and you are the folks who are dealing with
that asset. So I want to thank you for your great work. Thank
you for being here.
Thank you.
Senator Webb. Thank you, Senator Blumenthal.
Senator Begich.
Senator Begich. Thank you very much, Mr. Chairman.
Thank you all for being here. I appreciate it.
Let me start with a couple of questions, but first, Mr.
McGinnis, there is a piece of legislation that Senator Graham
and I have sponsored on space availability for widows of combat
veterans, as well as Guard and Reserves. To be very frank with
you, we are not changing any of the prioritization. We are just
making sure if there is a seat open and all the prioritization
has occurred, then there is opportunity. The response we got
informally was not very thoughtful in my view. I will not
belabor it here, but I would like you, if you could, to take a
look at that legislation and give your thoughts on it.
We have a lot of bipartisan support. As a matter of fact, a
lot of people on this committee have sponsored it. We think it
is a fair way to approach. It is like an airline industry. When
there is a seat empty, there is no value to it, and if there is
an opportunity, we should explore that. I think what we have
tried to do is recognize the rules and regulations of
prioritization of utilization of space available and
recognizing that, but not overtaking that and leaving a lot of
authority to DOD.
So if you could take a look at that bill, that would be
great.
Mr. McGinnis. I will, sir.
Senator Begich. My staff will be happy to talk with your
staff about that.
I will not belabor it more than that, to say the response
was not as thoughtful as I thought it would be. I will leave it
at that.
Mr. McGinnis. I will look at it.
Senator Begich. Thank you very much.
Secretary Hale, this might be to you and to Secretary
Rooney also. I want to understand the process. You have to
understand where I come from. I come from being a former mayor
where if I have a CFO, they know all, and at the end of the
day, they have to sign off on money things. No department can
go do their own stuff, and even when personnel has stuff,
someone has to sign off their savings or costs. So I do not
necessarily say that is the way it all works in the military. I
am not suggesting that.
But let me walk through an example and help me understand
how you would be engaged in this or in your case, Secretary
Rooney.
I am dealing with, and a lot of folks are dealing with,
this around the country with bases that are being reviewed for
potential reductions or reductions of services or personnel,
may they be military and/or civilian. We are dealing with this
at Eielson Air Force Base right now. Here is the scenario. The
proposal was laid out. It will save X amount of dollars. We
then, of course, questioned this. Now they are sending a team
up to analyze what the savings will be, which seems odd that
you would propose a savings and then analyze it later, but I
will leave that for a second.
First of all, I will start with you, Secretary Hale. When
the Secretary of the Air Force--I am using them as an example,
I do not mean to pick on them, but they are the ones we are
dealing with with Eielson. They propose these savings that
recognize a certain amount of money that will be saved. What is
your interaction with those activities? Do you accept those
based on that information? Then holding that thought, the
question I would have for you, Secretary Rooney, is when they
propose this--and it is basically a bulk of personnel savings--
how are you engaged in that, in analyzing that number, may they
be civilian and/or personnel or military active personnel?
Secretary Hale, to the first question. What is that engagement?
Mr. Hale. We are dealing with one of the world's largest
organizations, Senator Begich, and many of these proposals do
work up through our Military Services and departments which
have cost analysts and staff similar. They are not formally
CFOs, but they have assistant secretaries for financial
management and comptroller. My staff tends to review the ones
that are in contention or perhaps cut across all the Services.
I do not know for sure on the Eielson one, but my guess is
it was an Air Force estimate and reviewed by them.
Senator Begich. So you accept because they go through this
kind of chain, to a certain extent, I am not saying all the
time.
Mr. Hale. If we have reason to question it, no, but we do
not review every single proposal that comes forward. I do not
know on the particular one you are referring whether we did. I
would need to find out.
Senator Begich. Let me ask then on the personnel. So when
they recommend or suggest that it will save this amount of
military personnel and X amount of civilian personnel, again
recognizing they go through this chain, what happens at your
level, if anything? I do not know.
Dr. Rooney. Actually, it would. Two of the areas within
personnel and readiness deal with military personnel policy and
civilian personnel policy, but embedded in that is this idea of
Total Force. Our role typically at that point is working with
the Services to ask them what, in fact, are they going to use
as tools, specific drawdown tools available potentially for the
military, if they are seeing that the reduction would come from
the personnel side, and walk through with them from a policy
standpoint what exact shaping tools are they using and making
sure they are understanding the costs or the implication of
those.
The same with the civilian side. We have set processes and
procedures to, hopefully, reintegrate the civilians within the
workforce, and walk through whether, in fact, they are
following those procedures and have considered that in cost
estimates.
Senator Begich. I appreciate that answer. But I would have
expected that from our personnel department in the city would
have done that. The departments do their thing and then the
personnel walks through it because sometimes departments will
over-estimate for the benefit of getting past the Office of
Management and Budget (OMB). Getting past OMB, life is better.
But in the mayor's office we always had to say, well, are these
real, what does it mean?
In this situation, I am assuming they then submit to you
something that says here is what we guess, here is how much
civilian, here is how much Active, and then you walk through
this process. Sometimes it is easy because it is clear, but
sometimes more complicated. Is that a fair statement? Depending
on what it is, is that fair?
Dr. Rooney. A fair statement.
Senator Begich. Can I ask for the record--and again, I do
not expect you to have it off the top of your head here--what
role, maybe limited or extensive, that you might have had in
this review within your area with regard to this redirection?
It is a lot of people. Actually, they do not know how many.
That is the challenge, to be very frank with you. They have
estimated Active military, but they cannot give us an answer to
this day on civilian. We have asked them four times. I know
there is a document that exists that says here is what we
anticipate because someone had to review it to say here is what
it will save. I have not seen it. We have asked for it over and
over and over again.
So is that something you could look at and respond? If your
answer is, well, we did not get anything, okay. Or we did, and
we cannot give it to you yet, okay. Or, yes, we have it, here
it is. I would prefer the latter, to be very frank with you. I
am hoping it is the latter.
Dr. Rooney. What we will do is look at it. Based on what
you are indicating, it is very possible it has not reached the
level yet where we would see it fleshed out to the point to be
able to give some feedback. But what I will do is check with
our team, if they have been involved to this point, and if not,
be able to check and see what work has been done, and then we
can give you a better idea when it would, in fact, come to us
for a review. But it usually has a little more detail than what
you described before we would actually see it to be able to
give some reaction.
[The information referred to follows:]

The fiscal year 2013 budget reflects a balanced workforce that
decreases spending on military personnel, civilian full-time
equivalents, and contracted services. It reflects our best judgment
today, representing a carefully coordinated approach based on our
strategy and policy, balancing operational needs and fiscal reality.
Furthermore, we must budget for a future where we face a decreasing top
line, and in order to help components do so, the Department of Defense
(DOD) established civilian manpower targets at fiscal year 2010 levels,
with certain exemptions and exceptions in critical growth areas.
Individual components develop their workforces to meet their missions,
tasks, and functions based on their operational requirements, workload
needs, and available funding. At the departmental level, we do not
prioritize the components' missions for them or tell them how to size
their workforces. As such, we do not require the components to submit a
report estimating civilian drawdown.
However, we are committed to ensuring the components have a
balanced, flexible, responsive workforce that is the appropriate mix of
military, civilian, and contracted support; efficiently mitigates
risks, ensures continuity of operations, and promotes an organic
knowledge base; and ensures mission requirements are met most cost
effectively and efficiently.
In developing budget requests and making manpower determinations,
Personnel and Readiness works together with other elements of the
Secretary's and DOD's leadership team to ensure that risk mitigation,
continuity of operations, and mission attainment shall take precedence
over cost of performance.

Senator Begich. My time is up.
I would have anticipated even the kind of detail you are
talking about that you would expect I would expect when they
make a reduction to a military base to shift 600-plus people
plus more civilians, which we do not know of, that you would
have more information to make those judgments because we have
to make the decision that, okay, this is an okay budget and we
have to check off. But if we do not understand how they got
there, we cannot make a rational decision. So that is why I am
in this quandary.
I will tell you there has been a lot of this--pointing--and
I know the way it works, especially within the military. There
are more forms about forms to have more forms. So somewhere in
this mix someone wrote down in 2013 and 2014 and 2015 we
anticipate this civilian reduction, this military reduction for
the savings of X so that we can then get past OMB and the CFO.
Someone did it somewhere. If they did not, then to be very
frank with you, that is incompetency. But somewhere it is done.
I just know it. That is how DOD works here, more reams of paper
than paper can be produced every day, is my view. So that is
just a thought there.
I have some other questions which I will submit for the
record for generally all of you. They are broader in the sense
of some policy issues, and I will submit those.
I thank you for you letting me have my rant. Thank you, Mr.
Chairman, for letting me rant.
Senator Webb. Thank you, Senator Begich. Actually, we will
have another round if you want to come back and ask more
questions.
Senator Begich. I will submit them.
Senator Webb. Having spent 5 years in the Pentagon, I can
say a lot of the reams of paper that grow around the Pentagon
have been produced at the behest of the Senate and the House of
Representatives. [Laughter.]
Senator Begich. The good news is I am not asking for more
paper. I am just looking for a piece of paper that they
produced.
Senator Webb. Senator Ayotte?
Senator Ayotte. Thank you, Mr. Chairman.
Speaking of paper, I wanted to ask Secretary Hale about
where we are on audit because I was able to ask the Chief of
the Air Force. I know that the Air Force may have the most
difficulty in meeting Secretary Panetta's goal of a 2014
statement of budgetary resources. This is something I have been
very interested in. In fact, I introduced an amendment to the
National Defense Authorization Act (NDAA) in this past go-
around wanting to codify that you meet the audit requirements.
Just wondering where we are. Are we going to meet the 2014
deadline for a statement of budgetary resources in each of our
Services and within the overall DOD?
Mr. Hale. I am reasonably confident. This is a tough
problem, tougher frankly than I anticipated. But we have
several things going for us.
The first is the strong endorsement by Secretary Panetta
which has opened doors wider than I expected, and we are doing
everything we can to leverage it. In particular, I think what
we are doing that we have not been able to do in the past is
get this out of being a comptroller issue and into being a
commander issue. We absolutely have to do that because we have
to change business processes, and only the commander can do
that. We have the money. We have the governance process. We
have interim goals which are critical. You probably heard me
say before no one wakes up thinking, I really got to work hard
today for a 2014, let alone a 2017, goal. So we have interim
dates.
The Secretary convened a meeting of all the Service
Secretaries and Service Chiefs. We had everyone there. Amazing
to me. They get it that it is important now.
Senator Ayotte. It is important. This is not just any
paperwork.
Mr. Hale. So I am going to stop with reasonably confident.
Senator Ayotte. Okay. I appreciate that.
We did talk about a lot of paperwork, but this is really
important particularly when we are asked to make some very
difficult decisions about DOD in terms of it being a management
tool as well as an information tool for Congress. Would you
agree with me on that?
Mr. Hale. I would. We have over-promised and under-
delivered for a long time. So that is why the best you get is
reasonably confident, Senator.
Senator Ayotte. Reasonably confident. I will take it. How
is that?
I wanted to ask Secretary Rooney, yesterday you and I had a
chance to meet and talk about New Hampshire's deployment cycle
support program within our Guard. It is one of the challenges
that we have had that our guardsmen and women and our
Reserves--we have really used them in these conflicts in Iraq
and Afghanistan. They have been part of our Total Force. We
would not be able to have fought in Iraq and Afghanistan
without our Guard or Reserve. Yet, often the whole deployment
cycle support is not there for them.
So, New Hampshire came up with a very strong public/private
partnership. We partnered Federal Government resources with
State government, as well as private organizations like Easter
Seals. We have been keeping metrics on it so that we can
measure the results, and, in fact, the results have been
getting our veterans to work, reintegrated into work. We have
actually saved someone's life in a suicide, which we are very
proud of, and really serving our families.
So, I wondered Secretary Rooney, if you have had a chance
to look at that after we talked yesterday, what are your
impressions of it. I would also ask Mr. McGinnis as well, and
then I would also love to invite both of you to New Hampshire
to see firsthand how this program works.
Dr. Rooney. Thank you, Senator. Starting with your last
point, as I indicated to you yesterday, I would welcome the
opportunity, particularly if I am back home in New England on
the weekend, to join you and actually see the program.
I appreciate the additional information you did send over.
You hit upon a key aspect. When we talk about the
challenges that we have in managing to leverage resources and
be efficient, it is how do we not only extend what we are doing
in DOD, but reach out and form more of these public/private
partnerships. It is going to be a way that we have to be very
diligent about looking for those opportunities, finding those
situations that work the best, and how can we replicate them.
After I left you, I was meeting with the senior enlisted,
and we started talking about this, about how do we successful
transition, and whether it is Guard and Reserve or Active, it
is just how do we transition our folks from the military and
reach out. They indicated to me too that they were aware of the
New Hampshire program and also possibly another one in Oregon
and maybe another State.
I think what all of us need the responsibility for doing,
myself and Mr. McGinnis, is to look for those opportunities,
learn more about how they work, and see if we can duplicate
them so that we are addressing the issues, as we heard of,
suicide and unemployment and transition. Our job can be to more
tightly align with how do we translate military skills into
skills that the civilian workforce can use. We can do a good
job about that, but then really rely on those public/private
partnerships. We are seeing in several cases that they work.
Senator Ayotte. I think one of the reasons it works in New
Hampshire is because we know there are limited resources, but
we are leveraging those with the State and with the nonprofit
community to take advantage of all the services in a way that
is very proactive for those that return from overseas or return
from deployment.
I do not know if you wanted to add anything, Mr. McGinnis?
Mr. McGinnis. Yes, ma'am. The funding that has been
provided for these programs in the past has been congressional
adds. There has been a number of State programs that have been
supported. The appropriated dollars both to the Services and to
DOD--and YRRP is focused on the long list of mandated
requirements I have to make sure happens within the YRRP. We
are focused on that.
However, our YRRP Center for Excellence (CFE) is putting
together a process to be able to evaluate all these programs,
as Dr. Rooney mentioned. We share a very similar problem with
my colleague in military communities and families, Secretary
Gordon, and we are working with him to put together a process
where we can evaluate these programs. But like Secretary
Rooney, I would very much want to come up and see your program.
Senator Ayotte. We would love it. Come in the fall. It is
gorgeous. We will have you sooner too.
Mr. McGinnis. Thank you.
Senator Ayotte. I wanted to ask Dr. Rooney, certainly
Secretary Woodson, where we are. Our All-Volunteer Force--I
think you would all agree that our troops have done everything
we have asked of them and more.
So last year, did we not increase TRICARE enrollment fees?
Dr. Rooney. Modestly we did, yes.
Senator Ayotte. But we did.
We tied it to cost-of-living adjustments, correct? Now you
are back before us--I know, Secretary Hale, you certainly have
an opinion on this--to ask for additional TRICARE increases.
These increases are very significant.
I know my time is up here, but I think this is a really
important issue. So I will wait for another round.
But for some individuals, these are not trivial. For
example, a retiree receiving between $22,000 and $45,000 a
year--their annual fees will go from $500 to $1,500 a year,
threefold in only about 4 years. So this is a pretty
significant issue.
I think we have a duty, given what our servicemen and women
have done, to really have a very hard discussion about this. I
am really concerned about it.
I know my time is up. I will stick around to ask more
questions and turn it back to the chairman.
Senator Webb. Thank you, Senator Ayotte.
Actually, I am going to get into that. So I welcome your
participating when I do.
I have one other little item that I would like to raise
now, and there may be other questions that I or other members
will submit for the record. They will have until close of
business tomorrow in order to do so.
I want to follow on what Senator Ayotte just said.
Before I do that, Dr. Rooney, last year Secretary of
Defense Gates made a decision to eliminate, reduce, or
reallocate 140 general and flag officer positions. We held a
hearing on that issue, as you may recall. Can you give us an
update on the status of that?
Dr. Rooney. Yes, sir. As of now, we have eliminated 49 of
the positions. As you are aware, this is a process that we
expect between now and 2016 to reach the number that you
indicated. But right now we are at 49. We are expecting, as we
continue the drawdown in our overseas operations, that we will
continue to actually increase that number of those that have
been eliminated or reduced.
Senator Webb. So you are continuing the process that was
begun when Secretary Gates initiated it?
Dr. Rooney. Yes. In fact, Secretary Panetta was affirmative
in his support for continuing that process.
Senator Webb. All right.
Now, I would like to follow on to what Senator Ayotte said
and add some of my own concerns here, as I did in the full
committee hearing about a week ago.
First, I have said many times--I think all of you know that
I believe whether there is a specific contractual obligation or
not, when someone has served a full career, we have a moral
obligation to provide them with lifetime medical care. Would
you agree or disagree?
Dr. Rooney. Sir, I believe we have to offer the best
medical care possible in respect of their service, yes.
Senator Webb. Secretary Woodson?
Dr. Woodson. Yes, I do believe we have a responsibility,
particularly for the wounded, ill, and injured, to provide
long-term lifetime medical care.
Senator Webb. What about for those who serve a career?
Dr. Woodson. I think we have an obligation to provide them
with a benefit package that is very generous and reflects their
sacrifice and service.
Senator Webb. Thank you. That defines the struggle that we
all have here. I know how difficult it has been to put together
these numbers.
Secretary Woodson, I want to go back and examine the
percentage that you raise with respect to 1996 versus today. I
want to just have my staff take a look at that and get back to
you. I may have some further questions about how that number
was arrived at.
I would like to put up a chart that you had in your written
testimony over here because this is another piece of the
reality, and that is that if you look at cost per enrollee in
the system, that cost has grown at pretty much the same pace as
civilian health care. As I have said many times, our health
care difficulties, as we have seen from the last 3 days in the
Supreme Court, is a national problem. It is not a DOD problem.
It is a challenge for all of us. But we are pretty much seeing
the same percentage increase if you use 2005 as a baseline as
we have seen nationally. Is that a correct statement?
Dr. Woodson. That is correct. Thank you for putting up that
chart because I have the very same chart.
[The chart referred to follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Senator Webb. I think it is a great starting point for this
discussion.
Another clarification is, as far as I know, when we
summarize the costs even for TRICARE For Life, we do not take
the costs of Medicare Part B and apply it when you are looking
at the health care costs inside DOD. Right?
Dr. Woodson. Let me make sure I understand your question.
Senator Webb. Let me be clearer. When a retired
servicemember reaches the age of 65, they are required to sign
up for Medicare Part B before they can get TRICARE For Life.
Dr. Woodson. That is correct.
Senator Webb. The cost of Medicare Part B--just to
summarize, when you reach the age of 65, you are automatically
entitled to Medicare Part A. But you have to elect to get
Medicare Part B. It is wider coverage. But for a retired
servicemember who wants TRICARE For Life, the DOD benefit, they
are required to sign up for Medicare Part B.
Dr. Woodson. That is correct.
Senator Webb. When we look at the increase in the costs or
the percentage increase in the costs inside DOD, we do not
factor in Medicare Part B. That is a total separate account.
Correct?
Dr. Woodson. That is correct, but remember 90 percent of
folks will and have taken Part B. TRICARE For Life represents
that wraparound insurance for that other 20 percent, which
includes a Part D, which is a pharmacy benefit. Remember prior
to 2001 when TRICARE For Life came on board, many folks were
paying independently for that wraparound insurance. So you are
correct in your statement about Part B, but most folks will be
paying Part B anyway.
Senator Webb. Medicare Part B is a very expensive program,
and we do not count that when we look at the cost of TRICARE in
terms of DOD funding. Correct?
Dr. Woodson. That is correct.
Senator Webb. Can you put up this other chart?
[The chart referred to follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Senator Webb. If you are looking at this from the
perspective of a retired servicemember--I spoke to this in a
full committee hearing. But when you are on Active Duty,
obviously all your medical care is provided for. When you
retire before the age of 65, presently you are at where the red
marks are on this line. You hit 65. You are where that far
right bar is in terms of how much you are required to pay in.
The blue represents the proposal from DOD for the increases in
TRICARE fees.
So if you are somebody out there, having retired, looking
at what it is going to cost you for health care, you are
seeing, first of all, as Senator Ayotte pointed out, a
significant jump with the proposals from DOD, but if you are
over here past 65, you are seeing just a really large, sudden
expenditure.
Dr. Woodson. Yes. Thanks for bringing this up because this
is an interesting chart. First of all, it does not include the
average out-of-pocket costs. The figures you have given there,
where you are looking at a premium of $7,000 or a cost $7,672,
represents the upper tier of folks who pay Part B. They would
have to be making $428,000 a year in order to pay that premium.
Senator Webb. The couple, not the individual. Actually, if
you will see the first line there, that is the lowest tier.
Also, let us remember if somebody is on that upper tier, they
are also paying Medicare again for the money that they are
making. They are paying three times. They are paying Medicare
Part B. They are going to be paying TRICARE, and they are going
to be paying for Medicare on the income that they are making.
Dr. Woodson. Yes, but the important issue, in terms of the
optics relative proportion, is that Medicare Part B--they do
not start tiering until about $170,000 a year. So you are
really talking about an upper echelon.
The other thing about the chart is, again, you are not
talking about total out-of-pocket costs. That is why the
differential looks so wide there. If you looked at the other
out-of-pocket costs, you would see that it would not be as----
Senator Webb. Actually, that goes to another point, and
then I am going to let Senator Ayotte follow on here, and that
is that people who think that the TRICARE fee by itself is all
that somebody is paying is not correct. For instance, if you
are talking about TRICARE standard, you pay a 25 percent cost
share after you pay your fee. So when people are talking about
the notion that the amount that our retirees are paying for
health care is very small, I agree with you that is not
reflective of the amount that they are paying.
Dr. Woodson. That is exactly why we talk about cost share
because that takes into account the relative out-of-pocket
costs, and so the statistics I gave you before were correct,
that in 1996 the relative contribution cost share was 27
percent. It has dropped to about 10 percent, even less if you
look at prime. What we are talking about is a rebalancing so
that even in 2017 and beyond, the relative cost share is only
going to be about 14 percent, which is about half of what it
was originally. So you have to talk about out-of-pocket costs.
Senator Webb. Right. We will look at your figures.
Dr. Woodson. Oh, absolutely. We can provide you details on
that.
Mr. Hale. Could I just add one more point that I think is
important to this comparison? Although we should not copy the
civilian system, we need to keep it in mind. Good Medigap
coverage for a couple is probably $4,000 a year. We are talking
TRICARE For Life at the highest tier of $900, at the lowest
tier for $22,000 and less, more junior retirees, $300. It is
meant to be generous. I think that is right. But I think we
have to keep this in mind. This is a dynamic health care
system, and we have to make some of those or----
Senator Webb. Look, that is in addition and in addition
to----
Mr. Hale. Yes, but it would be in addition for the
civilians as well. They would be paying that $2,000----
Senator Webb. What we are talking about is an obligation to
provide them medical care for the rest of their life based on a
compensation package that begins the day that they enlist and
is amortized over the rest of their life. It is not a direct
comparison, in my view.
Now, we are going to continue this probably for the next 4
or 5 months. But I appreciate your views and you have heard
mine.
Mr. Hale. Okay. I understand. May I add one more thought?
That is, you keep this in the context that we owe them not only
good medical care, we have to provide training and equipment
for them, as you know a lot better than I do given your
military service. We have to have a balanced package as we
respond to the----
Senator Webb. I totally agree with that, but what I am
saying to you is you cannot renegotiate the front end once the
back end is done. This is an obligation that has been made to
people whose military careers are now done. If you want to
reexamine the whole compensation package, that is something
that actually is on the table.
Senator Ayotte.
Senator Ayotte. I would agree very much with the chairman
on this. Just in terms of what we are talking about, as far as
a comparison, there is a reason that in President Lincoln's
second inaugural address he said that we have a duty. Really,
we have to ``bind up our Nation's wounds to care for him who
shall have borne the battle and for his widow and his orphan.''
This is different than the rest of the population in terms of
what they have sacrificed and what they have put on the line
for us and what they were promised. What is it that they
expected in all this? So I think that that is what we are
talking about here.
What bothers me about this is that the reason that you are
here in this position is that--let's face it. Something like
the BCA--you came with us last year to ask for TRICARE
increases, and that was not easy, was it, Secretary Hale? That
was a difficult question. I know you did not get everything you
wanted.
Mr. Hale. We appreciate your support.
Senator Ayotte. No, exactly. We supported you on that, and
you are back before us this year.
In the context of what we are looking at with something
like the BCA, you have been handed a number. You are under
additional budgetary pressures. Health care costs are rising in
every sector. But we have not, as a Congress, dealt with the 60
percent of the spending that is going up in Federal spending
that includes Medicare, that includes Medicaid, that includes
the mandatory programs. I understand why you are here before
us.
I do not think, though, that we should put that, if we do
not show the courage to deal with the entire budget--to really
put a significant increase and burden after we just did an
increase last year on this group of individuals who have served
our Nation, given what they had as anticipation when they came
into Service, as Senator Webb has said, and where we are making
these changes. So that is one of the overall concerns I have
about this.
I understand that you were handed a number in the BCA.
Would you be here asking for these increases immediately after
you got some last year but for the BCA?
Mr. Hale. I suspect the answer to that is no, but the BCA
is a law that you passed and we do need to be consistent with
it. My worry is that if we choose not to make these decisions,
we will have to take it out of force structure and investment,
and I believe that we have already, consistent with the
strategy, done what we should there. It is actually quite
disproportionate toward the investment side and very
disproportionate on the low side for personnel. So if you do
not support this, I am not sure where we go.
Senator Ayotte. But my point in the bigger picture in all
this, which is really not your fault that you are put in this
position--is that because in Congress we are not looking at the
whole picture, that you are in a position where you are handed
the BCA, you are coming before us, you are going to ask for
these health care increases after just having increased TRICARE
last year. I think that we also on our end, to put this a
little bit on us, that we have to take on the big picture here
or we are going to be in a place like sequestration. We are
going to be in a place where there is no question, reductions
are going to happen to our military with withdrawal from Iraq
and drawdown in Afghanistan. But you are here. It is troubling
to me that we are going to take it out of that group first
instead of dealing with the big picture of our budget problem.
Mr. Hale. I would love a grand budget deal.
Dr. Woodson. But the truth of the matter is we are not
taking it out of that group first. As Secretary Hale said in
his opening statement, while personnel costs at 30 percent--
when the Secretary laid out the policies and procedures for
looking at the budget, 90 percent came from troops, weapons
programs, ships, planes. 10 percent came from personnel costs,
and the truth of the matter is these TRICARE fee adjustments
represent only slightly less than 5 percent.
Senator Ayotte. I do have one substantive question. You
received the Government Accountability Office (GAO) report
which recommended a consolidation among the Services of health
care as a way of a significant cost saving measure. I do not
see that in all of this. I do not see a significant move in
terms of changing and consolidation in trying to look at other
ways where we could save money in health care. In fact, GAO
recommended that you could achieve between $281 million and
$460 million in annual savings from that. Have we gone down
that road at all?
Dr. Woodson. Yes. So you may be aware that we delivered to
Congress the required report to Congress in the NDAA looking at
the restructuring of the military health system. We were ready
to move out on that last fall when at the 11th hour, we got a
prohibition in the NDAA saying that we could not make any
changes in the military health system. So we have gone down
that path in terms of analyzing what we need to get the
greatest amount of efficiencies by looking at common business
practices and common service orientation.
I would suggest to you again that as much as we are
bringing focus and energy to reorganizing the structure of the
military health system--can we put up chart 1 please?
[The chart referred to follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Dr. Woodson. You need to understand that headquarters
functions actually represent only about 2 percent of budget,
and we affectionately call this slide ``the planet slide''
because it shows the relative amounts of money in the budget.
If you look to the far right, that really represents
headquarters function, and where we spend the bulk of the money
is actually in delivery of care and private sector care and
maintenance----
Senator Ayotte. I apologize. I will grab that report and
look at it right away. So is this something you would still
want to do?
Dr. Woodson. Absolutely.
Senator Ayotte. If you did it, could you also not have to
ask for the increases that you are asking for?
Dr. Woodson. The answer is no because if you look at that
slide, again headquarters function, while we want to squeeze
that lemon very hard, only represents about 2 percent of really
our costs. So the headquarters function is not going to get us
to where we need to go.
The other thing that you have to remember is that it is
about putting the program on a sustainable course so that it
will be there for future generations and men and women who
stand up and raise their right hand and say I will protect and
defend, that a benefit will be there, a generous benefit will
be there, to take care of their lifelong needs and medical
care. The issue is that because we have had prohibitions for 16
years, we actually are far behind the curve and not on a
sustainable course.
Put up number 4 there, please.
[The chart referred to follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Dr. Woodson. I want to show to you how dramatic this is. If
you look at particularly the private sector--and I know we do
not want to talk about comparisons--over the course of the last
decade or so, contributions to premium costs in health care
have gone up 168 percent. Premium costs have gone up 160
percent. If you look at the blue line at the bottom, you can
see that there has been no increase until last year when we had
these very modest increases of $2.50 per month for singles and
$5 a month for families.
The issue is that we have not been on a sustainable course,
and we need to certainly slightly rebalance it. With all of the
proposals, we will not go back to what was the original agreed
upon cost share. We will only be at half of that, but we will
be on a more sustainable course. This is about a national
security issue that goes on for decades.
Senator Ayotte. This in my view--with all respect to the
private sector, they do not endure what our soldiers do in
battle----
Dr. Woodson. I understand.
Senator Ayotte.--or shot at--the things that they have to
experience. So I do not find the comparison good.
I think that if we as Congress would actually say that this
is a commitment we want to follow through on, that we could
find a way to do it if we are willing to take on entitlements,
if we are willing to take on the rest of the budget rather than
you all trying to find a way to pass this on to our veterans in
the first instance. That is my big-picture concern here.
But I understand that health care is going up everywhere,
but I do not find the comparison the same.
Senator Webb. Let me just have the final word here, seeing
as I have the gavel. [Laughter.]
Just a couple of things. This is almost going the way that
the lawyer hearing went when we had all the Judge Advocates
General up here. It is going for another half hour.
We will have further discussion about this and we will
actually want to come back to you again, Secretary Woodson.
There are some data that I may want.
But let me just make three final points here in terms of
where our concerns are.
First, I understand the hand that you are dealt. I spent 5
years in the building. I was on the Defense Resources Board for
4 years. I understand the hand you are dealt.
Second, I understand the notion of getting a sustainable
course. The difficulty here is if you are going to look at the
back end after someone has completed their career, that is a
different situation than analyzing the whole context of the
moral contract that goes into service. That is a concern.
Then third, the reason I put that chart up there with
Medicare Part B is I do not think there are very many members
up here who understand that a military retiree has to buy into
Medicare Part B before they get TRICARE For Life. They do not
understand that. They see the little bar at the very top, the
red part of the bar. They do not understand the blue part. I
think I got that right. So it is an important part of the
decision process up here when people look at that because it
does not show up in the DOD budget, but it does show up in
somebody's bank account.
So we will continue this discussion. Again, I very much
appreciate your all coming to testify today.
This hearing is adjourned.
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Mark Begich
tricare west
1. Senator Begich. Dr. Woodson, I understand you made a decision
recently on the TRICARE contract in the West Region, which serves my
home State of Alaska. As you know, Alaska is just beginning to move
towards delivering military care in a somewhat similar manner as is
done in the lower 48 States. It's been a long and challenging process.
So, the decision on the contract award will have a substantial impact
on my constituents. I understand this award went to the higher price
bidder. The contract award process is more detailed than simply price,
but price is pretty important these days. Is it accurate that the
contract was awarded to a higher bidder?
Dr. Woodson. Yes, the contract was awarded to the higher priced
offeror. The source selection factors for this solicitation gave
greater weight to technical and performance-related factors than to
cost and price-related factors. The Source Selection Authority compared
offers and, within the parameters of this authority, determined that
the higher price was more than offset by the added value offered.

2. Senator Begich. Dr. Woodson, will you provide me with a full
briefing on the decision from the Department of Defense (DOD) so I may
better understand it, as it will have a tremendous impact on all men
and women in uniform, but especially on constituents in Alaska, as we
don't want to go backwards with progress that has been made in the
State.
Dr. Woodson. I would be happy to arrange for a briefing once this
protest is settled. The decision in the West is under protest and a
briefing prior to the outcome of that proceeding would be guide
limited.

tricare increases
3. Senator Begich. Secretary Hale and Dr. Woodson, in years past,
DOD has proposed to increase TRICARE fees, and thereby achieve savings,
that were based in part on the principle that beneficiaries would
either opt out of TRICARE completely, or decrease the amount of health
care they used. This year DOD's proposal for TRICARE Prime enrollment
fees is for a first-year increase of 30 percent to 78 percent. That,
plus other increases in health care costs to retirees, will result in
$12 billion in savings to DOD over 5 years. How much revenue does DOD
expect to generate from the proposed fee increases?
Mr. Hale and Dr. Woodson. The fiscal year 2013 health reform
proposals are expected to save DOD a total of $12.9 billion through
fiscal year 2017. These savings are derived from four effects:

First, we project some savings from stopping and
reversing the increase in the number of retirees who use
TRICARE as their primary health insurance vice using their
employer-sponsored insurance. In fiscal year 2000,
approximately 60 percent of retirees relied on TRICARE. Today,
it is roughly 84 percent with projections that it will reach 90
percent by fiscal year 2017. Our estimate is that these
proposals will reduce this reliance to 79 percent, roughly what
it was in fiscal year 2008. For fiscal year 2013, these savings
amount to $201 million.
Second, we project a minor decrease in health care
utilization due to the higher fees.
Third, we project that beneficiaries will use health
care options that are less costly for DOD. We project more
beneficiaries will use TRICARE Standard vice Prime, that they
will use more generic prescriptions vice brand, and that they
will use military treatment facility (MTF) and mail order vice
retail pharmacies.
Finally, there is the direct savings from increased
fees that will offset DOD's cost of health care.

For fiscal year 2013-fiscal year 2021, we project that 25 percent
of the savings will come from the increased reliance on employer-
sponsored health care, 7 percent of the savings will come from the
decrease in utilization, 28 percent will come from the use of less
costly options, and that 40 percent will come directly from the
increased fees.

4. Senator Begich. Secretary Hale and Dr. Woodson, how much does
DOD expect to save from beneficiaries changing their behavior with
regard to health care use?
Mr. Hale and Dr. Woodson. The fiscal year 2013 health reform
proposals are expected to save DOD a total of $12.9 billion through
fiscal year 2017. These savings are derived from four effects:

First, we project some savings from stopping and
reversing the increase in the number of retirees who use
TRICARE as their primary health insurance vice using their
employer-sponsored insurance. In fiscal year 2000,
approximately 60 percent of retirees relied on TRICARE. Today,
it is roughly 84 percent with projections that it will reach 90
percent by fiscal year 2017. Our estimate is that these
proposals will reduce this reliance to 79 percent, roughly what
it was in fiscal year 2008. For fiscal year 2013, these savings
amount to $201 million.
Second, we project a minor decrease in health care
utilization due to the higher fees.
Third, we project that beneficiaries will use health
care options that are less costly for DOD. We project more
beneficiaries will use TRICARE Standard vice Prime, that they
will use more generic prescriptions vice brand, and that they
will use MTF and mail order vice retail pharmacies.
Finally, there is the direct savings from increased
fees that will offset DOD's cost of health care.

For fiscal year 2013-fiscal year 2021, we project that 25 percent
of the savings will come from the increased reliance on employer
sponsored health care, 7 percent of the savings will come from the
decrease in utilization, 28 percent will come from the use of less
costly options, and that 40 percent will come directly from the
increased fees.

personnel decreases
5. Senator Begich. Secretary Rooney, DOD is proposing a decrease of
8,000 personnel in fiscal year 2013. How did DOD determine 8,000
personnel decreases were feasible and will not undermine the workforce?
Dr. Rooney. DOD's fiscal year 2013 budget request, including the
proposed reduction in personnel, reflects a balanced workforce that
decreases overall spending on military end strength and DOD's Federal
civilian workforce, as well as on contract services. It reflects our
best judgment today and represents a carefully coordinated approach
based on DOD's strategy and policy that balances operational needs and
fiscal reality without placing national security and our overall
defense posture at risk. Proposed reductions in the military personnel
levels reflect declines in our current overseas commitments; revised
strategy, posture, and operational planning; and changes to our force
structure. Reductions in civilian personnel are predominantly
associated with ongoing organizational assessments and mission/function
prioritization in an effort to reduce administrative workload. These
reductions preserve DOD's civilian workforce's capability to perform
key enabling functions for the operating forces, such as critical
training and preparation to ensure readiness, equipment modernization
and reset, medical care, family support, and base operating and
infrastructure services--all vital services that support our men and
women in uniform and help meet the Nation's security needs.

6. Senator Begich. Secretary Rooney, what assessment was conducted?
Dr. Rooney. The reductions in the workforce reflect, in part, a
continuation of DOD's efficiency initiative, directed by Secretary
Gates and first included in the fiscal year 2012 budget. Specifically,
they reflect the direction given to complete organizational assessments
and mission/function prioritization, reflecting DOD's commitment to
challenge workload requirements and more appropriately size the
workforce to meet the most pressing and critical priorities with a
focus on reducing administrative functions associated with headquarters
staffs. Additional reductions planned and reflected in the fiscal year
2013 budget correlate to changes in DOD's force structure, strategy,
posture, and operational tempo.

7. Senator Begich. Secretary Rooney, of the 8,000 civilian
personnel reduction, please provide how many each Service will have to
decrease by and in what areas--base support, et cetera.
Dr. Rooney. Total U.S. Direct Hire (USDH) full-time equivalents
(FTE) decreased by 7,367 from the fiscal year 2012 level of 751,172 to
the fiscal year 2013 level of 743,805. There was a net decrease of USDH
(reimbursable) FTEs of 12,194 (see charts by Service component and
appropriation below), which were offset by a net growth of 4,827 USDH
(direct) FTEs, resulting in the overall decrease of 7,367.

The decrease in USDH reimbursable FTEs is primarily in
the Military Departments' Operation and Maintenance and
Revolving Funds accounts, as shown in the chart attached.
Reimbursable functions include logistical support functions
such as depot-level equipment/aircraft repair and maintenance
and ship maintenance and operations.
Of the Defense-wide reductions, 306 USDH reimbursable
FTEs were converted to USDH direct FTEs. The remaining Defense-
wide reductions were in the drug demand reduction and
intelligence programs.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

joint basing
8. Senator Begich. Secretary Rooney, you mention in your written
testimony submitted for the record that there have been some exceptions
for growth and increases to the civilian workforce--to include joint
basing requirements for the Navy and Air Force. Why have these
exemptions not also been extended to Air Force and Army joint bases--
such as Joint Base Elmendorf-Richardson (JBER)?
Dr. Rooney. When DOD directed its components to hold civilian
funding to fiscal year 2010 levels, we recognized that some allowances
had to be made for new missions or legislative requirements. One such
allowance, as needed, was for implementing certain Base Realignment and
Closure (BRAC) 2005 directed initiatives associated with selected joint
basing agreements.
Joint basing generated civilian workforce transfers between the
Services. As a result, both the Air Force and Navy increased, while the
Army saw its civilian workforce decrease as joint basing was
implemented. Therefore, the Army did not require a growth exception for
joint basing. Based on workforce shifts of installation support
realignments, the Navy and Air Force requested exceptions to their
overall civilian workforce levels. Based on overall joint basing
requirements, the Army did not request an exception.

9. Senator Begich. Secretary Rooney, I am concerned the Air Force,
as the installation's executive agent, is not meeting joint basing
requirements at JBER. JBER lost more than 220 civilian personnel
billets previously identified as necessary to accommodate joint basing
and the increase in Army end strength at the installation. Has the Air
Force sought exceptions for joint bases where they are the lead or just
the tenant? Why or why not?
Dr. Rooney. The Air Force actively sought exceptions to protect
civilian growth associated with joint basing, acquisition excellence,
plus operations and maintenance in-sourcing. While some exceptions were
granted, DOD had to also respond to the Budget Control Act (BCA) of
2011. As such, the Air Force focused on reductions in overhead and
support areas while minimizing the impact to functions tied to joint
basing, acquisition excellence, the nuclear enterprise, and its flying
missions.
BRAC 2005 created joint basing as a means to identify, capture, and
continue significant savings through consolidation thus freeing
resources for other priorities. The joint bases for which the Air Force
is the last Service are now in the process of reducing some of its
previously planned growth by consolidating and centralizing many base
support functions; examples include the ``Tailoring Installation
Support'' and ``Civil Engineer Transformation'' initiatives. Their
joint base commanders have the authority to, and will, reallocate
manpower and dollars across their functions to maximize capabilities
while mitigating impact to the services they provide. In spite of these
fiscal challenges, Air Force remains committed to joint basing while
meeting or exceeding the needs of our mission customers.

base services
10. Senator Begich. Secretary Rooney, as you know, to meet the
fiscal year 2010 cap, the Services decreased civilian personnel
primarily in base support services. Do you have any concerns the
Services will take the additional reductions in base support services
and thereby compromise quality of life and installation support?
Dr. Rooney. No, I am not concerned that quality of life and
installation support will suffer. The reductions in DOD's civilian
workforce, including those in base support services, are correlated to
workload and based on mission/function prioritization, reflecting the
changes in DOD's strategy and force structure. DOD has established an
internal, multi-level governance process for monitoring implementation
of all efficiencies and associated budget reductions. Through such
governance processes, the Service and Department's leadership ensures
that base operating and infrastructure services, critical training to
ensure readiness, equipment modernization and reset, medical care, and
family support are delivered in a manner and with sufficient personnel
to maintain quality of life and warfighting capabilities.

separation
11. Senator Begich. Secretary Rooney, I understand it is DOD's
intent to utilize voluntary separation measures when implementing
civilian personnel reductions. Yet, most applicants are being turned
down when they apply for voluntary separation or retirement. In these
economic times, a lay-off is unacceptable. Does DOD have the
flexibility it needs to utilize voluntary incentives to the fullest?
Dr. Rooney. Yes, these incentives have served DOD well in avoiding
involuntary separations. In accordance with the governing statute,
Voluntary Separation Incentive Pay (VSIP) and/or Voluntary Early
Retirement Authority (VERA) can only be granted when a voluntary
separation would avert an involuntary separation, or when the vacated
position can be restructured to meet organizational needs. It is
management's responsibility to determine when it is necessary to use
these authorities and to determine who is in the eligible population.
As a result, employees who do not work in areas targeted for VSIP/VERA
are not eligible and they generally represent the group of applicants
who claim they are being turned down.
To minimize involuntary separations, DOD has a statutory limit of
25,000 VSIP payments annually. We do not anticipate exceeding the
statutory limit in the current environment. There is no ceiling on
VERA, but the number may be limited by the 25,000 VSIP limit because
most employees who apply for VERA also apply for VSIP. In fiscal year
2011, DOD approved 3,854 VSIPs and 712 VERAs (649 with VSIP). As of
March 31, 2012, DOD has approved approximately the same number of VSIPs
and VERAs as it did in fiscal year 2011.
If the use of voluntary separation incentives does not avoid the
need for involuntary separations, DOD relies on the DOD Priority
Placement Program (PPP), DOD's civilian career transition assistance
program. When employees are scheduled for displacement due to
downsizing or organizational restructuring, they receive hiring
preference for DOD job vacancies through the PPP. Almost 260,000
civilians have been successfully placed through this program, and it
remains the centerpiece of DOD's overall efforts to maintain a stable
workforce.

Voluntary Separation Incentive Pay Approved
----------------------------------------------------------------------------------------------------------------
Fiscal Year
-------------------------------------------------------------------------------
2012 (1st and 2nd
2009 2010 2011 qtr)
----------------------------------------------------------------------------------------------------------------
Army............................ 820 790 2,143 1,679
Navy............................ 364 540 812 265
Air Force....................... 496 236 247 1,107
Other DOD....................... 313 463 652 427
-------------------------------------------------------------------------------
Total......................... 1,993 2,029 3,854 3,496
----------------------------------------------------------------------------------------------------------------

Voluntary Early Retirement Authorities Approved
----------------------------------------------------------------------------------------------------------------
Fiscal Year
-------------------------------------------------------------------------------
2012 (1st and 2nd
2009 2010 2011 qtr)
----------------------------------------------------------------------------------------------------------------
Army............................ 280 250 250 399
(241 with VSIP) (197 with VSIP) (234 with VSIP) (381 with VSIP)
Navy............................ 149 150 186 71
(102 with VSIP) (125 with VSIP) (175 with VSIP) (60 with VSIP)
Air Force....................... 157 107 142 247
(151 with VSIP) (99 with VSIP) (136 with VSIP) (241 with VSIP)
Other DOD....................... 173 293 134 77
(108 with VSIP) (157 with VSIP) 114 with VSIP) (74 with VSIP)
-------------------------------------------------------------------------------
Total......................... 759 800 712 794
(602 with VSIP) (578 with VSIP) (659 with VSIP) (794 with VSIP)
----------------------------------------------------------------------------------------------------------------

12. Senator Begich. Secretary Rooney, are there legal restrictions
or barriers to more lenient use to avoid a reduction in force?
Dr. Rooney. Yes. As explained in my previous response, VSIP and the
VERA are governed by law. Section 9902 of Title 5 of the U.S. Code,
imposes limits on the Secretary's independent authority to use these
separation incentives. These tools may only be used for two purposes:

1. To reduce involuntary separations that would otherwise occur.
2. To restructure the workforce to meet mission objectives without
reducing the overall number of personnel. We cannot approve VSIP or
VERA requests unless the voluntary separations would achieve one of the
two specified purposes.

family support
13. Senator Begich. Secretary Rooney, family support programs are
protected in the budget but indications are they will not see any
growth in budget in the out-years. How does DOD intend to ensure
funding of family support programs keeps pace with inflation?
Dr. Rooney. To ensure that funding of family support programs keeps
pace with inflation and family programs are not reduced, I emphasized
the need for Services to safeguard and sustain funding levels for their
family programs. This resulted in implementation of a Comptroller-
mandated, in-depth, mid-year review of the Services' budgets. The
Services are in the process of scrutinizing their budgets, tracking
program funding, and disclosing discrepancies that could indicate
diversion of funds from programs for which the funds were originally
intended. Ongoing tracking of budgets and reporting on status of
budgets supports the Secretary's position of ``keeping faith'' with
servicemembers and their families to protect family assistance
programs. Additionally, resourcing plans must maximize leveraging
community-based organizations that offer legitimate resources to
support and empower our military families. DOD's ability to adapt
programs and establish partnerships that more effectively and
efficiently meet the needs of our military families are key to DOD's
continued success in an ever more fiscally-constrained environment.

assignments for women
14. Senator Begich. Secretary Rooney, I've long been an advocate
for eliminating assignment restrictions for women in the military.
Please describe the recent DOD changes with respect to women serving in
the military.
Dr. Rooney. On February 9, the Secretary of Defense notified
Congress of his intention to remove the co-location restriction and
permit an exception to policy that allows women to be assigned to the
battalion-level of specific direct ground combat units. Co-located
positions are not part of ground combat units, but by virtue of the
duties or missions involved, must be co-located with the ground combat
units. In addition, positions opened under an exception to the existing
DOD policy permit assignment of women to specific direct ground combat
battalions in select occupations open to women. The experience gained
by assigning women to these select positions will help assess the
suitability and contemporary relevance of the direct ground combat unit
assignment prohibition and inform future policy decisions. In total,
14,325 positions are opening as a result of these changes. The Services
will begin implementing these changes effective May 14, 2012.

15. Senator Begich. Secretary Rooney, what more is DOD doing to
give women a larger role in the Services?
Dr. Rooney. See response to question #14.

reserve component
16. Senator Begich. Mr. McGinnis, I was pleased in your opening
statement that you mention the Innovative Readiness Training (IRT)
program. I am pleased to see this program's funding remained stable in
the budget request at $20 million. Please elaborate on the benefits of
the program to our Reserve component and civilian and military
partnerships.
Mr. McGinnis. The IRT program provides real world training
opportunities for DOD servicemembers, which prepares them for wartime
missions while supporting the needs of America's underserved
communities, many in rural areas. Through this program, the National
Guard and Reserve and various Active component military units refine
their planning, logistical, engineering, health care, driving, and
transportation skills by performing services and developing projects in
and for communities that otherwise would not have the resources to
conduct them on their own. In many cases, the community provides the
materials and the military provides the manpower, equipment, and
training to sustain the improvements.
This year, along with significant training in logistics, joint
operational planning, coordination, and communication, Navy Seabees,
Marine Combat Engineers, Army Reserve, and Air Force Red Horse teams
will gain vertical and horizontal engineering experience. In West
Virginia, over 1,300 Reserve component engineers and support personnel
will build roads and helipads. In New Mexico, houses for homeless
Navajos will be constructed, and in Arizona, a school for exceptional
children will expand.
In Arkansas last year, 5 communities were provided much needed
medical, dental, optometry, and veterinary care; over 6,000 residents
received direct medical care. Just last month, over 10,000 residents of
Kauai, HI received similar medical services and 3,500 pairs of glasses
were fabricated. Currently, the Arctic Care mission is underway in 16
villages in partnership with the Norton Sound Health Corporation in
Nome, AK. Next month, three rural communities in Alabama will provide
the back drop for medical training and many residents will receive much
needed health care. Over 300 military medical personnel train at each
of these health care missions.
As overseas military operations wind down in the coming years, it
is imperative to have sustainment training opportunities available to
the Guard and Reserve. This program provides that unique niche of high-
value mission essential training in support of the Nation's underserved
and remote communities.

17. Senator Begich. Mr. McGinnis, you highlight the alarming
Reserve component unemployment rate in your testimony. I understand the
Army Reserves has a program called the Employer Partnership of the
Armed Forces (EPAF). This program is having tremendous success ensuring
members are trained and receive credentials for civilian work while
staying qualified for their military work. The Army Reserves is working
hand-in-hand with employers to understand what credentials and skill
sets are required for employment, training the force, and then placing
members into jobs. Are you familiar with this program?
Mr. McGinnis. Yes, my office is very familiar with this program.
The EPAF was developed by the Office of the Chief, Army Reserve to work
with employers to facilitate employment opportunities for Army
reservists. After careful review of the success of EPAF, and with the
concurrence of the Chief, Army Reserve, EPAF has transitioned to a
multi-Service program known as ``Hero2Hired (H2H)'', which is
administered by my office, and is available for use by servicemembers
in all seven Reserve components. H2H, with a web site H2H.jobs, retains
many of the great features and lessons learned in EPAF and has expanded
tools designed to provide outreach, support, and mentorship to the
unique Reserve component population. The tools help all unemployed and
under-employed Reserve component servicemembers and spouses with
employment assistance.

18. Senator Begich. Mr. McGinnis, how is DOD leveraging the lessons
learned from successful initiatives such as this one?
Mr. McGinnis. The Yellow Ribbon Reintegration Program (YRRP)
applies lessons learned to its operations on a continuous basis,
constantly improving the quality of curriculum, materials, and
resources provided to the Service components. H2H is a program provided
by YRRP to address the needs of unemployed and under-employed Reserve
component servicemembers. YRRP also made significant enhancements to
the DOD YRRP Center for Excellence whose primary mission is to gather
lessons learned, conduct analysis, and propagate the end results
throughout the Services for their use.

19. Senator Begich. Mr. McGinnis, the 168th Air National Guard Wing
at Eielson Air Force Base has a critical need for a communications
facility. Unfortunately, funding for this facility has not been
provided and funding for it continues to slip into the future years.
Without construction and modifications to the existing facility,
communications will fail for this wing. Would you please look into this
issue and provide an update?
Mr. McGinnis. While my office provides policy oversight of the
Reserve components, any final decisions on construction and funding for
National Guard facilities falls within the purview of the Services. As
such, my office did not play a direct role in any ultimate decisions
related to the 168th. However, upon reviewing the matter, I was
informed of the following information:
The communications facility is scheduled for design and subsequent
construction in fiscal years 2012 and 2013. This facility requirement
was reviewed and found to be better suited for accomplishment using a
combination of minor construction and sustainment, restoration, and
modernization (SRM) funds instead of military construction (MILCON)
funds.
The project calls for a repair of the existing roof, construction
of an addition, and renovation of the existing space. The roof was
repaired in 2011. Construction of a 3,650-square-foot addition for $2
million is under design for the fiscal year 2012 program and will be
executed using minor construction funding. A companion project
renovating 5,504 square feet for $1.85 million is under design for the
fiscal year 2013 program.

20. Senator Begich. Mr. McGinnis, I am especially concerned with
the decreases proposed by the Air Force in Air Guard equipment and
manning. What role did you play in the deliberations this year and what
role did the States play?
Mr. McGinnis. The Assistant Secretary of Defense for Reserve
Affairs serves as an advisor to the Secretary of Defense through the
Under Secretary of Defense for Personnel and Readiness on all matters
pertaining to the planning, programming, budgeting, and execution
system for the Reserve components within DOD.
The budgets are developed by the Secretaries of the Services based
on their views of the future of their Services. The role of Reserve
Affairs is to advise the Secretary of Defense, but we do not play a
direct role in development of these budgets. However, we did
participate in the Office of the Secretary of Defense review of the
Services' budget submissions.
I am not aware of whether the States Adjutants General were
involved in the development of this budget. It is the responsibility of
the Service Secretaries to communicate, through the National Guard
Bureau, with the State Governors and representatives, and I fully
support that interaction and communication. If that was done this year,
my office would not necessarily have played a role.
______

Questions Submitted by Senator Lindsey Graham
sequestration
21. Senator Graham. Secretary Hale, the BCA requires DOD to reduce
all major accounts by a total of $492 billion over 10 years. Secretary
of Defense Panetta has said that this would have a catastrophic impact
on our military and its ability to protect this country. What is the
impact on military readiness, equipment, and training?
Mr. Hale. The initial impact of these reductions would come from a
potential sequestration in January 2013. DOD is concerned that the
sequestration process would have significant consequences due to the
uncertainty surrounding the process and the rigid formula which
Congress has prescribed for its application. Assuming the Fiscal Year
2013 Defense Appropriations Act Conference Report contains language
similar to the Joint Explanatory Statement of the Committee of
Conference accompanying Division A--Department of Defense
Appropriations Act, 2012, DOD would be forced to reduce each line item
within each procurement appropriation by the same percentage and each
program element within each research and development appropriation by
the same percentage. This percentage would be calculated based on the
budgetary resources, primarily the enacted fiscal year 2013
appropriation and any unobligated balances carried forward at the end
of fiscal year 2012. Some examples of the problems this method would
cause are found in line items such as those for a ship, where it is not
feasible to buy a fraction of a ship, or in a line item funding a
multiyear contract where a fraction of the funding would not be
sufficient to pay the negotiated cost of the multiyear contract. With
over 1,500 individual line items in these accounts, DOD could not fix
all of these issues with the transfer authority that Congress typically
provides; this would leave broken programs across all of these accounts
within DOD. Finally, sequestration would force an immediate percentage
reduction in our operation and maintenance accounts which would impact
readiness. Funding provided for overseas contingency operations is not
excluded from sequestration.
The fiscal year 2014 and subsequent budgets will be developed using
DOD's planning, programming, budgeting, and execution process. Changes
to our budget required by revised caps on the defense budget will be
managed through this process to best allocate potential reductions to
the currently planned funding to protect our highest priorities. As
changes of this magnitude will impact all aspects of DOD's budget, the
process will be implemented in coordination with the White House and
the Office of Management and Budget (OMB).

22. Senator Graham. Secretary Rooney, if sequestration is allowed
to go forward, are we creating a hollow force and diminished support
for military families and schools?
Dr. Rooney. I share your concerns about the devastating impact of
further automatic cuts should Congress fail to enact additional deficit
reduction measures.
As the Secretary testified on February 29 to the House Budget
Committee, sequester would subject DOD to another roughly $500 billion
in additional cuts over the next 9 years. In fiscal year 2013, these
cuts would have to be implemented with limited flexibility. These
changes could hollow out the force and inflict severe damage to our
national defense and programs that are vital to our quality of life.

23. Senator Graham. Mr. McGinnis, I am concerned about the current
cuts in the Reserve and National Guard. What greater catastrophe looms
in the event of sequestration for the Reserve component?
Mr. McGinnis. The fiscal year 2013 budget submission supports the
National Defense Strategy and will enable our Reserve components to
continue to fulfill their vital national security role. The current
budget provides funding and programmatic support for the training,
equipping, recruiting, and retaining of the Guard and Reserve.
Sequestration will have a direct impact on the operations, maintenance,
and training of our Reserve components and can run the risk of
preventing the ability of the National Guard and Reserve to provide
trained, ready, and cost-effective forces that can be employed not only
for unanticipated national crises, but also on a regular operational
basis, providing strategic depth for large-scale contingencies. The
extent of the impacts of sequestration will depend on congressional
action or inaction, OMB guidance, and the measures each Service employs
to implement those measures.

24. Senator Graham. Dr. Woodson, will access and quality of medical
care decline in the event of sequestration?
Dr. Woodson. See response to question #22.

25. Senator Graham. Secretary Rooney, Secretary Hale, Mr. McGinnis,
and Dr. Woodson, are you currently conducting any planning in your
areas of responsibility (AOR) for the impact of sequestration, and if
so, how are you assessing and mitigating the risk of the potential cuts
beginning in January 2013?
Dr. Rooney, Mr. McGinnis, and Dr. Woodson. The President's budget
makes the necessary budget adjustments to avoid devastating DOD through
sequestration. If sequestration becomes an inevitability, DOD will
evaluate all options available to comply with the law.
Mr. Hale. Consistent with direction from OMB, DOD did not reflect
the effects of the sequestration in its fiscal year 2013 budget
submission. The President's budget proposes over $4 trillion in
balanced deficit reduction, which Congress could enact and avoid
sequestration. DOD is not currently planning for sequestration. OMB has
not directed agencies, including DOD, to initiate any plans for
sequestration.

reductions in active duty end strength
26. Senator Graham. Secretary Rooney, despite ongoing combat
operations, it seems clear that budgetary pressures are going to force
reductions in the number of Active Duty military personnel: Army down
49,000; Navy down 9,000; and Marine Corps down 16,000. The Air Force
will downsize to prevent exceeding its end strength limit, due to high
retention. I am concerned about the need for advance planning to
implement cuts like these, and particularly with respect to the ground
forces, the effect this may have on morale and readiness in the
present. How will cuts in the Army and Marine Corps affect dwell time,
assuming we are still deploying units to Afghanistan?
Dr. Rooney. In the near-term, the pace of the reductions will
account for the completion of our mission in Afghanistan and provide
the resiliency that comes with sufficient dwell times.
In the long-term, these reductions are consistent with our plan to
transition to the new strategic guidance--to build a force that is
smaller, more agile, and able to adapt to an uncertain future security
environment.
The Services are shaping their future force structure in ways that
protect their ability to maintain and regenerate capabilities needed to
meet future, unforeseen demands, maintaining intellectual capital and
rank structure that could be called upon to expand key elements of the
force. For those critical skill sets, there will be a need to keep on
hand some of the specialized infrastructure (people, facilities,
training curricula), or seed corn, that will enable a new capability to
be developed in a timely manner. Keeping experienced mid-grade officers
and noncommissioned officers will also be key. The seed corn and the
experience will need to be properly balanced between the Active and the
Reserve components.

27. Senator Graham. Secretary Rooney, if we are unable to find the
mandatory spending authority for the force shaping legislation you
would like to have (such as early retirement authority and more
Selective Early Retirement authority), what measures would you have to
use to achieve these reductions?
Dr. Rooney. We currently have a limited number of force management
tools we can use to achieve these reductions. They include, but are not
limited to: Selective Early Retirement Board (SERB), Temporary Early
Retirement Authority (TERA), Voluntary Retirement Incentive (VRI), and
Voluntary Separation Pay (VSP).
The reinstatement of Enhanced SERB authority, the extension of
Early Discharge or Reduction in Force (RIF) authority, and expanded
Time-in-Grade waiver authority, combined with the use of the current
authorities, will allow the Services to execute a very balanced
drawdown. These additional authorities allow us to shape the force with
greater flexibility and fidelity.

army and air national guard
28. Senator Graham. Mr. McGinnis, I'm interested in your views on
the role of the Army and Air National Guard. There is no question that
Guardsmen have been essential contributors in Iraq and Afghanistan. In
the future, in an era of tight budgets, we need to have a clear
understanding from the Army and Air Force about how the National Guard
will and should best be employed. What is your view of the appropriate
role of the National Guard? Stated differently, what does the term
``operational reserve'' look like for the National Guard as it's
implemented over the Future Year Defense Program (FYDP)?
Mr. McGinnis. Missions that are predictable and long-lasting are
particularly well suited to the Guard and Reserve. This was clearly
established in the Comprehensive Review of the Future Roles of the
Reserve Component approved by Secretary Gates on April 27, 2011. The
legislation expanding authority in title 10, section 12304, that was
passed last year, facilitates this type of utilization. The Guard and
Reserve have proven themselves over the last 10 years. From a cost and
readiness point of view, their continued use makes good sense. Placing
Reserve component units and individuals in service force generation
models with appropriate levels of resourcing makes full use of the
Total Force. It also relieves stress on the Active Force, permits the
Active Force to train for full spectrum operations, and maintains the
readiness levels of the Reserve component.

29. Senator Graham. Mr. McGinnis, data from the Air National Guard
suggests that operating under today's deployment constraints, the Air
Guard costs only 53 percent of an equivalent Active Duty Air Force
Major Command. In light of the cost effectiveness of the Guard and
Reserve, why do you support cutting the Reserve capability in the Navy
and the Air Force?
Mr. McGinnis. The current National Guard and Reserve is, arguably,
the most combat seasoned Reserve Force ever, and DOD seeks to
capitalize on this significant investment to provide needed military
capacity during current austere economic times. Since 2001, Reserve
component units and individuals have been heavily employed across the
full spectrum of military operations ranging from combat missions
overseas to Homeland emergencies and national special security events.
They have consistently demonstrated their readiness and enduring value.
To ensure the Reserve component can continue to provide operational
reserve and strategic capabilities, DOD included funding and programs
in its fiscal year 2013 budget request for their training, equipping,
recruiting, and retention. I believe the service force generation
models provide the best mechanism to maintain a ready Reserve component
force that can routinely contribute to the operational force. As
discussed in the recently released Comprehensive Review of the Future
Role of the Reserve Component, I continue to strongly advocate for the
value that the Guard and Reserve can bring to the force mix equation;
value that leverage cost differentials, attainable readiness, and
inherent strategic depth. I intend to continue to work closely with the
Services and Joint Staff to ensure a ready Reserve component that
contributes to the most efficient delivery of required capabilities of
the Total Force.

30. Senator Graham. Mr. McGinnis, why is this the correct strategy,
either from a fiscal or readiness point of view?
Mr. McGinnis. Even as the pace of operations declines, placing the
Reserve components in the Service rotational models expands readiness,
permits the Active Force to reset and train, and provides an efficient
use of the Total Force. There are currently ongoing studies that will
provide further guidance on the appropriate force mix to achieve the
right balance of Active and Reserve components to provide the necessary
capabilities across the spectrum of operations to effectively support
the national defense strategy.

cybersecurity
31. Senator Graham. Secretary Rooney, defense against cyberattacks
is on every American's mind and DOD obviously has a big role to play
and much at stake in this threat. What policies are being implemented
to increase the skills and numbers of civilian and military personnel
with cybersecurity skills?
Dr. Rooney. To increase the cybersecurity skills of civilian and
military personnel, DOD is updating its current information technology
(IT) and information assurance workforce management guidance and
enhancing training and education offerings. DOD is in the process of
establishing policy and procedural requirements for the cyberspace
workforce, leveraging the basic concepts of previous issuances, DOD
Directive 8570.01, ``Information Assurance Training, Certification and
Workforce Management,'' and DOD 8570.01-M, ``Information Assurance
Workforce Improvement Program.'' In addition, under oversight of the
DOD CIO, the Information Resources Management College (iCollege) of the
National Defense University has restructured its cybersecurity
certificate program and recently introduced a cyber leadership program.
DOD continues to explore optimal tools for recruitment and
retention. Efforts include establishing a 2-year pilot program to use
the DOD Information Assurance Scholarship Program to develop IT
acquisition personnel with cybersecurity skill sets; working with the
Office of Personnel Management to extend and enhance the Cybersecurity
Schedule A Hiring Authority (currently due to expire in December 2012);
and developing a new cyberaptitude test to support military recruiting
efforts.

32. Senator Graham. Secretary Rooney, how are you avoiding
duplication of efforts to train and recruit these specialists across
the Federal Government as cited by the Government Accountability Office
(GAO)?
Dr. Rooney. In light of emerging cyberthreats, cyberworkforce
roles, responsibilities, and skill requirements continue to evolve, not
only in DOD, but across the Federal Government. DOD is working on
Federal-wide efforts through the National Initiative for Cybersecurity
Education (NICE) and Federal CIO Council to establish a common lexicon
across government and the private sector; identify current and emerging
cyberskill requirements; and develop relevant education, training, and
recruitment strategies. Also, DOD is developing a directive to
establish policy and guidance for the management of the workforce in
the cyberspace domain which will include an American National Standards
Institute (ANSI) accredited, commercial certification requirement, as
appropriate. Collaborations with other Federal Government entities and
the use of commercial certification providers reduce duplication by
establishing a baseline that can be applied across the Government,
while still allowing DOD, or component-specific training based on
relevant threat or mission profiles.

33. Senator Graham. Mr. McGinnis, how can the Reserve components be
used creatively to enhance DOD's strength in this important area?
Mr. McGinnis. Many cybersecurity personnel in the Reserves are at
the forefront of that industry in their employment as civilians. Within
this evolving domain, Reserve components offer DOD the wide range of
opportunity, flexibility, and depth of expertise that is difficult to
capture within Active Forces. The Active component cyberworkforce and
Active Duty missions are focused and scoped to meet the day-to-day
Service-specific needs, limiting the ability to maneuver or plus-up in
a crisis or a shift in threat.
This originates from the depth and currency of expertise that
individual reservists bring from their civilian positions that is not
now captured in the training and development of the Active component
cyberforces. Changes in the cyberindustry are rapid and the capacity
for those changes to be reflected in Service cyberschools is slower
than it is in industry. Reservists bring to the fight depth and up-to-
date information which is then rapidly shared and infused into the
Active component mission.

disability evaluation system
34. Senator Graham. Secretary Rooney, do you agree that we have a
large and growing problem for wounded and ill servicemembers who are in
need of disability evaluation?
Dr. Rooney. More than a decade of war has increased DOD's
disability caseload but we are committed to ensuring that the
evaluation and compensation of our wounded and ill servicemembers is
fair, correct, and thorough. Many of these wounded and ill
servicemembers suffer from highly complex injuries that take time to
manifest, properly diagnose, and evaluate. DOD evaluated 18,393
servicemembers for disability during 2011, about the same number as in
2010 and about 22 percent more than in 2001. More than 50 percent of
those DOD evaluated in 2011 went through the legacy process. Since
November 2007, 49,478 servicemembers have entered and 19,518 have
completed the Integrated Disability Evaluation System (IDES). Today,
fewer than 2,000 servicemembers remain in the legacy process. At the
same time, the inventory of servicemembers in the IDES has grown
rapidly as installations complete their older, legacy cases and enter
new cases in IDES. As of early May 2012, 27,371 servicemembers were in
the IDES process (68 percent Army, 12 percent Marine Corps, 9 percent
Navy, and 12 percent Air Force). DOD's number of servicemembers
undergoing disability evaluation has grown since the beginning of the
conflicts in Iraq and Afghanistan, and we project that it will continue
to grow as servicemembers redeploy from Afghanistan and the Military
Services reduce their end strength. Unfortunately, predicting the exact
number of referrals into the IDES is complicated because many injuries
and illnesses may take weeks, months, and years to manifest to the
point where they prevent a servicemember from performing their duties.
Nevertheless, we are committed to providing the necessary resources to
accelerate IDES timeliness and improving all aspects of the Disability
Evaluation System (DES) for our wounded and ill servicemembers who are
in need of disability evaluation. We are confident that we have the
right measures in place to adequately staff and accelerate the IDES so
it remains manageable for recovering servicemembers and the Military
Services as they draw down and refit their forces.

35. Senator Graham. Secretary Rooney, what is the solution to this
problem?
Dr. Rooney. DOD leadership is focused on improving the integrated
disability evaluation process. DOD and the Department of Veterans
Affairs (VA) leaders meet regularly to review progress toward that end.
The Secretaries of DOD and VA have met to review progress multiple
times in the last year and will receive monthly updates on progress
toward this priority goal. Within DOD, the Military Services'
disability agencies and medical and personnel communities are expected
to execute the DOD portion of IDES in 175 days and do so in accordance
with their 10 U.S.C. Chapter 61 responsibilities and authorities.
Under the IDES in March 2012, servicemembers averaged 395 days to
complete both DOD and VA systems, significantly less than in the
previous legacy system, but still short of our goal to have 60 percent
of servicemembers complete the IDES in 295 days by the end of 2012. DOD
is concentrating on accelerating the IDES to meet that goal and will
not rest until all referred servicemembers experience the most
efficient IDES possible, even in times of increased caseloads. DOD
plans to accelerate the IDES by emphasizing the following themes.
Proper Staffing
The Services have planned their budgets to ensure proper staffing
of the IDES. Their efforts are underway with the Army completing 1,218
of 1,400 (87 percent) hiring actions for additional IDES staff. The
Navy has increased its Informal Physical Evaluation Board staffing by
47 percent and has reduced processing time from 50 days in January to
11 days in March 2012, well within the goal of 15 days. It is
noteworthy that there has been growth in the number of soldiers in the
IDES. Although the number of servicemembers in the IDES has grown since
2007, that growth is mainly a result of the transition between the
prior legacy processes and the IDES. Although DOD expects some increase
in the number of servicemembers requiring disability evaluation as
servicemembers redeploy from Afghanistan and the Services reduce end
strength, DOD believes the right measures are in place to staff and
accelerate the IDES so the situation remains manageable.
Improving System Execution
DOD and the Services are focused on fine-tuning the IDES by
identifying and implementing best practices in training and execution.
For example, the Navy has made significant gains in accelerating their
medical evaluation boards (MEB) at Camp Lejeune by using existing
technology in DOD's Armed Forces Health Longitudinal Technology
Application (AHLTA) to streamline the medical summaries. The Navy is
now preparing to implement this improvement at all locations. The Air
Force has improved their initial IDES referral screening process to
prevent unnecessary referrals and added workload. The Army recently
completed a review of its IDES process and is implementing an Execution
Order (EXORD) to streamline and standardize their IDES operations. Each
of the Services is taking positive steps to improve execution.
Senior Leadership Involvement
DOD and VA leaders meet regularly to ensure they oversee and drive
progress within their commands. The Secretaries of DOD and VA meet
quarterly to discuss IDES progress. The Vice Chief of Staff of the Army
and the Navy's Bureau of Medicine leadership both meet monthly with VA
senior staff to review IDES processes and direct attention to areas
needing improvement. Recently, these top leaders convened joint VA and
DOD teams to examine existing capabilities and implement by this summer
an electronic, paperless, searchable IDES case file transfer system.
This work is on track and will significantly reduce workload,
accelerate the process by about 20 days, and save about $600,000 in
annual mailing costs.
DOD's goal is to continue to improve the IDES so that
servicemembers will benefit from a process that is faster, fairer, and
reduces the benefits gap. While this is appropriate, lasting
improvement in disability evaluation requires a national dialogue and
significant legislative work. DOD is in the beginning stages of
exploring this strategic reform and envisions this to be a long-term
project that will span several legislative and budgeting cycles. Any
large-scale effort to revolutionize the DES would eventually require
your leadership and we look forward to working with you when and if we
reach that point. Because soldiers comprise approximately 67 percent of
the current IDES caseload, the Army bears most of that operational
burden. To accelerate disability processing, the Army issued execution
and operation orders in the first half of fiscal year 2012. The orders
direct staffing, standardization, and execution improvements. We are
confident this effort will produce results for the Army and the DOD as
a whole.
On the joint technology front, VA plans to release an improved
version of the software DOD and VA use for disability evaluation in the
third quarter of fiscal year 2012. These improvements will enhance case
management capability and add electronic interfaces that will reduce
labor-intensive data-entry requirements and free staff to focus on one
core VA IT system. In the fourth quarter of fiscal year 2012, VA plans
to implement an electronic case file transfer capability or paperless
claim file to the available IDES IT support tools. VA, in partnership
with DOD, is planning future veterans tracking application
improvements, including synchronization of disability IT improvements
with efforts to develop an integrated electronic health record and the
planned virtual lifetime electronic health care record.
My Wounded Warrior Care and Transition Policy staff is also
preparing updated IDES program guidance that will streamline and
consolidate policy. DOD anticipates that this publication will ease
execution of the IDES policy and procedural guidance and accelerate
disability evaluation.

36. Senator Graham. Secretary Rooney, what will this situation look
like in a year or 2 if we don't come up with a solution?
Dr. Rooney. Predicting the exact number of referrals into the IDES
is complicated because many injuries and illnesses may take weeks,
months, and years to manifest to the point where a member's fitness for
duty maybe called into question. We project that DOD's number of
servicemembers undergoing disability evaluation will grow as
servicemembers redeploy from Afghanistan and the Services reduce their
end strength. But, we are also confident we have the right measures in
place to adequately staff and improve the process so the situation
remains manageable for servicemembers as they recover from their wounds
and prepare to transition back to their communities and the Services as
they drawdown and refit their forces.

tricare reforms
37. Senator Graham. Secretary Hale and Dr. Woodson, I've said that
I support health care reform in DOD. Do you agree with me that if we
don't control the growth in health care costs, we will pay for it
through decreased personnel and readiness?
Mr. Hale and Dr. Woodson. Absolutely. We project that the total
medical care budget will grow to 10.7 percent of the DOD topline by
fiscal year 2017 if we do not take additional measures to slow the
growth in health care costs.
If Congress does not provide us with needed support for the health
reform proposals included in the fiscal year 2013 budget, DOD will have
to find about $12.9 billion from other defense programs to meet its
health care obligations. Such action would place the new defense
strategy at risk. Without needed authority, DOD will face further cuts
in forces and investment to be consistent with the BCA. DOD's budget
proposal already makes substantial reductions in the investment
accounts so further cuts might fall mostly on forces. This could mean
cutting additional Active Duty and Reserve Forces by fiscal year 2017
at a magnitude that could jeopardize DOD's ability to pursue the new
defense strategy.

38. Senator Graham. Secretary Hale and Dr. Woodson, we received a
32-star letter embracing these proposals, so among the senior military
leaders, there is no dissent, is that correct?
Mr. Hale and Dr. Woodson. That is correct; these proposals have the
full support of DOD's senior military leaders.

39. Senator Graham. Secretary Hale and Dr. Woodson, how does this
administration's proposal for fee increases compare with the proposal
put forward in 2006, which we all felt was too much, too fast?
Mr. Hale and Dr. Woodson. While there are some similarities between
the 2006 and 2013 proposals, there are also significant differences.
The 2006 proposal for Prime enrollment fees also involved three tiers
and the enrollment fees for 2017 for each of the tiers are roughly the
same as the 2006 proposals. However, the 2006 proposal was based on
retired rank vice retired pay. In 2006, the tiers were split by junior
enlisted (E-6 and below), senior enlisted (E-7 and above), and
officers. Based on current data, roughly 24 percent of retired
beneficiaries under the age of 65 would fall into the lowest category
and 28 percent would fall into the highest category. With the 2013
proposal, 48 percent will fall into the lowest category and only 12
percent will fall into the highest category. The 2006 proposals for
Standard also involved implementing an enrollment fee and raising the
deductible. The 2006 proposals had tiers with the lowest tier having a
2017 enrollment fee of $410 and the highest tier, $820. The 2013
proposal has no tiers for Standard and the proposed 2017 enrollment fee
is $250. The deductibles proposed in 2006 were also tiered with the
lowest tier having a $542 deductible in fiscal year 2007 and the
highest tier having an $820 deductible. The 2013 proposal, with no
tiers, is for a 2017 deductible of $580. There was no TRICARE For Life
enrollment fee proposed in 2006. Finally, the 2006 pharmacy proposed
copays were similar to the copays implemented in fiscal year 2012.

40. Senator Graham. Secretary Hale and Dr. Woodson, from what I
have heard, one of the most controversial elements of the reforms that
you are seeking in health care is a three-tiered system that links the
amount of the fee a retiree pays to his or her military retired pay.
What is DOD's rationale in moving to means testing for military retiree
health care benefits and why is it the right approach?
Mr. Hale and Dr. Woodson. Where feasible, the proposed fee
increases were tiered by military retirement pay, based on the
principles of the December 2007 Task Force on the Future of Military
Health Care. In its deliberations, the Task Force recognized that
military retirement is not like most civilian retirement systems and
that the entire military compensation system differs from the typical
civilian salary system because much of the compensation is in-kind or
deferred. Thus, changes in the health care benefit were examined in the
context of this unique system and its compensation laws, policies, and
programs. The Task Force believed that, for equity reasons, military
retirees who earn more military retired pay should pay a higher
enrollment fee than those who earn less. While this tiering approach is
not commonly used in the private sector for enrollment fees, the Task
Force believed that it made sense in a military environment.

41. Senator Graham. Dr. Woodson, under current law, the TRICARE
Prime benefit is supposed to be cost neutral--that is, the government
costs for Prime should not exceed the government costs for Standard.
Does the cost of TRICARE Prime today comply with this requirement? If
not, what is the difference in government costs between TRICARE Prime
and TRICARE Standard for retirees?
Dr. Woodson. The Prime benefit is no longer cost neutral compared
to Standard/Extra plans.
Section 731(c) of the National Defense Authorization Act (NDAA) for
Fiscal Year 1994 required that the benefit that became known as TRICARE
Prime ``shall be administered so that the costs incurred by the
Secretary under the TRICARE program are no greater than the costs that
would otherwise be incurred to provide health care to the members of
the uniformed services and covered beneficiaries who participate in the
TRICARE program.'' When TRICARE was implemented in 1996, the Prime
enrollment fee was set to: (1) offset the substantially reduced out-of-
pocket costs, including the elimination of the Standard deductible, the
near-total elimination of the 25 percent Standard inpatient copay, and
the substantial reduction of outpatient copays; and (2) make Prime cost
neutral to the government. Subsequent enactments regarding TRICARE for
Active Duty family members have superseded the NDAA for Fiscal Year
1994 requirement for Active Duty family members, but not for Prime-
eligible retirees.
For a working retiree family of three, the cost to DOD of providing
health care in fiscal year 2011: Prime--$13,442; Standard--$11,267. The
disparity between Prime and Standard/Extra was recognized in 2005 and
resulted in proposals to adjust cost shares to both Prime and Standard/
Extra. DOD was largely prohibited from changing fees and copays until
fiscal year 2012. The net result is that Prime is not cost neutral to
the Standard/Extra plans.

42. Senator Graham. Dr. Woodson, is cost neutrality of a managed
care option like Prime compared to fee for service still desirable,
still achievable?
Dr. Woodson. Cost neutrality is a laudable goal and our efforts
should try to move in that direction. However, we cannot get to
complete cost neutrality without significantly increasing the cost
shares under Prime above the levels proposed in the President's budget.
The proposed increases in the Prime enrollment fee are one part. We
also believe that increases in utilization management envisioned under
the Patient Centered Medical Home concept that we are implementing will
bring the cost of Prime closer to Standard/Extra.

43. Senator Graham. Dr. Woodson, if you want to encourage more
people to move from Prime to Standard, why make Standard more
expensive?
Dr. Woodson. DOD took a balanced approach to benefit reform with
increases in cost shares for Prime, Standard, and to TRICARE For Life.
Each program has not kept pace with the cost of medical care and thus
DOD has been faced with funding a larger share of the total health care
expenses. While Prime, with the fixed enrollment fee and relatively
modest outpatient visit copay, saw the more significant change in the
beneficiary share of the cost, Standard/Extra with no enrollment fee,
fixed deductible, and especially the relatively low catastrophic cap
also saw significant change. Both had to be adjusted and indexed so
that the relationship between what DOD pays and what the beneficiary
pays moves closer to what was originally intended and remains there.

44. Senator Graham. Dr. Woodson, your reform proposals to TRICARE
pharmacy will likely cause people to use mail order pharmacy instead of
their local pharmacy, is that correct?
Dr. Woodson. The copay changes included in the President's fiscal
year 2013 budget proposal are intended to encourage beneficiaries to
use the most cost-effective venue. Costs to both the government and to
beneficiaries are lower in the military treatment facilities and the
mail order pharmacy program than in the retail network pharmacy
program. For example, review of recent DOD pharmacy data (fourth
quarter of fiscal year 2011) show that moving 1 percent of the retail
market of maintenance medication over to mail order would save
approximately $1 million in fourth quarter of fiscal year 2011 or $4
million per year. It is worth noting that this 1 percent decrease in
the retail market would have been a 1.8 percent increase in use at mail
order pharmacies during the fourth quarter of fiscal year 2011 (because
the retail market was larger than mail order). Also, these savings
estimates assume the 1 percent moving over from retail to mail exactly
matches the mix of maintenance medications that make up the retail
market basket used in the study.

45. Senator Graham. Dr. Woodson, can you explain the cost
difference for DOD for prescriptions obtained at a local pharmacy
versus those that come from mail order?
Dr. Woodson. Based on DOD analysis of maintenance medications,
which was comprised of 19.9 million prescriptions filled during the
fourth quarter of fiscal year 2011 at all three points of service
(military treatment facilities, retail, and mail order), the data show
that the mail order and military treatment facility venues to be more
cost-effective points of service. The results showed the mean cost per
90-day supply of a market basket of maintenance medications was 19
percent lower through either the mail order program or military
pharmacies, compared to the retail pharmacy network.

46. Senator Graham. Dr. Woodson, how much does DOD spend in
pharmacy costs every year and where do you see that cost going in the
future?
Dr. Woodson. The table below highlights actual pharmacy costs for
fiscal years 2009 through 2011. The table shows current projected costs
for fiscal years 2012 and 2013. We have assumed slower growth in the
future due to proposed copay changes and project that pharmacy expenses
will increase at roughly the Consumer Price Index, Medical (3 to 5
percent per year). Failure to increase pharmacy copayments may result
in higher actual expense.

[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal Year
-----------------------------------------------------------
2009 2010 2011 2012 2013
----------------------------------------------------------------------------------------------------------------
Under 65 Pharmacy Expense........................... $3.42 $3.82 $4.32 $3.95 $3.76
Medicare Eligible Pharmacy Expense.................. 4.19 4.06 3.71 4.32 4.72
-----------------------------------------------------------
Total Pharmaceutical Expense...................... 7.61 7.88 8.03 8.27 8.48
----------------------------------------------------------------------------------------------------------------

47. Senator Graham. Dr. Woodson, what initiatives are underway,
other than adjustments to cost sharing, to reduce the costs of the
TRICARE pharmacy program?
Dr. Woodson. Over the last several years, DOD has made significant
efforts to control rising pharmacy benefit costs. The strategies and
efforts pursued have been drawn from private sector best business
practices, national trends, congressional mandates, professional
consultants, and independent studies. Each effort has had an effect in
controlling the rise in pharmacy costs. Many programs and policies
surrounding formulary management within TRICARE closely mirror what
commercial plans do to manage drug benefits.
Implementation of section 703 of the NDAA for Fiscal Year 2008
granting DOD authority to obtain Federal discounts in the retail
pharmacy venue has collected over $3.5 billion in refunds as of March
30, 2012.
Publication of an Interim Final Rule in December 2009 covering
seasonal flu, H1N1 flu, and pneumococcal vaccines followed by a final
rule in August 2011 provided the authority for the TRICARE pharmacy
benefit to cover all TRICARE-allowed vaccines within the retail
pharmacy setting, significantly increasing accessibility of vaccines
for the prevention of diseases. Over 700,000 vaccines have been
administered through 45,000 retail pharmacies under this program since
December 2009 at no copay for beneficiaries. In addition to the
increased accessibility of vaccines for beneficiaries, the discounted
price to the government was a factor in the decision for this effort.
The TRICARE Management Activity Beneficiary Education and Support
Division in conjunction with the Pharmaceutical Operations Directorate
implemented a comprehensive home delivery (mail order) marketing
program in 2010. Over the course of 2 years this initiative has
contributed to an overall increase of 23 percent in home delivery. In
2011, home delivery prescriptions totaled over 12 million. At the same
time that the home delivery use increased, the growth in the more
expensive retail use has slowed, declining for the first time in 2011.
In the first quarter of fiscal year 2012 the government cost savings
associated with this enhanced communication effort totaled $17.2
million.
Substantial additional cost avoidance (over and above the standard
retail rebate) is realized as a result of the ongoing clinical and cost
effectiveness evaluations of drugs and drug classes for the TRICARE
Uniform Formulary (first implemented mid-2005), which allowed for
tiered formulary copays and the ability to negotiate with manufacturers
for better pricing based on formulary status. As an example, the
additional first-year cost avoidance for drug classes reviewed in
fiscal year 2010 was estimated to be $131 million. In fiscal year 2011,
approximately $161 million in cost avoidance was obtained over and
above the mandatory retail refund. The recent copay changes have also
added to our negotiation leverage with the pharmaceutical
manufacturers.
Step therapy, requiring a trial of a preferred agent prior to
covering a non-preferred agent--is among the formulary tools used to
promote evidence-based and cost-effective drug therapy and to negotiate
better pricing with manufacturers. We estimate that over 4 years
(August 2007-June 2011), formulary decisions in four major drug classes
with step therapy programs resulted in at least $786 million in
voluntary rebates over and above the mandatory retail rebate.
The NDAA for Fiscal Year 2007 directed implementation of an over-
the-counter (OTC) demonstration project to allow selected OTC drugs to
be included on the DOD Uniform Formulary thereby allowing access to
less costly medications in place of the more expensive prescription
products. The success of the program from both the beneficiary and
government perspective has resulted in preparation of a legislative
proposal requesting permanent authority for this program. Through
November 30, 2011 the program has saved DOD $48.5 million.

48. Senator Graham. Dr. Woodson, TRICARE is a complex program that
includes many benefit options. The administration's proposals will add
to its complexity by creating a three-tiered copayment structure based
on retired income. Did you take into consideration the increasing
complexity of administering TRICARE in the development of your reform
proposals?
Dr. Woodson. Yes, we did consider the complexity in administering a
pharmaceutical copayment structure based on retired income. For that
reason, DOD's pharmacy copayment increase proposal is not linked to
retirement pay. The proposed fees will be tiered, as they are today,
based on the drug class status (i.e. generic, brand, or non-formulary).
For Prime and TRICARE For Life enrollment fees, DOD's decision was to
tier the premiums. This will add some complexity, which was taken into
consideration, but it was determined to be achievable and worth the
effort.

49. Senator Graham. Dr. Woodson, what are the costs associated with
the administration of the new benefit structure in fiscal year 2013
through fiscal year 2017?
Dr. Woodson. The fiscal year 2013 fee proposals included an
implementation cost of $33 million in fiscal year 2012. The model
assumed these costs in fiscal year 2012 on the assumption that contract
modifications would need to be issued in fiscal year 2012 in order for
the benefit changes to go into effect for fiscal year 2013. For
subsequent years, starting fiscal year 2013, the budget also included
annual administrative costs of $16 million for ongoing administration
of the enrollment fee process in TRICARE Standard. All of these amounts
should be viewed as rough order-of-magnitude placeholders, pending
development and analysis of actual implementation details, timelines,
et cetera.

50. Senator Graham. Secretary Hale and Dr. Woodson, you and the
military leadership have described the fiscal year 2013 budget request
as an interconnected whole. What is the budgetary and programmatic
impact on that whole if Congress fails to enact the reforms you have
requested?
Mr. Hale. The reforms we requested are an essential element in
meeting the fiscal controls mandated by the BCA of 2011. Therefore, any
reduced savings from failure to implement DOD's TRICARE reform
proposals will have to be replaced with commensurate reductions in
other DOD accounts. This will undermine DOD's attempt to execute the
new strategy as stated and raises the risk that readiness will suffer.
Dr. Woodson. If Congress fails to enact the proposed health care
reforms, DOD will be forced to shoulder the increasing cost of military
health care, likely at the expense of force structure and in
modernization. DOD's budget proposal already makes substantial
reductions in the investment accounts, so further cuts could mean
cutting additional Active Duty and Reserve Forces, which would impact
DOD's ability to pursue the new defense strategy.

51. Senator Graham. Secretary Hale and Dr. Woodson, how realistic
are your health care savings targets for fiscal year 2013 in light of
the timetable for completion of legislation for fiscal year 2013?
Mr. Hale and Dr. Woodson. DOD will continue dialogue with Congress
to identify options to achieve savings in fiscal year 2013. Our budget
estimates are predicated on fee changes going into effect on October 1,
2012. DOD requires several months of lead time to make the appropriate
contract and system changes to meet this timeline. Delays in the
timetable for the completion of legislation will result in reduced
savings in fiscal year 2013.

52. Senator Graham. Secretary Hale and Dr. Woodson, what options
does DOD have to achieve savings in fiscal year 2013 if the NDAA
becomes law late in fiscal year 2012?
Mr. Hale. The fiscal year 2013 budget request assumes
implementation of the TRICARE reform proposals on or about October 1,
2012. The projected fiscal year 2013 TRICARE savings are $0.7 billion.
Should the NDAA for Fiscal Year 2013 preclude the TRICARE reform
proposals, DOD will most likely have to find commensurate savings in
operational accounts with potential negative impact on readiness.
Dr. Woodson. Our budget estimates are predicated on fee changes
going into effect on October 1, 2012. DOD requires several months of
lead time to make the appropriate contract and system changes to meet
this timeline. Delays in the timetable for the completion of
legislation will result in reduced savings in fiscal year 2013. DOD
will continue dialogue with Congress to determine the appropriate
course of action and implementation timelines.

internal efficiencies in health care
53. Senator Graham. Dr. Woodson, military family and veterans
groups have urged that you exhaust internal efficiencies in health care
before increasing fees. What progress are you making in internal
reforms and how much money have they saved prior to going ahead with
this year's proposal?
Dr. Woodson. We completely agree. We have been working aggressively
to reduce the administrative overhead of the military health system by
reducing reliance on contract support; reducing the number of
government staff; reducing the number of boards and studies conducted;
implementing leading purchasing practices for buying the best medical
products at the lowest cost; and simply doing more with less.
Health care savings initiatives--other than beneficiary cost
sharing proposals--continue to be proposed and implemented, resulting
in real cost savings. However, it is important to note that because the
vast majority of the health care budget is spent on providing direct
patient care, there is a limit on the amount of savings that can be
achieved through internal efficiencies alone. As a result, changes in
beneficiary cost sharing represent only one of the key steps that we
are taking to improve health care and reduce the rate of growth in
health care costs. We are also employing other approaches, including:
(1) Moving from Healthcare to Health; investing in initiatives that
keep our people well while promoting healthy lifestyle; (2) Maximizing
Internal Efficiencies; that reduce the administrative overhead of our
military health system; and (3) Reforming Provider Payments; by
responsibly paying private care providers and aligning with Medicare
reimbursement levels, as required by law.
Over the past several years, we have made great progress in
implementing changes that have resulted in real cost savings. Below is
a summary of these efforts:

Federal Ceiling Price: In 2008, with the support of
Congress, DOD championed changes in law (known as Federal
Ceiling Price) that require pharmaceutical manufacturers to
provide DOD about $800 million annually in discounts for drugs
provided to TRICARE beneficiaries through retail network
pharmacies. This authority will provide DOD over $4 billion in
collections over the next 5 years, representing substantial
savings.\1\
---------------------------------------------------------------------------
\1\ $1.5 billion in collections since 2009, based on data ending 31
January 2012; discretionary savings (DHP) and the reductions in outlays
from the Medicare-Eligible Retiree Health Care Fund (MERHCF) since 2009
were approximately $3.5 billion.
---------------------------------------------------------------------------
Outpatient Prospective Payment System: In 2009, by
aligning its payments with Medicare rates (known as the
Outpatient Prospective Payment System), DOD instituted changes
in the way it reimburses private hospitals for outpatient
services provided to TRICARE beneficiaries. When fully
implemented, these changes will save DOD over $900 million
annually. This new system will result in over $4.6 billion in
savings over the next 5 years.
Sole Community Hospital: DOD is in the process of
revising its payment rules to reimburse inpatient care claims
at sole community hospitals by using Medicare rates; when fully
implemented, this action will result in savings of about $100
million annually.
Medical Supply Chain Optimization and Standardization:
To further reduce costs, DOD is changing the way it buys
medical products, by leveraging the bulk buying power of the
military health system. A series of strategic price reduction
initiatives are being implemented, saving DOD on average $60
million annually.
Reducing Administrative Overhead: DOD is reducing
administrative overhead in the military health system by
streamlining its processes; reducing the number of unnecessary
reports, studies, and commissions; and initiating other actions
which will result in over $200 million in reduced personnel and
contract costs annually.
Reducing Fraud, Waste, and Abuse: DOD is stepping up
its efforts to detect fraud, waste, and abuse from fraudulent
providers and institutions, and to recover overpayments. We
expect these efforts will save DOD on average $35 million
annually over the next 5 years.
Investing in Health: Finally, in effort to control
long-term costs, DOD is pursuing a multifaceted strategy to
invest in initiatives that keep beneficiaries well, promote
healthy lifestyles, and reduce inappropriate emergency room
visits and unnecessary hospitalizations while improving patient
satisfaction. In the short term, we expect savings on average
of over $25 million over the next 5 years.

54. Senator Graham. Dr. Woodson, how can Congress help you achieve
them?
Dr. Woodson. We appreciate Congress' support for past efficiency
efforts. DOD continues to reduce the administrative overhead of its
military health system by reducing reliance on contract support;
reducing the number of government staff; reducing the number of boards
and studies being conducted; implementing leading purchasing practices
for buying the best medical products at the lowest cost; and simply
doing more with less.
More is achievable with changes in the organizational structure of
military medicine (report submitted to congressional committees). We
look forward to Congress' support for these proposed changes.

transitional health benefits
55. Senator Graham. Dr. Woodson and Mr. McGinnis, if the
administration's plan to reduce military personnel goes forward, some
who have served may be involuntarily separated. What health benefits
will those involuntarily separated from Active Duty receive?
Dr. Woodson and Mr. McGinnis. Active Duty servicemembers who are
involuntarily separated from the Active component may \2\ qualify for
180 days of premium free TRICARE coverage under the Transition
Assistance Management Program (TAMP); (10 U.S.C. 1145(a)(2)(A)). TAMP
offers comprehensive, premium-free TRICARE coverage to both the sponsor
and eligible family members on the same basis as an Active Duty family
member. At the conclusion of this transition period the individual and
or his family is also eligible to purchase the Continued Health Care
Benefit Program (CHCBP) plan, which is a premium based, temporary
health care coverage program (18 months of eligibility) similar to
better known COBRA program. It provides the Basic program benefits
generally offered under the TRICARE Standard program. The premium rates
are based on the Federal Employees Health Benefits program employee and
agency contributions for a plan with similar benefits.
---------------------------------------------------------------------------
\2\ Eligibility for the TAMP for sponsors and family members is
determined by the sponsor's Service branch and information in the
Defense Enrollment Eligibility Reporting System. TAMP categories are:
members involuntarily separated from Active Duty and their eligible
family members; National Guard and Reserve members, collectively known
as the Reserve component, separated from Active Duty after being called
up or ordered in support of a contingency operation for an Active Duty
period of more than 30 days and their family members; members separated
from Active Duty after being involuntarily retained in support of a
contingency operation and their family members; and members separated
from Active Duty following a voluntary agreement to stay on Active Duty
for less than 1 year in support of a contingency mission and their
family members.

56. Senator Graham. Dr. Woodson and Mr. McGinnis, what about for
those involuntarily separated from the Reserve components?
Dr. Woodson and Mr. McGinnis. ``A member of a Reserve component who
is separated from Active Duty to which called or ordered in support of
a contingency operation if the Active Duty is Active Duty for a period
of more than 30 days'' may \3\ qualify for 180 days of premium free
TRICARE coverage under the TAMP (10 U.S.C. 1145(a)(2)(B)). TAMP offers
comprehensive, TRICARE coverage to both the sponsor and eligible family
members on the same basis as an Active Duty family member.
---------------------------------------------------------------------------
\3\ Ibid.
---------------------------------------------------------------------------
If the Reserve component member is involuntarily disaffiliated from
the Armed Forces altogether and the member had TAMP, TRICARE Reserve
Select, or TRICARE Retired Reserve coverage at the time, the member and
eligible family members may purchase premium-based coverage under the
CHCBP.

57. Senator Graham. Dr. Woodson and Mr. McGinnis, are these
benefits fair and reasonable or should Congress consider some
enhancement, particularly for the Reserve and Guard?
Dr. Woodson and Mr. McGinnis. Congress recently enhanced the
transitional health benefits for Reserve component members. Section 703
of the NDAA for Fiscal Year 2010 (P.L. 111-84) amended law and offered
Active Duty dental coverage to the Reserve component sponsor (and
sponsor only) in TAMP. This provision was implemented by the Final Rule
published in the Federal Register December 28, 2011 (76 FR 81366-81368)
and is fully operational as reported in the TRICARE news release http:/
/www.tricare.mil/mediacenter/news.aspx?fid=742.
Comprehensive coverage under the CHCBP is now available for
purchase by all individuals who lose coverage under TAMP or any TRICARE
program under Chapter 55 of Title 10, U.S. Code.
This is further bolstered by the enhanced health care benefits
eligibility from the VA enjoyed by combat veterans. This enrollment
period was extended from 2 years to 5 years by section 1707 of the NDAA
for Fiscal Year 2008 (P.L. 110-181, January 28, 2008), which amended 38
U.S.C. 1710(e)(3).
DOD has proposed a legislative change to extend eligibility for
TRICARE Reserve Select and TRICARE dental coverage for a period of 180
days for members of the Selected Reserve who are involuntarily
separated.

family support programs
58. Senator Graham. Secretary Rooney, Secretary of Defense Panetta
has assured Congress that support for family support programs is
protected throughout DOD even in this austere budget. Yet, testimony
provided by the National Military Family Association argues that
``family programs are being short-changed,'' by reductions in child
care and family support.
Our expectation is that the Secretary's pledge will be fulfilled.
What are you doing in your oversight capacity to ensure that family
programs are not reduced during this time of war?
Dr. Rooney. To ensure that family programs are not reduced during
this time of war, I emphasized the need for the Services to safeguard
and sustain current funding levels for their family programs. This
resulted in implementation of a comptroller-mandated, in-depth, mid-
year review of the Services' budgets. The Services are in the process
of scrutinizing their budgets, tracking program funding, and disclosing
discrepancies that could indicate diversion of funds from programs for
which the funds were originally intended. Ongoing tracking of budgets
and reporting on status of budgets supports the Secretary's position of
keeping faith with servicemembers and their families to protect family
assistance programs.
______

Question Submitted by Senator Saxby Chambliss
uniformed services employment and reemployment rights act
59. Senator Chambliss. Secretary Rooney and Mr. McGinnis, the
Uniformed Services Employment and Reemployment Rights Act (USERRA)
protects millions of people, largely National Guard and Reserve
members, as they transition between their Federal duties and civilian
employment. USERRA is intended to eliminate or minimize civilian
employment disadvantages resulting from service in the Reserve
components and protect the rights of those members when they deploy.
Since September 11, 2001, over 835,000 citizen soldiers have mobilized
to fight the war on terrorism. Many American soldiers have served more
than one tour of duty and may be required to serve more. As we downsize
the Active Force and operationalize the Reserve Force, it is likely
that Reserve soldiers will continue to mobilize to fill the gaps of the
smaller Active Force. In light of this stress on the Reserve
components, do you see the need for any changes to USERRA to provide
additional protection to our Guard and Reserve members?
Dr. Rooney and Mr. McGinnis. No changes to USERRA are required at
this time. On balance, our Nation's employers have proven to be full
partners in the 21st century Total Force. Moving forward, as we believe
civilian employment is a key part of individual readiness, we are
committed to ensuring strong protections for Reserve component
servicemembers. As such, we will continue to review existing laws to
ensure that they are keeping up with the needs of the servicemembers.
______

Questions Submitted by Senator Kelly Ayotte
medicare and tricare
60. Senator Ayotte. Dr. Woodson, the Centers for Medicare and
Medicaid Services (CMS) are engaged with a number of States in seeking
ways to enhance care and reduce costs for Medicare/Medicaid dual-
eligible beneficiaries. The nearly 2 million TRICARE For Life
beneficiaries are another large population that is dually entitled--to
Medicare and TRICARE in this case. Have you explored with Medicare
leadership the possibilities for interagency cooperation to evaluate
potential approaches to coordinating benefits and enhancing care for
TRICARE For Life beneficiaries?
Dr. Woodson. TRICARE For Life provides Medicare wraparound coverage
when health care is a benefit under both programs, as long as the
beneficiary is enrolled in Medicare Part B. Medicare pays 80 percent of
their allowed amount, and claims automatically cross over to TRICARE
where TRICARE processes the remainder for payment.
Recently, TRICARE Management Activity staff met with
representatives from the CMS' Innovation Center to discuss the
Comprehensive Primary Care Initiative that CMS is developing. This
initiative will use a managed care approach to providing preventive
care and disease management for Medicare and other patients. It will
reward providers when costs are reduced as participants in the
initiative achieve desired health outcomes. Many TRICARE For Life
beneficiaries are likely participants in the initiative, and TRICARE
intends to monitor progress and results of the initiative to assess how
and whether to apply the care approach to a broader segment of our
TRICARE For Life population.
We have also instituted new management controls that are applicable
when TRICARE becomes primary payer for a TRICARE For Life beneficiary's
stay in a skilled nursing facility (SNF). This occurs after exhaustion
of the 100-day SNF care coverage provided by Medicare. We have found
that bills for SNF care are among the largest of any that TRICARE For
Life must cover. Now we require that SNF care beyond 100 days be
preauthorized and base the decision upon review of medical records to
ensure: (a) that skilled care truly is required; and (b) if skilled
care is required, that it is of such intensity that it cannot be safely
provided at a lower, less expensive, level than in a SNF.

61. Senator Ayotte. Dr. Woodson, would this be a way to provide
better care at a lower cost to the taxpayers for TRICARE For Life
beneficiaries?
Dr. Woodson. There is potential that Medicare's Comprehensive
Primary Care Initiative will demonstrate an improvement in outcomes and
will lower cost. That is why we are supportive of the initiative and
intend to monitor its progress and results closely to determine if the
approach is one that would have application to a broader set of our
TRICARE For Life beneficiaries.

defense health program
62. Senator Ayotte. Secretary Hale, I understand that in their 2007
report, the Task Force on the Future of Military Health Care called on
DOD to conduct an audit of financial controls on the DHP, to include
establishment of a common cost accounting system. Did you serve on this
task force?
Mr. Hale. Yes, I did serve on the Task Force on the Future of
Military Health Care before assuming my current position. As noted
above, the Task Force recommended: (1) the conduct of an external audit
to ensure the proper financial controls with respect to health care
eligibility and coverage, and (2) the establishment of a common cost
accounting system to provide a more accurate level of accounting for
costs across the Military Health System (MHS).
The Defense Manpower Data Center (DMDC), a component of the Defense
Human Resources Activity (DHRA), provides the beneficiary data upon
which eligibility for health care benefits is determined. The data is
maintained in the Defense Enrollment and Eligibility Reporting System
(DEERS) database. Both DMDC and DHRA understand and support the value
of an independent, external audit of financial controls on the DHP.
DMDC is audited twice yearly by auditors external to the DHRA and
the DHP. In that regard, the DOD Inspector General conducted an Audit
of Beneficiary Data in the DEERS database (Project No. D2010-D000FR-
0149.000) ``to assess the completeness and accuracy of beneficiary data
contained in DEERS used to estimate health care liabilities on DOD
financial statements,'' and actions are underway to address the
findings of the audit.
With respect to the establishment of a common cost accounting
system, DOD is in the process of developing a statement of work to seek
expert assistance in evaluating a set of alternatives for creating a
common cost accounting structure and universal application across MHS.
More specifically, DOD will evaluate the feasibility of overlaying a
common cost accounting structure across the various disparate financial
systems of the Service Medical Departments and the TRICARE Management
Activity. In addition, DOD will evaluate the option of adopting a
single financial system across the MHS, with special consideration to
Service or Department systems further along in their development. We
strongly believe that having a common cost accounting structure is a
key component for improving financial transparency across the MHS and
we are working on an aggressive schedule to accomplish this critical
evaluation.

63. Senator Ayotte. Secretary Hale, is that recommendation still
valid today?
Mr. Hale. Yes, the recommendation is still valid today. As
mentioned previously, both the DMDC and the DHRA understand and support
the value of an independent, external audit of financial controls on
the DHP, to include the establishment of a common cost accounting
system. In addition, DOD is working aggressively to evaluate options
for improving financial transparency across the MHS.

64. Senator Ayotte. Secretary Hale, what actions are underway to
achieve greater accountability and additional savings for the DHP, to
include protection against fraud and recovery of payments from other
health insurance?
Mr. Hale. DOD is employing a multi-prong approach for achieving
greater accountability and additional savings for the DHP, to include:
(1) Moving from Healthcare to Health; investing in initiatives that
keep our people well while promoting healthy lifestyle; (2) Maximizing
Internal Efficiencies; that reduce the administrative overhead of our
MHS; and (3) Reforming Provider Payments; by responsibly paying private
care providers. We are also stepping up our efforts to reduce fraud,
waste and abuse and increase our recovery of payments from other health
insurance. Specific strategies include utilizing third party entities
to detect other health insurance coverage and prepare these cases for
recovery; educating beneficiaries about legal requirements to disclose
other health insurance coverage; and training MTF staff in proper
patient intake procedures and tools available to increase recovery of
payments.

[Appendices A through F follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[Whereupon, at 3:39 p.m., the subcommittee adjourned.]

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2013 AND THE FUTURE YEARS DEFENSE PROGRAM

----------

WEDNESDAY, APRIL 25, 2012

U.S. Senate,
Subcommittee on Personnel,
Committee on Armed Services,
Washington, DC.

CONTINUATION OF TESTIMONY ON THE ACTIVE, GUARD, RESERVE, AND CIVILIAN
PERSONNEL PROGRAMS

The subcommittee met, pursuant to notice, at 1:07 p.m. in
room SR-232A, Russell Senate Office Building, Senator Jim Webb
(chairman of the subcommittee) presiding.
Committee members present: Senators Webb, Blumenthal,
Graham, Brown, Ayotte, and Vitter.
Committee staff member present: Leah C. Brewer, nominations
and hearings clerk.
Majority staff members present: Jonathan D. Clark, counsel;
Gabriella E. Fahrer, counsel; and Gerald J. Leeling, counsel.
Minority staff member present: Richard F. Walsh, minority
counsel.
Staff assistant present: Jennifer R. Knowles.
Committee members' assistants present: Gordon Peterson,
assistant to Senator Webb; Ethan Saxon, assistant to Senator
Blumenthal; Brad Bowman, assistant to Senator Ayotte; Sergio
Sarkany, assistant to Senator Graham; and Joshua Hodges,
assistant to Senator Vitter.

OPENING STATEMENT OF SENATOR JIM WEBB, CHAIRMAN

Senator Webb. The hearing will come to order.
The subcommittee meets today to continue to receive
testimony from the military Services on military and civilian
personnel programs contained in the administration's Defense
Authorization Request for Fiscal Year 2013 and the Future Years
Defense Program (FYDP).
I would like to begin this hearing by thanking everybody
for adjusting their schedules. As you have been informed, we
have a series of votes that will begin in approximately 1 hour.
So I am going to summarize my statement, at the end of which I
will have my full statement entered into the record. Then I
think we previously asked that the civilian assistant
secretaries give a brief overview of theirs. All of the written
statements will be entered into the record, and hopefully we
can allow enough time for members who wish to ask questions to
use this next hour in a fruitful manner.
As always, the hearing record will be open until close of
business tomorrow if there are written questions for the record
for any of those of you who are here today.
We have today the senior leaders responsible for military
and civilian personnel matters within the Services. We will
discuss, as always, the plans and programs for fiscal year 2013
and also specific budget items in furtherance of this
subcommittee's oversight responsibilities.
We have Hon. Thomas R. Lamont, Assistant Secretary of the
Army for Manpower and Reserve Affairs; Hon. Juan M. Garcia III,
Assistant Secretary of the Navy for Manpower and Reserve
Affairs; Hon. Daniel B. Ginsburg, Assistant Secretary of the
Air Force for Manpower and Reserve Affairs; Lieutenant General
Thomas P. Bostick, USA, Deputy Chief of Staff G-1, U.S. Army;
Vice Admiral Scott R. Van Buskirk, USN, Chief of Naval
Personnel, U.S. Navy; Lieutenant General Robert E. Milstead,
Jr., USMC, Assistant Commandant for Manpower and Reserve
Affairs, U.S. Marine Corps; and Lieutenant General Darrell D.
Jones, USAF, Deputy Chief of Staff for Manpower, Personnel and
Services, U.S. Air Force.
We had originally scheduled this hearing for a few weeks
ago. At that time, General Milstead was recovering from some
very serious surgery. We are pleased that you have successfully
recuperated, although you might have been better off being able
to avoid this hearing a couple of weeks ago. But we are very
happy to have you with us today, General.
As I stated at our oversight hearing with the Office of the
Secretary of Defense (OSD) witnesses in March, we have some
very serious challenges here. General Schwartz, Air Force Chief
of Staff, called these challenges with personnel programs ``the
monumental defense issue of our time.'' These challenges, as
everyone knows, have been made more difficult by the Budget
Control Act (BCA).
Much of the subcommittee hearing last month was devoted to
the TRICARE fee issue. I am not going to go into that in any
detail today. Just suffice it to say that it is an issue of
great concern to me and some other members on this
subcommittee.
We are concerned about the planned reduction of large
numbers of military personnel, more than 120,000 across Service
components. I have been able to have personal discussions with
a number of you about that issue. It may come up again today.
The Integrated Disability Evaluation System does not seem
to be working. I have been able to have discussions again out
of this hearing room with people about that. It is being
implemented worldwide. There are some 23,000 servicemembers in
the system, that at least by our count, are still awaiting some
sort of resolution.
We are interested in examining the roles and opportunities
for service by women. The Marine Corps, particularly, has had
an interesting week in that regard. We will have a discussion
about that.
Sexual assault prevention and response remain a priority,
as always, for our subcommittee.
Another priority is the many discussions we have had
regarding total force mix of military personnel, Department of
Defense (DOD) civilian personnel, and contractors. This has
come up a number of different times. It was a major part of our
hearing last year. It will come up again today.
Lastly, we continue to be interested in the DOD's and the
Services' efforts to eliminate, reduce, and reallocate 140
general flag officer positions and 150 Senior Executive Service
positions.
At the outset of the hearing, I think it is important for
those of us who are on this end of the table to express our
great appreciation to all of you for what you and the people
who serve alongside you do every day to make our country more
secure and also to make DOD a better functioning place.
At this time, I will enter my full statement for the
record.
[The prepared statement of Senator Webb follows:]
Prepared Statement by Senator Jim Webb
The subcommittee meets today to receive testimony from the Military
Services on military and civilian personnel programs contained in the
administration's Defense Authorization Request for Fiscal Year 2013 and
the Future Years Defense Program.
With us today are the senior leaders responsible for military and
civilian personnel matters within the Services. We will discuss not
only their plans and programs for fiscal year 2013, but also specific
budget items in furtherance of this subcommittee's oversight
responsibilities. We will begin marking up the 2013 defense bill in the
next few weeks. Your statements and testimony today are extremely
important as we prepare for that important activity.
Our witnesses today are:

The Honorable Thomas R. Lamont, Assistant Secretary of
the Army for Manpower and Reserve Affairs;
The Honorable Juan M. Garcia III, Assistant Secretary
of the Navy for Manpower and Reserve Affairs;
The Honorable Daniel B. Ginsberg, Assistant Secretary
of the Air Force for Manpower and Reserve Affairs;
Lieutenant General Thomas P. Bostick, USA, Deputy
Chief of Staff G-1, U.S. Army;
Vice Admiral Scott R. Van Buskirk, USN, Chief of Naval
Personnel, U.S. Navy;
Lieutenant General Robert E. Milstead, Jr., USMC,
Assistant Commandant for Manpower and Reserve Affairs, U.S.
Marine Corps; and
Lieutenant General Darrell D. Jones, USAF, Deputy
Chief of Staff for Manpower, Personnel and Services, U.S. Air
Force.

Lieutenant General Milstead, I understand you tried to avoid this
hearing the first time by scheduling surgery. I am pleased that your
plan failed, and we are happy to see you back in good health.
As I stated at our oversight hearing with the Office of the
Secretary of Defense witnesses in March, this subcommittee faces a very
clear challenge this year as we address the need to control the
increasing costs of personnel programs. General Schwartz, the Air Force
Chief of Staff, called this challenge ``the monumental defense issue of
our time.''
This challenge is made more difficult by the funding limitations
imposed by the Budget Control Act. To comply with the discretionary
funding caps, the administration has made several proposals to reduce
military personnel costs, including end strength reductions of more
than 120,000 military personnel, limiting pay raises beginning in 2015,
establishing a BRAC-like commission to conduct a comprehensive review
of military retirement, and increasing TRICARE fees for military
retirees and their families.
Much of this subcommittee's hearing last month was devoted to the
TRICARE fee issue, and I won't rehash that here. Suffice to say, I
believe we have made a moral contract with servicemembers past and
present to provide them a lifetime of medical care in exchange for a
career of military service. The Department's proposal to institute fees
for TRICARE for Life, in my view, does not fully take into account
other fee requirements that already are in place.
We are also very concerned about the planned reduction of large
numbers of military personnel--more than 120,000--across all Service
components. I want to hear from the personnel chiefs in particular
about their plans to reduce the size of their forces, how they will
ensure adequate dwell time, and how they will avoid the need to
involuntarily separate soldiers, sailors, airmen, and marines. Our
witnesses today are well aware that our men and women in uniform have
sacrificed much on behalf of our Nation during the past decade. I
specifically would like to know what force-shaping tools the Services
must have in place to achieve force reductions in a compassionate and
sustainable manner.
In a related issue, the Integrated Disability Evaluation System
(IDES) does not seem to be working as initially planned. It is
bureaucratic and timeconsuming. It has been fully implemented worldwide
for some 15 months, and yet there are more than 23,000 servicemembers
in the system according to the latest data provided to the committee.
For the Army alone, its IDES population would equal six brigade combat
teams. I would like to hear from the personnel chiefs their view of how
this new evaluation system is progressing and what we can do to make it
more efficient and fair.
Many of us on the committee continue to be interested in examining
the roles and opportunities for service by women. The Department
recently proposed to Congress policy changes that would open more than
14,000 positions to women. Additionally, last week the Marine Corps
announced opening a limited number of training slots in combat
specialties to women, a significant departure from current
restrictions. As our witnesses know better than anyone, for a variety
of reasons, more than 75 percent of the Nation's youth do not qualify
for enlistment in the military. Maintaining unnecessary barriers to
service of those who are qualified and motivated to serve magnifies the
challenge in recruiting the most qualified individuals for service in
the All-Volunteer Force. At the same time, this subcommittee has an
obligation to ensure policy changes continue to move us in the right
direction. I look forward to learning more from our witness today.
Sexual assault prevention and response remain a priority for this
subcommittee. Last year, we enacted a number of legislative provisions
to assist victims of sexual assault. Additionally, Secretary Panetta
recently announced several initiatives in this area, some of which may
require legislation. I would like to hear what the Services are doing
to reduce incidents of sexual assault in the military, prosecute
offenders, and provide greater assistance to victims of such crimes.
Another continuing priority is accounting for the total force mix
of military personnel, DOD civilian personnel, and contractors. At last
year's hearing, with all the same witnesses except for Admiral Van
Buskirk, I asked how you account for civilian contractors when you
build your manpower models. There was a good deal of difficulty in
pinning down actual numbers. I would like to know how we have
progressed on addressing this issue since last year.
Lastly, this subcommittee continues to be interested in the
Department of Defense and the Services' efforts to eliminate, reduce,
and reallocate 140 general and flag officer positions and 150 Senior
Executive Service positions. I would like to know what progress has
been made in executing these reductions.
I'm sure that we all agree that there is no greater responsibility
for Congress and our military leaders than to care and provide for our
servicemembers and their families. That includes making careful,
deliberate, and sometimes painful budget choices necessary to protect
the viability of the All-Volunteer Force and to ensure our military
remains the finest in the world. Tradeoffs must be made between what is
nice to have and what we must have--not just in terms of weapons,
planes, and ships, but most importantly in terms of our people. We must
have the right number with the right qualifications and skills.
I look forward to hearing your testimony about the health of your
Services, military personnel and their families, and your assessment
and counsel concerning the difficult choices ahead. As always, I
encourage you to express your views candidly. Let us know how we can
best assist our servicemembers and their families to ensure that our
military remains steadfast and strong.
We will now hear opening statements from our witnesses. Given the
number of witnesses, I ask that the witnesses keep their oral
statements to 3 to 5 minutes. Their complete prepared statements will
be included in the record. Following the opening statements, we will
limit our questions to 7 minutes per round. I am going to call witness
by Service, starting with the Army.
Finally, I would like to note that this will be the last
subcommittee hearing for Dick Walsh, minority counsel to the committee.
Dick has been with the committee for over 10 years and has made
innumerable contributions always in a bipartisan fashion. We will miss
him, and we wish him luck.
We have received a statement from the Reserve Officers Association.
If there is no objection, it will be entered into the record.

Senator Webb. With that, Senator Graham, welcome.
Senator Graham. Thank you, Mr. Chairman. I will just forgo
an opening statement and look forward to receiving the
testimony.
Senator Webb. Thank you.
We have received a statement from the Reserve Officers
Association, and if there is no objection, that will be entered
into the record.
[The information referred to can be found at Appendix A:]
Senator Webb. With that, we will start with Secretary
Lamont. Hopefully, you can summarize your statement in about 3
minutes or so.

STATEMENT OF HON. THOMAS R. LAMONT, ASSISTANT SECRETARY OF THE
ARMY FOR MANPOWER AND RESERVE AFFAIRS; ACCOMPANIED BY LTG
THOMAS P. BOSTICK, USA, DEPUTY CHIEF OF STAFF G-1, U.S. ARMY

Mr. Lamont. I will try to do it in half of that, if you do
not mind. I have truncated my lofty words and will rely upon
our written statement.
Senator Webb. Your written statement in full will be
entered into the record.
Mr. Lamont. Thank you.
Chairman Webb, Senator Graham, and members of this
subcommittee, thank you for taking the time to explore the
issues that are so critical to the men and women in our All-
Volunteer Army and to our national defense both today and in
the future.
It is an honor to serve as the Army's Assistant Secretary
for Manpower and Reserve Affairs.
After a decade of war, the Army is poised to draw down both
our military and civilian forces. We must do this smartly and
compassionately. Thousands of individuals will transition out
of military and civil service after serving faithfully and
honorably. They will need the support of the Nation and deserve
quality transition assistance.
Wartime experiences over the past decade have taught us
that we must have a total Army. The Army National Guard and
Army Reserve provide 51 percent of the Army's military end
strength for around 16 percent of the base budget. We look
forward to working with you to transform the Army National
Guard and Army Reserve into an operational force that provides
not only ready access to 1 million trained soldiers but also an
historic opportunity for our Nation to achieve the most cost-
effective use of its Army.
We are increasingly aware of the physical and emotional
toll a decade of war has taken on our force, and we are
committed to providing quality assistance to soldiers and
family members who are struggling with issues such as substance
abuse, depression, post-traumatic stress disorder (PTSD), and
sexual harassment and abuse. These issues affect readiness and
weaken our force. The Army continues to take aggressive action
to promote health, identify and reduce risky behaviors, and
prevent suicides. Further, at all levels of the Army, we are
reinforcing the Army value of respect in order to establish a
climate where sexual harassment, sexual assault, and hazing
will not be tolerated.
While we transform to a smaller Army, we remain dedicated
to improving readiness and building resilience in our soldiers,
civilians, and families. The Army must not and will not
sacrifice readiness as it draws down. We will emerge from the
forthcoming budget reductions a leaner force but one still
capable of and committed to meeting our obligations to the
Nation, the American people, and the dedicated men and women
who serve. Although our Army will become smaller in the coming
months and years, we will preserve the quality of our All-
Volunteer Force. This fighting force will retain the confidence
and pride of the American people as it has for more than 236
years.
I appreciate the support of the committee and your
commitment to taking care of our soldiers, civilians, and
families. The well-being of our force, regardless of its size,
is absolutely dependent upon your tremendous support.
Thank you very much. I look forward to your questions.
Senator Webb. Thank you, Secretary Lamont. General Bostick,
your written statement will be entered into the record as well.
I know you will be receiving some questions during the question
period.
[The joint prepared statement of Mr. Lamont and General
Bostick follows:]
Joint Prepared Statement by Hon. Thomas R. Lamont and LTG Thomas P.
Bostick, USA
introduction
Chairman Webb, Senator Graham, distinguished members of this
committee, thank you for the opportunity to appear before you on behalf
of America's Army. The U.S. Army is a values-based organization that
exists to serve the American people, to defend the Nation, to protect
vital national interests, and to fulfill national military
responsibilities. We are now poised to execute an historic drawdown of
both our military and civilian personnel, and we are proposing to do it
in a deliberate and careful manner. Thousands of individuals will
transition out of military and civil service and deserve quality
transition assistance.
While the future Army will be smaller, the Army is implementing a
number of improvements in force structure and other capabilities to
ensure it remains the best led, best-trained, and best-equipped land
force in the world today and in the future. Our soldiers have performed
superbly over the last 10 years of war, displaying the values,
character and competence that make our Army second to none. We must not
waver on our commitment to support all those who have served with
courage, pride, and honor.
Thank you for your steadfast commitment to ensuring that the needs
of our soldiers, their families, and our civilian workforce are met by
supporting our personnel initiatives to ensure growth, sustainment and
well being of our All-Volunteer Force.
strategic overview
America's Army, our soldiers, families, and civilians are strained
by nearly a decade of persistent conflict. More than 1.1 million
soldiers have deployed to combat, impacting not only the soldiers, but
their families as well. Additionally, Army civilians shoulder a
majority of the Generating Force mission, and 30,000 civilians have
deployed into harm's way. Now we will transition to a smaller force,
while continuing to remain vigilant of new threats and prepare for new
capabilities and requirements.
To maintain an All-Volunteer Force of the highest quality soldiers
and achieve our end-strength goal, the Army must responsibly balance
force shaping across accessions, retention, promotions, voluntary and
involuntary separations, and natural losses. We should assist our
soldiers and civilians who will transition from their military and
civil service careers to employment in the private sector.
One of the challenges we face is the nondeployable population. The
disability system is not effective and we must continue to work on an
efficient solution between the Services, DOD, and the Veterans
Administration to streamline the disability system and improve
coordination for health care, compensation, and benefits. The Army also
continues to focus on assisting our soldiers and family members
struggling with depression, substance abuse, and other Health of the
Force issues.
With the continued support of the American people and Congress, we
remain committed to the readiness, health and well being of our
soldiers, civilians, and family members. As part of this effort the
Army is also focused on wisely managing our resources in the health
care arena. The Department of Defense (DOD) has also put forward a set
of proposals to further reduce the rate of growth in health care
costs--proposals that are aligned with our priorities. TRICARE is a
superb health benefit--one of the best in the country--and
appropriately so. Just as in all areas of the defense budget, we need
to make decisions that preserve a strong benefit yet reflect the fiscal
realities of the times. The proposals take care to exempt populations
who have made the greatest sacrifices--those who are medically retired,
and those families who have lost their loved one while serving on
active duty. The changes proposed are also adjusted to reflect lower
adjustments for those retirees with lower retirement pay. Most
importantly, DOD continues to provide resources that improve the
overall health system for our soldiers and their families.
The American soldier is the centerpiece of everything we do in the
Army. Our efforts must remain focused on the preservation of our most
precious resource, our people.
drawdown/end strength
In keeping with the National Defense Strategy, the Army is building
our future force to meet the Nation's requirements. The Army is
reducing its Active component end strength to 490,000 soldiers by
fiscal year 2017. Based on Total Army Analysis of future requirements,
the force structure effective in fiscal year 2017 requires an
additional decrease of 24,000 enlisted soldiers and 5,000 officers
beyond our current rate of attrition over this same period. The Army
continues to reduce the additional temporary end strength increase
(TESI) of 22,000 soldiers, approved in 2009 by the Secretary of
Defense, and is on target to be at an Active component end strength of
552,100 by the end of fiscal year 2013. In fiscal year 2014, the Army
will begin to take further steps to significantly shape the force
toward the 490,000 fiscal year 2017 goal.
Our projected drawdown ramp allows for funding 490,000 of end
strength in the base budget starting in fiscal year 2014 and beyond,
with all other end strength supported by Overseas Contingency
Operations (OCO) funding. This ramp allows for a steady enlisted
accession mission of 57,000 and an Active Competitive Category officer
mission of 4,300. Our strength projections incorporate additional
soldier inventory, Temporary Endstrength Army Medical (TEAM), to
mitigate impact of the Disability Evaluation System (DES) nondeployable
soldiers. This TEAM end strength is assumed in fiscal year 2013 and
fiscal year 2014 and fully eliminated by end of fiscal year 2015.
In order to achieve expected end strength reductions, the Army
expects to use various types of separation authorities across all
elements of the force (officer, enlisted, and civilian). In order to
maintain America's Army as an All-Volunteer Force of the highest
quality, we are planning to execute the upcoming force reductions in a
responsible and targeted fashion while maintaining a ready force. Our
soldiers have performed superbly over the last 10 years of war and have
displayed the values, character and competence that made us successful.
We value their service and sacrifices, and will use precision, care,
and compassion in achieving the end strength goal without jeopardizing
combat operations. Under current loss rates, the Army will not be able
to reach its end strength goal over the fiscal year 2013-2017 period.
We are making use of reduced accession levels, promotion selectivity
and tightened retention standards to help shape our force naturally.
Through these processes, we expect to lose combat seasoned soldiers and
leaders, but our focus will be on retaining the best individuals in the
right grades and skills.
The National Defense Authorization Act (NDAA) for Fiscal Year 2012
provides several incentive authorities that will help the Army
encourage soldiers to separate over the drawdown period, along with the
flexibility to apply them to meet specific grade and skill needs. We
are developing cost data for potential use of Voluntary Separation Pay
(VSP), Temporary Early Retirement Authority (TERA), and Voluntary
Retirment Incentive (VRI) pay, but will need to realign or request
reprogramming of funds to support execution of these now existing
authorities. Unfortunately, there is no single force shaping method
among the choices of accessions, retention and separations, that will
achieve the Army's end strength goals, and there will be good soldiers
who we will not be able to retain. As soldiers depart our active duty
formations, the Army is committed to assisting them and their families
as they transition to the Army Reserve, National Guard, or civilian
life.
To maintain an All-Volunteer Force of the highest quality soldiers
and achieve our end strength, the Army must responsibly balance force
shaping across accessions, retention, promotions, voluntary
separations, involuntary separations, and natural losses.

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transition assistance strategy
Our Nation entrusts its best and brightest to the Army to support
the All-Volunteer force. Therefore, the Army has a responsibility to
help our transitioning personnel prepare for post-Army life by
providing the training and tools to enable their success. We must help
them use their Army training, education and experience to successfully
return to civilian life and to become gainfully employed. Support
through this transition process demonstrates the Army's commitment to
its soldiers and their families beyond their years of service.
Some of the more than 130,000 soldiers who transition from the Army
annually have difficulty finding employment. As of January 2012, 21
percent of our Gulf War II Veterans between the ages of 20 and 24 are
unemployed while the national unemployment average for the same age
group is 14 percent. Since 2001, the Army's annual unemployment
compensation costs have increased from $90 million to $574.5 million in
fiscal year 2011. As the Army executes force shaping in the 2014-2017
timeframe, the number of personnel requiring transition training and
counseling is expected to increase.
Consequently, the Army is transforming the way we transition
soldiers in order to give them the greatest opportunity for success
after their military service. On August 29, 2011, the Army published a
new Transition Policy, which encompasses transitions throughout the
entire lifecycle of Service (e.g. permanent change of station,
component change, promotion, schooling, deployment, demobilization and
separation/retirement). In particular, this policy establishes
Transition as a commander's program; ensures every soldier begins
mandatory transition counseling and planning no later than 12 months
before separating or demobilizing; mandates building a tailored plan
for an individual's needs which will have measurable outcomes; and
expands virtual services for career and education counseling before,
during, and after deployment. On December 29, 2011, the Army published
an Execution Order focused on transition policy actions which will have
an immediate and positive impact on soldiers preparing to separate from
Active Duty, demobilizing Reserve component soldiers, and their
families.
The Army supports the White House Employment Initiative and the
DOD/Department of Veterans Affairs (VA) Veterans Employment Initiative
Task Force to develop reforms to ensure all transitioning
servicemembers maximize their career readiness prior to separation in
line with the newly enacted Veterans Opportunity to Work to Hire Heroes
Act of 2011. With the Army's new proactive approach to transition, we
are connecting soldiers and veterans with career private industry
employment opportunities. The Army is working with the DOD/VA Task
Force to help identify the best information technology application and
functional capability to support this employment initiative.
civilian reductions and human capital management
The Army is reducing civilian on-board strength, where necessary
and appropriate, in order to meet funded targets. This reduction will
draw down civilian on-board strength in order to hold to fiscal year
2010 civilian funding levels. Headquarters, Department of the Army
Staff and all Army commands and agencies have conducted exhaustive
reviews of programs and functions in order to identify specific
functions, activities, and workload for elimination and/or reduction.
On February 2, 2011, the Department of the Army suspended civilian
employment offers for Operation and Maintenance, Army (OMA)-funded
positions, with exceptions for positions related to medical, law
enforcement, safety, health, welfare, and contingency operations. Other
exceptions to fill vacancies were approved at the Department of the
Army headquarters level. The suspension was lifted on April 29, 2011,
and commands and agencies were directed to manage civilian and
contracted workload within their targeted fiscal constraints.
The Secretary of the Army issued implementation guidance to Army
commands on July 11, 2011, informing them of their funded civilian
authorization levels and an implementation order was issued on August
3, 2011. The $834 million reduction in OMA funding is associated with
8,741 reductions in direct hire civilian authorizations. Commands and
agencies will take immediate action to reduce civilian on-board
strength as rapidly as possible, but no later than the end of fiscal
year 2012. Our reshaping efforts are already assisting commanders and
directors with reshaping efforts.
The Assistant Secretary of the Army (Manpower and Reserve Affairs)
and the Assistant Secretary of the Army (Financial Management and
Comptroller) have established business processes and reporting
mechanisms to effectively align requirements, authorizations, on-board
strength and associated funding execution for the civilian workforce.
Commands and agencies report monthly on the status of their civilian
workforce reduction plans, the number of civilian reductions effected
each month, the total number of reductions to date and the amount of
OMA funding expended on civilian payroll. In accordance with statutory
restrictions and the Secretary of the Army's instructions, service
contracts will not be initiated in lieu of reduced civilian manpower,
nor will existing contracts be modified to accommodate work formerly
performed by civilian employees.
To the maximum extent possible, the Army is relying on voluntary
departures and attrition to achieve the personnel reductions. Reshaping
tools to effect voluntary departures include Voluntary Early Retirement
Authority (VERA) and Voluntary Separation Incentive Pay (VSIP). Other
non-voluntary reshaping tools short of Reduction In Force (RIF) may
include release of temporary employees, separation of Highly Qualified
Experts (HQE), separation of re-employed annuitants, management-
directed reassignments and furloughs. If these measures do not achieve
the required civilian personnel levels, then a RIF may be considered.
Several commands are releasing temporary employees, re-employed
annuitants and HQEs. Many have also instituted internal hiring freezes,
with recruitment outside of the command requiring higher headquarters
approval. Commands have offered VERA to employees willing to retire
and/or VSIP to those willing to separate from the Federal Government.
If further reductions are necessary, a RIF will be the last resort. As
conditions change with regard to the size of the workforce, marginal
adjustments will be made to these planned reductions at installations
where such adjustments are warranted.

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recruiting and retention (officer and enlisted)
Our soldiers are the Army's most important resource, and our
ability to meet the challenges of the current and future operational
environment depends on our ability to sustain the All-Volunteer Force.
Even as we drawdown the Army, we must continue to bring high quality
men and women into the force to grow our future leaders. We must also
ensure that the Army retains the most talented soldiers with the skills
necessary to meet our future needs.
Despite the challenges of an ongoing conflict, the active Army and
the Army Reserve once again exceeded their enlisted recruiting and
retention missions in fiscal year 2011. The Army National Guard
intentionally under accessed in fiscal year 2011 to avoid exceeding
their congressionally mandated end strength limits. The active Army
accessed the highest percentage of high school diploma graduates since
fiscal year 1992--increasing from 94.7 percent in fiscal year 2009 to
98.7 percent in fiscal year 2011. The Army met its skill-set needs,
achieving over 99 percent Military Occupational Specialty (MOS)
precision. The Army's percentage of new enlisted soldiers with a high
school diploma was well above historic rates for all three components.
In addition, recruits scoring (50-99 percent) exceeded the DOD standard
of 60 percent, while recruits who scored in the lower range (30 and
below) on the Armed Forces Qualification Test decreased by 30 percent
(from 281 to 199). Ineligibility waivers granted for enlistment and
appointments declined by 4.45 percent from fiscal year 2010 to fiscal
year 2011 as a result of being more selective and the improved
recruiting environment. We are currently on track to achieve our fiscal
year 2012 mission and expect to recruit half of the fiscal year 2013
annual mission into the entry pool by the end of fiscal year 2012.
In fiscal year 2011, Combined Active Army (AC) and Army Reserve
Component (RC) enlistment and reenlistment incentives (bonuses and
education), totaled slightly over $1.39 billion. Entering fiscal year
2012, the combined Active and Reserve components will spend slightly
over $1.19 billion (AC recruiting; $406 million), AC retention ($231
million), Army National Guard recruiting and retention ($455 million),
USAR recruiting and retention ($274 million). A large part of the
fiscal year 2012 incentives budget is a result of obligations for
enlistment bonuses occurring from fiscal years 2007-2010. As a result
of lower recruiting missions and the favorable recruiting environment,
average Regular Army recruiting bonuses dropped from over $13,000 in
fiscal year 2009 to $2,500 in fiscal year 2012. Enlistment and
reenlistment bonuses are only used to incentivize longer-term
enlistments in a small percentage of critical skills. These incentives
ensure the success of the total Army recruiting and retention missions
and shape the force to meet specific grade and skill requirements. The
amount budgeted for contractual payments is anticipated to decrease
until at least fiscal year 2015.

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Over the years through research, the Army has improved personnel
assessment measures to more fully assess an individual's potential to
serve and predict a soldier's success in job performance, attitudes,
and career intentions. One valuable measure is the Tailored Adaptive
Personality Assessment System (TAPAS). TAPAS was developed to enhance
the selection of soldiers with Tier 1 credentials by screening out low
motivated, high attrition risk applicants. To date, more than 320,000
Army and 96,000 Air Force applicants have tested on TAPAS. The Navy
also started testing their applicants in late fiscal year 2011.
Preliminary results in operational testing indicate that soldiers who
pass the TAPAS screen have better retention and training outcomes than
soldiers in the same Test Score Category who fail the TAPAS screen.
Recruiting success is expected to continue in fiscal year 2012;
however, the Army and the Nation still face challenges such as rising
obesity rates and decreasing high school graduation rates as we recruit
the All-Volunteer Force. As the pool of qualified 17-24 year old
Americans continues to decline due to growing rates of obesity and
decreasing rates of high school graduation, it will become more
important for parents, teachers and business leaders to support a
youth's decision to join the Army. In today's environment fewer than
one in four 17-24 year-olds are eligible to serve in the Army. More
than 20 percent of high school students fail to graduate and 1 in 5
youths, 12-19 years old, are currently overweight, compared to 1 in 20
in the 1960s. This trend is projected to grow to 1 in 4 by 2015.
The Army must retain the flexibility to offer incentives to attract
and retain talent. The continued funding of these programs by Congress
is absolutely critical to the Army. These incentives assist in shaping
the force for both quality and specific talent required.
The Army continues to retain soldiers at unprecedented levels,
while engaged in the longest period of conflict for our All-Volunteer
Force. The Army has surpassed its retention goal, every year since
2002. Soldiers reenlist for three top reasons: current command climate,
job satisfaction, and the quality of life in the Service. Additionally,
retention rates within the last 24 months have been slightly higher
than anticipated.
In fiscal year 2011, the Active Army reenlisted 43,626 soldiers
towards an annual mission of no less than 40,000 and no more than
45,000. Soldiers extending to complete deployments with their units
represented an additional 7,346 extended contracts. The Army Reserve
reenlisted 12,934 soldiers, exceeding their annual goals by 11 percent.
The Army National Guard accomplished their mission as well by achieving
116 percent of their assigned mission, reenlisting 39,750 soldiers.
During fiscal year 2011 and into fiscal year 2012, retention
bonuses were carefully monitored and adjusted to ensure that the Army
met its retention goals while remaining fiscally responsible. As we
posture for future reductions in the size of our force, the Army is
using lessons learned from past reductions to ensure that today's
decisions maintain the viability of tomorrow's All-Volunteer Force.
Retention policies will emphasize retention of soldiers with high
potential coupled with appropriate force alignment and structure.
The Army's programs to recruit and retain both officers and
enlisted soldiers with critical skills have been effective. For
enlisted soldiers, the Enlistment Bonus, the Selective Reenlistment
Bonus, Critical Skills Retention Bonus, and the Student Loan Repayment
Program are proven tools that remain effective for filling critical
skills.
diversity
The diversity of our Army is a continuous source of strength as we
recruit soldiers and Army civilians from an increasingly diverse
America. We must take full advantage of opportunities to bring new
ideas and expanded capabilities to the mission by reaching out to
communities and building relationships that will support the Army's
human resource requirements. To this end, we have developed and
implemented our first strategy for conducting outreach activities on an
Army-wide basis. In this first year of execution, 9 commands are
responsible for coordinating 25 outreach events for the Total Army. The
Army staff will coordinate an additional 10 events for a total of 35
during 2012. Additional organizations and events will be added to the
strategy in the future.
Our ability to be inclusive of the Nation's diverse citizenry while
sustaining a high performance Army requires the engagement of senior
leaders and continuous diversity education throughout the Force. The
Army Diversity Roadmap, published in December 2010, outlines a unique
approach to an enterprise-wide diversity initiative over the coming
years and will guide our actions in the areas of leadership, people,
structure and resources, training and education, and inclusive work
environments. Within the Roadmap, we are implementing an intra-Army
council of senior leaders to advise the Secretary and provide a forum
for collaboration and sharing ideas in connection with implementation
of the Army Diversity Roadmap and execution of related initiatives. In
addition, the Council will facilitate delivering the diversity and
inclusion message throughout the Army.
Our initial diversity training and education efforts have focused
on practitioners who support our commanders and other leaders. We have
completed initial training for 560 Military Equal Opportunity (MEO) and
Equal Employment Opportunity professionals, and followed up with
materials to support unit-level instruction. Over the past 2 years, 300
general officers and civilian senior executives have completed a
diversity education program. In this program Senior executives are
presented with Army demographics and participate in experiential
exercises that facilitate awareness and perspective.
We will continue to invest in diversity education and inclusive
leadership by seamlessly integrating the training for senior leaders
into their initial leader development programs. Ultimately, we will
also reach every soldier and Army civilian through the Army's
institutional professional development system.
We must position the Army to recruit, develop and retain the most
talented people our Nation has to offer. Critical to our global mission
is an understanding of the cultures, languages and social norms of the
people in locations where we deploy as well as in our own ranks. This
diversity initiative is integral to the Army's long-term vision for
human capital and our understanding of the human dimension of
leadership and global engagements.
operationalizing the reserves
The wartime experiences of the past decade validate the need to
institutionalize the policies, procedures and legal authorities
conducive to achieving the most efficient utilization of the Total
Force through maintaining the Army's Reserve components as an
``operational force.'' Additionally, recent DOD strategic guidance
advocates maintaining key capabilities within the Total Force by
shifting certain capabilities to the Reserve components where they can
be maintained at a high readiness level at lower overall cost. This
strategy requires we continue to regularly employ National Guard and
Reserve Forces in support of our national strategy.
To support an Operational Reserve, the Army included resources for
the National Guard and Army Reserve within the fiscal year 2013 base
budget, including additional resources for collective training, full-
time manning and medical/dental readiness. This required investment in
readiness ultimately allows the Army to manage our Reserve components
as an operational force.
Towards that end, the NDAA for Fiscal Year 2012 provided the
authority for Service Secretaries to place limited numbers of their
Reserve component units on active duty as an operational force for
certain preplanned missions in support of the combatant commands where
the costs associated with such usage are contained in that year's
Defense budget. Additionally, the Secretary of the Army promulgated the
Army's Deployment Period Policy which established a common, 9-month
period of deployment for General Purpose Forces at division-level and
below. The policy also mandates common processes and procedures for
validating pre-deployment readiness across the Total Force with a view
towards integrating Active and Reserve Forces at the tactical level
consistent with the Secretary of Defense's policies for utilization of
the Total Force.
The Army National Guard and Army Reserve provide 51 percent of the
Army's military end-strength for around 16 percent of the base budget.
Transforming the Army National Guard and Army Reserve into an
operational force provides not only ready access to 1 million trained
soldiers, but also an historic opportunity for our Nation to achieve
the most cost-effective use of its Army.
nondeployable campaign plan
As a result of more than a decade of war, the Army has experienced
a dramatic increase in the number of soldiers who are unable to deploy.
During the 4-year period from 2007 through 2011, the nondeployable rate
for Brigade Combat Teams (BCTs) increased by nearly 60 percent, from
10 percent in fiscal year 2007 to greater than 16 percent in fiscal
year 2011. The corresponding decrease in the overall deployable rate
has required us to over-man deploying units so that BCTs deploy with
the required combat strength. This has directly impacted the Army's
ability to properly man the generating force. As a result, the Army
developed a comprehensive nondeployable campaign plan to analyze the
three categories representing the highest percentage of nondeployable
soldiers: Medical, Separations [Expiration Term of Service/
retirements], and Legal Processing.
With the support of this Congress, we made significant strides this
past year in the administrative categories; driving the overall rate
down to 14 percent. Legislation passed in 2011 authorizing 365-day
early separation will enable the Army to increase the readiness of our
deploying units as we backfill those separating with deployable
soldiers. Soldiers with medical conditions remain a challenge,
comprising nearly half of our nondeployable population. This population
will continue to grow as we draw down, decreasing the overall
population while retaining these non-deployable soldiers as they
undergo medical evaluation. Our soldiers continue to be the cornerstone
of our combat formations and as we draw down the force, we remain
committed to providing top quality service to our soldiers and their
families. Therefore, we have focused our efforts to reduce the number
of medically nondeployable soldiers by creating a Disability Evaluation
System (DES) Task Force that will represent both medical non-deployable
and DES initiatives. Through the collaboration of this multi-faceted
Task Force, we can continue to man an expeditionary Army with soldiers
who are deployable, while preserving the All-Volunteer Force.
the army disability evaluation system
The DES has made improvement over the last 4 years, as legislative
changes and the new Army Disability Evaluation System (DES) have made
the system less adversarial; provided greater consistency between
Military and VA ratings; and reduced the time it takes to start
receiving VA benefits after separation. However, we are committed to
improving the complex process.
The current process takes almost 400 days to complete. Even if the
Army were meeting DOD's goal of 295 days, 10 months is simply too long
for our soldiers and their families to wait while their future hangs in
the balance. Currently the Army has more than 19,000 soldiers tied up
in this process of disability adjudication; the equivalent of 5 Brigade
Combat Teams sitting on the bench, not available or deployable, who
must be replaced from other elements to meet operational and tactical
requirements. As a result of the lengthy processing times, the DES
continues to have a significant impact on Army readiness. More than 95
percent of these soldiers depart from the Army once through the
process.
The Army is committed to doing everything it can to improve the
current process. Our Senior Leadership meets monthly with our partners
in the Department of Veterans Affairs to focus on the execution of the
Army DES down to the installation level, identify performance issues,
and share best practices in order to streamline the process. More
recently the Army completed a Senior Leader assessment of the execution
of the Army DES at installations across the Army. This assessment
identified specific actions required to enhance and standardize
performance across the Army. Combined, these actions and standards will
ensure our soldiers receive the needed support in a timely manner;
provide the leadership at all levels visibility in order to adjust
resourcing and assess efficiency; and help us improve Army Readiness by
moving soldiers through the Army DES more expeditiously.
We are working with DOD leadership, the other Services, and our
partners in the Department of Veterans Affairs on improving the system
and look forward to collaborating with Congress on this issue.
quality of life/family programs
The strength of our Nation is our Army. The strength of our Army is
our soldiers. The strength of our soldiers is our Families. Because of
the tremendous sacrifices soldiers and families make every day, the
Army is resolute in sustaining the important programs that enhance
their strength, readiness, and resilience.
The Army Family Covenant institutionalized the Army's commitment to
provide soldiers and their families with a quality of life commensurate
with their level of service to the Nation. Army Senior Leadership
signed the first Family Covenant in October 2007 and reaffirmed its
tenets in October 2011. The Covenant represents our commitment to
provide programs and services to soldiers, both single and married, and
their families, regardless of component or geographic location. The
Covenant recognizes the strength and commitment of soldiers and their
families and establishes a lasting partnership with Army families to
enhance their strength, readiness, and resilience.
We are committed to improving soldier and family readiness by
continuing to build resiliency through strengthened soldier and family
programs that are simple and easier to access; maintaining
accessibility and quality of health care; sustaining high-quality
housing for soldiers and families; maintaining excellence in school
support, youth services, and child care; promoting education and
employment opportunities for family members; sustaining recreation,
travel, and quality of life opportunities for single soldiers; and
joining forces with communities to inspire support for soldiers and
families.

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army military equal opportunity policy
The Army is the leader in MEO policy and practice. Commanders at
all levels are responsible for sustaining positive MEO climates within
their organizations, thus enhancing Army Readiness. To remain relevant
within the ever-changing environment in which we operate, the Army is
revising its MEO policy by integrating and institutionalizing equal
opportunity goals, objectives and training practices. This effort will
strengthen the foundation of the Army's Human Capital Strategy. Since
fiscal year 2009, the Army has invested $3.2 million to include $0.8
million in fiscal year 2011, and expects to invest another $2.1 million
in fiscal year 2012 for MEO personnel services support, database and
survey systems, outreach support, and training for implementation.
women in the army
On January 13, 1994, the Secretary of Defense issued the Direct
Ground Combat Definition and Assignment Rule. The rule remains in
effect today and prohibits the assignment of women to units below the
brigade level whose primary mission is to engage in direct combat on
the ground.
The Army's current assignment policy (Army Regulation 600-13, 27
Mar 92) allows women to serve in any officer or enlisted specialty or
position except in those specialties, positions, or units (battalion
size or smaller) which are assigned a routine mission to engage in
direct combat, or which collocate routinely with units assigned a
direct combat mission.
On March 2, 2010, in the context of a changing operational
environment, with emerging requirements and missions, the Army
initiated a routine cyclic review of its assignment policy for female
soldiers. The purpose of the review was to assess the current Army
policy alignment with DOD policy. The Army completed the cyclic review
in March 2011 and submitted the results and recommendations to Army
Senior Leadership for decision. Prior to making that decision, the NDAA
for Fiscal Year 2011, section 535, directed the Secretary of Defense,
in coordination with the Services, to review laws, policies, and
regulations that restrict female servicemembers an opportunity to excel
in the Armed Forces.
The DOD review was completed in late January 2012 and released
February 9, 2012. The Army concurred with the other Services in the
revision of the Direct Ground Combat Assignment Rule that eliminates
gender-based assignment restrictions to units and positions that are
required to physically colocate and remain with direct ground combat
units that are closed to women and to further align Army assignment
policy with that of DOD. In doing so, the Army opened approximately
13,139 positions for the assignment of women. Additionally, we opened
six MOS: three in Field Artillery and the remaining three closed
specialties in the Logistics career field. We also requested and were
granted a DOD exception to the Direct Ground Combat Assignment Rule
that will authorize the Army to assign females to direct ground combat
units below the brigade level. This limited exception allows assignment
of female soldiers in select open specialties to serve in the battalion
headquarters of select direct ground combat units. Each of these
activities will take effect in late spring 2012.
Women in the Army have and continue to serve this Nation with honor
and distinction in the roles, positions, units, and specialties in
which they are allowed to serve. They have proven their ability to
serve in expanded roles throughout the Army both on and off the
battlefield. This review marks the beginning of a careful and
deliberate effort to apply lessons learned by commanders over more than
a decade of persistent conflict. The Army will continue to review
positions and requirements to ensure that all soldiers are provided
opportunities to reach their full potential and that we accomplish our
missions with the most capable and qualified soldiers.
sexual harassment/assault response and prevention program (sharp)
The Army's goal is to eliminate sexual assault and sexual
harassment through cultural change, thereby, creating a professional
climate where every member of the Army family (soldiers, civilians,
family members, and contractors) trusts their leaders to treat them
with dignity and respect.
The Army SHARP Program reinforces the Army's commitment to reducing
incidents of sexual violence while promoting sensitive care and
confidential reporting for victims of sexual assault, and
accountability for those who commit these crimes.
The Army continues to implement a comprehensive ``I. A.M.
(Intervene, Act, and Motivate) Strong'' Sexual Harassment/Assault
Prevention Strategy and Campaign.
The campaign is based on the same strategic framework and guiding
principles used to execute a successful military initiative--Prevent,
Shape and Win. The Army's goal is to ``Prevent'' sexual assault and
harassment before it occurs; ``Shape'' an Army culture that promotes
dignity and respect; and ``Win'' an environment that improves
prevention, investigation, and prosecution while reducing the stigma of
reporting.
The program consists of a comprehensive policy that centers on
awareness and prevention; training and education; victim advocacy; and
response, reporting, accountability and program assessment.
The Secretary of the Army and the Chief of Staff of the Army are
strong advocates for the implementation of the SHARP Program. They
consider SHARP an integral part of the ``Profession of Arms'' in
developing individual character and supporting the Warrior Ethos.
In 2008 the Army launched a comprehensive sexual assault prevention
strategy, which incorporates the ethical principles of the ``Profession
of Arms'' and requires leaders to establish a positive command climate
that clearly communicates sexual assault's negative impact on the force
and family members. The strategy further encourages soldiers to engage
in peer-to-peer intervention, and not tolerate behavior that could lead
to sexual assault.

This strategy consists of four integrated, cyclical phases
that are designed to achieve true cultural change as we work to
be the Nation's leader in sexual harassment and sexual assault
prevention:
Phase I (Committed Army Leadership) provides training on best
practices and allows commands the opportunity to develop
prevention plans to support the Army strategy.
Phase II (Army-wide Conviction) includes educating soldiers
to understand their moral responsibility to intervene and stop
sexual assault and harassment.
Phase III, which launched April 2011, is dedicated to
``Achieving Cultural Change'' and fosters an environment free
from sexual harassment and sexual assault
Phase IV, the final phase is ``Sustainment, Refinement and
Sharing.'' This phase will be implemented beginning April 2013.
Here, the prevention program will continue to grow while
motivating national partners--governmental and nongovernmental
organizations--to support our efforts in changing generally
accepted negative social behaviors.

The goal will be the reduction of sexual assault through primary
prevention by creating an environment where people are not afraid to
intervene as soon as conditions exist that could lead to sexual
misconduct if left unchecked.
The Army's campaign commitment includes integrating sexual
harassment and sexual assault prevention efforts; executing the SHARP
transformation plan; providing policies; training and education support
to commands; and establishing prevention partnerships.
The SHARP Program transition is occurring throughout the Army.
Building on previous training, SHARP Mobile Training Teams (MTTs) have
trained approximately 7,900 of 17,000 command-selected program
personnel on a prevention-focused 80-Hour Program Certification Course.
The course was approved by the National Organization for Victim
Assistance in December 2011 and credentialed under the National
Advocacy Credentialing Program.
The Army applied $40 million from fiscal year 2009-fiscal year 2011
to increase investigative and prosecutorial capabilities by hiring 12
highly qualified experts in the field of prosecution and investigations
and 23 additional special investigators. The Judge Advocate General
designated 16 special victim prosecutors and 5 Trial Counsel Assistance
Program attorneys. Additionally, there are plans to add another seven
Special Victim Prosecutors in fiscal year 2012.
The U.S. Army Military Police School Special Victims Unit Course,
Fort Leonard Wood, MO, has been selected as the DOD school house. In
essence, the Army will serve as the DOD executive agent for sexual
assault investigator training and the U.S. Army Military Police School
will serve as the proponent for sexual assault investigations training
for DOD.
The Army's school house employs a unique advanced interview
technique in its Special Victims Unit (SVU) Training Course. This
technique is called the Forensic Experiential Trauma Interview, or
FETI, which was developed by the Army SVU lead instructor. This new
interview technique combines the best of child forensic interview
techniques along with the principles of critical incident stress
debriefings and new neurobiology research to obtain not just the who,
what, why, when, where, and how of the incident, but also the three
dimensional experiential aspect of the crime. This process solicits and
documents critical forensic physiological evidence. Based on feedback
from the field this new technique has already shown to be substantially
more effective in obtaining information and substantially more
beneficial evidence which enhances our ability to prosecute sexual
assault cases. The FETI technique is also being trained by our Army
trainers to Federal, State, and local civilian agencies and has been
embraced as a promising best practice.
The SVU course is not only taught by USAMPS and USACIDC experts,
but is also augmented by other nationally recognized experts as well as
legal instructors from the Army Trial Counsel Assistance Program.
Agents from DOD Inspector General, Naval Criminal Investigative
Service, and Air Force Office of Special Investigations have already
begun training at the SVU course. Army prosecutors will also begin
attending the SVU course in April of this year to foster additional
synergy and understanding between our CID Special Agents and
prosecutors. We have developed a plan to include prosecutors from other
DOD Services beginning in fiscal year 2013.
Additionally, the Army is continuing in its efforts to ensure
attorneys in the Judge Advocate community are receiving the most up-to-
date training so they are properly equipped to investigate/prosecute
sexual assault cases. Judge Advocates who are selected to serve as
Special Victims Prosecutors based on their skill and experience in the
courtroom, are required to attend a 2-week Career Prosecutors Course at
the National District Attorneys Association in South Carolina; a 1-week
Essential Strategies for Sexual Assault Prosecutions; and 2-weeks of
on-the-job-training with a designated civilian district attorney's
office, special victims in various other locations.
The Army is currently providing $3.5 million to support Judge
Advocate prosecution and defense capability improvements, to include
policy development, case management, training and education. DOD is
supporting the Army's investigation/prosecution training efforts with
an additional $1.3 million in funding.
Based on recent congressional, Office of the Secretary of Defense,
and Army directives, the Army is revising its policy and program
requirements to effectively expand the program to additional
beneficiaries such as family members 18 years of age or older, DOD
civilians serving overseas and Deployed DOD contractors deployed into
combat zones, while finalizing a plan to meet the NDAA for Fiscal Year
2012 requirements. Concurrently, the Army is revising its comprehensive
training and education program that began in fiscal year 2004 and
remains flexible to meet new legislative and military direction.
The Army is working with DOD leadership to ensure the manpower and
funding required to address the programmatic changes stipulated in the
NDAA are adequately addressed.

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health promotion, risk reduction and suicide prevention
The Army continues to take aggressive actions to promote health,
identify and reduce risky behaviors, and prevent suicides. Utilizing a
holistic approach, increased emphasis has been placed on developing and
implementing targeted training programs as well as funding for support
programs that impact the entire Army Family.
The key elements of the Army's approach are: ensuring that all
soldiers have prompt access to quality behavioral health care;
increased screening and documentation of mild traumatic brain injuries;
and improved leader awareness of high-risk behavior. As conclusions are
derived from ongoing studies, such as the Army Study to Assess Risk and
Resilience in Servicemembers (Army STARRS), the largest BH
epidemiological study that the Armed Forces has ever undertaken,
appropriate leadership decisions will follow to capitalize on the
outcomes. The Army has increased screening efforts to improve diagnosis
and treatment for soldiers through the Post-Deployment Health
Assessments, standardized screening protocols for those exposed to
concussive events and implemented the ``Pain Management Task Force'' to
appropriately manage the use of pain medications and adopt best
practices Army-wide.
The dramatic increases in suicides experienced from 2006 to 2010
leveled off in calendar year 2011 and were down slightly from their
record year in 2010. It is important to note, however, that suicides by
soldiers on Active Duty increased while those by soldiers not on Active
Duty decreased. There were 165 suicides by Active-Duty soldiers during
2011, an increase from 159 suicides in 2010. However, a significant
decrease was observed for Not-on-Active Duty members of the Army
Reserve and National Guard, with 115 suicides during 2011 compared to
146 in 2010. This represents a decrease of 25 suicides over the 2010
report.
The Army released the Army 2020 Generating Health and Discipline in
the Force Ahead of the Strategic Reset Report 2012. Referred to as the
Army Gold Book, the report is an update to the Army Health Promotion,
Risk Reduction, Suicide Prevention Report, 2010. It summarizes the
progress made in enhancing the health, discipline and readiness of the
Force and it represents the next phase in the Army's ongoing campaign
to counter the stress associated with more than a decade of war. The
Gold Book is designed to educate leaders, illuminate critical issues
that still must be addressed, and provide guidance to those grappling
with these issues on a day-to-day basis. It candidly addresses the
challenges that leaders, soldiers and families currently face, while
providing a thorough assessment of what the Army has learned with
respect to physical and behavioral health conditions, disciplinary
problems, and gaps in Army policy and policy implementation. The Army
is committed to ensuring the entire Army Family has access to the
training and resources necessary.

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army substance abuse program
More than a decade of war has created symptoms of stress for our
soldiers, including an increase in alcohol and drug abuse. The Army
Substance Abuse Program (ASAP) is a commander's program that uses
prevention, education, deterrence, detection, and rehabilitation, to
reduce and eliminate alcohol and drug abuse. It is based on the
expectations of readiness and personal responsibility.
In March 2010, the Army conducted a counselor requirements analysis
based on each installation's average daily client census with a ratio
of 1 counselor for 30 patients. Patient caseload was as high as 60
patients per counselor at some installations. The 1:30 ratio is an
accepted ratio based on literature and counselor input. Applying this
ratio yielded a requirement of 563 counselors assuming a 20 percent
growth in number of patients.
An Army priority in this area includes the hiring of more
counselors. There is a finite pool of qualified substance abuse
counselors nationwide and the Army is competing for this scarce talent
with private industry, the Veteran's Administration and State and local
governments. As of January 1, 2012, the Army has hired 500 of the 563
counselors needed. The Army is increasing the use of recruiting,
relocation, and student loan reimbursement incentives to attract more
qualified candidates, and is developing a ASAP Counselor Internship
Program which will allow students with Masters degrees to work in a
supervised internship for up to 2 years as they attain their licenses
and substance abuse counselor certifications.
The Confidential Alcohol Treatment and Education Program (CATEP),
began in July 2009 and offers confidential alcohol treatment to
qualified soldiers. For these soldiers, the chain of command is not
informed of the soldiers enrollment as was previously customary. This
pilot program was initially offered at Fort Lewis, Fort Richardson, and
Schofield Barracks. An initial assessment was conducted in March 2010,
and the Secretary of the Army directed that the pilot be expanded to
include Forts Carson, Riley, and Leonard Wood.
The initial assessment showed moderate success in attracting
soldiers and placed more career NCOs and younger officers into
treatment. Soldiers who participated in CATEP were very positive about
the opportunity to take care of their issues without commander
knowledge and were more motivated as patients. Some soldiers informed
their commanders about their enrollment and these commanders had a high
acceptance of the program. The program was assessed again during July
2011. The results showed that many soldiers with an alcohol abuse or
dependency diagnosis had walked away from treatment when asked to
change their behaviors. After careful consideration, the VCSA directed
implementation of several improvements to the pilot and consideration
of the use of a contract for soldiers interested in CATEP, with the
proviso that non-compliance with treatment would result in mandatory
placement in the Command ASAP. The pilot will be assessed again in
April and May 2012, after which the Secretary will decide whether to
expand the CATEP to the remainder of the Army. To date 1,129 soldiers
sought CATEP treatment and 784 were/are enrolled.

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congressional assistance
As the Army prepares for reductions in the force, we will need
congressional support to drawdown accurately and efficiently while
maintaining readiness. The Army continues to work with the various
parties to improve the physical disability system, so that our
servicemembers receive the transition they deserve. The continued
support of Congress for competitive military benefits and compensation,
along with incentives and bonuses for soldiers, their families, and for
the civilian workforce is critical in helping the All-Volunteer Army
contine to recruit, retain, and support the highest caliber of
individuals.
conclusion
We have invested a tremendous amount of resources and deliberate
planning to preserve the All-Volunteer Force. People are the Army, and
our enduring priority is to preserve the high quality, All-Volunteer
Force--the essential element of our strength.
While we transform to a smaller Army, we remain dedicated to
improving readiness, and building resilience in our soldiers,
civilians, and their families. The Army will not sacrifice readiness as
it draws down. We must draw down wisely to preserve the health of the
force or prevent breaking faith with the brave men and women who serve
our Nation. The Army has gained the trust of the American public more
now than at any other time in recent history, while fulfilling our
responsibilities toward those who serve.
The well-being of our force, regardless of its size, is absolutely
dependent upon your tremendous support. The Army is proud of the high
caliber men and women whose willingness to serve, is a credit to this
great nation. To conclude, I wish to thank all of you for your
continued support, which has been vital in sustaining our All-Volunteer
Army through an unprecedented period of continuous combat operations
and will continue to be vital to ensure the future of our Army.
Chairman Webb, and members of the subcommittee, I thank you again
for your generous and unwavering support of our outstanding soldiers,
civilian professionals, and their families.

Senator Webb. Secretary Garcia, welcome.

STATEMENT OF HON. JUAN M. GARCIA III, ASSISTANT SECRETARY OF
THE NAVY FOR MANPOWER AND RESERVE AFFAIRS; ACCOMPANIED BY VADM
SCOTT R. VAN BUSKIRK, USN, CHIEF OF NAVAL PERSONNEL, U.S. NAVY;
AND LT.GEN. ROBERT E. MILSTEAD, JR., USMC, ASSISTANT COMMANDANT
FOR MANPOWER AND RESERVE AFFAIRS, U.S. MARINE CORPS

Mr. Garcia. Thank you, Senator. I also will be short.
Chairman Webb, Senator Graham, and distinguished members of
the subcommittee, thank you for the opportunity to speak about
the sailors, marines, and civilians who comprise the Department
of the Navy.
There have been many successful changes in the Department
of the Navy since I testified before you last spring. We have
23 female officers assigned to submarines, with more being
assigned in the very near future.
Last year I spoke of new Navy Reserve Officers Training
Corp (ROTC) units at Arizona State University and Rutgers. This
year I am pleased to report that we are expanding our ROTC
presence at Harvard, Yale, and Columbia as part of our goal to
make naval service a viable option for the young men and women
from all regions and all segments of society.
In addition to ensuring our manpower and personnel policies
meet our country's security requirements, it is my honor and
privilege to represent and advocate for the more than 800,000
sailors, marines, and civilian employees. We are always
prepared to respond to the needs of our Nation.
Both sea services will strive to meet their operational
requirements with as an efficient a force as possible. For the
Navy, this means continuing to move sailors from shore support
functions to sea duty to enhance operational readiness. Such a
shift not only means fewer sailors will be available for
important work ashore, but also that sailors will, on average,
spend more time at sea away from their families. For the Marine
Corps, the reduction of nearly 20,000 in end strength coincides
with the planned withdrawal from Afghanistan.
Our highest priority remains the care and recovery of our
wounded, ill, and injured servicemembers. The Department of the
Navy is leading the way in innovative, therapeutic treatments
of our wounded warriors. At the National Intrepid Center of
Excellence, the Department of the Navy is pioneering research
into diagnosis and treatment of traumatic brain injury and
PTSD, but more work remains in this area.
I wish to thank the subcommittee members for your
continuous and unwavering commitment to support the Navy and
Marine Corps and the brave men and women who as sailors and
marines serve bravely in Afghanistan, spend months at sea apart
from their families, combat pirates in the Indian Ocean, board
drug runners in the Caribbean, guard embassies throughout the
world, conduct humanitarian missions whenever and wherever
needed, and perform countless other missions, often under
unimaginably demanding conditions and circumstances. Thank you.
Senator Webb. Thank you, Secretary Garcia.
[The prepared statement of Secretary Garcia follows:]
Prepared Statement by Hon. Juan M. Garcia
Chairman Webb, Senator Graham, and distinguished members of the
subcommittee, thank you for the opportunity to speak about the
Department of the Navy's personnel programs and about the sailors,
marines, and civilians who comprise the Department of the Navy.
There have been many successful changes in the Department of the
Navy since I testified before you last spring. By the end of March we
will have 23 to 25 female officers assigned to submarines, with more
being assigned in the very near future. The repeal of ``Don't Ask,
Don't Tell'' is fully implemented across the force with no significant
problems or incidents. National Naval Medical Center, Bethesda, has
transformed into the new joint Walter Reed National Military Medical
Center. Navy personnel comprise 27 percent of the hospital's staff.
In addition to ensuring our manpower and personnel policies meet
our country's security requirements, it is my honor and privilege to
represent and advocate for the more than 800,000 sailors, marines, and
civilian employees who are always prepared to respond to whatever our
Nation demands.
Vice Admiral Van Buskirk and Lieutenant General Milstead will
address their respective Service's personnel plans in detail, but I
would like to touch on some common challenges the Department of the
Navy faces as a whole.
Recently, the Secretary of the Navy unveiled the 21st Century
Sailor and Marine Initiative, which is designed to place an increased
focus on the resiliency and fitness of our servicemembers. With so much
of our defense strategy dependent upon our Navy and Marine Corps, we
must ensure that our resources support the most combat effective and
the most resilient force in our history. We must set high standards,
but at the same time provide individuals with the services and training
needed to meet those standards. The 21st Century Sailor and Marine
Initiative consists of five ``pillars'': readiness, safety, physical
fitness, inclusion and continuum of service.
Readiness will ensure sailors, marines, and their families are
prepared to handle the mental and emotional rigors of military service.
Both Services are introducing campaigns this year to deglamorize use,
and treat and track alcohol abuse. We will also develop new means to
deter Spice use, reduce suicides and increase our family and personal
preparedness programs. This includes zero tolerance for sexual assault.
We are continually working to improve the reporting, investigation and
disposition of sexual assault cases, ensuring that commanders,
investigators, and prosecutors receive sufficient training and
appropriate resources.
We will also increase our efforts to ensure the safest and most
secure force in the Department's history, including a reinvigoration of
our efforts to encourage the safe use of motor vehicles and
motorcycles.
Physical fitness is an important central pillar that resonates
throughout the 21st Century Sailor and Marine Initiative. Personal
fitness standards throughout the force will be emphasized. We will also
improve nutrition standards at our dining facilities with the
introduction of ``Fueled to Fight'', which ensures that healthy food
items will be available at every meal.
The Department of the Navy will be inclusive and consist of a force
that reflects the Nation it defends in a manner consistent with
military efficiency and effectiveness as it serves its primary function
of defending the Nation. The Department will also reduce restrictions
to military assignments for personnel to the greatest extent possible
consistent with our mission and military requirements.
The final pillar, continuum of service, will provide the most
robust transition support in the Department's history. Individuals
selected for either separation or retirement will be afforded myriad of
assistance programs and benefits that are available to them as they
transition to civilian life. These programs, which include education
benefits, transition assistance, career management training,
counseling, life-work balance programs, and morale, welfare and
recreation programs have been recognized by human resource experts as
some of the best corporate level personnel support mechanisms in the
Nation.
The budget process requires a careful balancing of resources and
assessment of risk. Within in the President's fiscal year 2013 budget
and the Future Years Defense Plan are the results of several other
difficult decisions and tradeoffs. The final product meets mission
requirements while providing appropriate compensation and benefits for
our Active Duty, Reserves, civilian employees, and military retirees.
Both sea services will strive to meet their operational
requirements with as efficient a force as possible. For the Navy this
means continuing to move sailors from shore support functions to sea
duty to enhance operational readiness. Such a shift not only means
fewer sailors will be available for important work ashore, but also
that sailors will, on average, spend more time at sea away from their
families. For the marines, the reduction of nearly 20,000 end-strength
coincides with the planned withdrawal from Afghanistan.
Our highest priority remains the care and the recovery of our
wounded, ill, and injured servicemembers. The Department of the Navy is
leading the way in innovative therapeutic treatments of our Wounded
Warriors. At the National Intrepid Center of Excellence the Department
of the Navy is pioneering research into diagnosis and treatment of
Traumatic Brain Injury and Post-Traumatic Stress Disorder, but more
work remains in this area.
There are other initiatives that deserve mention. We continue to
emphasize civilian hiring of veterans and of wounded warriors in
particular, through both competitive and non-competitive hiring
authorities. Similarly, the Department is continuing our participation
in the Military Spouse Employment Partnership both as a resource for
our members' spouses and as an employer.
Last year I spoke of new Navy Reserve Officers' Training Corps
(ROTC) units at Arizona State University and Rutgers. This year I am
pleased to report that we are expanding our ROTC presence to Harvard,
Yale, and Columbia as part of our goal to make naval service a viable
option for young men and women from all regions and all segments of
society.
As many of you are aware, the Navy has recently closed a number of
Junior ROTC programs at units that failed to meet the statutorily
required participation numbers. To minimize the effects of these
closings, I authorized the creation of National Navy Defense Cadet
Corps (NNDCC) units at a number of these schools. The NNDCC program is
virtually identical to Navy Junior ROTC, except there is only a 50
student minimum enrollment requirement and the schools must provide the
majority of the funding.
We continue to search for innovative ways to improve the efficiency
and capability of our forces as well as the quality of life of our
members and their families. Modernization of the military retirement
system could provide greater fairness and equity to servicemembers
with, perhaps, some savings to the defense budget.
We wish to thank the committee members for your continuous and
unwavering commitment to support the Navy and Marine Corps and the
brave men and women who, as sailors and marines, serve bravely in
Afghanistan, spend months at sea apart from their families, combat
pirates in the Indian Ocean, thwart drug runners in the Caribbean,
guard embassies throughout the world, conduct humanitarian missions
whenever and wherever needed, and perform countless other missions,
often under unimaginably demanding conditions and circumstances.
The following service specific information is provided for the
committee. We look forward to your questions.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Senator Webb. Admiral Van Buskirk and General Milstead,
your full statements will be entered into the record at this
time. We will also get back to you during questioning.
[The prepared statements of Admiral Van Buskirk and General
Milstead follow:]
Prepared Statement by VADM Scott R. Van Buskirk, USN
i. introduction
Chairman Webb, Ranking Member Graham, and distinguished members of
the Senate Armed Services Committee, thank you for the opportunity to
review Navy's fiscal year 2013 manpower, personnel, training, and
education budget request. I am honored to be here to represent the
outstanding men and women of the U.S. Navy, and their families, in this
my inaugural appearance before the committee as the 56th Chief of Naval
Personnel.
In developing our budget request, we recognized that our Nation is
at an historic inflection point, that we are shaping a Navy that will
be more agile, flexible, ready and technologically advanced. As we
continue our presence in the Middle East, maintain our commitments in
Europe, add emphasis and focus in the Asia-Pacific region, Navy has
continued to prove itself in providing a truly adaptive force
capability and capacity, at sea, on land and in the air. While Navy's
operations in Iraq and Afghanistan have been both sea and land based,
the shift in focus toward the Asia-Pacific region will likely increase
demands upon Navy's maritime role, even as the Nation works to address
the national security imperative of deficit reduction through a lower
level of defense spending.
As we move into this new era, Navy is well positioned to recruit,
develop, retain, and provide the American people the best and most
capable maritime fighting force in history. Navy has worked to become a
``Top 50'' organization, an employer of choice, providing world-class
benefits and opportunities. Moreover, as an All-Volunteer Force, we
must adapt to changing economic times, while continuing to implement
force management policies focused on incentivizing, encouraging and
rewarding high performance. We will continue to strive for a Navy that
attracts and retains top-performing sailors who possess the critical
skills necessary for our mission. Further, we are making hard choices
on sailor retention as Navy continues to transition, but we are
committed to doing so in a fair, transparent and compassionate manner
using performance as our benchmark.
Our fiscal year 2013 budget request enables us to continue to meet
the operational demands of the Fleet and the Joint Force while
optimizing personnel readiness. As we look to the future, Navy is
mindful that:

The All-Volunteer Force is the foundation of our Navy
and vital to the security of our Nation.
Navy life involves unique challenges and stresses as a
global, full spectrum sea service.
War related deployments since September 11 have placed
extraordinary demands on many sailors and their families.

We believe our request appropriately balances risk in supporting
the readiness requirements of the Fleet and Joint Force, changing
strategic mission focus, and essential programs that provide for the
care of our sailors and their families.
ii. a ready and capable global navy
Shortly after assuming office as the Nation's 30th Chief of Naval
Operations (CNO) last September, Admiral Greenert issued his inaugural
guidance to the Fleet, the CNO's Sailing Directions. Coupled with our
Navy Total Force Strategy for the 21st Century, it charts a course for
Navy to deter aggression, and, when necessary, decisively win our
Nation's wars. We will employ global reach and persistent presence
through forward-stationed and rotational Forces to protect our Nation
against direct attack, assure Joint Operational Access, and retain
global freedom of action. With our global partners, we will protect the
maritime freedom that is the basis for global prosperity. We will
foster and sustain cooperative relationships with our allies and
international partners as we enhance global security in a constantly
changing environment.

Informed by the Sailing Directions and our Navy Total Force
Strategy for the 21st Century, we have crafted our focus areas
. . .

Warfighting First: We will manage military personnel strength to
deliver an affordable, sustainable and resilient force that meets
mission needs. We will deliver a Force that is operationally ready--
assignable and deployable. To remain operationally effective, we will
deliver a career-continuum of technical training and advanced
education.
Operate Forward: We will deliver ``fit'' and balance to the Fleet--
not only the right number of sailors, but also the right skills and
experience for the job. We must also anticipate fleet and combatant
commander priorities to meet operational needs and provide the regional
skills required for theater security and cooperation of our Joint and
coalition partners.
Be Ready: We will attract, recruit, and retain a high-quality Force
through recruiting and outreach efforts--we must be competitive for the
best talent in the Nation. Most importantly, we will continue to care
for sailors and their families . . . the foundation upon which our Navy
is built.
iii. end strength
Our fiscal year 2013 Navy budget request appropriately balances
risk, preserves capabilities to meet current fleet and joint
requirements, fosters growth in emerging mission areas, and provides
vital support to sailors and Navy families. The request supports active
end strength of 322,700, and selected Reserve end strength of 62,500.
These levels will allow us to meet Fleet and the Joint Force
operational demands while optimizing personnel readiness as articulated
in the recently released Sustaining U.S. Global Leadership: Priorities
for 21st Century Defense. The President's $28.9 billion request for
Active Navy Manpower, Personnel, Training and Education seeks $27.1
billion in Military Personnel, Navy (MPN) appropriations and $1.8
billion in related Operation and Maintenance, Navy (O&MN). The Reserve
request includes $1.9 billion for Reserve Personnel, Navy (RPN) and
$24.7 million in related Operation and Maintenance, Navy Reserve
(O&MNR).
In fiscal year 2013, there is no OCO funding requested for Active
component end strength in support of non-core Individual Augmentee (IA)
mission. Following an assessment of the Reserve component's funding,
and ability to cover previous Active component-sourced non-core IA
requirements, 5,900 man-years of OCO funding was requested to support
4,500 Reserve IA billets throughout the fiscal year. We will continue
to fill IA requirements, when possible, with Reserve component
personnel funded through OCO appropriations.
As we work to stabilize Navy end strength with emphasis on
achieving warfighting wholeness, we continue to shift billets from
shore duty to sea duty while preserving nearly 600 critical shore
billets in sea-centric ratings, including regional maintenance centers,
afloat training groups, Fleet electronic warfare training and Ballistic
Missile Defense AEGIS billets. We expect last year's sea/shore-flow
requirements changes to result in reduced at-sea gaps this year and in
fiscal year 2013. We continue to apply Sea Duty Incentive Pay to
encourage and reward sailors for extended or repeat sea duty service to
help further mitigate our gaps at sea.
Navy will continue to size, shape, and stabilize the Force while
carefully monitoring personnel and Fleet readiness. As required, we
will apply, evaluate and adjust existing and new force-shaping tools
designed to retain the right skills, pay grade, and experience-mix
necessary to provide mission-ready Naval Forces, as required.
iv. force management: achieving balance, maximizing investments
We must always remember that the men and women of the All-Volunteer
Force in our Navy have remained versatile, adaptable and committed to
the Nation during a time of unprecedented, sustained combat operations,
and at tremendous personal sacrifice. As we take the necessary steps to
properly size and shape the Navy to meet current and emerging
requirements, we must be vigilant to ensure the readiness of the All-
Volunteer Force, while maintaining trust with those who serve in our
Navy.
We expect to finish fiscal year 2012 below end strength controls,
largely due to effective force management policies within the enlisted
force. At the same time, we are over-executing our officer strength. To
remedy this imbalance, we plan to stabilize enlisted strength while
gradually reducing officer strength. Our strategy focuses on
rebalancing the Force to achieve the right mix of officers and enlisted
personnel by increasing enlisted accessions over time, reducing officer
accessions in a controlled manner through judicious application of
force management tools to address officer overages in specific skills.
We will achieve proper force balance while respecting the sacrifices of
sailors and their families by using voluntary measures to the extent
possible before resorting to involuntary actions. Through careful
combination of both, we will meet dynamic force management challenges
and maximize investments in our people.
Our use of force management tools will be continuously evaluated as
end strength and force structure is reduced. We will keep a watchful
eye on indicators of shifting behavior and on economic trends and act
quickly to preserve our ability to attract and retain the highest-
quality sailors while achieving and then maintaining the right balance
of seniority, skills, performance, and experience to deliver optimum
military personnel readiness to the Fleet.
Perform-to-Serve (PTS) remains our primary, and most effective,
enlisted force-balancing tool, allowing us to manage enlisted
continuation behavior by rating. Based on performance ranking, PTS
identifies sailors at career decision points, up to 14 years of
service, who are best qualified for in-rate reenlistment, conversion
from overmanned to undermanned specialties, or separation from the
Navy. In fiscal year 2011, we converted 1,052 sailors, narrowing
critical manning gaps, while 6,765 sailors identified by PTS separated
at their End of Active Obligated Service. We plan to separate another
6,650 sailors through PTS in fiscal year 2012, and fewer in fiscal year
2013. PTS has significantly improved enlisted manning balance
permitting us to offer in-rate reenlistment to significantly more
sailors while returning advancement opportunity to historic norms.
To further assist in rebalancing the Force and relieve pressure on
sailors in a PTS reenlistment window, Enlisted Retention Boards (ERB)
were implemented as an additional force management tool. The ERB was
necessary to ensure we could reduce inventory within overmanned ratings
in cases in which converting sailors to undermanned ratings was not a
viable option. Unlike PTS, the ERB looked at all eligible sailors in 31
overmanned ratings, not just the ones in a PTS window. This past
summer, ERB examined the records of approximately 16,000 sailors in pay
grades E4-E8, with at least 7 and less than 15 years of service, who
are serving in overmanned ratings, and identified 2,947 for separation
in fiscal year 2012. Approximately 300 of these sailors, who will have
at least 15 years of service by September 1, 2012, are being offered
the opportunity to apply for early retirement under Temporary Early
Retirement Authority (TERA) enacted in the National Defense
Authorization Act for Fiscal Year 2012. We do not intend to use ERB
authority in fiscal year 2013.
We have used, and continue to use, a host of other tools to
contribute to ongoing force management efforts for both officer and
enlisted sailors, including:

High-Year Tenure separations in select pay grades and
years of service. We separated 912 sailors in fiscal year 2011,
and plan an additional 909 in fiscal year 2012, and slightly
more in fiscal year 2013, through recent changes to High Year
Tenure policy.
Early Transition. In fiscal year 2011, we allowed
1,541 sailors to separate up to 24 months before the end of
their enlistments, and anticipate authorizing a similar number
of separations in fiscal year 2012, but fewer in fiscal year
2013.
Annual performance-based continuation boards. We
reduced the number of active duty sailors in pay grades E7-E9
with over 20 years of service by 187 and expect an additional
50 losses in fiscal year 2012 and fiscal year 2013.
One-year time-in-grade (TIG) retirement waivers for
select senior enlisted and officers. We executed 37 officer TIG
waivers in fiscal year 2011 and expect approximately 45 for
fiscal year 2012 and fiscal year 2013.
Monthly probationary officer continuation and
redesignation boards. These boards authorize release or
redesignation of probationary officers (with <6 years
commissioned service). We separated 242 officers in fiscal year
2011 and anticipate separating 270 in fiscal year 2012.
Permitting voluntary retirement of officers with prior
enlisted service after 8, vice 10, years commissioned service.
Enacted in the NDAA for Fiscal Year 2011, we expect to
authorize approximately 60 retirements in fiscal year 2012 and
fiscal year 2013.
Selective Early Retirement (SER). SER Boards selected
124 unrestricted line captains and commanders for early
retirement in fiscal year 2012. In fiscal year 2013, we may
select approximately 40 Restricted Line and Staff Corps
officers for early retirement.
Voluntary Retirement Incentive (VRI). An authority
that allows Navy to precisely target specific commanders (O-5)
and captains (O-6) with between 20-29 years of service in
certain specialties and warfare areas to separate and retire
voluntarily.
Temporary Early Retirement Authority (TERA). In fiscal
year 2012, we are offering early retirement to approximately
300 sailors as an alternative to early separation required by
Enlisted Retention Boards. We are evaluating options for
further targeted use of TERA in fiscal year 2013.

Despite significant progress, additional force management actions
are necessary to maintain mandated end strength and officer levels with
the right mix of skills and experience due to high retention and low
attrition. For example, we will soon implement two new policies to
facilitate further enlisted force management:

In fiscal year 2012 and fiscal year 2013, we will
apply Initial Training Separation Authority to separate fewer
than 500 sailors per year who do not satisfactorily complete
their training pipeline, but for whom no suitable vacancy
exists.
We will adjust High Year Tenure thresholds to separate
fewer than 1,000 sailors in pay grades E2-E3 in fiscal year
2013.

We are contemplating whether additional authorities may be
necessary to enhance our ability to properly shape and balance the
Force. A range of broad, flexible, options to properly size and shape
the Force remains vital to Navy military personnel readiness. We
appreciate Congress enacting flexible authorities that provide
voluntary means to effectively manage the Force in a way that preserves
a positive tone across the Navy.
v. sailor and family support
Our fiscal year 2013 budget request of $131.7 million for sailor
and family care coupled with the items in the Secretary of Defense and
Defense Health Care budgets sustains or enhances our comprehensive
continuum of care. The health care proposals in the President's budget
are consistent with our efforts in identifying processes that are more
efficient, incentivizing positive health behaviors, promoting overall
wellness and keeping our sailors fit and ready to deploy on a moment's
notice. This budget keeps faith with those who serve and those who have
served, and responsibly meets the demands dictated by the Federal
budget crisis. With continued congressional support, Navy is committed
to retaining funding levels necessary to address the medical, physical,
psychological, and family readiness needs of sailors and their
families. I hope you will agree, and support our efforts.
Comprehensive Continuum of Care
Through a comprehensive continuum of care, we place the highest
priority on the medical, physical, psychological, spiritual and family
readiness needs of sailors and families. Navy's Operational Stress
Control Program, Navy Reserve Psychological Health Outreach Program,
Warrior Transition Program, Returning Warrior Workshop, Navy Safe
Harbor, and our Medical Home Port Program are critical continuum of
care elements.

The Operational Stress Control (OSC) program is our
proactive approach to address the personal readiness of our
sailors and their families. OSC is comprised of training,
assessment, policy, and tools to support and build sailor,
family, and unit resilience. It enables leaders to foster a
climate in which sailors use available resources to stay fit
and ready without stigma. OSC, with complementary and
integrated support from the Navy Chaplain Corps, provides
assistance for stress reactions before they become stress
problems. A 2011 Behavioral Health Quick Poll found most
sailors reported using positive methods to cope with stress.
The Navy Reserve Psychological Health Outreach program
improves the psychological health and resiliency of Reserve
Component (RC) sailors and families. Teams of psychological
health outreach coordinators and outreach team members, located
at the five regional Reserve commands, provide psychological
health assessments, education, and referrals to mental health
specialists.
The Warrior Transition program provides Individual
Augmentees the opportunity to decompress and transition to life
back home. Through small group discussions, chaplains and
medical personnel prepare sailors to resume family and social
obligations, return to civilian places of employment, and
reintegrate into the community.
Returning Warrior Workshops help remove stigma that
may prevent sailors from seeking support during demobilization
and reintegration.
Navy Safe Harbor supports the non-medical needs of
wounded, ill, and injured sailors, coast guardsmen, and their
families. This network of recovery care coordinators and non-
medical care managers, at 18 locations across the country,
provides individually tailored assistance to 748 enrolled
sailors, 43 enrolled coast guardsmen, and an additional 777
sailors considered assist cases. The fiscal year 2013 budget
request supports our enduring goal to provide the highest
quality care to our wounded, ill, and injured.
Medical Home Port program is a team-based primary care
model focused on optimizing relationships between patients,
primary care providers and other health care professionals to
enhance health and readiness. Beginning this year, mental
health providers will be embedded within Medical Home Ports
alongside the rest of the care team, and will facilitate
regular assessment and early behavioral intervention for
sailors and families. This will enable treatment in settings in
which patients feel most comfortable and will reduce stigma
associated with seeking care. Early detection and intervention
in the primary care setting reduces the demand for time-
intensive intervention in behavioral health specialty clinics.
The presence of behavioral health within the Medical Home Port
promotes increased comfort among primary care providers in
treatment of behavioral health issues within their scope of
practice in collaboration with the embedded specialists.
Behavioral Health
The Navy Behavioral Health program goal is to develop an
organizational climate that encourages psychologically healthy,
resilient and mission-effective sailors. It provides Navy-wide
resources for suicide awareness and prevention, intervention skills,
and risk mitigation procedures. We track and analyze data on suicide-
related behaviors and deaths to identify trends and develop additional
policy, training and outreach to prevent suicide risk. A 2011
Behavioral Health Quick Poll reflects positive trends in the percentage
of sailors attending Suicide Prevention Training and who recognize
proactive suicide-prevention efforts occurring at their commands.
Suicide Prevention: All Hands, All of the Time
Every Navy suicide represents a tragedy that affects command
cohesiveness and the loss of a valued shipmate; a loss the Navy is
determined not to accept. Our comprehensive strategy to combat suicide
incorporates four pillars: Education and awareness; Operational Stress
Control; Intervention; and Post-intervention support; a leadership-led
effort with a foundation built on a comprehensive array of education
and outreach.
Navy's suicide prevention approach builds combined sailor, family,
and command resilience with a goal of changing behavior through
personal resilience; peer to peer support; leadership intervention
throughout the chain of command; enhancing family support; and
fostering a command climate where help-seeking behaviors, when
required, are expected in order to restore personal readiness.
We have implemented a year-round strategic communication plan
focused on Navy's ``Ask-Care-Treat'' model, or ACT, which emphasizes
the value of peer-to-peer support. Additionally, targeted suicide
assessment training is provided for primary care providers at large
Medical Treatment Facilities as another viable means to identify at-
risk sailors.
The Suicide Prevention Coordinator network is growing with the
addition of webinar training that has trained more than 500 new suicide
prevention coordinators in 18 webinars since December 2011 and
additional webinar training is planned for members of the Public
Affairs community. We are also continuing to make progress in
implementing recommendations of the DOD Task Force on Prevention of
Suicides Among Members of the Armed Forces. Moreover, in fiscal year
2013, we will provide targeted chaplain training, guidance and tools
for leaders, to facilitate successful reintegration of sailors into
their units following behavioral health or other medical treatment. We
will improve integration of suicide prevention into the broader array
of resilience and prevention efforts to provide a coherent approach to
comprehensive wellness, resilience and prevention.
Sexual Assault: Not in my Navy
There is no place for sexual assault in the U.S. Navy. We are
committed to eliminating sexual assault completely; to ensuring
compassionate support for sexual assault victims; to investigating all
cases thoroughly; and to holding perpetrators accountable within the
full extent of the law. Since 2005, we have worked to build a robust
Sexual Assault Prevention and Response (SAPR) program, and we are
already engaged in a number of new initiatives to combat sexual
assault. These collectively are critical investments in both individual
sailors and in Force readiness. In addition to other direct measures,
we will use a proven process of tiered training for sexual assault
prevention and response and provide Navy's SAPR-Leadership training to
all E-7 and above leaders and every sailor through SAPR-Fleet training.
This process served us well in the repeal of Don't Ask Don't Tell and
we anticipate this will resonate in our campaign to eliminate sexual
assault from our Navy.
Our immediate goal is to measurably reduce the frequency of sexual
assaults involving sailors. Our first and perhaps most important tool
has been a strong, consistent, top-down leadership message of
intolerance for sexual assault. We are pleased to already be seeing
Department-level leadership forums translating into special workshops
and other sessions conducted by regional commanders and commanding
officers. Our second core strategy involves updated training tools for
Navy-wide use. We have already worked with civilian experts to review
relevant content in a broad range of Navy training curricula spanning
the full continuum of leadership development. We are developing special
new video programs for all sailors to emphasize the criticality of
sexual assault issues, and the responsibly of every sailor to actively
intervene in protecting shipmates in vulnerable situations. In
addition, we have undertaken special initiatives focused on those most
at risk--our youngest sailors just out of recruit training. Our
``Bystander Intervention'' program uses locally trained instructors in
small-group sessions to educate and mentor sailors at ``A-Schools''
Navy-wide. At TSC Great Lakes, we have combined this effort with a
number of simultaneous other initiatives--and we have developed a
process of periodic anonymous surveys to assess our impact. After a
year of progressive effort, it is still too early to speak of
definitive outcomes, but the initial signs are encouraging. In 2011,
over 67,000 sailors participated in an anonymous, web-based sexual
assault survey conducted by the Navy Secretariat. We plan to repeat
that process every 2-3 years worldwide to help us understand issues and
trends in the underlying incidence of sexual assault. If it is
necessary along the way, we will use our best accumulated data and
insight to adjust course in combating sexual assault. Civilian experts,
including researchers at the Centers for Disease Control, tell us this
kind of approach is cutting-edge and breaking new ground. However, that
is not all we are doing.
In just the past 2 years, we have conducted site visits and special
training at Navy sites worldwide. We have talked to stakeholders
including senior commanders, SAPR program mangers, sailor focus groups,
and even individual sexual assault victims. We have brought Sexual
Assault Response Coordinators and installation commanders together from
across the Navy for programs civilian experts on sexual assault
prevention summits. We have given special training to NCIS agents and
JAG lawyers on the unique aspects of sexual assault cases. NCIS
recently hired new criminal investigators with extensive civilian
backgrounds in sexual assault cases for every major Navy (and Marine
Corps) installation. We are working on tool kits for commanding
officers to help them make the right decisions in complex cases.
In summary, there is no place for sexual assault in the U.S. Navy.
We take the challenge seriously, we are engaged on numerous fronts, and
we are committed to a sustained effort.
vi. recruiting
Navy has worked hard to achieve strong recruiting success over the
past 4 years by projecting the Navy as an employer of choice and
attracting the Nation's very best men and women for America's Navy. Our
brand, ``America's Navy--A global force for good'', captures the
diversity of our Navy missions while also appealing to our target
recruiting market. In fiscal year 2011 and through fiscal year 2012 to
date, Navy's ``total force'' recruiting achieved accession recruiting
goals for officers in the Active component (AC) and enlisted recruiting
goals in both the Active and Reserve components (RC). Additionally, we
attained the best quality future sailors in history with 98.7 percent
of accessions entering as high school diploma graduates (HSDG) and 88.2
percent of accessions scoring in the upper 50th percentile on the Armed
Services Vocational Aptitude Battery (ASVAB).
Adapting to the current challenges of the recruiting environment
and in anticipation of an improving economy, Navy recruiting is
investing in the future with improvement of its Information Technology
(IT) systems and streamlining its processes as part of its innovative
Recruiting Force 2020 strategy. This strategy will provide an agile,
mobile and highly responsive capable recruiting force.
Looking ahead, we will continue to aggressively attack specific
recruiting areas, particularly in the healthcare profession where all
military services have had difficulty in attaining specialized medical
professionals. An additional challenge is RC General Medical Officer
recruiting where we achieved nearly 80 percent of our fiscal year 2011
goal primarily due to the high retention of active duty officers in the
unrestricted line communities. We continue to work closely with the
Office Chief of Naval Reserve (OCNR) and BUMED on several aggressive
initiatives to address both challenges as we keep Medical and RC
General Medical Officer recruiting as our top officer recruiting
priorities.
The fiscal year 2013 budget requests $276.0 million for recruiting
programs including accession incentives, advertising, and support for
our Active and Reserve recruiters. This represents a reduction of $34.1
million from fiscal year 2012 mainly due to adjustments in marketing
and advertising. Our budget request ensures that the recruiting force
remains appropriately sized and resourced for success.
Accession bonuses remain critical to meeting our goals for
recruiting health professionals, nuclear operators, and special
warfare/special operations personnel. We maintained bonus levels for
nuclear officers and health professionals, and continue to offer
enlisted accession bonuses to special warfare/special operations and
other critical ratings to meet increased demand. A favorable recruiting
environment has enabled us to reduce the number of ratings eligible for
an accession bonus from 67 in 2008 to 6 in 2012. The fiscal year 2013
active budget request for bonuses, special pays, and incentives,
represents a $22.1 million reduction from fiscal year 2012.
An integral component of achieving our force management goals
include competing for the best talent in our Nation's colleges and
universities. Our Naval Reserve Officers Training Corps (NROTC) program
has 61 units located at 75 host institutions with 87 cross-town
institution agreements. While the NROTC program has more than
sufficient capacity for our current requirements, Navy recognizes the
value of engagement and presence on the campuses of America's elite
colleges and universities and appreciates the high quality educational
experience provided to future military leaders at these institutions.
The highest quality applicants ever for our NROTC program in fiscal
year 2011 further reflected Navy's recruiting success.
To broaden outreach efforts and generate recruiting leads, and to
offset reductions in paid media advertising, we are expanding our use
of social media and other technologies. Navy Recruiting Command has
over 100,000 active followers across 19 prominent social media sites,
including 15 Facebook communities of interest. However, face-to-face
contact with recruits in the field remains the cornerstone of our
sustained success in attracting high quality, diverse individuals.
vii. retention
We continue to closely monitor retention behavior across the Force
and project we will meet our fiscal year 2012 overall officer and
enlisted retention goals. While we have been able to make selected
reductions in retention bonuses, sailor retention behavior indicates we
must continue to apply bonus programs to critical skill areas that are
less responsive to changes in the economic environment and which
require significant investments in training and education.
Enlisted Retention
Despite a decade at war, Navy continues to experience high levels
of retention among enlisted personnel across the force, due in large
part to Navy's efforts to provide a quality lifework experience,
increases in basic pay and housing allowances, and contributing
economic conditions. Additionally, we experienced higher retention
among female servicemembers, especially within critical technical and
warfighting skilled areas. fiscal year 2011 aggregate enlisted
retention was 63.9 percent, which is elevated relative to historical
norms, even though we utilized several force management tools to
suppress reenlistments.

------------------------------------------------------------------------
Fiscal Year 2011
Achievement
Active Navy Retention -------------------------
Reenlisted Expected
(Percent) (Percent)
------------------------------------------------------------------------
Zone A (0-6 yrs).............................. 66.0 59.0
Zone B (6-10 yrs)............................. 67.0 66.0
Zone C (10-14 yrs)............................ 72.7 72.0
------------------------------------------------------------------------

Our new and existing policies encourage longer-term career behavior
as sailors commit sooner to stay for longer periods. While affording
increased predictability of future personnel readiness, higher
retention also contributes to increased competition for reenlistment.
This past year, 14,544 sailors were discharged before the end of
their contracts, slightly above the projected attrition of 14,300; we
project similar attrition in fiscal year 2012. Misconduct-related
discharges this year are within 1 percent of misconduct discharges in
fiscal year 2011. Reserve enlisted attrition rates continue to trend
lower than the historical average, evidence of the high quality Force
we have recruited.
Demand in civilian industry for highly trained nuclear-qualified
sailors challenges our ability to meet nuclear retention goals. We are
committed to retaining sailors with critical skills in high demand in
the civilian sector, as well as sailors in specialties that continue to
experience high operational tempo in support of OCO, such as special
warfare/special operations and independent duty corpsmen. Selective
Reenlistment Bonus (SRB) remains the most important tool in our efforts
to retain these highly-skilled sailors.
By our close monitoring of retention behavior, we apply adjustments
to SRB levels on a semi-annual basis, or as required. We have adjusted
SRB levels five times in the past 18 months, reducing the number of
eligible skill areas by 26 percent compared to fiscal year 2011. In
fiscal year 2012, 33 of 84 ratings will receive SRB; the pool of
eligible sailors is 2.3 percent of our Active Enlisted Force,
representing a 60 percent reduction compared to fiscal year 2011. Our
SRB plan targets high-demand skill sets unaffected by slowing or down
economy, to include special warfare/special operations, information
technology, medical, cryptology, and nuclear ratings. The fiscal year
2013 budget request includes $107.3 million for new SRB contracts for
Active Duty sailors, a slight reduction from fiscal year 2012. The
fiscal year 2013 SRB budget for selected Reserve sailors is 13 percent
less than fiscal year 2012, a reduction achieved by realignment of
resources within the Navy Reserve Comprehensive Bonus Strategy to
target the most critical specialties.
Officer Retention
Active and Reserve officer retention rates remain high due, in
large part, to targeted incentive pays, improved mentoring, flexible
career options, and increased emphasis on lifework integration
initiatives and current economic conditions. Retention of female
unrestricted line (URL) officers beyond initial minimum service
requirement (MSR) has increased in the last 4 years in both the surface
warfare community (19 percent for Year Group 2001 to 33 percent for
Year Group 2004) and aviation community (14 percent for Year Group 1998
to 27 percent for Year Group 2001).\1\ Initiatives to improve retention
of Selected Reserve (SELRES) officer communities by 2014 include
targeted officer affiliation and retention bonuses, increased accession
goals, and Continuum of Service programs.
---------------------------------------------------------------------------
\1\ Because Minimum Service Requirement (MSR) is different for
Surface Warfare (5 years) and Aviation (7 years), 2 comparable year
groups (i.e., includes women who are past their initial service
obligation) were examined to more accurately capture overall URL female
retention. YGs 98 and 01 which both had only 7 year MSRs for prop/helo
and 8 years for jets (10 U.S.C. 653).
---------------------------------------------------------------------------
Although the overall loss rate for junior officers increased
slightly from fiscal year 2009 to fiscal year 2010, economic conditions
have contributed to surface and submarine communities meeting retention
goals for the third consecutive year. With signs of an improving
economy, we are closely watching junior officer retention since
retention through the operational department head tour is a critical
metric for monitoring the health of these communities.
After a decade of war, we are seeing signs of increased operational
stress on Naval Special Warfare (SEAL), Special Warfare Combatant-Craft
Crewmen (SWCC), Combat Support and Combat Service Support personnel;
increased operational tempo, decreased dwell time, and deployment
unpredictability have contributed to a decrease in junior officer
retention, particularly at the lieutenant commander (O-4) level.
Mentorship and increased access to family support programs and
operational stress control resources are primary tools to mitigate the
effects of stress on these officers and their families. The fiscal year
2013 budget request includes $7.6 million for targeted incentive pays
to retain these critical officers.
We have experienced slight improvement in medical community
retention, largely due to competitive incentives and bonuses. Select
subspecialties; including dentistry, psychiatry, clinical psychology,
clinical social work, physician assistants, general surgery, preventive
medicine, family medicine, mental health nurse practitioner,
perioperative, and nurse anesthetists, continue to require attention.
The fiscal year 2013 budget request includes $76.4 million for special
and incentive pays to retain these critical medical professionals.
Retention and Compensation Going Forward
The Budget Control Act of 2011 mandates reductions in Federal
spending at levels that require every area of the budget to be
scrutinized for efficiencies to produce cost savings. With the current
budget situation, the Navy believes that every area of the budget, to
include personnel costs, should be examined for efficiencies that could
lead to cost savings. However, before any changes are made, complete
understanding of the impact those changes might have on the
servicemember and the Navy should be understood. The current
compensation system, to include incentive pay, retirement and other
benefits, is a major factor in retention for servicemembers. Any
changes to this compensation package must be examined to ensure that
Navy retention requirements are met.
We routinely review special and incentive pay and bonus programs,
adjusting bonus levels and eligibility in response to manning levels,
in addition to reducing enlisted accession bonuses, Assignment
Incentive Pay (AIP) and SRB. Over the past year, we have reduced
officer bonuses in the aviation, and intelligence communities.
Additionally, we restructured the Submarine Support Incentive Pay
program to efficiently address shortfalls at specific career points and
reduced total program costs by over 58 percent since fiscal year 2009.
We will continue monitoring retention rates in fiscal year 2012 to
determine the need for further adjustments for select officer
communities.
The current military compensation system, including retired pay and
other monetary and non-monetary benefits, is a major factor in the
success and quality of the All Volunteer Force. Navy strongly supports
protecting the retirement benefits of those who currently serve by
grandfathering their benefits; Navy is working closely with the Office
of the Secretary of Defense (OSD) and other Services on this effort.
Any changes to compensation, especially the retirement system, must be
fair to the sailor and suitably reward the individual and their family
for their service. As we examine the personnel budget, we must
carefully consider, before imposing any cuts, the potential impact on
sailors and Navy military personnel readiness.
viii. learning and development
Education and training are strategic investments that enable our
highly-skilled force to meet the demands of CNO's Sailing Directions
and the Navy Total Force Strategy for the 21st Century. In response to
the demands of our increasingly diverse and technologically complex
world, we have increased our focus on Science, Technology, Engineering
and Math (STEM) in our accessions and education programs. The $1.5
billion fiscal year 2013 education and training budget invests in
innovative training technologies and increases our investment in
simulators, curricula, and instructors targeted at critical mission
areas.
Accessions Training and Education
We continue to invest in the Navy's ROTC program as an essential
contributor to a diverse work force and diversity of thought and, in
concert with appropriately-sized U.S. Naval Academy and Officer
Training Command accessions, we have the officer accessions capacity we
need to meet USN and USMC requirements. New investments in cyber
education at USNA will ensure our flagship institution produces
officers with the technical education and core competencies necessary
to excel in this area as 21st century warriors.
We have no plans to close Navy ROTC units, and in fact have
recently restored the historic Navy ROTC presence at Harvard, Yale, and
Columbia, and have opened host units at Arizona State University and
Rutgers. Although the Navy's Junior ROTC program has included closures,
they have occurred in accordance with Federal guidelines, and the bulk
of the affected units have substituted Navy National Defense Cadet
Corps (NNDCC) units in their stead. We are evaluating re-opening some
JROTC units previously closed under Federal guidelines, but which have
restored student enrollment above the statutory minimum enrollment
threshold. Recruit Training Command (RTC) is appropriately sized to
support current enlisted accession requirements and prepared to meet
the increases associated with economic changes.
Technical Training and Skills Development
The Navy continues to adjust staffing and student throughput of our
accessions pipeline schools in response to the changing size, missions,
and make-up of the Force. We have initiatives in progress to optimize
the efficiency and responsiveness of the supply chain that takes a
sailor from ``the street to the fleet''. For 2013 we made critical
targeted investments in our technical training schoolhouses focused on
improving readiness in key mission capabilities areas including
Integrated Air & Missile Defense; Anti-Submarine & Surface Warfare;
Command, Control, Communications, Computers, Combat Systems, and
Intelligence; and Ballistic Missile Defense.
The fiscal year 2013 budget request supports additional investments
in simulators, trainers, and new technologies that allow us to deliver
sailors to their commands with the skills needed to perform their
missions faster and at reduced cost. Coupled with training aboard
ships, simulators increase training opportunities and effectiveness
across the Fleet while minimizing stress on equipment, operating costs
and risk to our sailors. Examples of our fiscal year 2013 simulator
investments include the Integrated Air & Missile Defense Advanced
Warfare Trainer for our Ballistic Missile Defense platforms and the
Aegis Ashore Team Trainer for shore based Ballistic Missile Defense.
The Littoral Combat Ship (LCS) training program is based on the Virtual
Ship Centric Training Strategy, which uses virtual simulators in the
ashore LCS Training Facility to cover the full breadth and depth of
ship operations and maintenance training.
We continue to invest in the development and application of
innovative training technologies that offer tremendous potential to
provide our sailors the best technical training in less time with
improved understanding and retention. The field of intelligent tutoring
is a focus area for the Future Naval Capabilities Capable Manpower
science and technology program, and our enlisted cyber-warriors are
currently participating in a very promising Digital Tutor pilot course
that combines classroom, instructor led training with advanced
computer-based one-on-one tutoring to increase a student's motivation
and problem solving skills.
Joint and Professional Military Education
In the past year, the Navy has held education summits to examine
the role of joint education, professional education and technical
education in the career paths of our unrestricted line, restricted line
and staff officer communities. The results of these summits, combined
with a thorough review of the education requirements coded to all Navy
officer billets, are informing an ongoing review of the Navy's
education strategy. A review of Naval Post Graduate School (NPS)
curricula is underway to examine ways to reduce time required to
complete in-residence degrees, which, in conjunction with expanded
distance learning opportunities, will better align with our officer
career tracks and allow greater flexibility in meeting the Navy's
Joint, and professional education requirements. In the past year, we
have also begun new masters degree programs at the NPS for cyber
operations and for energy management.
A progressive continuum of professional military education,
including degree opportunities, also exists for enlisted personnel.
Junior enlisted pursue professional military education through distance
learning hosted by the Naval War College, while senior enlisted
personnel are afforded the opportunity to attend the Senior Enlisted
Academy (SEA), which graduated 505 senior enlisted sailors from its 6-
week resident course in fiscal year 2011.
Voluntary Education
The Navy's on-line Virtual Education Center (VEC) website and
counseling service has proven very successful in providing centralized
management of Tuition Assistance (TA) requests, sailors' academic
transcripts and virtual counseling. The VEC has enabled the Navy to
reduce operating costs by downsizing or eliminating local Navy College
Offices at some bases while also reducing paperwork and processing time
and increasing accessibility to educational opportunities for our
sailors.
Navy continues to maximize education opportunities through programs
specifically tailored to meet the needs of our sailors and their
families. The Navy College Program for Afloat College Education
(NCPACE) makes college courses available to sailors assigned to ships
and submarines deployed around the world. The Navy College Program
Distance Learning Partners (NCPDLP) program offers both associate and
bachelor degree programs through partnerships with accredited civilian
institutions. These institutions provide maximum credit for military
training and experience for every Navy rating and combine those credits
with courses they offer to meet degree requirements. Sailors may use
Tuition Assistance to offset their education costs in both NCPACE and
NCPDLP.
The Tuition Assistance (TA) program is the primary means for Navy
personnel to pursue their off-duty education goals. The TA program
management controls we implemented in 2010 require sailors to have a
plan with clear educational goals to emphasize both professional
development and academic success. These controls have helped us remain
within our established funding limitations while providing a more
equitable opportunity to use the program. Our management controls have
improved academic success as evidenced by the reduction in the non-
completion rate of TA-funded courses from 16 percent in fiscal year
2009 to 7.5 percent in fiscal year 2011.
Credentialing
The demand for credentialing examinations continues to be very
high, indicating the significant value sailors place on gaining
professional recognition for their training and experience. In fiscal
year 2011, we funded 19,762 certification exams, a 43 percent increase
over fiscal year 2010. The Navy Credentialing Opportunities Online
(COOL) website experienced 497,002 visits, a 65 percent increase over
fiscal year 2010, and 30,460,627 hits, an 11 percent increase. Sailors
in all 83 ratings have applied for funding, and 94.2 percent of those
completing voluntary certification examinations via Navy COOL funding
passed, far exceeding the national average pass rate of 75-85 percent,
and represents a positive return on investment. In 2011, Navy COOL and
Navy's Credentialing Program was awarded ``Best Workforce Development
Program`` by Human Capital Management Defense, and the Navy COOL
program was recognized through the Training Top 125 Award for the
second consecutive year.
In 2012, work has already begun to implement several improvement
recommendations from the President's Employment Initiatives DOD/VA
Veterans Employment Task Force and to develop Navy COOL pages to
display credentialing opportunities for Navy's 198,000+ civilian
employees. In addition, we will waive the time-in-service prerequisites
to make COOL available to all sailors affected by the ERB to help
posture them for success as they transition to the civilian workforce.
Navy Language, Regional Expertise, and Culture (LREC)
Cultural, historical, and linguistic expertise remains essential to
fostering strong relationships with global partners and to enhance our
ability to execute missions in multinational environments. Over the
past year, LREC efforts paid dividends in every geographic area of
operations, including support for Operation Tomodachi in the Far East,
Operation Odyssey Dawn in the Mediterranean, and Operation Continuing
Promise in Latin America. Navy's LREC program in fiscal year 2011
provided language and cultural training and products to over 67,000
sailors and officers, 49 flag officers and 46 senior leaders heading to
overseas assignments.
We recently expanded the Navy Reserve Language Culture and Pilot
Program to include all selected Reserve personnel. In fiscal year 2012,
we are increasing opportunities for overseas study, language and
cultural immersion, as well as professional exchanges with foreign
navies for U.S. Naval Academy midshipmen. We are also pursuing full
implementation of in-country language immersion training for Foreign
Area Officers (FAOs), and transitioning the Personnel Exchange Program
(PEP) to redefine long-standing agreements with traditional allies and
partners, while realigning towards nations in regions of increasing
strategic importance. In anticipation of the shift in focus outlined in
Secretary Panetta's Sustaining U.S. Global Leadership: Priorities for
21st Century Defense, LREC product development emphasis is
transitioning from Central Command (CENTCOM) to the Asia-Pacific
region, Indian Ocean perimeter, and West Africa.
This past year we participated in Maritime Security Cooperation
activities and supported the Joint Force in Afghanistan and Pakistan
with enhanced language and cultural capabilities through the
Afghanistan-Pakistan (AFPAK) Hands Program. We also provided timely,
tailored language, and Afghanistan/Pakistan training and culture
products to 3,695 Navy Individual Augmentees (IAs) and to sailors
assigned to units deploying to the CENTCOM Area of Responsibility.
ix. building for the future
As we navigate through a period of change, Navy must take action
now to posture itself for success in the future. Evolving missions,
shifting workforce demographics, and increased competition for skills
will require new and innovative approaches to attracting, recruiting,
and retaining the Nation's best talent. Mission success starts and ends
with a highly skilled, highly capable workforce. To build an effective
future force, we remain focused on developing and sustaining a diverse
workforce, providing our sailors with opportunities for greater work-
life balance, and promoting open, frequent communication with families.
Diversity Initiatives
Diversity is a Navy strategic imperative. By 2020, demographic
projections indicate that minorities will comprise nearly 40 percent of
the Navy's recruitable market, with minority representation continuing
to increase over time. Navy's ability to access and retain the talents
of varied sectors in our society has a direct impact on mission success
at home and abroad.
We recognize the value of diverse ideas, perspectives, and
experiences to remaining competitive in an increasingly global
environment; our Navy draws strength and innovation from this
diversity. Navy continues to effectively execute our accession strategy
of ``moving the needles,'' maintaining a high number of diverse
applicants and enrollments in both NROTC and U.S. Naval Academy class
of 2015. In recognition of our efforts, Navy received the 2011
Diversity MBA Magazine's Best Places for Diverse Managers to Work,
ranking number 26 on the list of the top 50 organizations for Diversity
Leadership, and the only government organization included on the list
of Fortune 500 companies. Additionally, the Association of Diversity
Councils recognized the Navy's Strategic Diversity Working Group (SDWG)
as the nation's number one diversity council for 2011.
Expanding Opportunities for Women
Gender diversity remains an important focus area for Navy, 23
percent of our enlisted accessions were women in fiscal year 2010 and
fiscal year 2011, and we are on-track to bring in a similar number of
women in fiscal year 2012. We are exploring ways to further increase
the number of women in the Navy in the future. With few exceptions in
which the combat exclusion applies, the vast majority of billets (93
percent) are available to women, including ship, aviation squadron,
afloat staff, naval construction force units and most recently,
specific submarine platform billets.
In fiscal year 2011, Navy began the integration of female officers
into the submarine force. Five of the eight crews being integrated
during the first round are successfully integrated and the remaining
three will be by the end of March 2012. Our second round will include
one additional SSGN and SSBN (i.e., four additional crews); women are
currently in the training pipeline for integration in November 2012. We
will continue to integrate women on submarines in a brisk yet
responsible manner, while leveraging the insights from the studies and
the lessons learned from initial integration efforts.
Life-Work Integration
In an All-Volunteer Force, life-work integration and flexible
career options are key to attracting, recruiting, and retaining the
talent of a new generation just entering the workplace. With 75 percent
of Fortune 500 companies reporting a chronic ``talent shortage'' among
mid-level employers, Navy continues to address the imperative to retain
talent and provide a work environment that is personally and
professionally rewarding. Navy's ability to recruit and retain the
talents of varied demographics has a direct impact on mission success.
We are actively creating programs to enhance personal and professional
development while providing life-work balance.
Sailors and their families continue to benefit from comprehensive
parental support programs including paternity and adoption leave,
extended operational deferment for new mothers, and expanded childcare.
We continue to support life-work integration while meeting mission
requirements through initiatives such as Career Intermission, telework,
and other flexible work options.
Communication with Navy Families
Navy recognizes that social networking and the Internet can greatly
facilitate communication efforts with sailors and their families. We
continue to promote open, frequent communication with our sailors and
their families and encourage development of social networking accounts,
mobile applications, public websites, and publishing newsletters to
sailors and their families via email.
The Navy Recruiting Command ``Navy for Moms'' website received a
2011 Workforce Management Magazine Optimas Award for ``Service.''
Through this award-winning website, families of current sailors can
share information with families of future sailors and answer many
questions about Navy life. Since its establishment in March 2008, more
than 36,000 members have used the website to discuss issues with others
who share common concerns. ``Military OneSource'' provides information
on many topics, including parenting and childcare, educational
services, financial information and counseling, civilian legal advice,
crisis support, and relocation information. This free, 24/7 information
and referral service offers practical solutions, background information
and advice via the telephone, email, or the web to all Active Duty and
Reserve sailors, and their families.
Social media venues such as Facebook have quickly become a primary
and effective means of communicating with a wide audience, including
family members. Additionally, in cooperation with Navy's Chief of
Information's social media team, we are able to connect to a much
broader audience by taking advantage of the U.S. Navy official Facebook
page, which currently has more than 400,000 fans.
Recognized for Results
Our efforts have culminated in Navy's recognition as a Top 50
organization. Top 50 organizations encourage innovation and focus on
performance, while taking care of their people through programs and
policies that support a culture of trust, respect, and collaboration.
In October 2011, Navy received several awards for Business Excellence
in Workplace Flexibility from the Alfred P. Sloan Foundation. These
awards recognize initiatives introduced at six different organizations
across the Navy that promote flexible work options while still
achieving business goals. For the third year in a row, Navy received
the prestigious Workforce Management Magazine's Optimas Award. This
marked the first time in the award's 21-year history an organization
has won 3 consecutive years.
Navy continues to earn recognition for its high quality training
and development programs. In the 3 years since Navy began participating
in the American Society for Training and Development (ASTD) awards
program, no other organization has won more awards for ``Excellence in
Practice.'' Most recently, Navy was honored with an ASTD BEST Award,
ranking third out of 32 best training organizations from a prestigious
list of recipients from 6 nations. For the second year, Training
Magazine recognized Navy as one of the premier training organizations
in the country, ranking seventh out of 125 organizations recognized. We
remain committed to seeking out best practices across industry and
benchmarking our programs against the best in the Nation.
x. conclusion
The President's fiscal year 2013 budget request supports critical
programs that will ensure Navy's continued success in delivering the
personal component of CNO's Sailing Directions, the Navy Total Force
Strategy for the 21st Century, and key capabilities in support of
Sustaining U.S. Global Leadership: Priorities for 21st Century Defense.
I look forward to working with you as we continue to shape the Navy to
meet current and emerging requirements, while confronting the
challenges that lie ahead. On behalf of the men and women of the U.S.
Navy, and their families, I extend our sincere appreciation for your
leadership, commitment and unwavering support. Thank you.
______

Prepared Statement by Lt. Gen. Robert E. Milstead, Jr., USMC
Chairman Webb, Ranking Member Graham, and distinguished members of
the subcommittee, it is my privilege to appear before you today to
provide an overview on Marine Corps personnel.
i. your marines
The Marine Corps is our Nation's expeditionary force in readiness.
We are ready to respond to today's crisis--with today's force--TODAY!
Currently, approximately 27,000 marines are forward-deployed in
operations supporting our Nation's defense. Our individual marines are
the Corps' most sacred resource, and the quality of our force has never
been better.
ii. end strength
New strategic guidance issued by the President and the Secretary of
Defense provides the framework by which the Marine Corps will balance
the demands of the future security environment with the realities of
our current fiscal environment and the lessons learned from 10 years of
combat. The new strategy includes a reduction in our Active component
end strength from 202,100 to 182,100 by the end of fiscal year 2016,
while maintaining our Reserve component at 39,600 marines. Although
reshaping the Marine Corps to a force of approximately 182,100 marines
entails some risk relative to current and anticipated capacity
requirements, we believe that it is manageable. Your new Corps will
have fewer infantry battalions, fixed wing, aviation squadrons, and
general support combat logistics battalions than we had prior to
September 11. However, it adds cyber warfare capability, special
operators, wartime enablers and higher unit manning levels--all lessons
gleaned from recent combat operations.
Our intent will be to conduct our drawdown in a measured way
beginning in fiscal year 2013. Our plan is to reduce our end strength
by approximately 5,000 marines per year and will be accomplished by
some accession cuts, natural attrition, and voluntary separation and
retirement authorities. The drawdown cannot be accomplished by
accession cuts alone--that is a lesson learned from the last drawdown
in the 1990s. In addition, we have no plan to conduct a reduction-in-
force (RIF) of our marines; they will be allowed to complete their
current period of service. Our all-volunteer system is built upon a
reasonable opportunity for retention and advancement; wholesale cuts
undermine the faith and confidence in service leadership and create
long-term experience deficits with negative operational impacts. Such
an approach would no doubt do significant long-term damage to our
ability to recruit and maintain a quality force.
Our overarching goal must be to keep faith with our marines and
their families.
iii. marine corps reserve
Our Reserve component continues to make essential contributions to
Total Force efforts in Overseas Contingency Operations. In 2011, we
continued to refocus our recruiting and retention efforts on meeting
our Reserve component authorized end strength. These efforts included
increases to the non-prior service recruiting mission, lowering rates
of attrition, and discreet targeting of those marines eligible to
receive an incentive. As a result, we achieved over 99.8 percent--
39,527--of authorized end strength in fiscal year 2011 (not including
reservists who served on active duty at least 3 of the prior 4 years).
Our incentives budget is $5.4 million in fiscal year 2012, and we
project an end strength of 39,249, approximately 1 percent below our
authorized level. For fiscal year 2012 and beyond, we have refined the
use of incentives to strengthen manning in specialties and grades where
we remain critically short. In particular, the recruitment of company
grade officers and aviators remains most challenging. Targeted
incentives and transition assistance outreach programs help us to
attract junior officers who are leaving the Active component. While
transitioning officers from the Active component provide the majority
of our company grade officer leadership, we have had considerable
success commissioning officers directly into the Reserve. The Reserve
Officer Commissioning Program, which includes Officer Candidate Course-
Reserve (OCC-R)--has produced a total of 431 lieutenants for the Marine
Corps since its creation in 2006 and has increased company grade
officer fills from 21 to 46 percent. More importantly, it enables the
Marine Corps Reserve to place officers in critical small unit
leadership positions at the platoon and company level.
To complement outreach efforts and the use of incentives, and to
address the challenges of geographic constraints, we offer occupational
specialty retraining. The Prior Service Military Occupational Specialty
Retraining Program is crucial in our efforts to join enlisted marines
to units that are located in areas of the country where it is
geographically challenging to recruit. This training has helped us to
build positive trends with respect to recruiting and retention and are
integral to our future success.
This year we increased efforts to fully staff Reserve aviation
squadrons. To achieve this goal, we developed a number of Reserve
aviation manpower initiatives designed to encourage transitioning
Active component aviators to affiliate with Reserve units. Since there
are a limited number of Reserve squadrons, the use of travel
reimbursement, incentives, and aviator retraining programs are critical
to achieving our staffing goals. Altogether, these programs, combined
with our prior service recruiting efforts, should provide for at least
90 percent manning of critical combat arms and company grade officer
billets by the end of fiscal year 2014, with Reserve squadrons reaching
this mark 1 year later.
iv. recruiting
The Marine Corps is unique in that all recruiting efforts (officer,
enlisted, regular, Reserve, and prior-service) fall under the direction
of the Marine Corps Recruiting Command. Operationally, this provides us
with tremendous flexibility and unity of command, allowing us to meet
accession requirements.
To meet future challenges in the recruiting environment, it is
imperative that we maintain our high standards both for our recruiters
and those who volunteer to serve in our Corps. Recruiting quality youth
ultimately translates into higher performance, reduced attrition,
increased retention, and improved readiness for the operating forces.
Our actions, commitment, and investments today in recruiting ensure a
high state of readiness in our Corps tomorrow.
In fiscal year 2011, we achieved over 100 percent of our enlisted
and officer recruiting goals for both the Active and Reserve
components. On the enlisted side, we accessed over 99 percent Tier 1
high school diploma graduates and over 74 percent in the upper Mental
Groups of I-IIIAs, both exceeding Department of Defense quality
standards. Our fiscal year 2012 Mission for enlisted marines is 28,500
regulars (Active component) and 5,450 reservists. In fiscal year 2012,
we expect to meet our annual recruiting mission to include all quality
goals. Additionally, we expect to have a strong population of qualified
individuals ready to ship to recruit training as we enter fiscal year
2013. The fiscal year 2013 mission forecast is 28,500 regulars and
5,800 reservists.
The Marine Corps seeks to reflect the diversity of the Nation and
be representative of those we serve. Diversity remains a strategic
issue that raises our total capability by leveraging the strengths and
talents of all marines. In fiscal year 2011, a tremendous amount of
effort and resources was placed into communicating the Marine Corps
diversity message through community outreach, recruit marketing,
training and education. This enduring challenge requires the Corps to
strategically evaluate our current efforts in order to drive toward
improved capabilities.
Our officer accessions mission for fiscal year 2012 is 1,450 Active
Duty and 125 Reserve officers. Historically, the Active component has
been the exclusive source of lieutenants and captains for the Reserves.
As previously noted, filling company grade officer billets for our
Selected Marine Corps Reserve units is traditionally our greatest
challenge, but the success from the OCC-R program is proving to help in
remedying this shortfall.
Our recruiting command is taking a hard look at its advertising
budget. It is imperative that we maintain the momentum within a
competitive media environment and still provide the basic awareness
level when reaching out to an increasing number of critical audiences
(prospects and their influencers, officer candidates, and multicultural
audiences) to include our diversity outreach. It is important that we
acknowledge that today's successes are dividends from the investments
made in recruiting and advertising 4 to 5 years ago.
Our greatest asset is the individual marine and recruiting remains
the lifeblood to the Corps and our bedrock to ``Make Marines, Win
Battles, and Return Quality Citizens.'' We thank you for the generous
support you have provided to us and look forward to working with you to
ensure continued success in the future.
v. retention
In fiscal year 2011, the Marine Corps achieved both its accession
and retention missions and completed the year with a 201,497 Active
component end strength (including 340 reservists who served on active
duty at least 3 of the prior 4 years). For fiscal year 2012, we will
continue to assess all recruiting and retention missions, enabling the
Marine Corps to successfully meet our mission requirements and poise
the force for the impending drawdown.
Even with our successes in recruiting, retention, and overall end
strength, the Marine Corps must continue to shape our force to meet
continuing mission requirements and fill critical military occupational
specialties (MOSs) with the most qualified marines. Incentive pays
remain critical to this effort, allowing the Marine Corps to fill hard
to recruit positions, such as crypto linguists and reconnaissance.
Enlistment bonuses also allow us to ship new recruits at critical times
to balance recruit loads at the depots and meet school seat
requirements. It is important to note that only 8 percent of new Marine
Corps recruits receive an enlistment bonus; the Marine Corps budget for
enlistment bonuses has decreased from $75 million in fiscal year 2008
to $14.7 million in fiscal year 2012.
Selective Reenlistment Bonuses (SRBs) similarly allow us to shape
our career force. SRBs target critical MOSs and allow us to laterally
move marines to these MOSs. There are currently 6 of 205 occupational
specialties where the on-hand number of marines is less than 80 percent
of what is required. Our SRB funding has decreased from $468 million in
fiscal year 2009 to $108.6 million in fiscal year 2012.
vi. women in service review
As directed by the National Defense Authorization Act for Fiscal
Year 2011, the Marine Corps, alongside the other Services, conducted a
review of the laws, policies and regulations regarding the service of
female members. The findings were delivered to Congress in February
2012. The Marine Corps requested an exception to policy that would
allow for the assignment of Active component female company grade
officers and staff noncommissioned officers (E-6 and E-7) into select
Ground Combat Element (GCE) units (Artillery, Tanks, Assault Amphibian,
Low Altitude Air Defense, Combat Engineer and Combat Assault) down to
the battalion level, in military occupational specialties (MOSs)
already open to female marines. This will open 97 officer billets and
274 staff noncommissioned officer billets for assignment of female
marines during 2012.
Concurrent with the exception to policy, the Marine Corps will
conduct responsible research to generate data that can be used to make
informed decisions and potentially develop appropriate gender neutral
tests to screen males and females prior to assignment to the GCE. We
must ensure that all marines assigned to the GCE have the required
physical aptitude. This research will include a force survey and a
research study that will assess the potential impact on recruiting, MOS
classification, entry level training, and promotions in order to inform
future assignment decisions. We will report back to the Secretary of
Defense with an initial assessment in November 2012.
The Marine Corps is committed to utilizing the skills and abilities
of our marines to achieve the highest levels of unit readiness and
focus on mission accomplishment. We are proud of the contributions that
women make across the Marine Corps and want to ensure female marines
continue to have opportunities to be successful.
vii. diversity
The Marine Corps is committed to attracting, mentoring and
retaining the most talented men and women who bring a diversity of
background, culture and skill in service to our Nation. In both
representation and assignment of marines, diversity remains a strategic
issue. Our diversity effort is structured with the understanding that
the objective of diversity is not merely to strive for a force that
reflects a representational connectedness with the rich fabric of all
the American people, but to raise total capability through leveraging
the strengths and talents of all marines.
We are near completion of a new comprehensive campaign plan to
focus our diversity effort in areas where improvement is most needed
and anticipate release of this roadmap this year. This is an effort
facilitated through our standing Diversity Review Board and a Diversity
Executive Steering Committee chartered to establish the foundations for
diversity success in the Total Force. In addition, since 2010, we have
conducted leadership seminars that introduce diverse college
undergraduates to Marine leadership traits and leadership opportunities
in the Marine Corps; we are actively seeking new communities within
which to continue this effort.
The Marine Corps has established minority officer recruiting and
mentoring as the highest priority in our recruiting efforts. Because we
acknowledge the accession and retention of minority officers has been a
challenge for our Corps, we are committed to taking steps to further
facilitate the mentoring and career development of all our officers
with emphasis on our minority officers in order to encourage the
retention of our best officers no matter their background.
Overall, we seek to communicate the Marine Corps diversity mission
through community outreach and recruit marketing; to ensure continued
opportunities for merit based development and advancement; and to
optimize training and education to increase the understanding for all
marines of the value that diversity brings to the Total Force.
viii. taking care of marines, sailors, and families
Marine families are America's families and a model for the Nation.
The Marine Corps will continue to take care of its marines and families
through enhanced family readiness and family care programs. Marine
communities are a team, and our programs promote increased
socialization and community connection through official unit
communication, readiness preparation and information, and referral
opportunities. These programs seek to improve resiliency by training
marines and families how to cope with the rigors of life in the Marine
Corps, whether at home or deployed.
Family Readiness
The Marine Corps has 380 Family Readiness Officers, who connect
marines and families at the grassroots level to critical information
and referrals and assist families during all phases of deployments. We
recently completed an overhaul of our Marine Corps Family Team Building
Training to ensure we are providing relevant, standardized and timely
support and information to our families. In fiscal year 2011, we
provided 5,869 Marine Corps Family Team Building training sessions.
Family readiness also benefits from dependable yet innovative
communication tools that help families effectively manage their lives
in times of stress. eMarine, a secure website, delivers readiness
information to marines and their families whether they are on active
duty stationed at large installations or in the Reserves living in
remote locations. It gives family members access to documents, photos
and videos, discussion forums, and vital information about their
marine's unit from anywhere in the world, 24/7.
The Marine Corps conducted a full review during fiscal year 2011 of
its Family Readiness programs to ensure they adequately support the
mission and operational requirements of the Marine Corps. While our
programs conform to the Commandant's guidance and congressional
direction, we are developing program plans and supporting resource
requirements to maintain capabilities at appropriate levels.
Family Care
Family care programs support the care and development continuum of
Marine Corps children from birth into their teens. Family care includes
our school liaisons, who provide approximately 70 school districts with
information about the needs of Marine Corps families and access to
beneficial training and counseling services to support teachers and
students. Marine parents are comforted by the support of a local
education expert, who provides meaningful insight to new transfers and
those with questions on local education policies.
Child care services remain a high priority. In fiscal year 2011, we
provided 15,927 child care spaces, which reflects an 18 percent
increase in capacity from fiscal year 2010. The Marine Corps opened
five new child development centers in fiscal year 2011 and plans to
open eight more in fiscal year 2012. The Marine Corps has completed a
Child Development Program and Facility Master Plan, which reviewed
child care capabilities and costs across the Marine Corps. This plan
will facilitate efforts to build multi-capable, adaptable services,
reexamine structure, and ensure that our programs are prepared to
deliver child care in an efficient manner. We will continue to
standardize our processes in fiscal year 2012 and will work to enhance
child care for marines and families serving on independent duty or at
locations that are isolated from military bases and stations. We are
also expanding our staffing model to include nurses at our Child
Development Centers and behavioral health specialists at our
installations across our family programs.
Families enrolled in our Exceptional Family Member Program (EFMP)
strongly endorse our focus on providing a continuum of care and the
improvements made to their level of support. Two years of increasing
enrollments and a reduction in issues experienced by families
relocating to new duty stations demonstrate this approval. EFMP had
only 4,500 enrolled family members in fiscal year 2008; it has over
10,000 today. The Marine Corps continues to underwrite the cost of up
to 40 hours of short-term respite care per month for enrolled families,
providing more than 450,000 hours of respite care in fiscal year 2011.
We continue to transform our program, which the Department of Defense
(DOD) and our sister services continue to recognize as a premier
program. Marine Corps policy ensures that the assignment and relocation
process is sensitive to EFMP family needs and allows marines to remain
competitive for promotion while maintaining a continuum of care for
exceptional family members.
Personal and Professional Development
We recognize and encourage all marines and their spouses to pursue
and achieve their life goals while serving in the Marine Corps or
beyond as veteran marines. Our Personal and Professional Development
(P&PD) program supports marines and their spouses with their education,
employment, financial fitness, and transition readiness goals. This
program integrates the efforts of several formerly-disparate programs
(education services, transition assistance, spouse employment support,
personal financial management, relocation assistance, library programs
and the Marine For Life network) to ensure we provide our marines and
spouses holistic education and support.
One of our most significant initiatives is to revise and improve
our Transition Assistance Management Program (TAMP) to better meet the
needs of our transitioning marines and their families. TAMP is being
integrated and mapped into the lifecycle of a marine from recruitment,
through separation or retirement, and beyond as veteran marines. The
Marine Corps efforts will comply with the multi-agency initiative, led
by OSD and VA, to help improve employment prospects of veterans, as
well as with implementing the provisions of the recently enacted
Veterans Opportunity to Work (VOW) Act.
The integration of our Marine For Life program in the P&PD Program
has improved our ability to work with the civilian community to find
opportunities for our transitioning marines and their spouses. Marine
For Life also provides an avenue for marine veterans to reach back for
assistance or to volunteer their services to assist transitioning or
veteran marines in their communities.
Regarding spouse employment opportunities, we see that tying these
programs more closely with formerly marine-focused programs, such as
transition assistance and on-base education, creates significant
synergy. Many of the same employers who seek marine veterans are also
interested in employing marine spouses. We look forward to working with
the Joining Forces Initiative, which seeks to streamline certification
and licensure procedures for marine spouses. We also support parallel
efforts to qualify marines for certifications based upon military
training and experience.
Our P&PD Program includes personal finance counseling efforts to
help marines make responsible financial decisions. We have created a
new personal financial management curriculum that covers 34 major
topics including saving and investing, credit and debt management, and
smart home buying, selling and renting. These efforts help ensure that
we are not focusing solely on those in financial distress but also on
preparing marines and their families to be financially stable and
prepared.
Bringing all of these programs together to offer an integrated set
of personal and professional development services will enable marines
and their families to be more effective, and more ready. At the same
time, these services will help marines be better prepared to make the
transition back to civilian life whether it be after a 4-year
enlistment or a 30-year career.
Behavioral Health Integration
The integration of our behavioral health programs seamlessly weaves
our efforts in sexual assault, suicide, combat and operational stress,
substance abuse and family advocacy/domestic violence into the larger
support network of command structures and the health and human services
across the Marine Corps. We focus on evidence-based practices to ensure
we are providing effective support in these critical areas and utilize
our Behavioral Health Information Network, which is a web-based
clearinghouse, for the latest information on behavioral health. This
integration further benefits from our Behavioral Health Advisory
Committee, a committee chartered for the purposes of examining
promising practices and making recommendations on our behavioral health
programs. A universal prevention training module, which is in
development, will reduce redundancy in our training efforts by
integrating all behavioral health program information. This training
will discuss common risk and protective factors across all behavioral
health programs.
Sexual Assault Prevention and Response
Our Sexual Assault Prevention and Response Program follows a
holistic approach to prevention and response, utilizing a top-down
leadership message of support and an emphasis on bystander
intervention. Marines have an inherent responsibility to step up and
step in to prevent sexual assault. Our priority is to reduce the number
of incidents as well as reduce the number of unreported sexual assaults
by utilizing a consistent and focused emphasis on command climate. The
Marine Corps has revitalized our curriculum for noncommissioned
officers to include a new video-based bystander training, entitled
``Take a Stand,'' designed to reduce stigma by stimulating conversation
and engaging marines with a more personalized message about sexual
assault prevention.
We are revitalizing our Command Team training module, updating our
annual training and enhancing our training for all first responders. We
have staffed our installations with subject matter experts, positioned
to have the greatest impact on victims and victim care. In addition,
24/7 Helplines are available at all major installations and Reserve
headquarters to provide resources and advocacy for victims. These
Helplines are answered by victim advocates who are trained to provide
immediate services to victims of sexual assault.
We continue our focus on accountability for those who violate the
Uniform Code of Military Justice. The Marine Corps Trial Counsel
Assistance Program (TCAP) trained 118 Judge Advocates in sexual assault
investigation and prosecution best practices in fiscal year 2011. TCAP
will continue this training in fiscal year 2012 and plans to train
approximately 125 Judge Advocates and 75 enlisted paralegals. The DOD-
wide release of the Defense Sexual Assault Incident Reporting Database
will enhance current case management capabilities.
Suicide Prevention
In calendar year 2011, we lost 33 marines to suicide, and we
preliminarily recorded 171 suicide attempts. While we have seen 2
consecutive years of decreased suicides and evidence of change in
marine attitudes toward behavioral health, we still have much work to
do. Leaders prevent suicide by strengthening all marines and
encouraging marines to engage helping services early, when problems are
most manageable. We continually encourage marines to recognize,
acknowledge and seek help for stress reactions, and we deploy evidence-
based prevention practices such as peer-to-peer suicide prevention
training. The Marine Corps will work closely with the DOD Suicide
Prevention Office to implement recommendations of its Joint Task Force
on the Prevention of Suicide. Our award-winning ``Never Leave a Marine
Behind'' suicide prevention program, which is peer-led and continually
updated to reflect emerging evidence-based practices, is tailored to
reflect the culture and values of the Marine Corps. We will continue to
forge strong relationships with Federal agencies, academia, and private
industry in order to further our understanding of suicide prevention.
Combat and Operational Stress Control
Combat and Operational Stress Control (COSC) helps Marine leaders
maintain their warfighting capabilities by addressing the negative
impacts of stress. COSC enhances force preservation, readiness and the
long-term health and well-being of marines and their families. Every
battalion or equivalent unit across the Total Force will have an
Operational Stress Control and Readiness (OSCAR) team by mid-2012.
OSCAR teams are comprised of mentors (selected unit marines and
leaders), extenders (unit medical and religious personnel), and mental
health professionals, who provide a network of support. As of March
2012, the Marine Corps had trained over 10,000 marines as OSCAR
mentors, who help reduce stigma and act as sensors for the commander by
noticing small changes in behavior and taking action early before
stress becomes a medical issue. COSC is incorporating lessons learned
into new courses in COSC fundamentals for all levels of enlisted
professional military education.
Our DSTRESS Line, which will have a global capacity by mid-2012,
addresses the full spectrum of behavioral health needs, whether they
are problems arising from the everyday stressors of life or a suicidal
crisis. DSTRESS Line is a ``by Marine/for Marine'' counseling center
for marines, attached Sailors, and families, who can call, chat online,
or Skype with a veteran marine, Fleet Marine Force corpsman, or Marine
Corps family member.
Substance Abuse
Our Substance Abuse Program works to reduce substance abuse and
dependency disorders that negatively affect the operational readiness
and health of the force. The program's tenets are prevention, treatment
and drug demand reduction. We are executing an Alcohol Abuse Prevention
Campaign throughout the Marine Corps this year to reduce the negative
impact that alcohol abuse and misuse has on the Marine Corps' readiness
and health.
Marine Total Fitness
In fiscal year 2012, we will also continue to develop our Marine
Total Fitness concept to develop marines of exemplary physical,
psychological, spiritual and social character. Marine Total Fitness,
which will support the Department of the Navy's 21st Century Sailor and
Marine Initiative will infuse resilience-based information and concepts
into all aspects of a marine's training and readiness. A totally fit
marine exhibits exemplary physical, mental, spiritual, and social
character and is prepared to successfully operate in and respond to the
rigors, demands, and stressors of both combat and garrison. The four
pillars of Marine Total Fitness--physical, psychological, social, and
spiritual--provide an avenue to deliver programs, initiatives and
resources.
Casualty Assistance
The Marine Corps Casualty Assistance Program is committed to
ensuring that families of our fallen marines are treated with the
utmost compassion, dignity, and honor. Always seeking to improve
survivor assistance and demonstrating a record of quick, effective
action, our Casualty Assistance Program is a 24-hour-per-day operation
manned by marines and civilians trained in casualty reporting,
notification and casualty-assistance procedures. Casualty Assistance
Calls Officers assist the next-of-kin with burial arrangements,
applications for benefits and entitlements, contact with benevolent and
philanthropic organizations, and obtaining reports of investigation.
Within days of the incident, families are connected to representatives
from the Tragedy Assistance Program for Survivors, a nationally-
recognized provider of comfort and care to those who have suffered the
loss of a military loved one. The Marine Corps reaches out to the next-
of-kin approximately 60 days after the loss to help resolve any
remaining issues and to let the families know that they are still part
of the Marine Corps family. We will remain steadfast in our support of
our Marine Corps families who have paid so much in service to our
Nation.
ix. semper fit & exchange services
I want to thank Congress, especially this subcommittee, for your
continued support for our Marine Corps Semper Fit and Exchange
programs. In the National Defense Authorization Act for Fiscal Year
2012, you and your colleagues included a provision which allows us to
access credit for business operations through the Federal Financing
Bank and thereby lock-in the best possible interest rates. Thank you
for your hard work on that bill.
The Commandant continues to stress that the Marine Corps will keep
faith with our marines, our sailors, and our families. We repeat this
theme in all that we do as we strive to deliver capability-based
programs all the way down to the unit level.
Semper Fit & Recreation
Our Semper Fit and Recreation programs support the readiness,
resiliency, and retention goals of your Marine Corps. Our efforts are
primarily focused on the areas of fitness, sports, health promotion,
and recreation, as they are essential in maintaining a fit marine. We
recently introduced High Intensity Tactical Training (HITT), a
comprehensive strength and conditioning program geared towards
optimizing physical performance and combat readiness. HITT is designed
to reduce the likelihood of injury while in theater; initial feedback
from marines is positive and Corps-wide rollout of the program,
including use in Afghanistan, began in February and will be completed
at all installations by June 2012.
Social resilience is linked with unit cohesion and we are
identifying unit-driven recreational activities to provide at Marine
Corps installations. Operation Adrenaline Rush, currently offered at
two installations, assists marines in reintegration by empowering small
unit leaders, maintaining combat readiness, and reinforcing unit
cohesion. The program offers opportunities for outdoor recreation
activities such as whitewater rafting and deep sea fishing.
Overall, Semper Fit makes every effort to deliver high quality
programs and services to marines and their families. Our programs are
vital to the continued success and development of your marines and your
Corps.
Marine Corps Exchange and Temporary Lodging Facilities
The Marine Corps Exchange (MCX) is inextricably linked to our
mission of taking care of marines and their families and is an
important part of the overall non-monetary benefits package. Our
success is measured on the program's value and contributions to the
readiness and retention of our marines, as well as our ability to
provide unparalleled customer service, premier facilities, and valued
goods and services at a savings. With MCX, unlike any other retail
store, marines can rely upon a high quality product at a fair price and
know that the proceeds are returned to their community, creating a
stronger Marine Corps. Like other Marine Corps Community Services
(MCCS) facility master planning efforts, MCX is executing branding
strategies, and our aggressive re-investment into our main stores is
near completion. We are also expanding the branding strategies to focus
on our Marine Marts and Temporary Lodging Facilities. All Marine Corps
design standards are focused on energy efficiency and sustainability.
Deployed Support
Deployed support is one of the most important services we provide.
Our Exchange, Recreation and Fitness, Communication, and MCCS Amenity
Wi-Fi services not only boost and maintain morale, but also help to
reduce mission-related stress.
Exchange
Ongoing missions in Afghanistan include the operation of two Direct
Operation Exchanges Tactical at Camps Leatherneck and Dwyer, one
Tactical Field Exchange at Camp Delaram II, one Imprest Fund Site at
Forward Operating Base (FOB) Edinburgh, and numerous Warfighter Express
Services Teams operating out of Camps Leatherneck, Dwyer, and FOB
Edinburgh.
Recreation and Fitness
We assist in providing sports, recreational, and fitness equipment
to units throughout Helmand Province. This transportable equipment
includes sports/recreation cooler kits filled with sports gear and
board games, electronic game kits, Theater-in-a-Box kits, and
functional fitness equipment for use in austere environments. Reading
materials, both electronic and paperback, are also available.
Communication
Morale Satellite services are available to forward operating bases,
combat outposts, and other austere locations. We have delivered 13
satellite communications systems to units in Afghanistan. Each system
has 2 phones which each provide 6,000 free minutes per month and 5
laptops that allow internet access, social networking, and chat/video
capabilities to deployed marines. In 2011, we provided over a half-
million minutes of telephone air time. In addition, approximately
23,683 marines were able to use the Morale Satellite services at
several different FOBs, including over 2,100 telephone calls over the
Thanksgiving and Christmas holidays.
MotoMail, supported by Marine and Family Programs and first offered
in December 2004, is another form of communications support which
continues to serve marines and families. MotoMail allows friends and
family members to submit letters and pictures online to deployed
marines. A marine will receive their letter within 24 hours of
submission. Since implementing this free service, over 4.1 million
letters have been created and delivered.
MCCS Amenity Wi-Fi Solution
The Marine Corps Community Services Amenity Wireless Fidelity (Wi-
Fi) Solution program deploys Wi-Fi capability at no cost to marines and
families. This morale and welfare initiative helps marines stay in
contact while separated from their families. The Wi-Fi is conveniently
located at temporary lodging facilities, exchange food courts,
libraries, education centers, child and youth centers, clubs, and
Wounded Warrior Program facilities. Since its inception, our Wi-Fi
program has been popular with marines and their families. As of the
first of this year, the program is available on 19 Marine Corps
installations with 240 buildings receiving Wi-Fi coverage.
x. wounded warrior regiment
The Marine Corps is grateful for this subcommittee's recognition of
the service and sacrifices of wounded, ill, and injured (WII) marines
and their families. Your marines continue to sustain wounds on the
battlefield, including catastrophic injuries that present significant
quality of life challenges. Marines also continue to be injured in
training accidents, become ill, and experience other tragedies that
require a wide range of interconnected non-medical care. Through our
Wounded Warrior Regiment (WWR), we provide this care--from the point of
injury or illness through return to duty or reintegration to civilian
communities.
Our WWR is a single command with a strategic reach that provides
non-medical care to the total Marine force. The Regimental Headquarters
in Quantico, VA, commands the operation of two Wounded Warrior
Battalions (at Camp Lejeune, NC, and Camp Pendleton, CA) and multiple
detachments in locations around the globe, including at major Military
Treatment Facilities and Department of Veterans Affairs Polytrauma
Centers. All WWR elements function as a cohesive team to allow for
consistent, top-notch services for WII marines, their family members,
and caregivers.
The Marine Corps approach to wounded warrior care is to return
recovering marines to their parent units as quickly as their medical
conditions permit. Allowing marines to ``stay in the fight'' is what
makes our care model unique and successful. When WII marines remain
with their parent units, they are supported by their regular command
structure with the full assistance of our WWR's comprehensive assets.
WII marines with medically acute cases (typically when their recoveries
are more complex and medical treatment or rehabilitation is expected to
exceed 90 days) are joined to a WWR element where they are enrolled in
programs to not only heal them medically, but also strengthen their
mind, body, spirit, and family during recovery and rehabilitation.
There is no one-size-fits-all approach to warrior care. Each case
is unique based upon the marine's phase of recovery, their location and
family situation. Care does not lend itself to a process, but rather,
it is a relationship between the WWR and the WII marine. As leadership
is an integral part of the healing process, our WWR assigns specially-
trained Marine Section Leaders to various locations where WII marines
are joined to maintain good order and discipline and ensure that these
WII marines are provided leadership, mentorship, and encouragement on a
daily basis.
Assets and Capabilities
Now in its fifth year of operation, our WWR continues to refine its
programs and services. Many program improvements are based upon sound
feedback from WII marines, their family members and caregivers. Our
fundamental assets and capabilities are available to WII marines
whether they are joined to the WWR or remain with their parent command.
Recovery Care Coordinators (RCCs)
We currently provide 49 RCCs to approximately 1,220 WII marines, 60
percent of whom are joined to the WWR and 40 percent remain with their
parent command. Our RCCs are located at 14 sites and serve as the WII
marine's central point of contact to help them set and meet their
recovery and transition goals. RCCs work in coordination with other
members of the marine's recovery team (Marine leadership, medical case
managers, non-medical case managers, and others) to ensure recovery and
transition actions are fully coordinated. Recent improvements to the
RCC program include standardizing Comprehensive Recovery Plans (CRPs),
the WII marine's ``life map,'' by implementing a quality assurance
program for consistent CRP development and documentation. We have also
developed a robust training program that provides RCCs with the
critical skills necessary to identify WII marines' needs, translate
those needs into concrete goals, and then provide actionable steps to
help the marine meet their goals. To facilitate a smooth transition
process, the RCCs have instituted a practice whereby they hand-off
cases of marines who leave the Marine Corps to other WWR assets for
post-transition monitoring and to provide for any ongoing or residual
care coordination requirements. Our RCCs coordinate with the Department
of Veterans Affairs' Federal Recovery Coordinators (FRC) on cases where
WII marines have been assigned an FRC to ensure a smooth transition to
VA services.
Warrior Athlete Reconditioning Program
When a marine is wounded, ill, or injured, our WWR helps focus them
on their abilities through the Warrior Athlete Reconditioning Program
(WAR-P). WAR-P provides activities and opportunities for marines to
train as athletes, to increase their strength so they can continue with
military service or develop healthy habits for life outside of the
Marine Corps. WAR-P, which is mandatory for marines joined to the WWR,
does more than help WII marines maintain a healthy body; it counters
declining self-perception, depression and stress that may be associated
with their injury. Under WAR-P, WII marines have more than 20
activities to choose from, including swimming, cycling, running,
wheelchair basketball, and strength and conditioning.
Sergeant Merlin German Wounded Warrior Call Center
The Marine Corps continues to honor its commitment to keep faith
with WII marines through our WWR's Call Center, a Department of Defense
Best Practice, which renders resource and referral assistance to WII
marines and Marine veterans. Our trained Call Center staff includes
retired marines, other Marine veterans, and family members of marines
augmented by a small staff of psychological health professionals. They
not only receive calls on a 24/7 basis, but also conduct outreach
efforts to check on the well-being of WII marines. Combat-wounded
marines who remain with their parent units are contacted at prescribed
intervals to determine if they have any needs or issues. If needs are
identified, the marine is referred to a non-medical care manager for
resolution. These calls can result in assignment to a Wounded Warrior
Battalion or the assignment of a Recovery Care Coordinator, or both.
This Call Center also serves as the WWR's hub for its new social media
efforts, which includes Facebook, Twitter, and a new WWR App that can
provide fact sheets, news updates, and other WWR-specific information.
Strategic Communication
Clear, consistent, and accurate information regarding services and
eligibility must reliably reach WII marines, their family members, and
caregivers. To address this need, the WWR continually disseminates
information on its programs and services to various audiences,
including Marine Corps leaders, to ensure the Marine Corps total force,
including all wounded warriors and commanders are aware of the WWR's
services.
Community Reintegration
As the vast majority of WII marines reintegrate to their
communities, our WWR has taken steps to ensure they are highly
competitive in a difficult job market. We provide specialized
transition support through Transition Cells, located at WWR
Headquarters and Wounded Warrior Battalions. Transition coordinators,
both Marine Corps and civilian employees (including representatives
from the Departments of Labor and Veterans Affairs), work closely with
marines to reach their employment and education goals. Based on the WII
marine's ultimate goals, the transition coordinators determine their
needs, develop pathways, provide coaching and resources, and help
network for employment and careers. For WII marines who are joined to
the WWR, their transition to civilian life begins as soon as their
medical conditions allow (typically at outpatient status). They must
start an education program, participate in an internship, or return to
work (ideally in a military occupational field commensurate with their
established goals).
Integrated Disability Evaluation System Support
The Marine Corps supports the current Integrated Disability
Evaluation System (IDES) process as it enables the recovering
servicemember and family to continue to receive our support and
transition smoothly to VA benefits from active duty status. While not a
universal concern, some marines have expressed dissatisfaction with the
IDES process due to the variance in their final DOD compensation
package and their VA compensation based on the same VA disability
rating determination. This is because DOD compensates for medical
conditions that are determined to be military unfitting by the service
Physical Evaluation Board (PEB), whereas VA compensates for all
disabling medical conditions incurred or aggravated during a period of
active duty. Although the Marine Corps does not own the IDES process,
we own the marine and it is our responsibility to be their advocate.
Over the past year, we have taken several actions to improve IDES
performance. These actions include:

providing Marine Corps leadership with detailed IDES
case processing information, resulting in their ability to work
closer with the Regional Medical Commanders on specific issues
impacting IDES performance;
enhancing the PEB administrative staff and bolstering
manning to perform field-level counseling and case processing
assistance;
providing Marine Corps disability evaluation attorneys
with a list of marines entering the IDES process for proactive
advocacy prior to the Medical Evaluation Board (MEB) referral;
and
ensuring all marines referred into the IDES receive a
pocket-sized information pamphlet on the IDES process which
provides detailed information on the establishment of the DOD
and VA compensation based on the VA determined disability
rating. It also identifies all actors (PEBLOs, VA Military
Service Coordinators, DES Attorneys, and Independent Medical
Reviewers) in the IDES process and describes how the marine can
work with that actor to achieve a better outcome.

These initiatives have reduced case backlogs and improved case
processing timeliness in the MEB and improved customer satisfaction.
Program Assessment
The WWR recognizes the importance of sound data to measure program
effectiveness and inform changes in the way we serve WII marines and
their families. Since the WWR was established in 2007, several surveys
have been conducted. The most recent survey was administered to WII
marines joined to or supported by the WWR and posed questions relating
to our various care coordination assets: Section Leaders, Recovery Care
Coordinators, the Wounded Warrior Call Center and Battalion Contact
Cells, Family Readiness Staff, and District Injured Support
Coordinators. Findings reveal that satisfaction levels have increased
for marines injured prior to 2007 and are now consistent with WII
marines injured post 2007. Much of this equalization can be attributed
to the reach-back capability that the Call Center possesses, conducting
outreach calls to offer assistance. There was also an increase in
satisfaction levels in the following areas: WWR personnel; the level of
information provided/ability to provide information; and ability to
provide support to family members. One of the most important data
points from the survey: 81 percent of respondents agreed or strongly
agreed that WWR personnel do a good job of coordination with each other
to make things easier.
Our WWR has also been assessed by the Department of Defense Task
Force on the Care, Management, and Transition of Recovering Wounded,
Ill, and Injured Members of the Armed Services. We are pleased to point
out that we were recognized for several best practices, including our
Hope and Care Centers, customization and delivery of the Keeping It All
Together Handbook to families at detachments, and our IDES Pocket Guide
for Marines.
WII marines and their family members and caregivers have sacrificed
much and I can assure this subcommittee and Congress that we will fully
honor their sacrifices by continuing to provide them quality care and
support to posture them for success, whether they return to duty or
transition back to civilian life.
xi. civilian marines
Our civilian marines support the mission and daily functions of the
Marine Corps and are an integral part of our Total Force.
In recognition of the need to study and clearly define our civilian
workforce requirements in light of civilian labor budget reductions, we
proactively conducted a full review of the civilian workforce in late
2010. This measure resulted in a self-imposed hiring freeze from
December 2010 to December 2011, but allowed time to prioritize
requirements within affordable levels and align resources with
capabilities. It also ensured the civilian labor force was shaped to
support the mission of the Corps today and for the future. As a result
of our efforts, the Marine Corps avoided drastic reductions of civilian
personnel and was able to reduce from a planned level of 21,000
personnel in direct funded Full-Time Equivalencies to 17,501.
Our fiscal year 2013 civilian personnel budget reflects efforts to
restrain growth in direct funded personnel. By establishing budgetary
targets consistent with current fiscal realities, we will be able to
hold our civilian labor force at fiscal year 2010 end-of-year levels,
with some exceptions for critical workforce growth areas such as
acquisition, intelligence (National Intelligence Professionals),
information technology, security (Marine Corps Civilian Law Enforcement
Personnel), and cyber.
The civilian labor budget represents less than 5 percent of the
Marine Corps' fiscal year 2012 budgetary submission, demonstrating that
our ``best value'' for the defense dollar applies to our civilians as
well as our marines.
xii. health care efficiencies
The Marine Corps supports the reforms in military compensation
programs included in the President's fiscal year 2013 budget. The
President's budget acknowledges the reality that military pay,
allowances, and health care costs cannot be ignored in our
comprehensive effort to achieve savings. The compensation reforms are
sensible. Modest pay raises continue--no reductions, no freezes.
TRICARE care enrollment and deductibles fees increase for retirees, but
they are comparatively moderate and tiered based on retirement income.
Pharmacy co-pays trend toward market rates and encourage the use of
generic drugs and mail-order delivery. In all cases, costs remain
substantially less than those in the private sector.
xiii. conclusion
To continue to be successful, we must always remember that our
individual marines are our most precious asset, and we must continue to
attract and retain the best and brightest into our ranks. Marines are
proud of what they do. They are proud of the ``Eagle, Globe, and
Anchor'' and what it represents to our country. With your support, a
vibrant Marine Corps will continue to meet our Nation's call.
Thank you for the opportunity to present this testimony.

Senator Webb. Secretary Ginsberg, welcome.

STATEMENT OF HON. DANIEL B. GINSBERG, ASSISTANT SECRETARY OF
THE AIR FORCE FOR MANPOWER AND RESERVE AFFAIRS; ACCOMPANIED BY
LT. GEN. DARRELL D. JONES, USAF, DEPUTY CHIEF OF STAFF FOR
MANPOWER, PERSONNEL AND SERVICES, U.S. AIR FORCE

Mr. Ginsberg. Thank you very much, Mr. Chairman.
Chairman Webb, Ranking Member Graham, and members of the
subcommittee, General Jones and I would like to thank you for
the opportunity to testify today on behalf of more than 700,000
airmen--Active, Guard and Reserve, and civilian, who make up
the most capable aerospace and cyberspace force the world has
ever known. We know that you and members of the subcommittee
are keenly interested in the well-being and support of our
airmen. We must start by thanking you all for everything that
you have done to support them each and every day.
In the past year, our Nation's airmen have performed
magnificently, carrying out operations precipitated by Arab
Spring, major natural disasters, Homeland defense missions, and
ongoing overseas contingencies in Afghanistan and the
conclusion of our Iraq operations.
It is vital to visit our airmen firsthand and see their
contributions and challenges they face every day, and we can
assure you that from Japan to Florida, from Wyoming to
Kandahar, your members of the U.S. Air Force are laying it on
the line for the Nation every single day.
It is due to the quality of our All-Volunteer Force that
your Air Force can project focused military power to achieve
strategic, operational, and tactical objectives globally in
support of our national security interests.
We have no higher priority than taking care of our airmen
and ensuring that they have the resources and support that they
and their families need to stay focused and ready to perform
the demanding missions we assign to them.
As this subcommittee already is well aware, the Air Force
had to make very hard choices in this year's budget submission.
We had to reconcile top-line reductions with our requirement to
fulfill our global commitments and maintain acceptable levels
of readiness while still sustaining key quality of life and
core services for our people. Despite a difficult budget
situation, the Air Force is committed to providing cost-
effective medical care services and programs to maintain a
healthy and resilient force. We must support our people to meet
the demands of high operational tempo and persistent conflict.
Developing and caring for our airmen will remain a key focus as
we continue to become more efficient and develop smarter and
more agile approaches to our achieving security objectives.
Again, on behalf of Secretary Donley and General Schwartz
and all of our airmen, we thank you for your commitment and
support to our Air Force. We look forward to answering your
questions.
Senator Webb. Thank you very much, Secretary Ginsberg.
General Jones, both of your full statements will be entered
into the record at this time.
[The joint prepared statement of Mr. Ginsberg and General
Jones follows:]
Joint Prepared Statement by Hon. Daniel B. Ginsberg and Lt. Gen.
Darrell D. Jones, USAF
The airmen of our great Air Force serve the Nation with
distinction. They have performed valiantly during more than 20
continuous years of combat operations dating back to Operation Desert
Storm, while simultaneously supporting multiple broad-spectrum
operations across the globe. Committed to meeting the requirements of
the President's Defense Strategic Guidance, while confronting the
realities of the current and future constrained fiscal environment
facing our Nation, the Air Force remains committed to recruiting,
developing and delivering to the battlefield innovative airmen who can
smartly and skillfully meet any task or mission. Our commitment as the
Air Force's Assistant Secretary for Manpower and Reserve Affairs and
Deputy Chief of Staff for Manpower, Personnel and Services is to align
the Air Force's greatest resource, our airmen, to support the national
security strategy. We must do so with fiscal responsibility, making
extremely difficult resource priority decisions while at the same time
demonstrating that we fully support our airmen and their families. As
we prioritize missions, it is critical we balance capabilities between
our Active and Reserve components to maintain a robust national
security posture in a dynamic global environment.
contingency operations
Our airmen remain at the forefront of today's conflicts and
contingency operations around the globe, serving proudly alongside our
soldier, sailor, and marine counterparts. Today there are more than
80,000 airmen either forward deployed or stationed abroad worldwide in
our Nation's defense with an additional 134,000 airmen providing direct
support to our joint warfighters from the continental United States on
a daily basis. That means 43 percent of our Total Force is directly
supporting combatant commander requirements every day. In late 2010,
the Air Force began a transition to a 6-month baseline deployment
length. This will increase at-home time for airmen between deployments
and use pre-deployment training resources more efficiently. We are on
track to complete this transition by October 2012. At the same time,
Air Force 365-day deployment taskings have increased to 2,300, up from
689 in 2005, and now represent 7 percent of the Air Force's total
deployments.
military and civilian personnel budgets
The Air Force is committed to maintaining and sustaining the
appropriate size and force mix to align with the new defense strategy,
ensuring we meet mission requirements with acceptable personnel tempo
and associated stress on the force. Detailed assessments of future
conflict scenarios and deployment rotation requirements drove force
structure adjustments resulting in the corresponding personnel
reductions. By the end of fiscal year 2013, end strength will be
reduced a further 9,900 from 510,900 to 501,000. This will result in an
Active Duty military end strength reduction from 332,800 to 328,900.
Our Air Force Reserve (AFR) military end strength will decrease by 900
(increase in 200 full-time; decrease in 1,100 part-time, including 700
associated technician positions) to 70,500, and Air National Guard
(ANG) military end strength will decrease by 5,100 (500 full-time;
4,600 part-time, including 1,400 associated technician positions) to
101,600. Approximately 80 percent of these reductions were driven by
force structure changes.
During the development of the fiscal year 2012 President's budget,
the Secretary of Defense released efficiency guidance to improve the
effectiveness and efficiency of business operations. As part of this
guidance, the Department of Defense (DOD) civilian end strength funding
was targeted at fiscal year 2010 levels. For the Air Force, this action
effectively removed funding for 16,500 civilian positions that were
planned growth between fiscal year 2010 and fiscal year 2012. To meet
the DOD-directed civilian funded targets, the Air Force conducted an
enterprise-wide review of efficiency initiatives, reducing overhead and
eliminating redundancies, while protecting areas of strategic
importance such as the nuclear enterprise, intelligence, reconnaissance
and surveillance. The reductions ultimately resulted in the Air Force
divesting 3,000 positions of planned civilian growth and approximately
13,500 established positions, primarily from management and support
staff areas.
The fiscal year 2013 budget includes a total budget authority
request of $34.2 billion for Active Duty, ANG and AFR military
personnel. Included in this budget is a 1.7 percent military base pay
increase, a 4.2 percent increase in the housing allowance and a 3.4
percent increase in subsistence allowance. We also project an 11.4
percent decrease in Overseas Contingency Operations (OCO) funds. In
addition, the civilian personnel budget requested for fiscal year 2013
is $12.4 billion for a programmed total force civilian strength of
185,900, and includes a 0.5 percent pay raise following a 2-year pay
freeze.
compensation reform
We support the President's plan to establish a military retirement
commission, undertaking a thorough review of the current retirement
system and make recommendations to modernize that system with input
from the Department We also support the recommendation that any changes
be grandfathered. The costs for military pay, allowances and health
care have risen significantly in the last decade. As part of a DOD-wide
effort, we are participating in the development of multiple proposals
to meet deficit reduction targets and slow cost growth. The adjustments
to the TRICARE benefits included in the budget reflect the proper
balance and the right priorities necessary to sustain the benefit over
the long term. National health care costs continue to rise at rates
above general inflation and DOD is not insulated from this growth as we
purchase over 60 percent of our care from private sector. DOD
beneficiaries' out-of-pocket costs with the proposed changes remain far
below the cost-sharing percentage they experienced in 1995.
military force management
The Air Force will continue to sustain excellence with a smaller,
more agile and modernized force. We continue to realize record high
retention and remain focused on tailored force management efforts as we
continue to size and shape the force to meet congressionally mandated
end strength. The Force Management Program is a targeted, multi-year
program managing the force along the 30-year continuum of service,
which leverages voluntary measures first, incentivized programs where
needed, and implements involuntary measures as required to yield
sustained support for combatant commanders across the globe.
The fiscal year 2012 voluntary force management programs include
active duty service commitment waivers; time-in-grade waivers; reduced
enlistment contract waivers; 8 versus 10 commissioned years of service
waivers for prior-service officer retirement, as granted in the
National Defense Authorization Act (NDAA) for Fiscal Year 2011;
voluntary separation pay; and Palace Chase transfers to the Air Reserve
components. We plan to utilize the Temporary Early Retirement Authority
granted in the NDAA for Fiscal Year 2012 by targeting a very limited
and specific number of enlisted airmen in selected skills.
The fiscal year 2012 officer involuntary force management program
resulted in 610 losses through use of a force shaping board for
probationary officers with less than 6 years Total Active Federal
Commissioned Service (TAFCS), a reduction in force board for captains
and majors, and lieutenant colonel and colonel selective early
retirement boards. The fiscal year 2012 enlisted involuntary force
management program currently only calls for date of separation
rollbacks.
In fiscal year 2013, the Air Force's voluntary programs are similar
to those in fiscal year 2012 and the only involuntary action is a
projected force shaping board for probationary officers with less than
6 years TAFCS. Additionally, the Air Force will continue use of limited
selective continuation and reduced promotion opportunities to captain
(95 percent) and major (90 percent).
While we must take proactive measures to manage the force to remain
within end strength, the Air Force is also committed to ensuring an
effective transition to civilian life for our airmen. We have increased
our focus on improving Transition Assistance Programs and are actively
participating with the White House Veterans Employment Initiative Task
Force, in an effort to reduce veteran unemployment. We are committed to
providing appropriate resources towards increased transition assistance
and veteran employment efforts as we continue to collaborate with the
Office of the Secretary of Defense (OSD), the Department of Veterans
Affairs (VA), the Department of Labor, the Department of Education, and
other government partners.
civilian force management
The Air Force has initiated programs to achieve the necessary
civilian force reductions while ensuring mission continuity to comply
with the fiscal year 2010 funding levels as directed by DOD. The Air
Force has implemented force management programs such as hiring
controls, a 90-day hiring freeze, and two rounds of voluntary
separation initiatives (Voluntary Early Retirement Authority (VERA) and
the Voluntary Separation Incentive Pay (VSIP)). More than 2,900
civilian employees have accepted VERA/VSIP incentives. A third round of
voluntary separation initiatives are planned to begin 1 May and
conclude on 31 August. During this time of reductions and reshaping the
force, the Air Force's primary goal is to minimize the number of
involuntary separations to the greatest extent possible.
retention, recruitment, bonuses, and incentive pays
The Air Force accesses, retains and grows motivated and uniquely
qualified airmen to meet the security threats of today and the future.
We must carefully tailor accessions to meet current needs, while also
considering the future, as not bringing in enough new recruits can
impact the force for 30 years to follow. Therefore, while our force
management plan includes reducing some officer and enlisted accessions,
those reductions are considered against future requirements. We project
reducing enlisted accessions for fiscal year 2012 and fiscal year 2013
by 1,030 and 1,232, respectively, and reducing officer accessions by 30
in fiscal year 2012, but no planned reductions in fiscal year 2013.
The Air Force seeks the highest quality recruits to fill our ranks
as current airmen retire or separate through programmed attrition. To
support these efforts, we have included $82 million in the budget for
the Air Force Recruiting Service to support Total Force recruiting
operations, and an additional $97 million for fiscal year 2013
advertising, a slight reduction in the total recruiting budget from
fiscal year 2012. In 2011, the Air Force experienced great recruiting
success, meeting all enlisted and officer recruitment goals for the
Active Duty and Reserve components. Just as notably, the quality of
recruits entering the Air Force greatly increased. For our CAT I to
IIIA recruits, the average score on the Armed Services Vocational
Aptitude Battery increased from 90.5 percent in 2010 to 98.5 percent
thus far in fiscal year 2012, and we anticipate continued overall
recruiting success in fiscal year 2012 and fiscal year 2013. However,
there are nine Air Force career fields, to include linguist, special
operations, and explosive ordnance disposal specialties where critical
shortages remain due to high operational demand, manning shortages, or
lengthy training pipelines. We budgeted $14.5 million in Initial
Enlistment Bonuses in fiscal year 2013 to attract airmen into these
critical skill areas. Active duty, non-line officer recruiters met 99
percent of their 2011 goal. We increased our efforts to recruit Fully
Qualified Health Professionals (FQHP), meeting the goal of 25 FQHP
officers in fiscal year 2011 while increasing our fiscal year 2012 goal
to 55.
The ANG met their fiscal year 2011 enlisted recruiting goal and are
on track for fiscal year 2012. However, ANG officer recruitment fell
short in fiscal year 2011 in both line officer and health professional
areas. In response, the ANG is executing precision recruitment efforts
in fiscal year 2012 towards officer candidates using a standardized
processing system, focused lead generation, and a heightened
advertising campaign to help meet officer recruiting goals by fiscal
year 2013.
The Air Force Reserve continues to attract and retain qualified
prior service and nonprior service recruits. For the 11th straight
year, the AFRC Recruiting Service has led DOD in meeting recruiting
goals. The Air Force's ability to attract and retain trained Active
component airmen into the AFR greatly reduces training costs, and
enhances the repository of talent and expertise available to meet the
Air Force's surge and steady state requirements.
Retention remains at an all-time high in the Air Force as a whole,
contributing to the need for multi-year force management programs to
remain within authorized end strength. However, retention is still
problematic for some skill sets and year groups, and we need investment
to counter low accession year groups of the past and to retain critical
warfighting skills for the future. Bonuses have proven the most
effective, responsive, and measurable tool for retention to encourage
airmen to remain in or retrain into career fields with high demand
requirements. Training and replacement costs far exceed the amount
invested in bonus programs, so the Air Force has allocated $420.4
million in fiscal year 2013 for Special and Incentive bonus pay. The
Air Force has portioned $232 million of this amount for Selective
Reenlistment Bonuses (SRB) for 78 Air Force specialties, down from 89
in fiscal year 2011. SRB investments have shown to improve retention up
to 1 to 8 percent per SRB increment, depending on the enlistment zone,
and have proven to be a critical tool in retaining our needed
specialties for the future. Retention of senior noncommissioned
officers (SNCO) in certain high-demand specialties such as combat
control and pararescue is also challenging. critical skills retention
bonuses (CSRB) remain a vital tool to target specific year groups
within specialties experiencing low retention, manning shortfalls, and
high operational demand. Therefore, the Air Force targeted $2.9 million
in enlisted CSRB towards retaining these SNCOs beyond retirement
eligibility. Additionally, we are investing $10 million in CSRB towards
officer specialties with retention and manning problems including
contracting, special tactics, combat rescue officers and health
professionals.
airman development
One of our primary initiatives in developing the force is an effort
to better define, identify, and track institutional, occupational, and
cross-functional competencies. During fiscal year 2013, we will
continue to institutionalize a process allowing force development
stakeholders at all levels to quantify and measure specific skills on
both an individual and aggregate basis. Doing so will allow us to
develop our Total Force airmen more deliberately by matching training,
education, and experiential opportunities to real-world requirements.
The Air Force is developing cross-cultural competence for all airmen,
in order to prepare them to deliver the global vigilance, global reach
and global power our Nation expects. To support this requirement, we
will focus our efforts on: (1) building expertise in foreign language,
regional, and cultural skills; (2) recognizing joint experience in an
airman's career; and (3) ensuring our educational offerings address
current and anticipated requirements for language and regional
expertise.
support to airmen and their families
Quality-of-life programs continue as one of our highest priorities.
As our force changes, we must adapt our programs and services to ensure
we meet the needs of today's airmen and families. Additionally, we must
tailor our offerings based on the utilization of services and the
availability of suitable alternatives.
We recently completed the second generation of our Caring for
People Survey. More than 100,000 Total Force airmen voiced their
opinions in this online survey conducted from December 1, 2010 to
January 3, 2011. The survey measured satisfaction with quality of life
across the Air Force community, to include airmen, spouses, Air Force
civilians, and retirees across multiple areas like medical care,
housing and support for families. The respondents expressed
satisfaction with housing, installation schools, military benefits,
dining facilities, fitness centers, child development centers and youth
programs. Information, Tickets and Travel, along with the Air Force
Food Transformation Initiative were standouts, competing with
comparable industry leaders in the travel and food service industries.
Some areas of concern include a sense of Air Force community, financial
issues, medical care for families and job satisfaction.
We have a project team developing base prototypes, technological
innovations and efficiencies to address concerns not just from the
Caring for People Survey, but a variety of other surveys and focus
groups as well. The team will provide installation commanders with
tools to help them determine how to shape quality of life programs
according to the needs of their local Air Force community. In that
vein, another key focus area is strengthening partnerships within local
communities to take advantage of the services they provide. In the end,
we will consolidate or divest quality of life activities that are not
financially viable or not well utilized in order to redirect resources
to the places where they matter most to airmen, their families and the
mission.
Our successful Food Transformation Initiative (FTI) continues as a
high priority through fiscal year 2012 and fiscal year 2013. A customer
satisfaction rating of 75 at the 6 FTI installations, compared to 67 at
other facilities, indicates we are on the right path as we work to
improve the delivery of meal choices, food quality, speed of service,
and the overall dining experience for our personnel. As another
indicator of success in our first year, we served an additional 530,000
customers and provided 133,000 more meals to our junior enlisted
members at FTI installations as compared to the previous year. Based on
the initial success of this program and with congressional support, we
anticipate expanding FTI to seven additional installations in fiscal
year 2013.
It is important to recognize the contributions of non-pay programs
in enhancing the quality of life for our airmen and their families. The
Defense Commissary Agency operates as a nonprofit organization and can
save a family of four an estimated $4,500 a year. Providing groceries
and household items .at cost. saved patrons a total of $2.7 billion
last fiscal year. Additionally, the Army Air Force Exchange Service
(AAFES) provides merchandise and services to military members and their
families at competitively low prices. The 3,100 facilities located in
over 30 countries provided an average 24 percent savings to customers
compared to comparable retail stores. Additionally, AAFES gives back to
the military community through significant dividend contributions,
which amounted to $90.6 million going back to the Air Force communities
AAFES serves in fiscal year 2010. AAFES also offers employment benefits
as 31 percent of employees are military family members.
We continue to strengthen our Air Force community by meeting
childcare needs through a robust construction effort to increase the
number of available childcare spaces and reduce our shortfall by the
end of fiscal year 2012. We are also adding 74 accessible childcare
playgrounds and 26 community nature parks in support of Air Force
families with special needs. The Air Force Expanded Child Care program
assists airmen who need child care for unusual shifts, extended duty
hours and drill weekends. Additionally, we funded our new respite
childcare program for special needs children at seven bases and we will
expand it to other locations throughout the upcoming year.
We are also expanding our Exceptional Family Member Program (EFMP)
to support more than 18,400 Air Force families with special needs
members, a 10 percent increase since the end of fiscal year 2010. To do
so, we placed 35 EFMP Family Coordinators at installations with the
highest concentrations of families enrolled in the program. We are also
adding 36 EFMP Medical Coordinators through fiscal year 2016 to support
families needing specialized medical care and included $3 million
starting in fiscal year 2013 to fund respite care and other EFMP
related programs.
The Air Force also recognizes the important role and sacrifices of
our ANG and AFR airmen and their family members. While many of the same
family support programs are offered to our Reserve components, we
realize that ANG and AFR families have difficulty sometimes accessing
those available resources. As a result, we have supported ANG and AFR
unique programs such as the Home Community Care program, which provides
fee-assisted, in-home quality childcare during scheduled drill
weekends. Returning Home Childcare for deployed personnel is another
ANG/AFR family program benefit, funding 16-hours of no-cost care per
child following deployments of 30 days or more. Finally, a Defense
Management Data Center survey administered to ANG/AFR families
highlighted the high satisfaction with the congressionally-supported
Yellow Ribbon Reintegration Program (YRRP), with 83 percent of
respondents expressing high satisfaction with the YRRP events.
Additionally, 77 percent said the information presented increased their
confidence in their ability to find and utilize vital resources that
would prepare them and their loved ones for continued military service.
military health system (mhs) governance
The Air Force fully supports the MHS Governance Task Force
recommendations. They are important because they represent the intense
and informed deliberation of both line and medical professionals who
were seeking the best solutions to maintain exceptional care for our
servicemembers while finding more effective and efficient ways to
deliver that care.
The Air Force believes implementation of the task force
recommendations will ensure the sustainment of this high level of
mission success. We agree that a more effective and efficient joint
medical solution can be attained without the expense of establishing a
unified medical command. The Services should--and will--continue
integrating common medical platforms to reduce redundancy and lower
costs. The task force recommendations will move us quickly to a
construct that curtails expenses and achieves savings to the greatest
extent possible while meeting our deeply important mission; providing
quality health care to the military member and their families, while
being good stewards of American taxpayer dollars.
airman and family resiliency
A key factor in maintaining the health of our Air Force is to
increase the resiliency of our airmen. Our efforts include a number of
programs in the Comprehensive Airman Fitness (CAF) model designed on
four pillars of resilience: Mental, Physical, Social and Spiritual.
This program provides tools to help Total Force airmen and their
families withstand, recover or grow in the face of stressors and
changing demands. It is our goal to expand education and training of
the CAF model to our accession and professional military education
units first. Next, we will provide Master Resilience training Air
Force-wide to individuals who provide face-to-face resilience skills
training at the installation level. Further, the Leadership Pathway is
a program incorporating basic resilience and life skills for airmen and
family members in utilizing existing resources offered at the Airman
and Family Readiness Center, Health and Wellness Center, Air Force
clinics/hospitals and base chapels.
The Deployment Transition Center (DTC) at Ramstein Air Base,
Germany, was established to provide valuable decompression,
reintegration and resilience training for returning servicemembers who
were exposed to significant danger and stress in combat zones. Since
calendar year 2010, over 3,000 airmen have completed the center's 2-day
program and have reintegrated with their home units and families. The
Air Force fiscal year 2012 budget includes $7 million for DTC
operations, research, curriculum development, materials and
intervention training.
suicide prevention
Suicide prevention remains a top Air Force leadership priority. The
Air Force uses an integrated public health approach to suicide
prevention, emphasizing leadership involvement, a supportive Wingman
culture, and access to evidence-based care provided by Air Force
helping agencies. The Air Force Suicide Prevention Program is one of
only 15 evidence-based programs listed by The Substance Abuse and
Mental Health Services Administration. Recent suicide prevention
initiatives include requiring face-to-face suicide prevention training
for all frontline supervisors in the three career fields with the
highest suicide rates in 2010. Since implementation in November 2010,
the suicide rates in these career fields dropped significantly.
Other initiatives include developing the Airman's Guide for
Assisting Personnel in Distress, a new web-based resource to assist all
airmen with strategies and resources for a variety of behavioral
concerns. We are also sponsoring a RAND study on the use of social
media and its impact on relationships and emotional wellbeing, as well
as research by the University of Rochester on specific clusters of risk
factors associated with suicide. The Air Force Community Action
Information Board/Integrated Delivery System (CAIB/IDS) links leaders
and helping professionals at every level of the Air Force organization
and monitors all our suicide prevention initiatives for continuity and
completeness. An audit of its effectiveness will provide guidance on
enhancing the functioning of these organizations and provide areas of
further improvement in our evidence-based program.
Proper public messaging on suicide prevention is important. Public
messages must avoid the impression that suicide is common, so the Air
Force has revised memorial service and public affairs guidance shifting
the focus toward the positive message of resilience, stressing the
benefits of early help-seeking and effective Wingmanship.
Finally, the Air Force is working closely with our sister Services
to implement recommendations made by the Defense Health Board's Task
Force on Suicide Prevention and to clarify roles and responsibilities
within the Department regarding suicide prevention.
sexual assault prevention and response
The Air Force strongly supports the Secretary of Defense's
commitment, focus, and initiatives aimed at eradicating sexual assault.
Eliminating sexual violence is everyone's responsibility. Leaders,
commanders and supervisors set the tone and must model zero tolerance
and behaviors supporting zero tolerance. The goal of our Air Force
Sexual Assault Prevention and Response (SAPR) program is to prevent and
respond to sexual assault through a balance of focused education,
compassionate advocacy and accountability, promoting respect and
dignity throughout the Air Force.
Prevention of sexual assault continues to be a high priority.
Career long education and training creates a foundation for prevention.
This education begins with accessions, continues through all phases of
professional military education, and is refreshed during annual
training. In February, we released a wing commander guide, An
Opportunity to Lead, containing five core elements to help commanders
provide immediate impact. The guide addresses personal leadership,
climate and environment, community leadership, victim response, and
offender accountability. In addition, Bystander Intervention Training
has been established as a requirement for all airmen, focusing on the
importance of recognizing signs of inappropriate or unsafe situations
and intervening appropriately.
The NDAA for Fiscal Year 2012 contained significant mandates
addressing sexual assault including a requirement for full time Sexual
Assault Response Coordinators (SARCs) and victim advocates at brigade
or equivalent level. The Air Force SAPR program has included full time
SARCs at installation level since 2005, including the six primary U.S.
Central Command area of responsibility AF locations. Air Force SARCs
receive training that meets national advocacy credentialing standards.
Victim advocates are military and Air Force civilian volunteers who
receive comparable training. Currently, 3,159 fully trained volunteers
are available to assist victims. The Air Force projected $31.8 million
to execute the SAPR program in fiscal year 2013. The budget funds full-
time SARCs, 24 dedicated investigative agents specializing in sexual
assault investigations, and operational program expenses for all first-
responder agencies and field level activities. To meet the new NDAA for
Fiscal Year 2012 requirement for full time Sexual Assault victim
advocates at brigade or equivalent level, the Air Force will need to
add 89 new positions (60 DOD civilians and 18 officers from the Active
Duty component, and 11 traditional Reserve officers from the Air
Reserve component). The associated cost is $7.5 million in fiscal year
2013, increasing to $8.4 million by fiscal year 2017.
Prevention and response are critical elements of the SAPR program.
Holding those who commit the crime of sexual assault accountable is
equally important. The Air Force is committed to accountability through
effective investigations, knowledgeable staff judge advocate advice,
and strong commander and senior enlisted support. The Air Force has 24
Air Force Office of Special Investigations investigators dedicated to
sexual assault investigations and funds 10 DNA analyst salaries at the
U.S. Army Criminal Investigations Laboratory to analyze Air Force
sexual assault case evidence. Investigators and judge advocates
participate in combined training and attend courses specifically
addressing sexual assault crimes. The recent Air Force Judge Advocate
General Keystone annual leader summit provided a 4-hour session for
staff judge advocates facilitated by subject matter experts on
investigation and evaluation of sexual assault cases. Executive Order
MRE 514 provides victim advocate privilege against disclosure of
certain communications by victims, SAPR victim advocates and family
advocacy program victim advocates, and we feel certain this provision
will encourage more victims to come forward and report sexual assaults
and incidents of domestic violence.
In March, the Air Force launched the Defense Sexual Assault
Incident Database (DSAID). The Air Force has worked closely with OSD
from concept development to DSAID system design, so we look forward to
implementing this valuable tool for enhanced reporting to Congress and
to our leaders and commanders and we appreciate Congress's continued
support in addressing this crime.
wounded warriors
The Air Force continues to strengthen its support for our wounded,
ill and injured population through our Warrior and Survivor Care
Division. Our wounded, ill and injured airmen deserve our very best and
the Warrior and Survivor Care Division is committed to providing them
individualized and focused non-clinical support. Through the Recovery
Care Coordinator (RCC) program, we have strategically placed 33 non-
clinical care managers around the country and in Germany. This RCC
network provides dedicated support and coverage from the moment Air
Force Casualty reports that an airman is placed in a seriously or very
seriously ill or injured status; serving as independent advocates for
each airman and working to ease the burden of administrative and
personal requirements as they navigate through their continuum of care.
Our Family Liaison Officers (FLO) also provide an invaluable
service to the families of our seriously or very seriously wounded, ill
and injured airmen. The Air Force has taken the concept used to support
families of the fallen and applied it to our wounded warrior families
as well. The FLO coordinates all logistical support for family members
to include arranging lodging, securing transportation, and seeing to
the comfort and other arising needs of the family.
While we provide excellent care for all our wounded, ill, and
injured with RCCs and FLOs, the Air Force Wounded Warrior Program
(AFW2) focuses exclusively on our combat wounded airmen. This program
provides long-term, non-clinical care management for combat wounded who
must meet a Medical Evaluation Board or Physical Evaluation Board to
determine whether they are fit for duty. Focused, personal care from
AFW2 allows our combat wounded airmen the opportunity to make informed
decisions when their future career path changes due to their injuries.
integrated disability evaluation system
The Air Force has collaborated with OSD and the VA to simplify the
Integrated Disability Evaluation System (IDES) process for
servicemembers by increasing transparency and reducing processing time
to improve the transition for servicemembers from DOD to VA. Overall,
the IDES monthly progress report for February 2012 indicates Air Force
Active component case processing is averaging 360 days, down from an
average of 540 days in recent years.
The Air Force Medical Evaluation Board (MEB) and Physical
Evaluation Board (PEB) are working diligently to meet timeliness goals
and ensure quality outcomes. We have directed considerable leadership
attention and resources targeting improved MEB and PEB decision
timeliness and are on target to meet review and decision guidelines by
October 2012. These focused efforts will ensure our wounded, ill and
injured personnel receive timely reviews and adjudications of their
cases. Along with the Army and the Navy, the Air Force is working with
the Wounded Warrior Care and Transition Policy Office to identify a
methodology for accurately tracking each step associated with the
transition phase.
Another venue of disability appeals administered by the Air Force
is the DOD Physical Disability Board of Review (PDBR). As the lead
component operating this Wounded Warrior Board, the Air Force recently
partnered with the VA in its outreach efforts to ensure every PDBR-
eligible veteran is made aware of their opportunity to have their
service assigned disability ratings reviewed. The goal of this
interdepartmental effort is to reach all 77,000 eligible veterans
within the year.
operational reserve
We appreciate the opportunity to also share information about the
highest quality, most cost efficient Reserve component in history. As
the new DOD strategy is implemented and planning occurs to conform with
an increasingly austere budget environment, the Air Force Reserve and
Air National Guard will continue to maximize the advantages of
Associations. Associate units have proven themselves as a solid
solution that exploits the strengths each component offers. They ensure
that the experience and cost effectiveness of the Air Force Reserve and
Air National Guard reach their full potential. This effort is critical
to mission success in an environment wrought with fiscal challenges.
Recently, Congress passed much-needed legislation allowing Service
Secretaries to involuntarily mobilize up to 60,000 members of the
Reserve component without a national emergency. The use of this
authority still needs to be planned, programmed and budgeted before it
can be implemented. The Air Force is working with OSD to develop the
policies and procedures to offer the fastest, most enduring support to
not only the combatant commanders around the world, but to all our
members; balancing their time between service to our country, their
families, and their employers.
The Air Force Reserve and Air National Guard are currently
sustaining combat operations in conjunction with our active duty
colleagues on five continents--lengthy operations which have produced
strains on our airmen and our equipment. We will continue to define the
most efficient mix of Active, Air Force Reserve, and Air National Guard
forces best suited to the strategy in terms of cost, operational
requirements, surge or regeneration capability, and employment of Total
Force assets. By ensuring optimal mix between the Regular Air Force,
the Air Force Reserve, and the Air National Guard the Total Force will
not only preserve previous investments in readiness, capability, and
capacity, but also protect the operational expertise of the force for
future use while ensuring a rapidly expandable, trained and ready
military.
military personnel appropriation (mpa) man-days
The MPA man-day resource enables the Air Force to leverage Air
Reserve Component capabilities supporting military missions beyond the
Active component's level of capability. In late 2009, a decision was
made to implement a requirements-based MPA man-day process as part of
the Air Force Corporate Structure (AFCS) fiscal year 2012 Program
Objective Memorandum (POM) development process. Since the fiscal year
2012 POM build, Air Force Major Commands have worked closely with the
combatant commanders to identify requirements. Once submitted,
requirements are staffed, verified and vetted through the AFCS based on
priorities established in the Annual Planning and Programming Guidance.
Additional criteria such as mission impact, critical skills, active
duty manning and level of support are also weighted to finalize the
prioritization. The Air Force is committed to continuing this
transparent process, which is designed to ensure appropriate deployment
of Reserve Component forces, enabling the Total Force to properly
respond to combatant command requirements.
integration of air force component personnel management
We are committed to fully integrating personnel management
policies, organizations, systems and processes across the Air Force
enterprise, with the outcome of providing more effective and improved
service to our airmen, reducing barriers to continuum of service, and
increasing emphasis on unified Total Force decisionmaking. This is not
only the right thing to do for our Air Force; it will drive greater
operational efficiencies and allow transfer of resources from tail to
tooth.
Since the Secretary of the Air Force directed the integration of
the three Air Force Component Personnel Management Systems into one,
personnel from across the Air Force headquarters have been working to
facilitate the integration and standardization of human resource
management with Total Force directives and instructions. As of this
date, analysis is underway on more than two dozen human resource
activities, with the high-level policy analysis phase on track for
completion in May 2012. We are looking closely at existing policy
guidance to standardize or consolidate management across components
wherever practical and where allowed by law. This effort has a targeted
implementation work plan of calendar year 2012, with follow-on actions
through the Future Years Defense Plan (FYDP).
diversity
Diversity remains a top priority of Air Force senior leadership.
The Air Force recognizes that a diverse force is a military necessity,
and we continue on a strategic path to attract, recruit, develop and
retain a diverse and inclusive workforce of highly qualified
individuals who reflect the rich tapestry of the Nation we serve. In
October 2011, a Declaration on Diversity signed by the Secretary of the
Air Force, Chief of Staff of the Air Force and Chief Master Sergeant of
the Air Force was distributed across the Air Force to highlight the
importance of diversity to the mission. Additionally, we increased
senior leader involvement in the Air Force Diversity Committee by
adding the Major Command Vice Commanders, who provide invaluable
insight on best practices throughout their respective commands. We are
well on the way to institutionalizing our Strategic Diversity Roadmap,
A Journey to Excellence throughout the Total Force.
Results from our 2011 Internal Communication Assessment Group
Diversity survey indicated 75 percent of airmen agreed it is important
for the Air Force to attract, recruit, develop, and retain a qualified,
diverse workforce as a way to maintain our edge as a superior military
organization. Furthermore, 88 percent of airmen surveyed believe the
Air Force is doing a good or excellent job creating diversity within
the Total Force.
Focus on Air Force outreach programs remains central to attracting
and recruiting diverse talent. To that end, in partnership with OSD's
Office of Diversity Management and Equal Opportunity, the Air Force
plans, coordinates and oversees national-level diversity outreach
programs supporting our diversity goals and objectives. Further, to
maximize resources, we utilize a Total Force perspective to determine
which events and opportunities provide the best return on investment.
We have 80 outreach events planned for 2012, including the Black
Engineer of the Year Awards, Joint Women's Leadership Symposium and the
Hispanic Engineer National Achievements Award Corporation Conference.
We continue to place emphasis on education, health, and mentoring in
the Science, Technology, Engineering, and Mathematics disciplines
through our community engagements, and feedback from community
influencers has proven very positive thus far.
Finally, the Air Force supports the Military Leadership Diversity
Commission recommendations and is poised to support Executive Order
13583, Establishing a Coordinated Government-wide Initiative to Promote
Diversity and Inclusion in the Federal Workforce. Upon OPM's release of
the government-wide Diversity and Inclusion Strategic Plan, we will
work with OSD to develop a plan of action and milestones to support the
President's goal of using the talents of all segments of society by
enhancing our ability to recruit, hire, promote, and retain a more
diverse workforce and creating a culture that encourages collaboration,
flexibility, and fairness to enable individuals to participate to their
full potential.
u.s. air force academy
The U.S. Air Force Academy (USAFA) continues to provide an
exceptional environment for educating, training and inspiring men and
women to become outstanding officers, motivated to lead the U.S. Air
Force in service to our Nation in a challenging global environment.
Senior Air Force leadership continues to energetically engage in the
Academy's oversight, ensuring cadet train, study and live in a safe and
productive environment. We continue our close working relationship with
the USAFA Board of Visitors (BOV), enjoying frequent interactions with
Ambassador Susan Schwab, USAFA BOV Chair, who is keeping the BOV
vitalized and actively engaged in providing external Academy oversight.
In the past year, USAFA cadets received numerous accolades for
their undergraduate work, including one Rhodes scholar and two Marshall
scholars, recognition by U.S. News & World Report as having the #2
Aerospace/Aeronautical/Astronautical Program in the Nation and #1
undergraduate-only institution in research funding-over $70 million,
and being ranked by Forbes #10 of 610 of America's Best Colleges. In
addition to outstanding academics, the cadets have also excelled in
athletics, being #2 of 120 NCAA Division I football programs in
academic progress rates, #1 of 9 academically in the Mountain West
Conference, and for the second consecutive year, the Academy's football
team will visit the White House to receive the Commander in Chief's
Trophy from the President. The President will also give this year's
commencement address at the Academy.
Respect for human dignity is at the core of the USAFA environment.
USAFA is a leader in developing programs for the prevention of and
responding to incidents of sexual assault and sexual harassment, gender
relations issues, and religious tolerance. The Academy is currently
conducting Religious Respect Training, which involves cadets, faculty
and staff, using training scenarios designed to spur critical thinking
on religious tolerance and actions. While the Academy had an uneventful
``Don't-Ask/Don't-Tell'' transition, it is unfortunately in the midst
of investigating several cases of alleged sexual assault and illegal
drug use.
USAFA is working hard to preserve an outstanding training and
educational environment in a fiscally challenging environment. As part
of the AF response to the requirements of the Secretary of Defense's
August 2010 Efficiency Memorandum, USAFA is reducing its civilian
workforce by 67 positions (4 percent of its current workforce). The
Academy is currently in the process of selecting members for the Class
of 2016 while focusing efforts to ensure the size of that class
supports the 1 Oct 2012 cadet wing end strength target of 4,000.
conclusion
The hallmark of the U.S. Air Force's success has always been, and
will remain, our people. Nearly 2 decades of sustained combat,
humanitarian, and stability operations have imposed extraordinary
demands on our forces. Yet our airmen continue to contribute
significant capabilities to the joint team and do so with the integrity
and excellence familiar to the global community. We will continue to
size and shape the force through all necessary means while retaining an
intrinsic value that attracts and keeps the highest quality airmen. We
are a smaller force, but a ready force. By sustaining accessions for
the long-term and balancing the total force to meet operational
requirements, your U.S. Air Force, with its joint partners, provides
unmatched capabilities across the spectrum of operations.

Senator Webb. Thank you very much, Secretary Ginsberg,
I am going to ask three questions, and then I am going to
move along to whichever other Senators on the subcommittee wish
to ask questions.
First, Secretary Ginsberg, let me ask for your
clarification on something. When I was in the Pentagon, the way
the budget process worked was, first, the Services got together
with their different components. They got the budget
submissions. They argued against a top line. They figured out
their budget. Then the different Services presented their
budgets to OSD, and I sat on the Defense Resources Board (DRB)
for 4 years. The DRB would examine the Service budgets. They
would challenge different components of it. You came up with a
DOD budget signed off by the Deputy Secretary of Defense and
eventually by the Secretary. That was then brought to the
Office of Management and Budget (OMB). OMB scrubbed it. Then
you had a DOD budget, and it came over here to Congress. Once
it came over to Congress, DOD as a whole was expected to
support that budget.
Is that the way things work?
Mr. Ginsberg. Yes, sir. I think that is fundamentally the
basic outline of the way it works today. We develop our budgets
through what we call the corporate process. What that really
does is bring together every component of the Air Force, every
office that has equity in the budget, and we develop a program
that is, of course, meeting the strategic guidance the
President lays out then within the fiscal realities and we
submit it to OSD. The other Services have a chance to look at
it. We develop a program and then we submit it up through OMB.
Senator Webb. It is a corporate process?
Mr. Ginsberg. Yes, sir.
Senator Webb. For instance, a little more than 20 years
ago, there was an Air Force Chief of Staff named Larry Welch
who I had served with in the Pentagon and who was widely
expected to become Chairman of the Joint Chiefs of Staff. He
went over to the House side and had a discussion with Les Aspin
about a tradeoff at that time between Minuteman and Midgetman
missile programs, how much money would go into one or the
other. He made a statement that he would personally support--in
his opinion, he could personally support something that had not
been in the budget. By the time he got back to the Pentagon, he
was reprimanded by the Secretary of Defense.
There was an article in the New York Times yesterday about
the Air National Guard lobbying the Hill against budget cuts
that were in a scrubbed budget. Are you aware of that effort?
Mr. Ginsberg. No, sir. I read that article. I do not know
specifically what that was referring to. No, sir.
Senator Webb. It said for 2 months the Air National Guard,
with the help of Governors from every State, has been battling
the Active Duty Air Force over proposed budget cuts. I can hear
Senator Graham wanting to get to the mic here. [Laughter.]
What do you think about that?
Mr. Ginsberg. Sir, I do not know exactly what that is
referring to again. So, of course, there you have the adjutants
general of the States who are the chief military advisors in
the State role to their Governors. When they are the adjutants
general, they are----
Senator Webb. What if they are over here in uniform?
Mr. Ginsberg. What is that?
Senator Webb. What if they are over here in uniform?
Mr. Ginsberg. It depends on what business they are carrying
out, sir.
Senator Webb. If they are carrying out this particular
business mentioned in this particular article.
General Jones, do you have a thought on that?
Mr. Ginsberg. I cannot comment on a specific hypothetical.
Sir, I do not know exactly again specifically the specific
situation.
Senator Webb. General Jones, do you have a comment on that?
General Jones. Senator, I am familiar with the article you
are speaking of. When we prepared the budget, it was a budget
that was designed to look at the new strategy, a balanced
approach, and that is certainly what the Chief and the
Secretary feel like they need to bring forward that balances
the requirement for the Guard, the Reserve, and the Active Duty
to coexist to support each other in a role that allows us to
use each to their strengths. I feel like that is the proposal
that was laid out by the Chief. Obviously, some people have
opinions of the proposals and the details of it. But I really
feel like the budget was something that was put together. The
proposals were vetted. They were discussed, and it was a
collaborative effort or a cooperative effort. Not every
decision was agreed upon 100 percent, but when you have to make
decisions, they will not all be agreed upon.
Senator Webb. We may end up coming back to that or someone
may end up coming back to that.
General Milstead, you and I had a discussion about this.
This is the front page of the Marine Corps Times this week.
Grunt training for women starting now, infantry school
admissions, new combat tests, et cetera. The Internet is abuzz
with this decision. There are a lot of people wondering what
the inception of it was, what the plan is. I think this is an
opportunity maybe for you to explain how this decision took
place, how you project this moving into the future as well.
General Milstead. Yes, sir. It is important to put that
story and the story that was in the New York Times as well in
context. It is also important to make sure that folks
understand what it is and, more importantly, what it is not.
Assignment policy for women has not changed. We are not
training women to be infantry officers. We do not have that
authority. That authority resides with Congress.
What we are doing is deliberate research. If I may, the
National Defense Authorization Act (NDAA) for Fiscal Year 2011
directed OSD and the Services to review the policies and the
laws and the regulations that pertain to women in the Service
and to report back. They stood up a working group with members
from all the Services and they reported back in February. That
report included a request from Congress to conduct an exception
to policy and what we call a pilot program. It also asked for
the authorities. It stated that they were removing the
collocation restriction, and then the Secretary further
directed----
Senator Webb. Just for clarification, what was that
request? What was the nature of that request when you said the
report included a request for a pilot program? All Military
Occupational Specialists (MOS)?
General Milstead. Thank you, a request to take open MOSs
and to establish them at a lower level. For instance, in the
Marine Corps, we did not have women below the division level in
certain MOSs. So it was a request for an exception to policy to
take a woman in an MOS that she is already authorized to serve
in and put her down to the battalion level. We intend to do
that as part of the research.
The Secretary further tasked the Commandant and the other
Service Chiefs to come back to him in 6 months and give him
their personal recommendation. So what we are doing is we are
doing a measured, responsible, and deliberate research, a
comprehensive plan, so that the Commandant, when he does give
his recommendation to Secretary Panetta, it will be based on an
analyses. It will be based on quantitative information and on
research, and it will be an informed recommendation.
Senator Webb. To clarify the record, because there are a
lot of people who are following this, what I understand that
you are saying is that this is pursuant to a request by the
Secretary of Defense. The opening up of infantry schools, et
cetera, is pursuant to a request by the Secretary of Defense
for the Commandant to give him a report in 6 months on
feasibility.
General Milstead. That decision was ours. We felt that we
could take volunteers--and they are volunteers. They have to be
volunteers under the protocols--take women officers when they
come out of the basic school, women volunteers, subsequent to
the MOS that they will be going to, to attend the Infantry
Officer Course (IOC), not to become infantry officers, but to
see how they do and to capture data which will be given to the
Commandant which will allow him to make an informed
recommendation to the Secretary how we proceed.
Senator Webb. We need to understand the origins of this
experiment. That is why I am trying to get it clear for the
record. The NDAA gave a broad recommendation, as I understand
what you are saying. Then the Secretary of Defense gave a
further request that within 6 months certain recommendations
from the Services come to the Secretary of Defense?
General Milstead. That is correct.
Senator Webb. This is pursuant to that request?
General Milstead. The decision being within our own wire.
It is the Marine Corps. He did not tell us to open IOC. The
Commandant--we came to him with a research plan and said we
want to push people down to the battalion level, assess that.
We want to take some women. We want to put them into IOC, see
how that comes up. We want to come up with common gender-
neutral standards. We want to do a test based on physical
fitness for both men and women to see what the level playing
field is. It is all to come to the Commandant and allow him to
make an informed recommendation to the Secretary of Defense on
the way he thinks that we should proceed.
Senator Webb. So when a male officer finishes IOC, is he
automatically entitled to one of two MOSs? Right?
General Milstead. Yes, sir. That is correct.
Senator Webb. So, if a female officer finishes IOC?
General Milstead. If a female volunteer attends IOC, it is
not for the purpose of getting the 03, 02, or 02, 03 MOS. She
will not receive that MOS.
Senator Webb. But if she successfully concludes----
General Milstead. Even if she successfully completes. This
is not to make female infantry officers.
Senator Webb. You are going to get a lot of comment on
that.
General Milstead. Yes, sir.
Senator Webb. Secretary Lamont, very quickly, because I
wanted to ask a question of each of your Service
representatives. Eight years ago this week, I spoke at the Army
Infantry School on a lessons-learned package that they had
talking about my experiences in Vietnam. That night, we had a
reception at the commanding general's house, and they informed
us that Pat Tillman had been killed. I think, first of all, it
is a little sad that we are not remembering what this
individual did for the respect of the military, leaving
millions of dollars behind and voluntarily enlisting and going
over and serving.
But what happened after that, the way that his death
wrongly characterized, apparently even when the Army knew it
was a friendly fire incident, and the existence of private
communication inside the general officer corps warning the Army
that this was a friendly fire incident--even his family did not
know it--was a really tragic circumstance for the family, and I
think a stain on the Army's reputation.
We then had an incident at Wanat where certain commanding
officers were held accountable by a U.S. Central Command
(CENTCOM) investigation and then their accountability was
removed by the Department of the Army subsequently.
We just had an incident not too long ago with a soldier who
apparently was shot by his own platoon leader accidentally
during a night engagement but was left on the battlefield when
others were evacuated, and there does not seem to have been a
lot of accountability.
Maybe, General Bostick, you would like to comment on it,
either or both of you. What is the Army doing in terms of
reinforcing the notions of the accountability of senior
leadership?
Mr. Lamont. I am certainly aware of the situation with that
captain, as I recall. Actually, I think he may have been a 1st
lieutenant at the time. As I understand it, it was at night.
They did not have awareness of where the fallen victim was
until later. I do know he was reprimanded. Unfortunately, I
also understand he was subsequently promoted. But I do recall
that there was a significant review, and, in fact, the
Secretary, as recently as 3 weeks ago, I think, met with the
father of the young victim.
General Bostick. First, our heart goes out to all of the
loved ones that have lost soldiers on the battlefield.
We realize that in our Army and the way we fight, we place
huge responsibilities on the shoulders of young sergeants and
lieutenants and captains. They have to make on-the-spot
decisions that sometimes are life-threatening-type decisions.
We count on them to do that every day.
We also count on leaders to train them and to be
accountable for their behaviors. When things go wrong--and they
always will in war--then we expect to thoroughly investigate
each one of these incidents. That is what happened in each of
these.
I can tell you in the case of Wanat, my wife taught that
young man when he was in elementary school. So for us, it had
special meaning, and I know the parents very well. I know Hondo
Campbell, who was asked to review the situation by the senior
leadership of the Army, took in the new evidence that came on
board, and he made his decisions, and the Secretary of the Army
stood by those decisions.
But I think in each one of these cases, our responsibility
is to make sure that if an investigation is due, it is
thorough, it is proper, and that we report back to the families
and we provide the care and compassion that they need to get
through it.
Senator Webb. Thank you.
Senator Graham.
Senator Graham. Thank you, Mr. Chairman.
Secretary Lamont, you mentioned efforts to deal with sexual
harassment and sexual assaults in the Army and the military, in
general. Is there anything this subcommittee can do or tools we
can provide or money we can appropriate or recommend to be
appropriated that we are not doing?
Mr. Lamont. I would hesitate ever to say you do not need to
give us any more money. But on the whole----
Senator Graham. You do not have to give a definitive answer
today.
Mr. Lamont. Right, and I appreciate the opportunity to do
that.
I think we are making every effort, frankly, to create the
kind of professional climate that gives to every soldier the
dignity and respect that he or she deserves. I do not know that
it is a money question. Although under the new NDAA
requirements that we shall have sexual assault counselors and
victim advocates at the brigade level, we understand that our
numbers would suggest roughly 980 personnel. The fact that we
are under a civilian cap now at OSD will in itself create some
problems because we will have to have a mix of both civilian
and military to meet those requirements. I think right now that
is the only thing that I would suggest that we would need from
this committee.
Senator Graham. Can I ask the same question of the Navy and
the Air Force?
Mr. Garcia. Senator, I would say that we believe we have
the resources and the commitment and the emphasis on the issue,
that we do not need any extra tools. You asked this question.
At the end of our ``sexual assault awareness month'' where
every unit in the Department of the Navy has just had four
separate stand-downs over the course of this month to emphasize
the priority that our leadership has in ending this scourge of
sexual assault and harassment across the force.
I am certain you are familiar with the Secrtary of
Defense's new guidance on convening special courts martial at
the 06 level.
Prior to this across the Navy, we have trained our Naval
Criminal Investigation Service personnel to be dedicated field
experts in capturing and sustaining and protecting evidence in
crime scenes. Our Judge Advocates General and our Staff Judge
Advocates are trained in the most effective prosecution
strategies where appropriate, expedited transfer for members
who request it within 72 hours. That is all on the response
side.
If I could take one more second to speak to the prevention
side. Every new sailor or marine in our department right now,
when they go to their A school, their first training school,
will receive bystander training, bystander intervention
training. Every leader, enlisted leader and officer leader,
will be trained in ensuring their command environment
eliminates the stigma for an individual, preventing an
individual from being willing to report such an incident.
You may have followed--I guess it has been about 3 weeks
now. Our Secretary, our Commandant, our Chief of Naval
Operations rolled out our new 21st Century Sailor and Marine
Initiative, and a key cornerstone of that, the readiness piece,
includes an effort to end sexual assault and acknowledge the
undeniable correlation, the link between irresponsible alcohol
use--close to 50 percent of our sexual assaults involve it in
some way or another, and that is why we are introducing the use
of breathalyzers that I suspect you are familiar with.
So I think we have the tools to combat this.
Mr. Ginsberg. Senator, there is absolutely no place in the
Air Force for sexual assault. This is really everyone's
responsibility. It is a command responsibility. It is every
airman's responsibility to not just go after those who
perpetrate this action but also to create a climate that
reduces the likelihood of this occurring. We are not just
following up the direction, of course, that of Secretary
Panetta who has, as Secretary Garcia laid out, mentioned later
a whole series of actions from elevating the level for a
disposition of case to the 06 level, but we are also taking a
number of steps on our own, including putting $2.4 million for
additional Office of Special Investigations investigators.
As Secretary Lamont mentioned, though, there is going to be
an additional resource requirement with the additional full-
time victim advocates, and we are going to address that in the
fiscal year 2014 budget.
Senator Graham. I think the committee would appreciate in
writing anything that you need from us, Uniform Code of
Military Justice changes, regulatory changes, funding
requirements, new positions, so that we can say in Congress we
have done everything within our power to help you do a job that
needs to be done and, quite frankly, has to be dealt with more
seriously. So if you could do that in the next week or 2, we
would appreciate it.
Senator Webb brought up the conflict between the Reserve
component and Active Duty component in the Air Force. I just
want to say I have not been visited by anybody from the Air
Guard to tell me what to do or not do about the proposed force
structure. I have decided that on my own, right or wrong, that
5,000 out of the Air Guard and Air Reserve and less than 1,000
out of the Active-Duty Force is probably not the right mix.
Some of the airframes that we will be retiring--I am not so
sure that is wise. In a down-sized world, you have to have the
right mix of Active Duty, Air Reserve, and Air Guard personnel.
The Council of Governors entity--what is the latest on
that?
Mr. Ginsberg. Sir, I think you have received----
Senator Graham. Yes, I think we got it yesterday.
Mr. Ginsberg.--some correspondence, but their proposal from
Secretary Panetta is basically to put back 24 C-130 and about
2,200----
Senator Graham. Right.
Mr. Ginsberg. Sir, if I could just talk about that.
Obviously, we talked about hard choices in my opening
statement. This is, of course, one of the many hard decisions
that the Air Force had to make. We had a new Strategic Guidance
that came from the President that talked about being more
flexible, agile, told the Air Force that we were going to have
a very high operational tempo over the long term.
At the same time, we had the BCA, $487 billion off the DOD
top line over 10 years. For the Air Force, that meant about $54
billion over a 5-year period over our FYDP.
So in order to meet the strategy and to be responsive with
the limited resources, we had to feed in overseas presence. We
had to maintain rotational demand and make sure that the
operational tempo was manageable across not just the Guard and
Reserve and Active. So we were really concerned about balancing
the budgets on the backs of our people.
Senator Graham. I got you. I met with General Breedlove and
Secretary Donley and had a real good discussion about what went
into the decisionmaking process.
The question for me and I think Members of Congress is $487
billion, given the threats we face--is that too much? I think
certainly we need to do north of $400 billion, but when it
comes to the Air Force, the Reserve component got hit pretty
hard.
This Council of Governors negotiation, I think, is an
appropriate thing for you to be doing because they are affected
by the decisions. Hopefully, we can find some compromise that
people will feel comfortable that we have the right mix
particularly in the Air Force. I do not think it is really a
concern in the other Services.
But my final question is as we go forward in a down-sized
environment of having to reduce the military, the Army by
80,000, what should the Nation know about future conflicts in
terms of how we meet future land engagements? Hopefully we do
not have another Iraq, Afghanistan war anytime soon, but the
possibility of a large land force being deployed is not unheard
of or impossible to imagine in the future.
General Odierno told the Appropriations Committee that if
we had another Iraq-like conflict where you had a large number
of forces deployed over a fairly significant period of time,
that with the reduction of Active-Duty Forces of 80,000, that
50 percent of that combat power and support power, personnel,
would have to come from the Reserves and the Guard. Does that
surprise you, Secretary Lamont?
Mr. Lamont. Not greatly. Clearly we are going to be in need
of a significant operational Reserve. To the extent that we
have the trained and ready forces to support a smaller Active
component, it is absolutely essential.
Senator Graham. The only reason I mentioned that is, I
think, that probably is true, and that does mean the Air Guard
and the Air Reserve who do the fighting and the refueling and
the transport--we have to look at the Guard and Reserve anew.
If our Active Duty component is going to be reduced to the
point, at least on the Army side and probably to the Air Force
side too, where the next major engagement will be one out of
two people will be a Guard member or a reservist for a very
long period of time, we will have to come to grips with that as
a Nation. Is that where we want to go? If we want to go, we
will have to plan for it because I do not think anyone has ever
planned for that before.
Mr. Lamont. I think we have to be very careful because as
we reduce the Active component of the Army, we may very well
find it necessary to shift further capabilities into the Guard
and Reserve. If we are going to do that, then we better make
sure they are trained and ready to go. So as we get into the
budget process, we have to ensure from our standpoint that we
have sufficient funds for not only full-time support to assist
the Guard and Reserve, but to also have the training monies. We
are very good right now on the equipping level, but we are a
little concerned that we have sufficient and adequate funding
to train them at the readiness level that we know we will need
to do.
Senator Graham. Thank you. Mr. Chairman.
Senator Webb. Thank you, Senator Graham.
Just as an aside on your very important question, when I
was responsible for the Guard and Reserve programs in the 1980s
before this current evolution that we see in Iraq and
Afghanistan, the way that the total force was designed at that
time was approximately half of the combat support and about
two-thirds of the combat service support, as I recall, in the
Army was in the Guard and Reserve. They wanted to keep the
immediate deployers, the combat units, fully manned up to, I
think, 18 divisions at the time. We are probably going to end
up with a similar formula as we draw down.
General Bostick, what was the Army's Active Duty strength
on September 11? Do you recall? The point being, just to get to
it, is that the number you are going down to now is slightly
above where it was on September 11. Is that not correct?
General Bostick. Yes, Senator. It was about 482,000-
483,000. We are going to come down to 490,000.
Senator Webb. Are you comfortable with that number? Is the
Army comfortable with that number?
General Bostick. I think, Senator, given the strategy that
has been laid out, we are comfortable given the assumptions
that we can make. We are never very good in the assumptions
that we make about the future, but given the assumptions that
we have made, given the strategy that we have outlined, we are
comfortable that if we stay on the ramp that we are on in terms
of drawing down the Army end strength, that we can do this in a
reasonable way and take care of soldiers and families as we
come down and still meet the missions that we have been asked
to do.
Senator Webb. Thank you.
Senator Ayotte.
Senator Ayotte. Thank you, Mr. Chairman.
General Bostick, if I can just follow up on the end
strength reductions on a couple of different fronts. First of
all, with the 72,000 in end strength reductions in the Army,
how much--call it what you want, how much latitude did you
build in there? How much contingency did you build in there?
Where are we in terms of being on the edge of a position where
we could put ourselves in a place where we would hollow out our
force? As we think about 72,000, how much did we build in there
that we may have made a mistake in terms of future
contingencies that we are asked to respond to?
General Bostick. From an operational standpoint, Senator, I
would say again, given the strategy that has been outlined from
the President, we look at that strategy, develop a force
structure, and then our job is to man that force structure. So
based on the strategy and the assumptions that go into that
strategy, if we can stay on the ramp that the Secretary and the
Chief have asked us to stay on through the end of 2017, there
will be risks there but we believe we have mitigated the risk
as best we can.
Where we can get hollow is in a number of areas. A lot of
folks think about hollowness of a force in terms of people. But
the Chief and the Secretary have said that they need a balanced
force, and we are not going to retain force structure to hurt
ourselves in readiness, and readiness could be in training
readiness, it could be in the quality of life for our soldiers
and families, it could be in modernization. So currently the
biggest portion of our budget, 45-46 percent of our budget, is
in personnel and it is in manning. So we have put the risk in
other areas beyond personnel.
Senator Ayotte. What are our current dwell times and where
would the end strength reductions--where will we be with dwell
times? Also, can you tell me what the dwell times are in
particular for the military occupational specialties?
If what you have told us thinking about we have an
unanticipated contingency because, as you have noted, we have
been particularly bad at predicting our next conflict, where
does that bring us in terms of needing to reverse the Army's
end strength reductions?
I know that is a series of questions, but if you can help
me where we are with dwell times, where does this bring us with
the end strength reductions. It is one of the concerns I have
about the readiness of our forces.
General Bostick. The dwell times--and it is a difficult
question to answer simply because dwell is an individual
metric. If you add it all up, when I testified last year, the
dwell was about 1 to 1.5. Today it is about 1 to 2. But there
are MOSs like our aviators, our infantry, and those low-density
MOSs that have much lower dwell times. It varies on grade. So
if you are a young junior enlisted, then your OPTEMPO and your
dwell is lower than a senior officer or a senior non-
commissioned officer (NCO). But if you add it up across the
Army, it has been a long time that it has taken a reach of 1 to
2 dwell, but we are there now except for some of the key MOSs
that I talked about later.
We are very concerned on end strength as we come down. If
we come out of Afghanistan as planned in 2014, that is when the
majority of--our bigger end strength reductions will happen in
2014 and beyond. So the temporary end strength increase of
22,000 that Congress and the Secretary of Defense have
authorized us to have is helping us meet the demands of our
deployers. So we have no issues with meeting our deployer
strengths at their late arrival dates, have had no issues with
ensuring that they are able to have end strength in addition to
compensate for their disability evaluation system, the soldiers
that are involved in that. So from an end strength perspective
and the glide path that we are on, I feel fairly comfortable as
long as we are able to maintain the Overseas Contingency
Operations (OCO) dollars. Everything above 490,000 is not in
our base. It is an OCO. So that is something that we have to
fight for each year.
In terms of your last point on reversibility, we have asked
Congress for the ability to increase the affiliation bonus from
Active component to Reserve component from $10,000 to $20,000,
and we think that will allow us to put more of our NCOs and
officers that are leaving the Active Force into the Reserves.
What the Chief and the Secretary have asked us to do is put
some of our young captains and senior NCOs in drill sergeant
status and recruiting, more of them in those positions and more
on the platform in our institutional Army, if you will, so that
if we had to grow the Army quickly, the part that we cannot
grow is our mid-grade officers, our mid-grade NCOs. So if we
have them in some of our school locations where we have pulled
them out or converted it to civilian positions, we would have
some flexibility to grow the Army.
Senator Ayotte. How many are going to receive involuntary
termination in terms of officers and NCOs with the drawdown,
the 72,000 drawdown?
General Bostick. I do not have a specific number on that.
We have asked Congress for the authorities to have involuntary
separations. There will be some officers and there will be some
very good NCOs that will want to stay in the Army and will
probably not.
What the Secretary of the Army and the Chief have said is
that is our last resort. They want to do this without
involuntary separations. Also on the voluntary separations like
we had in the 1990s, we open it up to everyone, and a lot of
our very best folks would leave.
We think we can manage it, but there will be some
especially in the 2014-2015 timeframe that on this ramp will
have to leave by other than natural causes.
Senator Ayotte. General, I would really very much
appreciate if you could get us an estimate of how many
involuntary terminations there will be both in the commissioned
and then the NCOs.
Also, I think it is really important for people to
understand, as I understand it, that some of those people that
are going to get involuntary terminations have done multiple
tours for us in these conflicts that we have been fighting.
Mr. Lamont. Could I just very quickly address a couple of
your issues? You have mentioned the dwell time, but I want to
let you know, we are moving our deployment cycle down to a 9-
month cycle. So we hope that will help reduce some of our
stress on the force and maybe even eventually, as we reduce in
Afghanistan, our dwell time will then rise.
As you say on the hollowing out of the force and our
concern with our assumptions, the problem is the enemy always
gets a vote. We never know what the enemy is going to do. We do
not know what contingencies are going to arise, and we must be
extremely careful in how we plan for reversibility and
expandability as necessary.
Just on some of the numbers, I hate to throw out numbers,
but I have seen numbers that will approach in the enlisted
category perhaps as high as the mid-20s, 23,000, 24,000, and on
the officer contingent--again, these are very rough numbers and
all based gain on assumptions and attrition rates, but officers
may go up to 4.5 to maybe 5,000.
Senator Ayotte. That is a very significant number for many
who have done multiple tours for us. So I think the American
people need to understand that in terms of some of the choices
that we are making.
I very much appreciate all of your being here. I have some
follow-up questions that I will probably submit for the record
on other issues. Thank you.
Senator Webb. Thank you, Senator Ayotte.
Senator Blumenthal.
Senator Blumenthal. Thank you, Mr. Chairman.
Thank you all for your excellent work in a time of great
challenge, and thanks to all the men and women who serve under
you.
I have some questions that really relate to the
responsibilities that will be increasingly important placed on
our Reserve and National Guard and in particular on the
transition assistance that we give them as they come, many of
them, off Active Duty to go into the Reserve, which has been a
focus of mine, and also on the employment opportunities once
they return to civilian life.
I am troubled by reports--and you may want to comment on
them--that there are instances of discrimination. I do not know
how to put it any more politely, but discrimination against
reservists or National Guard because of the possibility that
they may be deployed and therefore unavailable in their
workplaces, number one.
Number two, whatever transition assistance we can give them
while they are in the military but also afterward when they are
in civilian life, a Transition Assistance Program (TAP) type of
assistance. I know that many of the Services--I am most
familiar probably with the Marine Corps and what it is doing to
expand the TAP.
I would ask you to comment on those areas of transition
assistance and employment opportunity when our Reserves and
National Guard come off Active Duty and also the kinds of help
we are giving to our veteran services.
Secretary Ginsberg?
Mr. Ginsberg. Senator, thank you. There are a couple issues
there that you really raised that are very critical for our Air
Force and our future. There is a very key readiness concern
there that if our Guard and Reserve airmen do not feel like
they have the support of their employers, they are not going to
be raising their hands to volunteer for the missions, whether a
pop-up contingency or some type of steady state action. So we
need to make sure, in addition to the family support and the
direct support we provide them, that we have the backing of
their employers. So this is absolutely vital for our Air Force,
and what we have been trying to do is communicate across the
force to the families, to the employer partners that we are
going to really need our Guard and Reserve over the long term.
Of course, if an airman does have a problem, we encourage
them to file a real complaint, obviously, to be investigated by
the Department of Labor. So very vital there.
But the other issue there, sir, is the one you mentioned
about the transition support, and that is a realm where the
President has made it a very top priority. We are going to be
working to make TAP available to our Guard and Reserve in a way
that really has not been available to them over the long term.
So any Guard and Reserve member who goes on a deployment over
180 days is going to be eligible for a full range of transition
programs, counseling, resource databases. That is all going to
be put at their fingertips. But we are moving out on that and
it is a key concern to us.
Senator Blumenthal. Thank you.
Secretary Garcia?
Mr. Garcia. Senator, thank you for your question.
We too have heard anecdotally accounts of our reservists
having difficulty in employment and coming back to returning
employers. We have run each case to ground.
But I think I would have to point out as well the other
side of that coin, that on the Navy side alone, we have
mobilized 67,000 reservists for year-long mobilizations over
the course of this war. The Navy reservist model is a little
bit different. They tend to follow their Active Duty service.
They tend to be a little bit older demographic. The
overwhelming evidence is that supporters, especially against
the backdrop of a struggling economy, with these Navy personnel
have accommodated in many cases voluntarily paying the
differential between their mobilized salary and that which they
have made in their civilian capacity, and it is real
patriotism.
Our Marine Reserve model is a little bit different. Those
cases that have run up against the regulations and the law, and
those cases--we have run each one to ground.
Secretary Ginsberg mentioned the work we are doing with our
counterparts at Labor, OMB, and the Department of Veterans
Affairs (VA) in fleshing out the details of the Veterans
Opportunity to Work to Hire Heros Act of 2011, known as the
``VOW to Hire Heroes Act.''
But above and beyond that, the TAP reform that both
Services are doing, initiatives like the American Corporate
Partners, where heads of a stunning number of companies across
America have reached out to serve as mentors for our separating
personnel as they go through TAP. Within the Department of the
Navy, every separating member, to keep them on the team to the
maximum extent possible--for example, at Naval Sea Systems
Command which is our largest civilian hiring entity, we set a
goal of hiring 365 departing members last year, one a day, and
we have hired 500. We have set a goal for 300 this year.
So the transition process is receiving full priority.
Senator Blumenthal. I do not mean to disparage employers in
general. I think that the instances of alleged discrimination
or non-hiring are a small minority, but as Secretary Ginsberg
said, they create disincentives that may have a ripple effect
or ramifications beyond that. I agree with you. My impression
is the vast majority of employers want to do the right thing.
I am very interested, I know Senator Graham has asked about
sexual assault, and I commend the Secretary of Defense and all
of you who have taken a really increasingly hard line on that
issue. But I want to ask about an unrelated issue--and I would
like to follow up in questions because I want to give my
colleagues a chance to ask some questions and that is, suicide
prevention. How are we doing? Any progress to report? Any
comments for us?
Mr. Garcia. I had the opportunity to respond to Senator
Graham's question earlier. General, do you want to start this
one off?
General Milstead. Of course, one is too many, and nobody is
dancing in the end zone, but we are doing better. If you look
at the numbers, calendar year 2009 was the dark year for us. We
were at 52. The next year we came down to 37, and this past
year we were at 33. So the glide slope is right, but again,
until you get a zero--and so far this year we are at 12, a
little bit ahead of where we were last year, but I am not sure
what that means.
We continue to work this. In the Marine Corps, we have
given this to our NCOs. We continue with our training. Now we
have a training program for our junior marines, for our NCOs,
and then for our young officers and staff NCOs, our platoon
sergeants and our platoon commanders. But the NCOs--those are
the guys that have their fingerprints all over the guys and
gals, where we see this, the young ranks.
So we are optimistically hopeful, but this is something
that we will continue to work at until we have zero. As you are
well aware, Senator, this is a national problem. It is just not
within the military. But it has the Commandant's attention. It
has all the Services' attention.
Admiral Van Buskirk. Senator, I would like to add we are
also putting more resources towards it, and just recently we
have added--we have operational stress training teams out in
the fleet concentration areas that can be out there among our
sailors, our men and women, out there so they can help train
our leadership to identify the signs of increased stress with
our servicemembers and then additionally be a resource that
they can actually go on board the ships to help counsel our
people as well.
24/7 hotlines as well that we are manning to ensure we have
the people available to counsel at any time a person has some
indication that they may have some problems.
So I think adding that and adding additional leadership
focus to this is critical. But certainly we do not like the
trends we are seeing across the Services and we want to
continue to combat and put the resources against it, sir.
Senator Blumenthal. Thank you.
Mr. Garcia. If I could just punctuate that point, Senator.
I think in some part what makes this such an agonizing problem,
each of us reviews the operations reports each morning from the
night before, and to try to discern a pattern in these cases is
so difficult. Across the Department of the Navy, we will
typically see about five and a half suicide events per day,
that is, ideation, attempts, or in the worst case, the act. It
is not rare to have days, five and a half more incidents, where
the members involved have never deployed. It is difficult to
make the correlation, the formal link, between the operational
tempo and the deployment piece.
It took me a while to get to this point. What I take some
comfort in is that an ideation event, if it does not culminate
in an attempt, or, God forbid, the actual act, I want to
believe is a sign that we are making progress in that a sailor
or marine knows the resources to go to. His shipmates, his
fellow marines, are recognizing the telltale signs and are
reaching out and getting information to the right people.
Senator Blumenthal. Thank you, all. I really appreciate
your excellent answers. Thank you.
Thank you, Mr. Chairman.
Senator Webb. Thank you, Senator Blumenthal.
Senator Vitter.
Senator Vitter. Thank you, Mr. Chairman, and thanks to all
of you for your service. In that vein, by the way, we just had
Navy Week in New Orleans associated with commemoration of the
War of 1812, and I got to meet a number of servicemembers. They
happened to all be Navy. But I tell you what. We have a lot of
problems and a lot of challenges, but it is not the young
people in the military. So thanks for your leadership and
thanks for them.
I have some questions focused on some concerns I have with
the cuts and proposals as it affects Louisiana. Let me put it
in context. Look, these are very tough budget times. There are
going to be a lot of decisions that are not popular to
different States, and we all get that.
I think what frustrates me and some other Members are two
things.
Number one, in a lot of these cases, we are not given and
we do not see, even after digging, a clear metric and a clear
justification and rationale.
Number two, in a lot of these cases, I see jointness going
out the window at a time when greater jointness, including
greater efficiency, is more necessary than ever. In some of
these decisions, I personally see the stovepipes hunkering down
and sacrificing jointness and through it, greater efficiency.
So that is the context of some of these concerns and
questions.
Specifically the Air Force--and I will ask you, Mr.
Secretary--is recommending to cut out the 917th Fighter Group
at Barksdale, the A-10s there. Now, when we looked into that,
when we asked the folks on the ground in Louisiana, including
the Army folks at Fort Polk who they help train, those folks on
the ground said that about 70 percent of all of the joint Air
Force/Army training at Joint Readiness Training Center (JRTC)
at Fort Polk use that 917th Fighter Group during the Green Flag
East exercises. So there was tremendous appreciation of that
participation in that joint training.
When we asked the Air Force--I just got a letter from the
Secretary, and his response was that the same 197th group has
only fulfilled its requirement, meaning that training, once
over the last 3 fiscal years.
Now, this is not a 10 percent difference of opinion. This
is different planets, and so it is very concerning to me when
you get wildly different statistics and numbers behind a
decision. How am I to reconcile those wildly different
statistics?
Mr. Ginsberg. Senator, I certainly will reconcile the
numbers for you. We will go back and validate and we will
certainly get back to you on that.
I will say a couple of things. One is on the decision to
retire the A-10s, that was based on our force planners'
assessment of what the future demand was going to look like,
what was the range of scenarios that the Department of the Air
Force would have to support the joint war fight in and what was
the overall capacity of aircraft that were needed for that. A
decision was made to take down more A-10s than F-16s because
the F-16 is a multi-role aircraft versus the A-10 which is more
single purpose. So that was the decision to take down--that was
the approach to take down the capacity.
In terms of where the specific units were in the
distribution among the Guard and Reserve, it was similar to
what I talked about. The thought was similar to what I
mentioned before, that in order to maintain the overseas
presence and to maintain an acceptable level of operational
tempo across our force, to do more of those reductions in the
National Guard and Reserve. So that was the overall thought
process there.
Sir, I would just like to highlight that. If there is a
unit at JRTC that is in the box, ready to go deploy, whether it
is the 917th or an A-10 unit from Moody Air Force Base in
Georgia, that is a valid requirement, and in the same way that
the Air Force plugs in with its Service counterparts down
range, it will do so here in order to make sure that our
comrades are ready to go and that we can train like we fight
every day. So that is something we will be working through.
But, sir, I do want to make sure we are providing you all
the information that you need.
Senator Vitter. Certainly, I would like that follow-up and
reconciliation.
More broadly we have asked for specific savings numbers and
analysis for that, as well as Louisiana National Guard 259th
Air Traffic Control Squadron from DOD. The only thing we have
gotten are conclusory statements or the decision or a letter
with a paragraph explanation. We have constantly, many times
over, asked for a specific cost savings assessment. If you can
get that to us more broadly.
[The information referred to follows:]

The new Defense Strategic Guidance states that U.S. forces will no
longer be sized to conduct large-scale, prolonged stability operations.
Analysis based on scenarios consistent with the Strategic Guidance
resulted in a reduced requirement for tactical combat aircraft and a
preference for multi-role fighters to provide the most flexible
capability within each scenario. As a result, A-10 retirements were
selected in lieu of other combat aircraft and the Air Force made the
difficult choice to retire five A-10 squadrons comprised of 102 A-10
aircraft. Previous reductions in fighter force structure shifted the
Total Force ratio toward Reserve component forces, and Air Force
decisions in the fiscal year 2013 President's budget request (20 A-10s
from Active Duty, 61 from the Air National Guard, and 21 from the Air
Force Reserves) rebalanced that ratio to create a more sustainable
force structure over the long term.
Before I explain how we determined where to take the A-10
reductions out of the Air Force Reserve, I'd like to clarify the
discrepancies you noted in the A-10 taskings for the 917th Fighter
Group and their support of the Joint Readiness Training Center (JRTC)
at Fort Polk. The Air Force has formally tasked the 917th Fighter Group
one time through the Air Combat Command Consolidated Planning Schedule.
However, due to their proximity to Fort Polk, the 917th Fighter Group
routinely accepts ad-hoc requests from the JRTC for close air support
training outside of Air Combat Command Consolidated Planning Schedule.
The Air Force Reserve reduction of 21 A-10 aircraft required a
decision between two unit-equipped bases, Barksdale and Whiteman AFB.
The Air Force Reserve employed four realignment strategy principles
that influenced the selection of specific locations for aircraft
reductions. It first ensured aircraft reductions would not negatively
impact operational support to the combatant commands. Second, it
considered if force structure movements would create any new Air Force
bills. Third, it attempted to minimize risk by optimizing crew ratios
to exploit expected increase in mission capability rates. The final
principle considered locations that continued to have an Air Force
mission due to the presence of another Air Force component. In
addition, although not stated as one of the four guiding principles,
our sphere of influence also factored in and allowed for maximum
reversibility at minimum cost.
The decision between Barksdale and Whiteman Air Force Base (AFB)
Reserve A-10 units was difficult, as both units are tenant
organizations on Active Air Force installations, have excellent
recruiting capabilities, sound track records of performance, and
provide support to joint warfighting and training. Ultimately, the Air
Force Reserve determined that the B-52 classic association at Barksdale
AFB would be best positioned to absorb some of the adverse impact of
closing the A-10 squadron at Barksdale. Conversely, the A-10 unit at
Whiteman AFB is a stand-alone tenant unit. Closing the Whiteman unit
would make it difficult to absorb the personnel. The Air Force will
continue to provide support to joint warfighters at the JRTC through
the Air Combat Command Consolidated Planning Schedule system.
By divesting the A-10 squadron at Barksdale AFB, the Air Force
expects to save approximately $336 million over the Future Years
Defense Program. The savings account for operations and maintenance
personnel, flying hours, aircraft modifications such as wing
replacements, and depot sustainment funding.
The decision to divest the 259th Air Traffic Control Squadron
(ATCS) was based on the lack of an Air National Guard flying mission
assigned to the Alexandria International Airport. The cost savings to
the Air Force will include cost avoidance for the purchase of a next
generation deployable radar and deployable instrument landing system as
well as non-flying and depot level repair cost savings that exceed
$500,000 per year. Additionally, the manpower saved by divesting the
ATCS allowed the Air National Guard to realign the corresponding end
strength towards bolstering readiness in areas such as aircraft
maintenance, intelligence, surveillance, and reconnaissance, and
domestic operations.

Senator Vitter. On the 917th, if it is true that they have
participated in a big number, a majority--folks on the ground
say 7 percent of that training at Fort Polk--what will be the
replacement for that type of training?
General Jones. Senator, I think it is important that when
they talk about what will be the replacement, not that they ask
for what type, what specific aircraft, but what capability.
That is where we were stuck with the tough decision to have to
eliminate single capability aircraft to go with multi-role
aircraft so we could bring in something that could do more than
just one thing. So what we would be providing them is a multi-
role aircraft that could perform the same function the A-10 was
performing.
Sir, if I could just go back and comment on one thing you
said earlier about jointness, the question of Services
hunkering down and trying to back away from jointness--I really
do not agree with that. I would have to tell you that having
served in the U.S. European Command when I was a younger
officer, having been the J-1 at CENTCOM during much of the
conflict when General Abizaid was the commander, we are all so
bought into jointness that it would be impossible for us as a
department to walk away from how we fight now. We fight as a
joint, integrated team. Our leadership teams are integrated.
Our relationships across the Services have been solidified, and
that is the only way we will be going to war in the future.
Senator Vitter. Okay. To follow up on that thought,
regarding this A-10 decision, let me ask your Army colleagues
when in the process was the Army consulted regarding the impact
of this A-10 decision? How early or late and who was consulted
about that on the Army side?
Mr. Lamont. I frankly cannot respond to that. I will have
to take that for the record and find out. I assume it would be
within our G-3 staff, our training and operational concerns.
General Bostick. Senator, we will go back and find out, but
I would agree with my Air Force colleague. We will never walk
away from jointness, and any opportunity that we have to train
is going to be a good opportunity for the country. So just like
we cannot walk away from the Reserve component, we cannot walk
away from jointness and the combined nature of how we fight is
the only way that we can do this.
Senator Vitter. If you would follow up because I think it
would be an interesting test of this debate to see when in time
and at what level the Army was actively in a meaningful way
consulted on this decision.
Mr. Lamont. We will find out.
Senator Vitter. Okay. I will look for that follow-up, and I
appreciate it.
[The information referred to follows:]

The Air Force did not consult with the Army regarding moving the A-
10 mission out of Barksdale. The Air Force made difficult choices to
closely align with the new Department of Defense strategy. In doing so,
it favored aircraft with multi-role capabilities versus those focused
on niche missions. The Air Force Reserve was faced with a fair share
reduction of A-10 fleet and had to make a decision between two unit-
equipped bases, Barksdale and Whiteman Air Force Base (AFB), to reduce
21 A-10s. Both units are tenant organizations on Active Air Force
installations, have excellent recruiting capabilities, sound track
records of performance, and provide support to joint warfighting and
training. The Air Force Reserve determined that the B-52 classic
association at Barksdale AFB would be best positioned to absorb some of
the adverse impact of closing the A-10 squadron at Barksdale.
Conversely, the A-10 unit is a stand-alone tenant unit on Whiteman AFB.
Closing the unit would make it difficult to absorb the personnel.

Mr. Ginsberg. Senator, could I just say that during the
development of our budgets, each Service's plan is vetted
through the other Services, and of course through our Office of
Secretary of Defense overseers. So there are smaller forums and
larger forums. We have our programmers, plans, and programs. We
call them the ``eights.'' They regularly review the budget
submissions towards the tail end, once each Service is
developed, and then our budgets go through something they call
the Defense Management Action Group, and that is where the
Services can look before it is submitted to Congress, before it
goes to OMB. Every Service gets to peer into what each other
Service is doing. Also, there are lots of communications back
and forth where we highlight some of the big issues that are
going to be coming forward in the year ahead.
Senator Vitter. Secretary Ginsberg, again on the Air Force
side, Global Strike Command is a relatively new command at
Barksdale.
Senator Webb. Senator Vitter, I am going to have to
interrupt you because we are on a 7-minute clock, and a vote
has been called. I know Senator Brown wants to ask a question.
You could submit that question for the record as can anyone
else on the subcommittee before close of business tomorrow
night.
Senator Vitter. I will submit that for the record. Thank
you, Mr. Chairman.
Senator Webb. Senator Brown.
Senator Brown. Thank you. I will be brief. Thank you.
How much time do we have before the vote?
Senator Webb. The vote has been called.
Senator Brown. I will be done long before then. Thank you.
General Milstead, first of all, I am encouraged to hear
that General Amos is opening up some slots for the training of
women at Marine Corps Infantry School right down the road in
Quantico. I want to commend him for that.
I read a quote from General Gray who said every marine is
first and foremost a rifleman. All other conditions are
secondary. I agree with that also. I am a strong proponent of
women in combat, providing they fit the qualifications.
Where do you think the perception comes from that somehow
female servicemembers could, ``compromise the mission''? Have
you heard that? Do you think it is relevant? Do you think it is
something that is being handled appropriately?
General Milstead. Sir, again, I do not believe the Senator
was in here when I first responded to Senator Webb's response
that this is research so that the Commandant can make an
informed recommendation to the Secretary.
But we have approximately a little over 13,000 women
marines. I have been in combat twice with them. They are in
combat. That is a misunderstanding of a lot of people. Our
women are in combat. I am a Cobra pilot. We have women Cobra
pilots. But we are talking a difference between closed and open
MOSs. Our women marines, just like our women sailors and our
women soldiers and our women airmen, make a great contribution
and have made a great contribution, and we have no inclination
at all in turning our back on that.
Senator Brown. It means a lot. I appreciate the effort and
I will convey that to General Amos.
I know that Senator Graham and I and others are deeply
concerned about the Air Force, and I think the Army has struck
a good balance between Guard and Reserves and regular Army. The
Air Force--I have to tell you I am not quite happy with the way
things are shaking out. I feel that the Guard and Reserves are
getting the short end of the stick. A lot of the input that has
been given, I feel, has fallen on deaf ears.
I am deeply concerned about the fact that the Air Force has
taken all the toys and is holding them and then really having a
difficult time sharing and especially because I feel we get a
very good value for the dollar in the Guard and Reserves
especially in Massachusetts. Some of the units are at 70-80
percent mission-capable and yet we are going to take away
that--destroy some of those teams and shift and adjust. It is
deeply, deeply concerning to me. So if we were to make these
irreversible cuts to the Guard based on disputable facts or
flawed assumptions, could that be reversed? Could those actions
be reversed, do you think?
Mr. Ginsberg. Senator, we really have struck a balance,
given again the strategic demands----
Senator Brown. You have been given guidance from Secretary
Panetta, but then you have gone and done it how you felt it was
appropriate. Is that a fair statement?
Mr. Ginsberg. Yes, sir.
Senator Brown. The Army has done the same thing, but they
have a different model.
Mr. Ginsberg. Sir, we just looked at what the demands were
going to look like over the future, what were the war plans
that we would have to fulfill, what are the rotational
requirements, and then we had to, again, balance those
considerations with the fact that there was a very significant
change in our resourcing over the fiscal year plan.
Senator Brown. Yes, but you are going to get a better value
for your dollar with the Guard and Reserves. You know that the
OSD Reserve Affairs report basically said the method of
calculating the baseline costs and capabilities of the Guard
and Reserves--without having the appropriate information, is it
possible the Service Chiefs are assuming key data that would
show how to preserve the greatest amount of military capability
at the lowest cost or not?
Mr. Ginsberg. Sir, there has been a lot of discussion about
the costs, of course. If there is a way to do a mission more
cheaply and to get it done, we are going to do that, sir. The
challenge has been when you are using the Guard and Reserve in
a very high operational intensity, that some of the cost
benefits become more ambiguous.
Senator Brown. But if you shift some of the Active
components to some of the Reserve bases like has been done in
the past, you are going to get that good value for the dollar
and also stretching out the mission.
Mr. Ginsberg. We foresee a very intense deployment schedule
for the Guard, Reserve, and the entire force, and like I said,
as you are using them more intensely, again the cost
differences among the various components become more ambiguous.
In the meantime, sir, we also have to be, of course,
concerned about what is the demand that is placed on the force
and what is the stress level that we put on everybody. We are
concerned that if we get these balances wrong, that a member of
the Guard or Reserve is going to have to deploy at an intensity
that will just be unacceptable to them, and our airmen are
going to walk with their feet not just on the regular Air Force
side but across our entire force.
Senator Brown. I do not know if I agree with that
assumption. I have been in 32 years. I have met with all the
Guard and Reserve air components in Massachusetts and
throughout, and I will tell you what, this conversation is not
over. If it is not going to be addressed by you guys keeping
and staying at the table, we will handle it in committee and we
will do it for you. I do not know how else to say it. We will
make sure we play a very active role.
Unfortunately, we do have to go vote, but I do have a
question or two for the record I will submit.
Thank you, Mr. Chairman.
Senator Webb. Thank you, Senator Brown.
Again, all members of the subcommittee will have until the
close of business tomorrow to submit any further questions for
the record.
I thank all of you for your testimony and for your
continued service to our country.
This hearing is adjourned.
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Kelly Ayotte
integrated disability evaluation system
1. Senator Ayotte. Secretary Lamont and General Bostick, while
speaking at the Warrior Care and Transition Program Training Conference
in Orlando, Florida, in 2011, the former Vice Chief of Staff for the
Army, General Chiarelli, said that the current Army Disability
Evaluation System (DES) is ``complex, disjointed, hard to understand,
and it takes too long to complete.'' How long does it take for the
average soldier to complete the DES process?
Secretary Lamont and General Bostick. Active component soldiers who
completed the Integrated Disability Evaluation System (IDES) in April
2012 averaged 396 days from referral through notification of the
Department of Veterans Affairs (VA) benefits decision, Reserve
component soldiers averaged 401 days.

2. Senator Ayotte. Secretary Lamont and General Bostick, what is
the Department of Defense's (DOD) goal for completing the DES process?
Secretary Lamont and General Bostick. The goal for completing the
IDES is 295 days for Active component soldiers and 305 days for Reserve
component soldiers, measured from date of referral to the IDES through
notification of the VA benefits decision.

3. Senator Ayotte. Secretary Lamont and General Bostick, how long
does this process take and why is it taking so long?
Secretary Lamont and General Bostick. Active component soldiers who
completed the process in April 2012 averaged 396 days and Reserve
component soldiers averaged 401 days. The Army is enduring the effects
of 10 years of war and lacks sufficient capacity to efficiently process
the increasing number of soldiers now in the IDES.

4. Senator Ayotte. Secretary Lamont and General Bostick, how many
soldiers are currently enrolled in the Army's DES?
Secretary Lamont and General Bostick. As of April 23, 2102, there
were more than 24,000 soldiers enrolled in the DES, including over
18,800 who are enrolled in the IDES and over 5,100 who are enrolled in
the legacy DES.

5. Senator Ayotte. Secretary Lamont and General Bostick, would it
be correct to say that as these soldiers progress through the 400-day
process, they are obviously nondeployable and count toward the Army's
overall end strength?
Secretary Lamont and General Bostick. Yes, these soldiers are
nondeployable and do count against the overall Army end strength. The
purpose of the DES is to maintain a fit and ready force. Soldiers going
through that process are being evaluated to see if they are fit enough
to continue to serve in the Army. Approximately 5 percent of those who
begin the process are deemed fit and continue to serve. The remainder
are evaluated for disability ratings and are separated.

6. Senator Ayotte. Secretary Lamont and General Bostick, what can
we do to fix this?
Secretary Lamont and General Bostick. The Army is aggressively
working to improve performance of the DES. We are currently
implementing a number of initiatives designed to improve the
performance, including: adding over 1,100 in staffing; publishing
guidance to standardize the process across the Army; enhancing our
training; and establishing procedures that will enhance the sharing of
information with the VA. However, the Army believes we need to
fundamentally change the DES; and remain convinced statutory reform is
the only way we can achieve a sustainable system worthy of the
sacrifices of our volunteer force in this era of persistent conflict.
The Army is looking at several different options to improve the
DES--one of which would be a process where DOD determines a disabled
servicemember's fitness for duty, and if found unfit, provide a
lifetime annuity based on the member's rank and years of service. The
VA would then establish compensation for service-connected injuries,
disease, or wounds. We believe this type of system would achieve an
average disability process outcome in less than 90 days: improved
readiness; reduced complexity; decreased impact on limited medical
resources; and less adversarial.

7. Senator Ayotte. Secretary Lamont and General Bostick, is part of
the problem the dual DOD/VA adjudication systems?
Secretary Lamont and General Bostick. The IDES was designed to
eliminate the duplicative elements of the separate disability processes
previously operated by VA and the military. It employs a model that
features a streamlined exam process using VA protocols and a single
disability rating to be issued by VA. One of the principal goals of the
new system was to ease servicemembers' transition to veteran status so
they can quickly access VA benefits to reduce the risk of financial
hardship. From this perspective IDES was successful.
IDES allowed for a move toward a single process with a single
examination and a single source for all disability ratings. However,
soldiers continue to receive two ratings. The Services can only
compensate for military unfitting (fit for duty) service-connected
conditions, while the VA compensates for all service-connected
conditions. This duality creates confusion, and the belief the Services
are not being loyal to or fair with servicemembers; it is also wasteful
and time consuming.
We need to move to a system where the Services determine a disabled
servicemember's fitness for duty, and if found unfit, provides benefits
based on the member's rank and years of service and let VA establish
compensation for disabling service-connected conditions. We believe
this type of system would achieve an average disability process outcome
in less than 90 days, improve readiness, while decreasing the impact
the system currently has on our limited medical resources. It would be
a less adversarial system.

8. Senator Ayotte. Secretary Lamont and General Bostick, could
these two systems be combined into one in order to streamline the
process, help our troops, and save taxpayers' money?
Secretary Lamont and General Bostick. The Army believes there is a
need to clarify the objectives of each respective system. The current
DES is over 60 years old and was designed for a draft-based military,
in an industrial/agricultural economy. Its focus on disability and
compensation reduces incentives or creates conflicting incentives to
participate in rehabilitation or to return to work and is not adequate
for the needs of today's professional all volunteer military.
The Army believes the system requires reform. We recommend a
simpler process where DOD determines a disabled servicemember's fitness
for duty, and provides benefits based on the member's rank and years of
service. VA continues to determine disability benefits as it does now
using one of its predischarge programs. We believe this type of system
would achieve an average disability process outcome in less than 90
days and ensure that VA benefits were available to soldiers immediately
after separation.

dwell time
9. Senator Ayotte. General Bostick, what is the impact on readiness
when there is insufficient time at home between deployments?
General Bostick. Over the past 11 years, the Army has successfully
satisfied the high demand for conventional ground forces throughout two
conflicts. The Army works hard at ensuring that our deploying units are
adequately manned and ready to meet operational demands. The price of
meeting the increase in the operational demand has significantly
stressed our military personnel and their families. To fully
reconstitute our units, soldiers and their families must be given the
time and resources they need to reintegrate and reverse the effects of
the sustained operational tempo. A study completed in 2009 confirmed
what we already intuitively knew: soldiers require more than 2 years to
fully recover, both mentally and physically, from the rigors of combat
deployment. The Army's goal is to achieve and maintain a dwell time of
at least 2 months at home for every month deployed for the Active
component soldier and 4 months at home for every month mobilized for
the Reserve component soldier.
The withdrawal of forces from Iraq will assist the Army with
restoring its operational depth and returning strategic flexibility in
our formations and among our leaders. In the second quarter of fiscal
year 2012, the median Active component Army individual boots-on-the-
ground (BOG):dwell reached the goal ratio of 1:2. The ongoing drawdown
of forces in Afghanistan will continue to improve the BOG:dwell ratio
of the force, and as dwell times increase, the Army will be able to
focus on sustaining the rotation rates of 1:2 as envisioned. This will
ensure the force's long-term health, and will, once again, allow the
necessary time to train units to perform missions across the full
spectrum of operations.

10. Senator Ayotte. General Bostick, what impact does insufficient
dwell time have on families?
General Bostick. Most families focus on the quality of the dwell
time rather than the length. But it does take time to adjust and become
reacquainted with what it's like to be together again. Soldiers'
reintegration with their families is an individual process. It is
important for soldiers to spend quality time with their families in the
reset period following deployment. With less dwell time, returning
members may not have enough time to reconnect with their families and
fit back into the home routine before they have to deploy again.
Children worry about the next deployment, which impacts their ability
to get to know their parent again. To help families with this process,
the Army is educating family members about reintegration, helping them
recognize changes in family structure and functioning, and the
importance of establishing expectations before the soldier returns.

11. Senator Ayotte. General Bostick, what impact does insufficient
dwell time have on the Army's ability to train for full spectrum
operations, including major combat operations?
General Bostick. The amount of dwell time required for a
redeploying unit to progressively build readiness for a broad range of
military operations (including major combat operations) depends on
complexity of the unit's design, functions, interaction with external
organizations, and degree the unit will be employed in harm's way or
employ deadly force. Whether or not dwell time is sufficient depends on
a number of factors, primarily how quickly the Army is able to reset
the unit with personnel and equipment and how much training resources
and venues are available to support the unit's progressive training
strategy. If dwell time proves insufficient for the unit to fully
prepare before expected to be available for contingency operations,
then the Army must accept either more training time or risk before
deploying the unit, as allowed by exigencies of the situation.
Risk associated with insufficient dwell time is somewhat mitigated
by developing unit leaders throughout their career in professional
military education and through participation in Army training venues
like Combat Training Centers; by providing training support
capabilities that allow unit components to sharpen skills using
virtual/constructive/gaming venues through iterative execution of
increasingly complex tasks, conditions, and enabler integration--
complexity which is simply infeasible to create for live training at
the unit's home station due to constraints on maneuver space, airspace,
joint/interagency/multinational availability; by training on
fundamentals first and progressively building the proficiency of
individuals, crews, sections, small units, then larger formations; and
by integrating adaptability into training, which enables a
professionally disciplined force to apply their mastery of fundamentals
to any assigned mission and adapt to circumstances. Units deploying
with insufficient dwell may not have had opportunity to perform as a
large formation, to fully integrate external enablers required of
unified operations, or to practice against the full arrange of threats
presented by contemporary operating environments.

12. Senator Ayotte. General Bostick, what are the Army's current
goals for dwell time between deployments for the Active and Reserve
components?
General Bostick. Because individuals follow a variety of deployment
patterns, we measure dwell as a ratio of time spent deployed (boots-on-
the-ground (BOG)) to time spent not deployed (dwell). Our near-term
goals are for Active component soldiers to have 2 months of dwell for
every 1 month deployed (a 1:2 BOG:dwell ratio) and for Reserve
component soldiers to have 4 months of dwell for every month deployed
(1:4 ratio).

13. Senator Ayotte. General Bostick, what military occupational
specialties and types of units are receiving the least time at home
between deployments?
General Bostick. Because individuals and units follow a variety of
deployment patterns, we measure dwell as a ratio of time spent deployed
BOG to time spent not deployed following the deployment (dwell). In
terms of this ratio, aviation units and aviation-related specialties
have been the most taxed. This is especially true among junior enlisted
soldiers and warrant officers, who have seen slightly more than 3
months of dwell for every 2 months deployed. Other units such as civil
affairs, intelligence, military police, psychological operations,
engineers, and special forces have also been heavily taxed and remain
just above the mandated 1:1 BOG:dwell ratio for units. However, the
soldiers in these units tend to have better median individual BOG:dwell
ratios than aviation soldiers, suggesting a wider variety of assignment
opportunities or partial-unit deployments.

14. Senator Ayotte. General Bostick, what are the current dwell
times for individuals with these specialties and for these types of
units?
General Bostick. Because individuals and units follow a variety of
deployment patterns, we measure dwell as a ratio of time spent deployed
BOG to time spent not deployed following the deployment (dwell). As
previously stated, aviation units and aviation-related specialties have
been the most taxed. This is especially true among junior enlisted
soldiers and warrant officers, who have seen slightly more than 3
months of dwell for every 2 months deployed, a 1:1.5 ratio. This ratio
is highly correlated with the unit ratios, as these soldiers do not
have many assignment opportunities outside of these units. More senior
noncommissioned officers and commissioned officers have been
experiencing ratios better than 1:1.8, largely because they have more
assignment opportunities.

15. Senator Ayotte. General Bostick, do you believe the Army should
be reducing its end strength before achieving its dwell time goals?
General Bostick. For the last several years, the Active Army has
enjoyed the benefits of a temporary end strength increase that was as
much as 22,000 soldiers above its 547,000 permanent end strength.
Because of this increase, the Active component was able to achieve its
median 1:2 individual BOG:dwell goal in second quarter of fiscal year
2012. With the expected decrease in demand for deployed forces, we do
not anticipate that the median individual BOG:dwell will worsen.

16. Senator Ayotte. General Bostick, if future unanticipated
contingency operations emerge and the Army's dwell time predictions
turn out to be too optimistic, at what point would you recommend
pausing or reversing the Army's end strength reductions?
General Bostick. Once the Army is no longer able to sustain the 1:2
BOG:dwell ratio assigned to it in the Guidance for Employment of the
Force, the senior Army leadership would need to assess the risk to the
force and recommend to the Secretary of Defense that he pause or
reverse the end strength reductions.

traumatic brain injury
17. Senator Ayotte. Secretary Lamont, Secretary Garcia, Secretary
Ginsberg, General Bostick, Admiral Van Buskirk, General Milstead, and
General Jones, can you give me a sense as to how many of your
servicemembers have suffered from a traumatic brain injury (TBI)?
Secretary Lamont and General Bostick. Since 2000, there have been
233,425 DOD servicemembers including 134,938 U.S. Army soldiers
diagnosed with TBI.
Secretary Garcia and Admiral Van Buskirk. From 2000 through 2011,
Navy has had 32,379 TBI cases among Active and Reserve sailors while
Marine Corps has had 33,989 such cases among Active and Reserve
marines. In 2011 alone, Navy had 2,825 instances of TBI while Marine
Corps had 4,747. Mild TBI accounts for approximately 77 percent of TBI
cases documented across the Services since 2000, and 84 percent of all
TBIs occur in garrison.
Secretary Ginsberg and General Jones. The Air Force accounts for 14
percent of the total TBI cases in the military, with 32,119 cases from
2000 through 2011 (deployed and nondeployed, all severity). There are
approximately 2,500-3,500 total cases per year, with the majority not
being associated with deployment. According to the Medical Surveillance
Monthly Report, there were 242 cases of deployment-associated TBI in
airmen in calendar year 2010 (0.56 percent of Air Force deployments).
Of the total cases, 81.8 percent were mild, defined by the duration of
alteration of consciousness, loss of consciousness, or post-traumatic
amnesia at the time of injury. As reported in the civilian TBI
literature, 85-90 percent of those who sustain mild TBI recover fully
within 3 months, often sooner. Early identification, education, rest,
and symptom management facilitate recovery. Those who sustain recurrent
concussions and/or have co-morbid conditions such as Post-Traumatic
Stress Disorder (PTSD) may take longer to recover.
General Milstead. The official TBI data for DOD is reported through
the Defense and Veterans Brain Injury Center (DVBIC). Current DVBIC
data indicate 233,425 total TBI cases throughout DOD from 2000 through
2011. In that same time period, the Navy has had 32,379 TBI cases
within Active and Reserve components, while the Marine Corps, Active
and Reserve components, has had 33,989 such cases. In 2011, the Navy
had a total of 2,825 TBIs while the Marine Corps had 4,747. Mild TBI
accounts for approximately 77 percent of TBI cases documented across
the Services since 2000, and 84 percent of all TBIs occur in garrison.

18. Senator Ayotte. Secretary Lamont, Secretary Garcia, Secretary
Ginsberg, General Bostick, Admiral Van Buskirk, General Milstead, and
General Jones, what is your Service doing to address this problem and
care for our servicemembers who have sustained a TBI?
Secretary Lamont and General Bostick. The Army has instituted a
comprehensive program to better detect, diagnose, treat, and track TBI.
This program contains four essential elements: (1) baseline
neurocognitive testing of all deploying soldiers; (2) a comprehensive
in-theater policy for assessing and treating soldiers exposed to
potentially concussive events, who may have been exposed to a traumatic
event; (3) establishment of an expansive garrison clinical care program
to meet the medical and rehabilitation needs of patients with all
severities of TBI; and (4) an aggressive research program looking at
ways to better diagnose and treat TBI.
Army policy directs that all soldiers who have been exposed to
possible concussive events are screened for TBI and are given mandatory
recovery time. The Army has improved provider education and training
with regard to screening, evaluation, and management of concussion in
both the deployed setting and the garrison environment. Research is
being conducted to find possible biomarkers of TBI, to improve accurate
and timely diagnosis of TBI, and to increase the treatment options for
individuals with a positive diagnosis of TBI.
Secretary Garcia, Admiral Van Buskirk, and General Milstead. TBI
care on the battlefield has improved significantly since the beginning
of Operations Enduring Freedom and Iraqi Freedom. Most improvements
have targeted early screening and diagnosis followed by definitive
treatment. In 2010, the Deputy Secretary of Defense issued Directive-
type Memorandum 09-033, ``Policy Guidance for Management of Concussion/
Mild Traumatic Brain Injury in the Deployed Setting,'' which has
resulted in improved diagnosis and treatment of battlefield concussion.
For Navy and Marine Corps, the primary treatment site for concussed
servicemembers has been the Concussion Care Restoration Center (CRCC)
at Camp Leatherneck in Afghanistan. Since its opening in 2010, the CRCC
has treated over 964 servicemembers, resulting in a greater than 98
percent return-to-duty (RTD) rate and an average of 10.3 days of duty
lost from point-of-injury to symptom-free RTD. There is also a
Concussion Specialty Care Center (CSCC) at the North Atlantic Treaty
Organization (NATO) Role III Hospital in Kandahar, with a neurologist
on staff.
Upon return from deployment, enhanced screening methods for TBI and
mental health conditions are being piloted at several Navy and Marine
Corps sites. These efforts include additional screening and follow-up
for any servicemember noted to have sustained a concussion in theater.
Efforts are underway to increase use of the National Intrepid Center of
Excellence (NICoE) across DOD, and development of NICoE satellite
sites, to provide state-of-the-art evaluation and treatment for
patients who do not improve with routine clinical care.
Secretary Ginsberg and General Jones. Of the total TBI cases from
2000 to 2011, 81.8 percent were mild, defined by the duration of
alteration of consciousness, loss of consciousness, or post-traumatic
amnesia at the time of injury. As reported in the civilian TBI
literature, 85-90 percent of those who sustain mild TBI recover fully
within 3 months, or often sooner. Early identification, education,
rest, and symptom management facilitate recovery. Those who sustain
recurrent concussions, and/or have co-morbid conditions such as PTSD
may take longer to recover.
As outlined in the 2009 Department of Veterans Affairs/Department
of Defense Clinical Practice Guideline (CPG) for Management of
concussion/mild TBI, most of the initial management of mild TBI can be
accomplished by primary care in the patient-centered medical home, with
referral to specialty services when needed. In addition to the CPGs,
providers also have tools produced by the Defense Centers of Excellence
for Psychological Health and TBI, such as the Pocket Guide for
Management of TBI and the Co-Occurring Disorders Toolkit. The Air Force
has one stand-alone multidisciplinary TBI clinic at Joint Base
Elmendorf-Richardson. This TBI clinic stood up in 2008 and was started
to support the local Army units who account for over 90 percent of the
patients treated. Additional efforts to standardize mild TBI care are
in place for higher risk units in the Air Force, such as explosive
ordnance disposal. One example is a provider-to-provider video
teleconsult pilot project that brings together primary care providers
with a TBI team of experts using video teleconference capability to
allow exchange of knowledge and de-identified case discussion.
A theater system of TBI care has evolved since the release of
Directive Type Memorandum (DTM) 09-033: ``Management of Concussion of
mild TBI in the Deployed Setting.'' Leadership's responsibility to
identify and report servicemembers involved in mandatory events (within
50M of blast, direct blow to head, and motor vehicle crash) ensures
early identification of TBI. Medics and providers standardize care by
using clinical algorithms for evaluation and management of mild TBI,
including mandatory rest periods. Located throughout Afghanistan, 11
concussions care centers, which are overseen by the theater neurology
consultant, allow servicemembers sufficient time to rest and recover,
resulting in an over 95 percent return to duty rate. Clinical history
and examination, together with post-injury neurocognitve testing in
theater, aids in return to duty decisionmaking.

19. Senator Ayotte. Secretary Lamont, Secretary Garcia, Secretary
Ginsberg, General Bostick, Admiral Van Buskirk, General Milstead, and
General Jones, do you have all of the resources and authorities you
need to care for our servicemembers with TBI?
Secretary Lamont and General Bostick. While resources are adequate
for current efforts, continued congressional support of the Army's TBI
clinical and research efforts will ensure improved screening and
delivery of care.
Secretary Garcia, Admiral Van Buskirk, and General Milstead. Caring
for sailors and marines who have sustained a TBI remains a top
priority. While we are making progress, we recognize that there is much
work ahead of us to determine the acute and long-term impacts of TBI on
our servicemembers. Our strategy must be both collaborative and
inclusive, by actively partnering with the other Services, our Centers
of Excellence, the VA, and leading academic medical and research
centers, to make the best care available to warriors afflicted with
TBI.
We are grateful to you and your colleagues for your outstanding
support of our efforts in improving the care of our sailors and marines
and their families. We believe we have both the resources and
authorities required for the diagnosis, treatment, and recovery of our
servicemembers who have sustained a TBI. While we are resourced well,
we should continue our vigilance in the area of TBI policies that
support tracking and surveillance efforts. We need to ensure sailors
and marines receive the optimal care at all points in the continuum
from point of injury to reintegration.
Secretary Ginsberg and General Jones. At this time, the Air Force
has sufficient resources and authority to provide care for airmen who
sustain TBI. In addition to the steps taken to identify and care for
airmen with TBI, the Air Force has support from our sister Services,
the Defense Centers of Excellence for Psychological Health and TBI, the
Defense and Veterans Brain Injury Center, and the NICoE.
______

[The prepared statement of the Reserve Officers Association
follows:]

APPENDIX A

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[Whereupon, at 2:20 p.m., the subcommittee adjourned.]

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2013 AND THE FUTURE YEARS DEFENSE PROGRAM

----------

THURSDAY, JUNE 21, 2012

U.S. Senate,
Subcommittee on Personnel,
Committee on Armed Services,
Washington, DC.

DEPARTMENT OF DEFENSE PROGRAMS AND POLICIES TO SUPPORT MILITARY
FAMILIES WITH SPECIAL NEEDS

The subcommittee met, pursuant to notice, at 2:35 p.m. in
room SD-106, Dirksen Senate Office Building, Senator Jim Webb
(chairman of the subcommittee) presiding.
Committee members present: Senators Webb, Begich,
Gillibrand, and Blumenthal.
Committee staff member present: Leah C. Brewer, nominations
and hearings clerk.
Majority staff members present: Jonathan D. Clark, counsel;
Gabriella E. Fahrer, counsel; and Gerald J. Leeling, counsel.
Minority staff member present: Diana G. Tabler,
professional staff member.
Staff assistants present: Jennifer R. Knowles and Brian F.
Sebold.
Committee members' assistants present: Brian Burton,
assistant to Senator Lieberman; Lindsay Kavanaugh, assistant to
Senator Begich; Elana Broitman, assistant to Senator
Gillibrand; Ethan Saxon, assistant to Senator Blumenthal; and
Lenwood Landrum, assistant to Senator Sessions.

OPENING STATEMENT OF SENATOR JIM WEBB, CHAIRMAN

Senator Webb. The subcommittee will come to order. The
subcommittee meets today to receive testimony on the Department
of Defense (DOD) programs and policies to support military
families with special needs in review of the National Defense
Authorization Act (NDAA) for Fiscal Year 2013 and the Future
Years Defense Program.
At the outset, let me say a few things. First, I know that
this is a hearing that was supposed to have been held
yesterday. Some of you have been required to stay over a day in
order to testify. I want you to know I appreciate that, and I
think everybody here is aware of what we have been doing on the
Senate floor for the past 3 days. We had the Farm Bill up and
we entertained more than 70 amendments in 3 days.
Having spent 4 years as a committee counsel on the House
side, I can tell you it is a lot different on the Senate side
in terms of how we address amendments because each of these
amendments is debated. There is a time for a vote, and each
senator has to personally present themselves when they vote. It
is a very timeconsuming process, and I think there is actually
a pretty good bipartisan feeling right now that we were able to
get through such a complex piece of legislation, nearly a $1
trillion piece of legislation during that time period.
But I do apologize for not having been able to have held
this hearing yesterday. We thought about trying it, but quite
frankly, we would have been in and out of here constantly, and
I do not think it would have been the best use of the time of
the people who have come here to testify.
I would also like to acknowledge Senator Gillibrand, who
is, I have heard, on her way, for having expressed an interest
in a couple of these issues, which resulted in Senator Levin
and Senator McCain suggesting that we hold a hearing on these
issues. So this is what we are doing. This was during the
recent markup of the Defense Authorization bill. She requested
that some specific special needs programs be examined in an
open subcommittee hearing. We are doing that today and very
pleased to be doing that today.
We are fortunate to have with us today a diverse panel. Our
witnesses are Dr. Karen S. Guice, Principal Deputy Assistant
Secretary of Defense for Health Affairs, and Principal Deputy
Director of TRICARE Management Activity; Dr. Rebecca L.
Posante, Deputy Director of DOD's Office of Community Support
for Military Families with Special Needs; Dr. Vera F. Tait,
Associate Executive Director, and Director of the Department of
Community and Specialty Pediatrics of the American Academy of
Pediatrics; Mr. Jeremy L. Hilton, a military spouse, a veteran,
and a military family advocate, as well as the 2012 Armed
Forces Insurance Military Spouse of the Year as voted by his
fellow military peers in Military Spouse Magazine; Dr.
Geraldine Dawson, Chief Science Officer of Autism Speaks, and
Professor of Psychiatry at the University of North Carolina at
Chapel Hill; and Mr. John O'Brien, Director of Healthcare and
Insurance for the U.S. Office of Personnel Management (OPM).
This panel represents a variety of interests and
viewpoints: the Federal Government, clinicians, the military
family community, non-profit organizations, and academia. We
look forward to hearing from each of you today.
I have said in many previous hearings that ensuring that
our uniformed personnel and their families receive first-rate
healthcare is one of the critical elements in what I view as
the military's moral contract with those who volunteer to serve
our Nation. I say that as someone who grew up in the military,
who had the honor of serving as a marine rifle platoon and
company commander during Vietnam, whose son served as a marine
infantryman in Iraq, whose brother served, and both my sisters
married military professionals. I care deeply about this, as I
am sure everybody on this panel does also.
Families play a significant role in maintaining our
volunteer force, and this is true now more than ever. Our
servicemembers must know that their families are receiving
timely and professional medical care, especially when they are
so frequently deployed. This can be even more imperative in
cases where military family members have special needs.
We are mindful that the term ``special needs'' is very
broad. For some families, ``special needs'' may mean obtaining
necessary care and treatment for complex medical issues. For
others, it means gaining access to resources necessary to
accomplish goals set out in a child's individual education
program at school. For many, it can mean a combination of
medical treatment, educational services, and systems of support
for caregivers.
Given the unique challenges inherent to military life,
including frequent relocations to new homes and schools, and
having a new team of medical providers with each permanent
change of station (PCS), not to mention deployments, it is no
wonder that DOD felt it necessary to establish the Exceptional
Family Member Program (EFMP). This program provides support to
our military families with special medical and educational
needs through identification and enrollment, assignment
coordination, and family support. Currently, more than 120,000
servicemembers are enrolled in this program.
Beyond support through EFMP, DOD reports that in fiscal
year 2011, more than 10,000 beneficiaries were enrolled in the
Extended Care Health Option (ECHO) program, which supplements
basic TRICARE coverage. This program provides eligible Active
Duty families with up to $36,000 a year to help cover the costs
of services and supplies necessary for qualifying medical and
physical conditions.
Data for the ECHO program provides us with a sense of the
scope of conditions that some military families face today. For
example, DOD tells us that more than 6,000 dependents have been
diagnosed with autism. More than 1,000 have infantile cerebral
palsy. Another 2,700 have disorders including epilepsy, hearing
loss, digestive disorders, spina bifida, or muscular dystrophy.
These are just the major categories of medical conditions
military families with special needs must address.
Today, we aim to increase our awareness of the challenges
facing our military special needs families. Some examples: we
recently heard of the need for better outreach to military
families with special needs, some of whom may be unaware of
resources that are available to them, continued effort to
provide more uniform support through EFMP from installation to
installation, and assisting our servicemembers and their
families to navigate the various medical and educational
services available from State to State.
We have also been informed that OPM recently determined
that applied behavior analysis (ABA) therapy for autism
spectrum disorders is considered medical therapy for purposes
of offering it to beneficiaries under the Federal Employees
Health Benefits (FEHB) program. DOD has been offering ABA
therapy for several years, but not under its basic TRICARE
program as it has determined that ABA is an educational
intervention and not a medical therapy. We are interested in
hearing the thoughts of today's witnesses about this
distinction.
We appreciate the breadth of knowledge the panel before us
today possesses. I hope that our witnesses can help us to
identify the key issues and concerns facing military families
with special needs, the steps DOD has taken to address those
concerns, and where DOD and Congress can do a better job.
We look forward to your testimony. I encourage all of you
to express your views candidly, to tell us what is working and
what is not, and to raise any concerns and issues you may want
to bring to this subcommittee's attention.
I would also point out at this time that we have received
written statements from the National Military Family
Association and the National Council on Disability. These
statements will be included in the record at the end of the
testimony of the witnesses that we have today.
[See Annexes A and B]
Senator Webb. We will now hear brief opening statements
from each of our witnesses. I would like to say to each of our
witnesses that your full prepared statements will be entered
into the record in their entirety at the end of your opening
statements. I would ask that you look to keeping your opening
statements to about 5 minutes.
We have six witnesses, so that is going to take us probably
a little more than a half hour to do that.
Please proceed. Dr. Guice, welcome.

STATEMENT OF DR. KAREN S. GUICE, PRINCIPAL DEPUTY ASSISTANT
SECRETARY OF DEFENSE FOR HEALTH AFFAIRS AND PRINCIPAL DEPUTY
DIRECTOR, TRICARE MANAGEMENT ACTIVITY

Dr. Guice. Mr. Chairman, members of the subcommittee, as
you can tell, I have laryngitis. I would like to beg your
indulgence in letting me talk a little over the 5 minutes, if I
have to.
Thank you for the invitation to discuss the military health
system----
Senator Webb. Very convenient, Dr. Guice, that you would
have laryngitis when we have called you to this hearing.
[Laughter.]
You are getting a lot of empathy right now, so if you want
to make your statement briefer, that is fine. We can do it any
way possible to accommodate you.
Dr. Guice. Thank you. Military service brings unique
challenges to anyone who wears the uniform. Those
servicemembers who have special needs children have additional
challenges.
DOD is proud of the programs and services we offer to these
families in conjunction with other support services provided by
State and local governments and the private sector. Dr. Rebecca
L. Posante will talk about those services provided by the
Office of Community Support for Military Families with Special
Needs. I will briefly touch on the health benefits and
supplemental services we provide through our basic medical plan
and the ECHO program.
DOD offers a comprehensive and uniform medical benefit for
military beneficiaries delivered worldwide through our military
treatment facilities or purchased care. For our beneficiaries,
these medical benefits include access to a variety of
providers, including specialists, inpatient and outpatient
care, as well as prescription medication.
In addition to the basic health plan, the military health
system offers the ECHO program. This program provides
additional beneficiaries not otherwise available under the
basic health plan to eligible Active Duty servicemembers with
special needs. By ensuring our Active members have access to
these services, we support military retention and readiness for
DOD.
One example of the services covered under the ECHO program
is ABA treatment for patients with autism spectrum disorders
(ASD). Since 2001, DOD has covered ABA services for qualifying
members. Because many of our Active Duty families found it
difficult to access certified ABA providers under the
traditional ECHO program's criteria, we implemented a
demonstration project in 2008, to determine if we could expand
the availability of providers.
Under the demonstration program, we cover ABA services when
provided by tutors who are under the direct supervision of
certified ABA therapists. This demonstration project has
succeeded in expanding access to services, and participation in
the demonstration project has grown by average of 3 to 5
percent per month per year. We are now in the process of
converting the demonstration project into a permanent part of
the ECHO program.
Military families also asked us to help sustain continuity
of care and service during reassignments and relocations. We
work closely with our TRICARE regional offices and TRICARE
contractors to ensure that there is a smooth transition for
families with children who have special needs when they
relocate.
I understand that one of the primary purposes of this
hearing is to address medical coverage decisions by OPM for the
FEHB Plan and TRICARE relative to ABA for patients with ASD. In
2010, DOD conducted an assessment to determine if ABA qualified
as medically necessary and appropriate under existing TRICARE
law and regulation. Through robust analysis, peer review
literature, and independent technical analyses, ABA was
determined to be an educational intervention, and as such, did
not meet the criteria for coverage under the basic medical
program.
Our determination is consistent with the 2011 Agency for
Healthcare Research and Quality's Comparative Effectiveness
Review, Therapies for Children with Autism Spectrum Disorders.
In this review, the investigators found the literature to be
highly variable in quality, limited in those specific areas,
and inconclusive. They identified the need for more research to
determine which children benefit from a particular intervention
or combination of interventions.
In the same report, the investigators clearly separated
education and behavioral interventions for medical
interventions. They did not consider ABA to be a medical
intervention, which is consistent with DOD's 2010 review.
However, we also understand that OPM has recently reviewed
evidence that they believe now meets their threshold for
determining ABA as a covered medical service. We have formally
requested that OPM provide us this evidence so we can evaluate
it against our coverage criteria.
Medical care evolves over time, and we continuously
evaluate new medical interventions or treatments for
effectiveness and safety prior to a coverage determination. Our
coverage determinations are strictly governed by statute and
regulations, and require an extensive assessment of reliable
medical evidence. Our determinations are also based on what is
medically or psychologically necessary to diagnose and treat
disease or injury.
DOD is committed to providing comprehensive services for
military families who have children with special needs. By
providing robust medical care for our Active Duty members and
their families, along with supplemental services to further
support those with special needs, we contribute to a stronger
warfighter.
I am proud to be here with you today to represent the
military health system and our exceptional health providers who
provide exceptional service to exceptional people. I look
forward to answering your questions.
[The joint prepared statement of Dr. Guice and Dr. Posante
follows:]
Joint Prepared Statement by Dr. Karen S. Guice and Dr. Rebecca L.
Posante
Mr. Chairman, members of the subcommittee, it is a privilege for
both of us to appear before you today, and we appreciate the
opportunity to testify on our efforts to support military families that
include a member with special medical or educational needs.
The Department of Defense is proud of the programs and services we
provide to military families with special needs. We have been providing
specialized services to families for decades. In response to the
landmark legislation for military families with special needs (Sec. 563
of the National Defense Authorization Act, Pub. L. No. 111-84), the
Secretary of Defense established the Office of Community Support for
Military Families with Special Needs (OSN) in October 2010. This office
is leading efforts to streamline processes that can be improved, to
develop policies that guide the provision of support by the military
departments, and to generally help families identify, understand and
navigate the systems they will encounter. This office is closely linked
with our colleagues in the Office of the Assistant Secretary of Defense
(Health Affairs) and the TRICARE Management Activity (TMA) within the
Office of the Under Secretary of Defense (Personnel & Readiness).
Support to military families with special needs is an especially
important task for the Department. Military families with special needs
are first military families. They have the same challenges any other
military family may encounter in the face of periodic moves,
deployments, and separation from family. Further, they face additional
challenges, navigating often complex systems to obtain the services and
benefits their families need to help their loved one function to their
maximum potential. Each time a military family moves the process starts
over, and they face questions such as: Who provides early intervention
services in this State? Am I going to the local school system, public
health or a regional board to get help? What do they call their
programs here? Is there a waiting list for Medicaid, or perhaps, how
long is the waiting list? Where do I sign up for the women, infants,
and children program, and will they accept the certification from my
current state? What will we do when we can no longer take our non-
verbal child to the dentist who has finally achieved his trust? Will
there be anyone at the new location who will understand what we need?
What school district can best meet the needs of my child?
We recognize that these military families need assistance with
these questions, and we have worked to make this process less
challenging wherever possible.
the current state of the exceptional family member program
For over 30 years, the Military Services have administered the
Exceptional Family Member Program (EFMP), which identifies family
members who have special medical or educational needs, documents their
needs and ensures they are considered when the servicemember is being
considered for the next assignment. Since the NDAA for Fiscal Year
2010, the EFMP has been expanded to include a requirement for family
support and to extend the coordination of assignments based on the
family member's special needs to permanent change of station (PCS)
moves within the United States as well as overseas.
Currently, over 400 EFMP family support personnel serve military
families with special needs. All installations have either a full- or
part-time staff person, or (in smaller locations) a point of contact
for military families with special needs. Installations with greater
numbers of families with special needs may have multiple EFMP family
support personnel. All providers have been trained in their roles, the
agencies with which they will work, and the requirements of supporting
military families with special needs.
The OSN developed an EFMP Family Support Reference Guide and
disseminated it to all EFMP family support providers (to include
Reserve and Guard Components) as a guide to providing family support
and networking with community support systems. Through a Memorandum of
Understanding with the U.S. Department of Agriculture (USDA), the OSN
partnered with Cornell University and the University of Kansas to
conduct a benchmark study identifying the concerns of military families
with special needs, the support they require, and the systems that have
been effective in providing services. The research team conducted focus
groups with military families from all branches of Service and with
civilian populations. This study will generate recommendations for the
military in refining our support programs including staffing models,
metrics, evaluation standards, and a family satisfaction scale.
The OSN is working closely with the Military Services to
standardize the EFMP across Services. Military families want
consistency, and we are improving their ability to navigate internal
processes more easily by having standard forms, terms, and procedures.
The OSN embarked on a multi-year project to analyze current systems
(medical, personnel and family support) that make up the EFMP
(identification/enrollment, assignment coordination and family support)
to even more closely integrate service delivery. We have concluded the
first year of the functional analysis. Over the longer term, we will
create an integrated, longitudinal electronic record that works across
all military departments. This system will prevent families from
reinventing paperwork with every PCS, allow the medical command to
alert the personnel command about availability of medical services, and
regardless of Service affiliation the family will receive a warm
handoff to the receiving location. This is a detailed, iterative
process involving multiple data and case management systems. The end
result, however, will offer an important enhancement to the families we
serve.
listening to our military families
In the last 2 years, we have held two EFMP family panels
representing military families of all ranks, Service affiliation,
Active Duty and Reserve components, and ages and disabilities of the
family member with special needs. We have conducted three studies on
access to special education in the public schools, access to Medicaid,
and a benchmark study on what makes a support system work. The lack of
State and local data identifying military-connected families who use
public sector programs, including special education, remains a gap.
We have also consulted with non-governmental agencies on their
knowledge of the relevant issues regarding special needs families, and
participated in several of the Military Family Caucus sessions. These
Caucus sessions pertained to special needs, and military family members
who advocate for families with special needs were invited to discuss
issues in our office. We have read the National Council on Disability's
report, How to Improve Access to Health Care, Special Education, and
Long-Term Support and Services for Family Members with Disabilities,
and met with the researchers who developed the report. The same issues
for our families emerge in each forum: access to special education,
access to Medicaid, transition problems with access to TRICARE when
families change locations, and a request for inclusion of applied
behavior analysis as a medical benefit within TRICARE rather than
through the Extended Care Health Option.
We have focused on providing the information military families with
special needs members need, particularly during critical transition
moments; we work to educate them about what is available to them and
assist them with obtaining resources and benefits within the scope of
the law. Our efforts have been directed at identifying the problems
families encounter, addressing those we have the authority to address
(such as consistency across the military departments) and collaborating
with the agencies/programs responsible for services not within our
control.
educating our families
While the Department does not have authority over programs in other
governmental agencies or programs administered by the States, we have
the responsibility to educate our families on how to identify resources
available to any American citizen and obtain benefits. We can provide
information about special education and the Individuals with
Disabilities Education Act (IDEA) and all its requirements and
protections. Many military family children benefit from special
education and the families must know how these systems work. Our
military families need and benefit from programs such as Medicaid,
Supplemental Security Income, and early intervention, too.
The OSN has created a wealth of information for military families
available on line at the MilitaryOneSource.mil website or by calling
Military OneSource. These include written guides for families whose
children have disabilities and a new guide for families where there is
an adult family member with special needs. Both guides will be
accompanied by a facilitator's manual, which can be used by EFMP staff
(or families) to conduct training sessions on special education, early
intervention, TRICARE, and much more. We conduct monthly webinars
utilizing the talents of leaders in our field on such subjects as care
giving, assistive technology, guardianship and estate planning, and
advocacy. We have produced a series of podcasts available on smart
phones and a mobile website that allows families to access EFMP
providers, EFMP enrollment forms, and all of our online content.
Several e-learning modules have been developed to increase parents'
knowledge about special education and how to collaborate with school
personnel, about the EFMP and about other Federal and State programs.
We are in the process of revising the content and presentation on
the Military OneSource website and anticipate completion of this
revision by September 1. From one landing page families with special
needs will be able to learn about military and community programs,
access an EFMP provider, sign up for a webinar or view archived
webinars, request materials, or make an appointment for a specialty
consultation with a Military OneSource consultant who is a professional
in special needs.
supporting dod programs to serve family members with special needs
OSN has created an internal coalition of Defense organizations to
address issues of access for our military families with special needs.
Through effective collaboration with the military departments, the EFMP
and Morale, Welfare and Recreation, we have built over 200 accessible
playgrounds for children with disabilities and installed pool lifts in
all military swimming pools. We have developed online tools for
families who are moving with a special needs family member to help them
plan their move. For the past 2 years in cooperation with the military
children and youth programs, we have funded ongoing training and
support to enable those programs to integrate children and youth with
disabilities. The OSN purchased and distributed books and electronic
subscriptions to all military departments' installation libraries and
family centers to create an EFMP library. The set of references is
intended to assist professionals and family members in accessing
materials on disability-related topics. In addition, special education
law resources were provided to military department legal offices and
selected medical offices. We work closely with the DOD Education
Activity to ensure the 9,700 children with special needs attending a
DOD schools receive appropriate special education services.
access to special education
Military families are concerned about access to special education
services. Obtaining comparable services from one assignment to the next
is the most consistently reported obstacle for military families and
often reflects differences in eligibility and services between States.
For example, the American Association for Employment in Education
(AAEE) has reported shortages of special education teachers, speech-
language pathologists, school psychologists, vision and hearing
specialists, school nurses, physical therapists and occupational
therapists, with many regions of the country reporting considerable
shortages for several years in a row (AAEE, 1996-2010). There are wide
disparities in school nurse staffing ratios; some exceed 1: 4,000. Only
75 percent of schools have a full or part time nurse; 25 percent have
no registered nurse. Seventeen percent of schools with more than 750
students have no registered nurse on duty (National Association of
School Nurses (NASN)). Forty-eight States and the District of Columbia
identified special education teaching and/or at least one of the
related service provider categories as an official ``shortage area''
for the 2011-2012 school year (Teacher Shortage Areas Nationwide
Listing, U.S. Department of Education, Office of Postsecondary
Education, March 2011). Given well-documented fiscal pressures on State
budgets, it is likely that discrepancies in which resources are
available between school districts and among States will persist.
To address family member information needs in this area, OSN has
initiated multiple efforts including establishing a resource
clearinghouse to help families with relocation; identifying and
promulgating effective support practices among service branches; and
sponsoring research studies on evidenced-based educational practices.
OSN developed an online Education Directory to inform families of
points of contact, resources, and procedures in public school districts
in the States with the highest number of military assignments. The
project continues and by the end of fiscal year 2014, we will publish a
directory that includes all 50 States and the District of Columbia.
Through the USDA MOU previously mentioned, we are partnering with
Ohio State University and Pennsylvania State University to collect more
detailed data about the extent and types of issues impacting families
as they attempt to access comparable special education services in
their new duty station. This project will support the identification of
special education issues for which parents and family support providers
need additional training and assist in determining if a formal military
complaint documentation system should be explored in collaboration with
the U.S. Department of Education.
access to medical services--tricare, extended health care option (echo)
and medicaid
In managing health and health benefit issues, we first ensure we
are faithfully following public law regarding what is a covered medical
benefit. We also seek to align our initiatives to the Military Health
System (MHS) strategic plan, the Quadruple Aim, which is comprised of
four interrelated missions--Assure Readiness; Improve Population
Health; Enhance the Patient Experience of Care; and Responsibly Manage
the Cost of Care. We consider ``family readiness'' as an essential
element of our Readiness strategy.
The MHS has long been a leader in offering benefits and services to
military families with special needs. We have directed considerable
effort in formulating policy for coverage of effective therapies under
the TRICARE Basic Program and the Extended Care Health Option (ECHO)
program.
TRICARE Basic Program
The TRICARE Basic Program--whether TRICARE Prime, TRICARE Extra, or
TRICARE Standard--offers a comprehensive health benefit that covers any
medically or psychologically necessary care for special needs
beneficiaries, to include physician visits, immunizations,
psychological testing and medical interventions such as speech therapy,
physical therapy and occupational therapy. TRICARE offers exceptionally
comprehensive coverage with very low out of pocket costs to our
beneficiaries. For active duty families enrolled in TRICARE Prime, the
out of pocket costs are almost non-existent, and families are further
protected by a $1,000 out of pocket catastrophic cap, after which DOD
pays 100 percent of allowable costs. By law, the TRICARE Basic Program
may not cover non-medical services such as Applied Behavior Analysis
(ABA).
Extended Care Health Option
The ECHO program, established under Title 10 U.S.C. Code 1079,
provides additional benefits not otherwise available under the TRICARE
Basic Program to certain eligible active duty family members with
special needs. As established by law (National Defense Authorization
Act for Fiscal Year 2009, Public Law 110-417), the government will
cover up to $36,000 per beneficiary per year in ECHO benefits.
As we noted at the beginning of our testimony, similar to other
military families, our active duty families with special needs members
must move frequently from one location to another. To ensure continuity
of care for ECHO participants when they move, our TRICARE contractors
have established case management hand-off processes so that the
receiving contractor will be prepared to maintain for a family the set
of ECHO services it had been receiving before moving. Because of the
complexity and diversity of the services required to effectively
address the special needs of many participants in ECHO, TRICARE
requires its regional managed care support contractors to provide case
management services to ECHO participants. Applied case management
ensures access to a comprehensive, coordinated set of required
treatments and services.
Each of the three TRICARE contractors is required to deliver a
uniform TRICARE benefit. Consequently, a family can expect to receive
the same ECHO services upon arrival at the new duty station. However,
families may notice some differences in the administration of these
services by our regional contractors. The Department does permit some
variation in administrative practices in order to permit the use of
contractor best practices. In the unlikely event a family should be
denied coverage under either TRICARE Basic or ECHO it had been
receiving in another TRICARE region, there is a well-designed appeal
process beneficiaries may use, and the contractors are required to
assist them in understanding and exercising their appeal rights.
Examples of benefits not available through the TRICARE Basic
Program, but available through ECHO include: assistive services,
expanded in-home medical services, institutional care when a
residential environment is required, and other services that the
Director of TMA determines are capable of reducing the disabling
effects of a qualifying condition. These ``qualifying conditions''
include Autism Spectrum Disorders (ASD). At the end of fiscal year
2011, DOD had over 10,000 TRICARE beneficiaries registered in the ECHO
program.
The Department has worked to ensure our special needs families with
ASD have access to the most widely-accepted educational intervention,
known as ABA. Since 2001, the Department of Defense has covered ABA
services for eligible active duty family members under the ECHO program
(and its predecessor, the Program for Persons with Disabilities).
Originally, we covered ABA services only if provided by a Board
Certified Behavior Analyst (BCBA). We found there were not enough of
them available to satisfy the demand from Active Duty family members
for services. So, in 2008 we constructed a demonstration to increase
access to ABA services by permitting tutors, under the supervision of
BCBAs, to provide the services. Even today, ECHO enrollees with an ASD
who want ABA services but who do not want to participate in the
demonstration may obtain the services directly from a BCBA, if
available from that source.
This demonstration has succeeded in expanding access to services--
and we continue to witness increased participation by ABA supervisors,
tutors and TRICARE beneficiaries. As of March 31, 2012, there were
3,783 beneficiaries enrolled in the demonstration--a number that has
grown by 3-5 percent annually, on average, since the program was first
introduced in 2008. Just as importantly, a recent DOD survey of
military parents of dependent children with autism reported that the
improved access to ABA services contributed to improved military family
readiness and retention.
The Department is now moving beyond a demonstration program and
seeking to embed the supervisor-tutor model of ABA provision as a
permanent element of the ECHO program. We published a proposed rule in
the Federal Register on December 29, 2011, to establish coverage of
this ABA provision under ECHO for eligible beneficiaries with ASD. Upon
final implementation of this rule, we intend to categorize ABA as an
``Other Service'' under the ECHO statute and permanently adopt a more
robust ABA services delivery and reimbursement methodology.
While we are pleased that we have been able to broaden access to
these services, we do recognize that some families experience
additional out-of-pocket costs when needed services exceed the
government's statutory limit of $36,000. Based on our own claims data
from 2011, 207 beneficiaries using the ECHO program had expenditures
above $35,000 per year. Another 489 beneficiaries had expenditures
between $30,000 and $35,000. Thus, in 2012, we estimate that
approximately 86 percent of TRICARE beneficiaries with an ASD diagnosis
and using the ECHO program have had 100 percent of their expenses
covered within the $36,000 government maximum.
Several Members of Congress have inquired about the feasibility of
categorizing ABA services as a medical benefit covered under the
TRICARE Basic Program. The Department conducted a thorough technical
assessment of ABA in 2010 to determine whether ABA met the requirements
for inclusion as a TRICARE covered service.
Our technical assessment looked at the following: Does the reliable
evidence, as that standard is defined in law and regulations for
TRICARE Basic Program coverage determinations, support a conclusion
that ABA is medically or psychologically necessary and that it is
appropriate medical care for Autism Spectrum Disorders (ASD)? (2) Does
the reliable evidence support a conclusion that ABA is proven as
medically or psychologically necessary and that it is appropriate
medical care for ASD in accordance with the requirements of 32 Code of
Federal Regulations Sec. 199.4. Can ABA be covered as a TRICARE benefit
under Chapter 55 of Title 10, U.S.C. if it is concluded that ABA is not
medically or psychologically necessary and that it is not appropriate
medical care for ASD, or that it is not proven as medically or
psychologically necessary or that it is not appropriate medical care
for ASD?
We found that ABA is an ``educational intervention'' and does not
meet the TRICARE definition of medically or psychologically necessary
care. The majority of the reliable evidence characterizes ABA as not
being a medical treatment, as that standard is defined in law and
regulations for TRICARE Basic Program coverage determinations, but
instead as involving non-medical, behavioral intervention services.
Consequently, the Director, TRICARE Management Activity has
concluded that ABA is not medically or psychologically necessary or
appropriate medical care within the meaning of the law and regulations
governing coverage of medical benefits under the TRICARE Basic Program.
However, the assessment indicates that TRICARE has authority to pay for
ABA to reduce the disabling effects of ASD for ECHO-registered
dependents with an ASD diagnosis, and this assessment helped guide our
decision to make ABA services a permanent part of the ECHO program. The
assessment and Director's conclusion serve as the administrative record
of the agency's decision and is reflected in the proposed rule. The
TMA's Medical Benefit & Reimbursement Branch reviews information about
Medicare's and other payers' coverage, regular medical technology
updates available through a subscription to Hayes, Inc. reports (a
medical technology assessment firm), data/evidence submitted by
beneficiaries and providers on appeal, evolving practice information
from the Office of the Chief Medical Officer, and TRICARE Managed Care
Support Contractors' evolving practice reports. TMA decides on the
basis of these information sources whether it is warranted to conduct a
formal review to determine if a medical technology can be confirmed by
the hierarchy of evidence specified in 32 CFR 199.2 to be considered
medically safe and efficacious.
Medicaid. Some military families with special needs beneficiaries
also qualify for Medicaid. There are select services that TRICARE does
not cover that are available through this Federal-State medical
program. Example of items and services that TRICARE (and most civilian
health insurance) does not cover includes long-term care, custodial
care (assistance with daily living), adult day services, or expendable
items such as diapers.
Because Medicaid is State-administered, military families that
include member(s) with special needs face difficulties each time they
move and they are required to reapply for Medicaid eligibility. In some
cases, this includes placement on waiting lists. Because of the
frequency of military rotations, some families do not move off the
waiting list before they once again relocate.
The Department has contracted with West Virginia University to
study the problems military families face with accessing Medicaid.
Preliminary findings of the West Virginia study indicate that families
and EFMP providers need more training on how to access Medicaid. The
final report from this study will be available in fall 2012.
The DOD State Liaison Office held an open meeting recently to
discuss adopting this as one of the issues to address with States much
as they have addressed the transition of school-aged children. We will
provide an update on the outcome of this recommendation in the near
future.
The Department recognizes the enormous challenges that military
families with special needs beneficiaries experience, and we have
aggressively sought to meet their needs with targeted programs and
services. As we stated earlier--family readiness is a military
readiness issue. We have made tremendous progress over the past several
years, consistent with the law that Congress has established.
In the case of military children with special needs, we have
crafted programs that have only been enhanced and improved over the
last 10 years--in the areas of education, special education, community
wide information and education. In the medical arena, we have
successfully expanded programs that allow for the delivery of services
beyond the traditional medical services authorized under TRICARE. We
have continuously worked to expand both service delivery and reduce
their out of pocket expanses. Congress has also expanded the
government's maximum cost-share for the ECHO program from $2,500
monthly maximum to $36,000 annually.
We are committed to maintaining our passion for excellence and
service to these very special families. We are proud of what we have
accomplished to date, and we are optimistic about our ability to
continue to meet family member needs for the long-term.
Again, we thank you for inviting us to be here today, and we look
forward to your questions.

Senator Webb. Thank you very much, Dr. Guice.
Dr. Posante, welcome.

STATEMENT OF DR. REBECCA L. POSANTE, DEPUTY DIRECTOR, OFFICE OF
COMMUNITY SUPPORT FOR MILITARY FAMILIES WITH SPECIAL NEEDS,
DEPARTMENT OF DEFENSE

Dr. Posante. Thank you, Senator Webb, for inviting me to
testify today. Supporting individuals and families with special
needs has been a passion of mine for over 30 years. I really
appreciate the attention being paid to this topic today.
When I brief the NDAA for Fiscal Year 2010 to military
audiences, I always refer to it as landmark legislation. It
established the Office of Community Support for Military
Families with Special Needs, for which it has been my pleasure
to serve as the Deputy Director for nearly 2 years. It served
as a catalyst for our efforts to streamline processes that can
be improved, to raise issues that need to be raised, to develop
policies that guide the provision of support by the military
departments, and to generally help families identify,
understand, and navigate the systems they will encounter.
Military families with special needs are military families
first. They face the same challenges that other military
families face due to periodic moves, deployments, and
separation from their extended families. But in addition, our
families with special needs face the challenge of navigating
often complex, stovepiped, and confusing educational, medical,
and community support systems. Our families have children with
intellectual, physical, communication, and emotional
disabilities. In about a third of our families, it is the adult
member that has a special need.
The good news is that there are a myriad of systems,
military, State, and local community systems, available to
support them. The bad news is there are a myriad of systems.
Our office has been charged with bringing order to this chaos
and helping our families access the support they need.
Currently, over 400 family support personnel serve military
families with special needs. All of our installations,
depending on their sizes, have a full or part-time staff person
or, in some very small locations, a point of contact for
military families with special needs. Over the last 2 years,
all of our providers have been trained on their roles, on the
agencies with which they should be working, and on the
requirements of supporting military families with special
needs.
Communicating with our families is important. Educating
them on programs, benefits, and resources is crucial. Working
jointly with the military departments, we have provided a
wealth of information to military families with special needs,
including materials available online and through Military
OneSource.
My written testimony outlines our ongoing work in greater
detail, where we are succeeding, and where we have more work to
do. Thank you so much for your support.
Senator Webb. Thank you, Dr. Posante. Again, I would remind
the witnesses that your full written statements will be entered
into the record at the end of your opening statements. Also,
just for the subcommittee, that the hearing record will remain
open until close of business tomorrow in case there are written
questions that anyone would like to present to you.
Senator Webb. Dr. Tait, welcome.

STATEMENT OF DR. VERA F. TAIT, ASSOCIATE EXECUTIVE DIRECTOR,
DEPARTMENT OF COMMUNITY AND SPECIALTY PEDIATRICS, AMERICAN
ACADEMY OF PEDIATRICS

Dr. Tait. Thank you. Chairman Webb and members of the
subcommittee, thank you for holding today's hearing on such an
important topic: military families who have children with
special healthcare needs. I am Dr. Vera Fan Tait, and I
represent the American Academy of Pediatrics (AAP), a
professional organization of more than 60,000 primary care
pediatricians and pediatric sub-specialists. I am honored to
join this panel, which includes such extraordinary advocates
and experts.
I am a pediatric neurologist and an Associate Executive
Director at the AAP. Prior to joining the AAP, I was in
practice for more than 25 years with my major areas of
expertise including children and youth with special healthcare
needs, traumatic brain injury, neurodevelopmental disabilities,
and neurologic rehabilitation. Caring for our Nation's military
families and their children has always been of paramount
importance for AAP. I am proud to say that one of the oldest
sections in our academy is the section on uniform services.
The impacts of long or multiple deployments on all military
families can be significant. For families with children who
have neurodevelopmental disabilities or disorders, these
impacts are often significantly exacerbated. The AAP believes
that the optimal health and well-being of all infants,
children, adolescents, and young adults, including those in
military families, is best achieved with access to appropriate
and comprehensive health insurance benefits. These benefits
must be available through public health insurance plans, like
Medicaid, the Children's Health Insurance Program (CHIP), and
TRICARE, as well as the private health insurance plans.
AAP policy recommends that minimum health benefits for
infants, children, and youth should provide all medically
necessary care within the medical home. We believe that medical
and other services must be delivered and coordinated, as you
said, Senator Webb, in a comprehensive patient- and family-
centered medical home, which is the quality setting where
physicians who are known to the family and to the child have
developed a partnership of mutual responsibility and mutual
trust.
The health insurance plan that most military families use
is TRICARE, and services, as we have heard, covered by TRICARE
provided by pediatricians who are Active Duty military, but
also community pediatricians and pediatric sub-specialists, who
provide care near military facilities. Military families often
face challenges navigating the TRICARE program, many times
struggling to find the appropriate pediatric providers or have
certain pediatric services covered.
One area of particular concern among military families, and
the reason we are here today, is to look at children with
special healthcare needs and the coverage of services for
children with neurologic disorders, especially the ASD.
Unfortunately, there is often no simple solution for families
whose children must receive care often from numerous providers.
A coordinated approach to intervention and treatment among the
medical home, the educational institutions, and the family is
really critical for success.
One demonstrated effective treatment for autism is ABA. The
symptoms associated with autism are directly addressed by ABA
methods, which have proven effective in addressing the core
symptoms of autism, as well as helping children develop skills
and improve and enhance functioning in other areas that affect
health and well-being.
The effectiveness of ABA-based interventions and autism has
been well-documented through a long history of research.
Children who receive early intensive treatment have been shown
to make substantial gains in cognition, language, academic
performance, and adaptive behavior, as well as social behavior.
Their outcomes have been significantly better than those of
children who have no access to these interventions. Though more
research and ongoing research is needed, ABA has both long-term
empirical and research data to demonstrate its effectiveness in
helping children who are diagnosed with ASD.
The AAP has endorsed the use of ABA treatments when
determined appropriate by physicians within a medical home in
close consultation with families.
Thank you for allowing me to testify before the
subcommittee today. We must do all that we can to support our
military families, but especially those who have the added
challenge of raising children with special healthcare needs.
Thank you, and I look forward to the questions.
[The prepared statement of Dr. Tait follows:]
Prepared Statement by Dr. Vera F. Tait MD, FAAP
Chairman Webb and Ranking Member Graham, thank you for holding
today's hearing on such an important topic--the programs and policies
that the Department of Defense has in place to support military
families with children with special needs. My name is Vera Fan Tait,
MD, FAAP, and I am representing the American Academy of Pediatrics
(AAP), a nonprofit professional organization of more than 60,000
primary care pediatricians, pediatric medical subspecialists, and
pediatric surgical specialists dedicated to the health, safety, and
well-being of infants, children, adolescents, and young adults.
I am a pediatr--ic neurologist and am an Associate Executive
Director at AAP, as well as the Director of AAP's Department of
Community and Specialty Pediatrics. In addition to my role with the
American Academy of Pediatrics, I am also a member of the Child
Neurology Society and the Association of Maternal and Child Health
Programs. Prior to joining the AAP, I was in practice for more than 25
years and my major areas of expertise include children and youth with
special health care needs, traumatic brain injury, neurodevelopmental
disabilities, and neurological rehabilitation. It was my privilege to
care for families with children with autism spectrum disorders and
other neurodevelopmental disabilities.
I have personally experienced the struggle that many pediatricians
face every day when trying to access needed medical, educational and
other services for children with special health care needs. Finding
needed services can be difficult even when they are adequately covered
by health insurance. It is only more difficult when a primary care
pediatrician or subspecialist can locate care only to find it is not
covered by a family's insurance.
Caring for our Nation's military families and their children has
always been of paramount importance for the Academy. I am proud to say
that one of the oldest sections we have at the Academy is the Section
on Uniformed Services. Created in 1959, the AAP's Section on Uniformed
Services has helped direct the Academy's leadership on the health and
well-being of our Nation's military children and adolescents. The
Section is comprised of over 900 members who are active duty or retired
military, as well as civilian pediatricians who serve military
beneficiaries. The section works closely with the pediatric consultants
to the surgeon general of each branch of the military.
An example of one of the Section's most recent accomplishments is
the development of the Military Youth Deployment Support Video Program,
which is designed to help children and adolescents cope with the
deployment of one, or sometimes even both, of their parents or
guardians to other countries around the world. The video was initially
designed by the Section on Uniformed Services and was subsequently
utilized by the U.S. Army Medical Command. So far more than 20,000
copies of the program have been distributed worldwide to military
families, various military youth serving professional agencies, and
primary care offices.
The health and well-being of children in America's military
families ranks as one of the top priorities of the Academy, and that is
why I am honored to represent AAP here today. The impacts of long or
multiple deployments on all military families can be significant and
for families with children with autism spectrum disorders,
neurodevelopmental disorders or other disabilities, these impacts are
often significantly exacerbated.
The American Academy of Pediatrics believes that the optimal health
and well-being of all infants, children, adolescents and young adults
through 26 years of age-including those in military families-is best
achieved with access to appropriate and comprehensive health care
insurance benefits. These benefits must be available through public
insurance plans like Medicaid, the Children's Health Insurance Program
and TRICARE, as well as private health insurance plans.
AAP policy recommends that minimum health benefits for all infants,
children, and youth should provide all medically necessary care, and
include such services as:

preventive care
hospitalization
ambulatory patient services
emergency medical services
maternity and newborn care, and
mental health and substance abuse disorder services.

Also included in the set of benefits should be:

behavioral health
rehabilitative and habilitative services and devices
laboratory services
chronic disease management, and
oral, hearing and vision care.

In short, all children must have a medical home. AAP believes that
medical and other services should be delivered and coordinated in a
comprehensive, patient and family-centered, physician-led medical
home--the quality setting for primary care delivered or directed by
well-trained physicians who are known to the child and family, who have
developed a partnership of mutual responsibility and trust with them,
and who provide accessible, continuous, coordinated, and comprehensive
care.
The health insurance plan that most military families use is
TRICARE. Services covered by TRICARE are provided by pediatricians who
are active duty military but also community pediatricians and pediatric
subspecialists who provide care near military bases and other military
facilities. AAP members providing care to children and families covered
by TRICARE face unique challenges compared to other public and private
programs and plans. For example, one of the challenges that military
families with children face is that the TRICARE program is largely
based on Medicare, a health system designed to provide coverage for
senior adults. Because of this program alignment, military families
often face challenges navigating the TRICARE program, many times
struggling to find appropriate pediatric providers or have certain
pediatric services covered.This is especially true for parents of
children with special health care needs. AAP has worked closely with
TRICARE programs to ensure needed services are available from routine
immunizations to highly specialized and acute pediatric care.
One area of particular concern among military parents of children
with special needs is the coverage of services for children with autism
spectrum disorders or other neurological disorders. Recently released
data from the Centers for Disease Control and Prevention confirms that
the prevalence of children with autism spectrum disorder (ASD) is
growing, as is the need for effective services to help children with
ASD maximize their potential.
Autism spectrum disorders, similar to other neurodevelopmental
disabilities, are generally not ``curable,'' and complex care is
required for the child along with services for the family.
Unfortunately, there is often no simple solution for families and
effective, family-centered care will include numerous providers. A
coordinated approach to intervention and treatment among the medical
home, educational institutions and the family is critical for success.
Optimizing medical care and therapy can have a positive impact on
the habilitative\1\ progress and quality of life for the child.
Medically necessary treatments ameliorate or manage symptoms, improve
functioning, and/or prevent deterioration. Thus, in addition to routine
preventive care and treatment of acute illnesses, children with ASD
also require management of sleep problems, obsessive behaviors, hygiene
and self-care skills, eating a healthy diet, and limiting self-
injurious behaviors.
---------------------------------------------------------------------------
\1\ ``Habilitative or rehabilitative care'' means professional,
counseling, and guidance services and treatment programs that are
necessary to develop, maintain, and restore, to the maximum extent
practicable, the functioning of an individual.
---------------------------------------------------------------------------
Effective medical care and treatment may also allow a child with
ASD to benefit more optimally from therapeutic interventions.
Therapeutic interventions, including behavioral strategies and
habilitative therapies, are the cornerstones of care for ASD. These
interventions address communication, social skills, daily-living
skills, play and leisure skills, academic achievement, and behavior.
An example of a demonstrated, effective treatment for ASD is
Applied Behavior Analysis (ABA). ABA uses behavioral health principles
to increase and maintain positive adaptive behavior and reduce negative
behaviors or narrow the conditions under which they occur. ABA can
teach new skills, and generalize them to new environments or
situations. ABA focuses on the measurement and objective evaluation of
observed behavior in the home, school, and community.
ASD is a medical/neurodevelopmental condition with behavioral
symptoms that are directly addressed by applied behavior analysis
methods. ABA has proved effective in addressing the core symptoms of
autism as well as developing skills and improving and enhancing
functioning in numerous areas that affect the health and well-being of
people with ASD.
The effectiveness of ABA-based interventions in ASD has been well
documented through a long history of research in university and
community settings.\2\ Children who receive early intensive behavioral
treatment have been shown to make substantial gains in cognition,
language, academic performance, and adaptive behavior as well as some
measures of social behavior, and their outcomes have been significantly
better than those of children in control groups.
---------------------------------------------------------------------------
\2\ ``Management of Children With Autism Spectrum Disorders,''
Scott M. Myers and Chris Plauche Johnson, Pediatrics 2007; 120; 1162;
originally published online October 29, 2007; DOI: 10.1542/peds.2007-
2362
---------------------------------------------------------------------------
Late last year, TRICARE proposed to extend coverage under the
Extended Care Health Option for Applied Behavior Analysis interventions
for Active Duty servicemembers who have family members with autism
spectrum disorders. AAP commented on the proposed rule and commended
the Department of Defense for undertaking the important task of
proposing measures to make it easier for Active Duty servicemembers
with children with ASD to better access needed health care services for
their children.
In short, though more research is needed, ABA has both long-term
empirical and research data to demonstrate its effectiveness in helping
children who are diagnosed with ASD, and AAP has endorsed the use of
ABA treatments when determined appropriate by physicians within a
medical home, in close consultation with families. ABA remains an
active subject of research and we encourage the Department of Defense
to maintain flexibility in the provision of ABA services as new data
may emerge.
Beyond just ABA services, one way to make it easier for military
parents with special needs children would be to examine how TRICARE
currently works for its beneficiaries. The Academy supports legislation
introduced in the House-the TRICARE for Kids Act,\3\ which could begin
the process of making TRICARE work better for all parents, but
especially those with children with ASD or other special health care
needs.
---------------------------------------------------------------------------
\3\ The TRICARE for Kids Act was subsequently included as an
amendment to the House's National Defense Authorization Act for Fiscal
Year 2013.
---------------------------------------------------------------------------
TRICARE for Kids would require TRICARE to establish a working group
of relevant stakeholders to review TRICARE policies and practices and
develop a plan to ensure that TRICARE meets the pediatric-specific
needs of military families, including those children with chronic and
special health care needs. We believe this is an excellent
collaborative model to ensure that TRICARE polices work for all
children in military families.
Thank you for allowing me to testify before the subcommittee today.
As I said earlier, caring for our Nation's military families and their
children has always been of paramount importance for the American
Academy of Pediatrics. We must do all that we can to support our
military families, especially those who have the added challenge of
raising children with special health care needs.
I look forward to your questions.

Senator Webb. Thank you very much, Dr. Tait.
Mr. Hilton, welcome.

STATEMENT OF MR. JEREMY L. HILTON, MILITARY SPOUSE, VETERAN,
AND MILITARY FAMILY ADVOCATE

Mr. Hilton. Mr. Chairman and distinguished subcommittee
members, thank you for allowing me to discuss our military
families impacted by disabilities.
I am a Navy veteran. My wife is Active Duty Air Force. When
our daughter, Kate, was born in 2002 with significant
disabilities, I resigned my commission to take care of her.
This year I was honored as Military Spouse of the Year by my
peers in Military Spouse Magazine. It is an amazing privilege
to be able to represent a million-plus military spouses and
their families.
A recent National Council on Disability Military Families
study concluded, ``Far reaching systemic changes are needed in
our Nation's health, education, and long-term service systems
to address the significant barriers faced by exceptional family
members.'' This hearing is a critical step in addressing and
acting on these extraordinarily important issues to our
military families.
Caring for a child with a disability can be exceptionally
expensive and remarkably stressful. We have higher medical
bills, therapy bills, home modification and equipment bills,
and other large expenses. Many families will need Medicaid
waiver assistance for their children, but State Medicaid waiver
wait-lists are very long, lasting for years. Every time a
military family moves, they go to the bottom of the next
State's wait-list. They rarely reach the top before moving
again. Those that do lose their Medicaid when the military
moves them.
There are a variety of ways in which this problem could be
rectified, including a military Medicaid waiver, an interstate
compact addressing Medicaid portability, allowing
servicemembers to maintain wait-list eligibility based on their
home of record, or extending the ECHO benefit into retirement.
In the end, we ask that our children are not penalized for the
service their mother or father renders to the Nation.
The extended care health option was created to bridge the
needs of families unable to access the State Medicaid waiver
programs. But experience shows it fails to come close to
replacing Medicaid waiver benefits. We are grateful for this
benefit, but we would like to see it updated and made more
flexible so it better fulfills its purpose.
We support the Senate report language directing DOD to
explore more flexible ECHO options. We respectfully ask that
EFMP families are included on any working groups considering
this and other issues that impact our families.
While we look forward to enhanced functionality and
flexibility of the ECHO program, the treatment of autism for
our military children is one area that I do not believe
requires further study. It requires action. TRICARE currently
segregates ABA, the standard of care, and the treatment of
autism into ECHO as a non-medical educational service.
TRICARE's classification of ABA as nonmedical allows TRICARE to
limit care to dependents of Active Duty servicemembers, and
places a financial cap on treatment services which fall far
below recommended standards. There is no other disease,
disability, or chronic health condition which is treated
similarly as autism and its segregation of treatment outside
the basic TRICARE benefit.
Because the ECHO benefit is only available for dependents
of Active servicemembers, dependents of our retirees are not
able to access ABA treatments under TRICARE. Prior to the
hearing, we supplied 80-plus stories to the subcommittee. Many
are heartbreaking, but inspiring at the same time. I am going
to read from a letter written by Lance Corporal Hardy Mills,
U.S. Marine Corps, Retired.
``In 2004 while serving with the 1st Marine Expeditionary
Force in Fallujah, Iraq, I was wounded severely by a rocket
propelled grenade. Because of my injuries, I retired medically
from the Marine Corps in 2006 with full disability benefits. I
am blessed with a supportive wife, and we have two beautiful
children.
Our son, Shane, has autism. As a retired Marine and
disabled veteran, my family depends on the military healthcare
system, TRICARE, for coverage of medical services and
interventions. Unfortunately because of my retired status,
Shane's medically recommended autism treatment, ABA, is not
covered by TRICARE. My family faces out-of-pocket costs of
$4,600 a month associated with this vital service because of
current TRICARE policy deficits. We have sold our home to
provide Shane the care he requires, but we are running out of
funding and ask for your intervention.''
The other letters are no less important and show the
struggles our military families have gone through to be able to
provide therapy to their children. In the end, many of these
families are still coming up significantly short, particularly
those with younger children and our retirees.
You will hear Dr. Tait and Dr. Dawson testify on the
scientific evidence that proves ABA is effective. Many other
reputable organizations and members of the medical community
have endorsed ABA therapy as the standard of care for autism. I
sincerely hope that the Senate Armed Services Committee will
take this into consideration and support an amendment to the
2013 NDAA to help our military kids impacted by autism.
These military families are remarkable Americans who endure
exceptionally trying circumstances in addition to their service
in an already stressful military lifestyle. I would encourage
you to take a moment and get to know each of them. As I am
certain you realize after reading these stories, we have much
work left to do in order to provide the appropriate level of
medical care, services, and support these military families
deserve.
I would like to personally thank the subcommittee members
and the professional staff for their leadership in providing
much-needed oversight to these issues. Thank you to this
subcommittee for not forgetting our military families. I look
forward to your questions.
[The prepared statement of Mr. Hilton follows:]
Prepared Statement by Mr. Jeremy L. Hilton
Mr. Chairman, Senator Graham, and distinguished members of the
subcommittee, thank you for the opportunity to discuss the issues
facing our military families impacted by disabilities and your
consideration of actions and initiatives that I submit need to be
accomplished to ensure our Nation honors its obligations to our
military families. By doing so, I believe we enhance the readiness of
our All-Volunteer Force and improve the lives of our military children.
introduction
I am a 1995 U.S. Air Force Academy graduate that cross-commissioned
into the Navy and served 8 years in the submarine force. In 2002, while
on shore duty at the Washington Navy Yard, our daughter, Kate, was born
with a number of significant disabilities. Seven months later, I
resigned my commission and have been taking care of our children ever
since. Since Kate's birth we have moved six times, five of those within
a 5-year timeframe due to deployments, training, and military Permanent
Changes of Station (PCS). Kate has undergone nine surgeries and
received thousands of hours oftherapy, provided by our family and
outside therapists. Our primary goal is to ensure she lives life to her
fullest and is educated and lives in the community to the greatest
degree possible. My wife remains Active Duty Air Force, and we are
currently stationed at Andrews AFB where she is the commander of an
AFOSI squadron. We have a 1-year-old son, Jackson.
In May 2012, I had the distinct honor of being selected as the
Military Spouse of the Year, based on my advocacy for military
families. I started as an advocate for our daughter. That advocacy
expanded within the Air Force, then the Department of Defense (DOD),
and then to the larger disability population. I quickly discovered
there are so many unruet needs in the disability world. Our families
are overwhelmed. There is little to no time to be advocates because
many families are simply surviving. We don't have the defense industry
or unions to ensure our programs receive the funding they require. We
have a very small group of volunteer parents that do their best to
raise these tough issues when they happen to be stationed in the DC
Metro area. What I have learned from being part of this process is that
our families do have a voice, but many times it is very quiet, at least
relative to the normal buzz in DC. However, what we lack in volume, we
make up for with passion. In the short amount of time we've had since
the hearing was announced, these amazing families have provided me the
most astonishing and personal insights into their lives and the hope
they have for their children. I hope the Committee finds their stories
instructive (see attachments after written testimony).
This committee plays an integral role in both legislation and
oversight on the issues that enable our families to support our
servicemembers while they protect our country. Your support continues
to be instrumental in making needed changes to the DOD infrastructure,
policy, and procedures which will allow our special needs military
families to deal with the significant stresses associated with service;
PCS, multiple deployments, and the high operational tempo that has
marked these past 10 years of war.
There are a number of areas that I will be discussing today:
Medicaid Waivers, the Extended Care Health Option (ECHO), TRICARE,
Autism, Education, the Exceptional Family Member Program (EFMP),
Survivor Benefits, and Legal Issnes. Each of these programs and issues
has a substantial impact on the health and wellbeing of our military
families with disabilities and it is critical that the Committee
understand what areas require improvement.
Many of these areas were considered in a recent National Council on
Disability (NCD) study on Marine Corps EFMP families (transmittal
letter included as Attachment A). In the preamble to the study, the NCD
Chairman, Jonathan Young stated:

``However, many of the changes necessary to improve the
supports available to military families with [Exceptional
Family Members] are beyond the control of the Marine Corps and
may require statutory and regulatory changes to meet these
needs.
NCD has concluded that far-reaching systemic changes are
needed in our Nation's health, education, and long-term service
systems to address the significant barriers faced by EFMs. NCD
thus seeks support from Congress, the military, and the
administration to build the critical Federal partnerships
necessary to effect systemic change and ensure that the men and
women serving our country can do so knowing their family
members with disabilities will have the supports and services
they need.''

This hearing is the first step in addressing these extraordinarily
important issues to our military families.
medicaid waivers
Caring for a child with a disability can be exceptionally expensive
and remarkably stressful. We have higher medical bills, therapy bills,
home modification, equipment and supply bills, and other large
expenses. Many, if not most, families impacted by disabilities will
come to rely on public assistance programs in some fashion for our
children who are disabled. The majority of such programs relate to
State-run Medicaid waiver programs which provide short and long term
benefits that TRICARE does not. Examples of such supports include
incontinence supplies, respite, employment supports, housing, and more
flexible medical coverage. Most of the Medicaid waiver programs run by
the States have significant waiting lists for citizens to access these
benefits because the need is simply much greater than the available
benefits. It is not uncommon for a family to place a 1-year-old on the
State Medicaid waiver waitlist with the hope the child will receive
benefits by the time they are a teenager or an adult, depending on the
type of waiver and the State in which they reside. For our highly
mobile military families, that means our children constantly remain at
the bottom of any given State's waitlist. If by chance they get off the
waitlist and receive services in one State, they will lose their
eligibility once they PCS, and they will find themselves back on the
bottom of the next State's waitlist. Upon retirement after a career of
service, our children, yet again, find themselves on the bottom of
waitlist at their new and final home.
There are a variety of ways in which this problem could be
rectified, including a military Medicaid waiver, an Interstate Compact
addressing Medicaid portability, allowing servicemembers to maintain
list-eligibility based on their home of record, or extending the ECHO
benefit into retirement. Given the cross-committee jurisdictional
nature of this issue, Medicaid reform may seem like a bridge too far,
but it is one that will have a significant impact on our families.
Parent advocates are currently working with a variety of partners
on finding a fix that addresses the problem. The DOD has funded a grant
for West Virginia University to study this issue and we expect findings
this summer. We would ask that this committee remain engaged on this
issue moving forward to ensure State Medicaid services for our military
children are provided for equally in comparison to their civilian
counterparts.
extended care health option program
The ECHO, created in 2005, was originally designed to bridge the
needs of families due to the inability to access State-run Medicaid
programs. Our experience has been that it does not replicate those
benefits because of the lack of flexibility in the ECHO program.
Military families strongly support the Senate report language that
directs the DOD:

``to assess participation in the ECHO program by eligible
dependents with special needs, and to explore options to
provide more flexible benefits.'' [sec. 703]

Our families are grateful for the ECHO benefit. However, it is time
to reassess its effectiveness to meet the requirements for which it was
created. As one is considering the benefits typical families might
need, it is imperative that DOD consider best practices as applied by
the States. Please understand that while these studies are taking
place, children may be very well going without necessary items or
therapy. We would hope for an aggressive timeline for dissemination and
prompt action on the basis of the results from the study.
There are two helpful resources when considering both Medicaid and
ECHO issues:

United Cerebral Palsy's annual ``Case for Inclusion''
which ranks the 50 States and DC on its Medicaid waiver
programs: http://www.ucp.org/the-case-for-inclusion/2011/
Medicaid's Web based resources: http://
www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/
Waivers/Waivers.html?filterBy=1915%28c%29#waivers

One striking item included in the Medicaid website highlights that
there are 423 different Medicaid waiver programs and demonstration
projects throughout all 50 States and the District of Columbia. There
must be a way we can find to serve the military family appropriately.
tricare
As most parents are quite aware, children are not simply little
adults. It is why the children's hospital model exists, to provide for
a child's unique health care needs. This is why TRICARE, being based on
Medicare, sometimes doesn't provide the best possible care for our
military children, particularly those who have special health care
needs. It is also why military families support the TRICARE for Kids
Amendment (Attachment B) included in the National Defense Authorization
Act (NDAA) for Fiscal Year 2013 recently passed by the House. This bi-
partisan amendment was co-sponsored by Representative Steve Stivers (R-
OH15), Representative Susan Davis (D-CA53), and Representative Bobby
Schilling (R-IL17) and has been endorsed by the Military Officers
Association of America (MOAA), the National Association of Children's
Hospitals (NACH), the National Military Family Association (NMFA), and
the March of Dimes.
From a recent endorsement letter by the March of Dimes (Attachment
C), they noted:

``Unfortunately, because TRICARE utilizes a
reimbursement structure based on Medicare, it often adopts
policies and practices from Medicare that do not address the
unique health care needs of children. Moreover, despite the
best efforts of the Department of Defense, military families
with children with special health care needs and chronic
conditions often have difficulty accessing resources and
services from local or regionally specialized providers. This
problem is further exacerbated by the mobility of military
families, who must repeatedly locate and obtain specialized
health care service in unfamiliar geographic regions as their
assignments change or they are deployed.
The TRlCARE for Kids Act seeks to better shape the
policies and practices of TRICARE to meet the needs of
children, including those with special health care needs or
chronic illnesses.''

Our hope is to ensure that the final NDAA includes the Tricare for
Kids amendment, section 723 in the House bill, and that the conference
committee report will mirror the Section 703 report language provided
by the Senate, thus providing a specific panel to address children's
health needs, and adding ECHO to DOD's ongoing evaluation and reporting
of cost, access, and quality.
autism
While we look forward to enhanced functionality of the TRICARE
program, the treatment of autism for our military children is one area
that I do not believe requires further study; it requires action.
TRICARE currently segregates Applied Behavioral Analysis (ABA), the
standard of care in the treatment of autism, into ECHO, which is an
entirely separate arm of TRICARE, as a ``non-medical educational''
service. TRICARE's classification of ABA as ``non-medical'' allows
TRICARE to limit care to dependents of Active Duty servicemembers and
places a financial cap on treatment services which falls far below
recommended standards. There is no other disease, disability or chronic
health condition which is treated similarly as autism in its
segregation of treatment outside the basic TRICARE benefit. Families
are forced to make the difficult decision of paying thousands of
dollars out of pocket to address these deficits or forgo medically
recommended care. Because the ECHO benefit is only available for
dependents of active-duty servicemembers, dependents of our retirees
(including Wounded Warriors retired due to injuries sustained in
combat) are not able to access ABA treatments under TRICARE and Guard/
Reserve families receive intermittent care.
Contrary to DOD's stated position, in April of this year, the U.S.
Office of Personnel Management (OPM) concluded that ABA treatment for
autism is a ``medical therapy.'' In a letter dated 19 April 2012
(Attachment D), OPM stated [bottom of page 5]

``The OPM Benefit Review Panel recently evalnated the
status of Applied Behavior Analysis (ABA) for children with
autism. Previously, ABA was considered to be an educational
intervention and not covered under the FEHB Program. The Panel
conclnded that there is now sufficient evidence to categorize
ABA as medical therapy.''

The previous findings are instructive as well as they point to what
level of evidence was required to overcome OPM's original objection. In
a 2006 letter to Representative Christopher Smith (R-NJ4) (Attachment
E), the Director of OPM, Linda Springer, stated

``It is OPM's most sincere hope that one day
randomized trials will demonstrate ABA to be an effective
course of treatment for autism and no longer be considered
investigational. OPM has great empathy for the families
affected by this tragic disorder, and regret our decision could
not be more favorable''.

Coverage of ABA care in the civilian sector also exceeds that of
TRICARE. Currently, 30 States have laws requiring private insurers to
cover autism-related therapies, including ABA, as a medically necessary
service. TRICARE's position that ABA therapy is ``non-medical'' is now
contrary to the Federal Government and laws in 30 States.
We now stand at a point where, without action by Congress, we will
soon see Federal workers provided medically prescribed autism therapy
for their children while military families receive either an inferior
level of care or, as in the case of the retired veteran's child,
receive no care. Our families simply cannot imagine that Congress would
find that appropriate.
With strong bipartisan leadership, the House's 2013 version of the
NDAA includes important language clarifying that military dependents
with autism, regardless of duty status, have access to medically
necessary behavioral health treatments including ABA through the
TRICARE basic program. Our military families ask that you work to
ensure comparable language is included with the Senate version of the
NDAA.
education
Special education as a career is truly a calling and the vast
majority of teachers who instruct our children are competent
professionals whose greatest desire is to see our children succeed.
However, with the pace, length, and number of deployments over the past
10 years, as well as the normal structure of the military lifestyle,
military families whose children require special education have
struggled to receive a free appropriate public education.
According to the Military Child Education Coalition, the average
military child will transfer schools 6 to 9 times between grades K to
12. For the special needs military family, the frequent moves present
additional challenges: reestablishment of medical care, educational
services, and necessary therapies each time they move to a new
location. For many of our families, this means the primary caretaker
parent will devote countless hours ensuring their child's needs are
met. In the event the spouse is employed outside the home, or in the
case of a dual active duty couple, there is little time to digest the
changing special education laws and regulations required to ensure a
child receives a free, appropriate public education. In many
situations, military families either go into debt to hire advocates or
lawyers to ensure their child is receiving an appropriate education or
they go without and watch their child regress in an inappropriate
placement without proper supports.
In the event that a school district does not provide appropriate
services for a military child, the family must weigh the following
before attempting to hold a school district accountable under the
Individuals with Disabilities Education Act (IDEA):

1. Legal fees, many lawyers no longer will take a case on
contingency
2. Expert witness fees (not reimbursable even if you win your
case)
3. Length of time left in the current assignment
4. Family and life considerations (financial and medical stress,
spouse deployed, wounded, or otherwise unavailable).

Military families have little control over where they will be
stationed, sometimes as part of a normal base reassignment, and
sometimes when a spouse and child(ren) have to live close to family
when a member deploys for a year or more.
Some school districts take advantage of military families,
calculating how long they will likely spend at a current base, and the
families' emotional, physical, and financial abilities to utilize their
procedural safeguards under IDEA.
The average due process case to hold a school district accountable
lasts a number of years, making IDEA's procedural safeguards
essentially meaningless for the large maj ority of military families,
particularly when confronted with an aggressive, cost-cutting school
administration. Most school districts have law firms retained from
taxpayer funds with unlimited time to run out the clock against a
military family. Military families have few resources to hire lawyers
or retain experts to ensure our children receive an appropriate
education.
Included in the 2011 NDAA was a directive to DOD to consider these
issues for study (sec 583). The DOD's response was that the evidence
was anecdotal therefore they could not make any conclusions without
appropriate data. This lack of data has been a consistent issue for all
military connected children as evidenced by the DOD report as well as
two GAO reports sparming over the last 5 years (GAO study entitled
``Military Personnel: Medical, Family Support, and Educational Services
Are Available for Exceptional Family members'' (2007) and GAO study
entitled ``Education of Military Dependent Students, Better Information
Needed to Assess Student Performance'' (2011)). Over the last 5 years,
we could have been collecting data to take action, but for some reason,
we haven't. It seems clear to me that a data element is needed to
identify our military connected students so we can access and evaluate
their needs.
In August 2011, four Service representatives wrote a letter to the
Assistant Secretary for Special Education and Rehabilitative Services,
Ms. Alexa Posny, for clarification and guidance on issues specifically
related to military families (Attachment F). To date, no response has
been provided. While many of the educational challenges facing our
military connected special needs students involve cross jurisdictional
issues, we desperately need this committee's strong leadership to
ensure our children our appropriately take care of.
Finally, the new Post-September 11 or Bill offers a terrific option
to transfer educational benefits to dependents; expanding these
benefits to cover more options beyond traditional degree-granting
education would be a welcome improvement for our special needs
dependents.
exceptional family member program
DOD support for families with special needs has been a work in
progress for many years. The 2010 NDAA included the creation of the
Office of Special Needs (OSN) within the Military Community and Family
Policy Office. The next year's NDAA provided for the creation of the
Military Exceptional Family Member Panel, which includes military
family members and adults impacted by disability. The goal of the panel
is to provide specific real world input to the OSN on issues facing our
families. Each of these has been a forward step in improving our family
member's ability to access a life that any parent would want for their
child. We thank the committee for taking legislative action to improve
DOD support for military families with special needs. However, the
proof is in the implementation of these directives.
The specific mandate provided to the OSN included ``The development
and implementation of a comprehensive policy on support for military
families with special needs''. Two years later, this hasn't been
completed. Without appropriate policy to review, it is not clear where
we stand with many of the other mandates assigned to the OSN.
Our families ask that appropriate oversight be provided to ensure
that the Office of Special Needs has the funding and personnel to carry
out its mandates and then ensure that they are completed in a
reasonable amount of time.
To consider best practices within DOD, one need look no further
than the Marine Corps, which is universally lauded as providing the
best care for its exceptional family members. Attached you will find a
recent brief provided by the head of the USMC Family Programs branch,
Rhonda LaPorte, which provides an immediate overview of the current EFM
Program as well as future direction. (Attachment G). We believe the
other Services should follow the lead of the Marine Corps as they
review their EFMP programs.
survivor benefits
Today, servicemembers with permanently disabled children face an
unfortunate dilemma. Under current law, the servicemember can only
direct survivor benefits to that child, and not a trust of any sort.
Because the Survivor Benefits Plan (SBP) annuity cannot be placed into
a special needs trust this survivor benefit ironically will make the
beneficiary ineligible to receive the Medicaid waiver which allows many
individuals with a disability to survive. One example of a consequence
includes a disabled adult being removed from a group home or other
long-term care facility provided by Medicaid because the SBP amount
exceeds State income thresholds for Medicaid waiver programs and
disqualifies the individual from that program. Please see Attachment H
for a more detailed analysis of this issue by a lawyer who specializes
in special needs trusts.
Civilian families are able to create special needs trusts for their
pennanently disabled children that preserve their access to Medicaid
while providing them additional supports that enable them to live in
their communities. We believe that members of the military should have
the assurance that their surviving family members with disabilities
will have the same opportunities after they are gone.
The Disabled Military Child Protection Act, H.R. 4329, was
introduced in this Congress to correct this disparity. Unfortunately,
because of a very modest cost and lack of a means to pay for it, the
measure was not included in the House version of the NDAA. We request
the Committee to file an amendment to be added to the Senate NDAA in
order to resolve this issue.
legal issues
There are a whole host of issues our military families face when
trying to access the legal system. For military families with special
needs, these primarily include issues related to guardianship, wills,
trusts, and special education. Each one of these issues create
significant out of pocket expenses above and beyond that of a typical
military family. The issues are not ones that the on-base JAG officers
are qualified to provide counsel on, and most JAG officers do not have
the connections required to even provide a referral.
Our families are encouraged by the Senate language regarding its
support for the American Bar Association's Military Pro Bono Project.
We would encourage the Secretary of Defense and the DOD's General
Counsel to consider the unique issues of our military families impacted
by special needs as they are investigating the report request by the
Senate (detailed in Senate Report 112-173).
disability issues
There are a variety of issues which impact the disability community
as a whole, including our active duty military families, our veterans
and retirees, and particularly our Wounded Warrior community. The
Senate will soon consider the Convention on the Rights of Persons with
Disabilities. The Senate Health, Education, Labor, and Pensions
Committee will hold a hearing on restraint and seclusion in our publics
chools on June 30. While the Senate Armed Services Committee does not
specifically play a role in these issues, please appreciate the fact
that these issues are ones that our families care about and your
support in ensuring these issues are resolved significantly impacts our
military community.
conclusion
``Disability is a natural part of the human experience
and in no way diminishes the right of individuals to
participate in or contribute to society.''

These are the congressional findings from the IDEA, the Federal law
that ensures children with disabilities are provided a public
education. If the concept that having a disability is a natural part of
our world is foreign to you, you are not alone. But like so many things
in our world, your perception can change in a millisecond. For some of
us, this will happen in a split second, whether that is an IED
explosion or from the doctor telling you something is wrong with your
baby. For others, it will be the shocking realization of the road you
are about to travel as you deal with your MS, cancer, or Alzheimers.
Smart disability policy is the right thing to do, both for our military
families and for its positive impacts on our force's readiness. Short-
term thinking and budgeting will in fact have significant long term
cost, whether we are talking about the rehabilitation of a young airmen
with traumatic brain injury or a child with cerebral palsy or autism.
Our entire society as a whole has made significant strides in the last
four decades in supporting people with disabilities. The strides our
society as a whole has made have been mirrored in many of the programs
within the Department of Defense and the VA. However, there continue to
be significant stovepipes within DOD, the VA, Tricare, the individual
services as well as individual States as opposed to an appropriate
sharing of best practices and implementing changes needed. What we need
is leadership at all levels of the chain of command, within Congress,
and within our local communities to make change reality.
I've attached a number of stories of individual military families
immediately after this written testimony. [See Attachment I]. These are
amazing Americans, who endure exceptionally trying circumstances and
somehow find ways to serve their nation and many times try to help
others. I would encourage you to take a moment and get to know each of
them. If you look ``hero'' up in the dictionary, you'd see the faces of
these moms, dads, and their children.
We don't pretend to think that there are any easy tasks in front of
us as a nation. How we deal with these tough issues will define us as a
Nation. Our families appreciate the opportunity and leadership
demonstrated by holding this hearing. Thank you to this committee for
not forgetting our military families.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Senator Webb. Thank you very much, Mr. Hilton.
Dr. Dawson, welcome.

STATEMENT OF DR. GERALDINE DAWSON, CHIEF SCIENCE OFFICER,
AUTISM SPEAKS, AND PROFESSOR OF PSYCHIATRY, UNIVERSITY OF NORTH
CAROLINA AT CHAPEL HILL

Dr. Dawson. Good afternoon, Chairman Webb, and members of
the subcommittee. I am Dr. Geraldine Dawson. I am the Chief
Science Officer at Autism Speaks, and I serve as Professor of
Psychiatry at the University of North Carolina at Chapel Hill.
Prior to joining Autism Speaks, I directed the University of
Washington Autism Treatment and Research Center for close to
two decades.
Autism Speaks is the world's leading autism science and
advocacy organization. We are dedicated to funding research
into the causes, prevention, treatments, and cure of autism,
and to increasing awareness and advocating for individuals with
autism and their families.
I am honored to appear before the Senate Armed Services
Subcommittee on Personnel, and to participate in this hearing
on issues facing military families who have dependents with
special needs.
Like their counterparts in civilian life, many military
families face challenges in providing proper treatment for
their child with autism. I am here today to talk about those
challenges and how the military healthcare system can lessen
their effect on families.
But first some information about autism. Autism is a
development disorder that affects a person's ability to form
social relationships and communicate with others. People with
autism also exhibit repetitive behaviors, some of which can
interfere with their ability to learn and function. Autism is
caused by a combination of genetic and environmental risk
factors.
But autism is no longer considered a rare condition. It
affects 1 in 88 children in the United States, 1 in 54 boys.
This year, more children will be diagnosed with an ASD than
AIDS, diabetes, and cancer combined. The prevalence of autism
has risen dramatically over the last several decades. In fact,
statistics show a tenfold increase in the past 40 years. Many
in the autism community use the word ``epidemic'' when
describing autism.
Fortunately, there are effective treatments for autism that
can change a person's course and outcome. Numerous controlled
clinical trials have shown that early intensive behavioral
treatment significantly increases IQ, language abilities, daily
living skills, while reducing the symptoms of autism.
In fact, a 2010 randomized control trial, funded by the
National Institutes of Health and published in the prestigious
Journal of Pediatrics, found that 50 percent of children with
autism who received early intensive behavioral treatment for 2
years had a 15-point increase in IQ. One-third of the children
showed an increase in IQ of greater than 30 points. This means
that early treatment changed these children's life
trajectories, setting them on a course that increases their
chance of living productive and satisfying lives.
These children will likely attend a regular classroom,
develop spoken language, and make friendships. This is not only
good for these individuals, it results in significant cost-
savings, as fewer services will be needed in the long-run, and
these individuals now can become more productive members of our
society.
Behavioral health treatments that are based on ABA have
become widely accepted among healthcare professionals as an
effective treatment for autism. These treatments are provided
by highly-trained licensed and certified professionals. Early-
in-life treatment involves working one-on-one with a child
typically for 25 to 40 hours per week.
Thirty States now require coverage of ABA treatment as part
of medical care. Employers, such as Microsoft and Home Depot,
universities, such a Ohio State, Harvard, and Princeton, and
healthcare facilities, such as the Mayo Clinic, do so as well.
Earlier this year, OPM concluded that there is enough
evidence to classify ABA as a medical therapy. In contrast to
the benefits covering ABA treatment that now will be made
available to the Federal civilian workforce, the healthcare
program for uniform servicemembers and their families, TRICARE,
provides only limited coverage for ABA treatment.
TRICARE classifies ABA treatment as an educational
intervention, and makes it available only through ECHO, and
caps coverage at $36,000 a year.
Furthermore, ABA treatment is restricted to dependents of
Active Duty servicemembers. Dependents of retirees, including
dependents of wounded warriors who were retired due to their
injuries sustained in combat, are unable to access ABA
treatment for their child with autism. Guard and Reserve
families receive intermittent care as they move between Active
and Reserve status.
$36,000 a year pays for about 11 hours of ABA treatment per
week. Many children with autism, particularly early in life,
and some who face severe challenges, need more treatment hours
in order to fully benefit from the treatment.
Given all that our military families have shouldered for
the past decade, they deserve better. On behalf of thousands of
military families affected by autism, I strongly urge Congress
to require TRICARE to provide behavior health treatment,
including ABA, to military families regardless of duty status,
and at the level of care prescribed.
Thank you, Chairman Webb and members of the subcommittee,
for this opportunity to speak about this important issue
affecting military families. I look forward to your questions.
[The prepared statement of Dr. Dawson follows:]
Prepared Statement by Dr. Geraldine Dawson, Ph.D.
Good afternoon, Chairman Webb, Ranking Member Graham, and members
of the subcommittee. I am Dr. Geraldine Dawson, Chief Science Officer
of Autism Speaks. I also serve as Professor of Psychiatry at the
University of North Carolina at Chapel Hill.
Autism Speaks was founded in February 2005 by Bob and Suzanne
Wright, grandparents of a child with autism. Since then, Autism Speaks
has grown into the world's largest autism science and advocacy
organization, dedicated to funding research into the causes,
prevention, treatments and cures for autism; increasing awareness of
autism spectrum disorders; and advocating for the needs of individuals
with autism and their families. We are proud of what we've been able to
accomplish and look forward to continued success in the years ahead.
I am honored to appear before the Senate Armed Services
Subcommittee on Personnel at this hearing on issues facing military
families with dependents who have special needs. Like their
counterparts in civilian life, many military families face the
challenge of providing proper treatment for a child on the autism
spectrum. I am here to talk about those challenges and how the military
health care system can lessen their effect on families.
the challenges of autism
I will begin by providing an overview of autism. Autism is a
developmental disorder that affects a person's ability to form social
relationships and communicate with others. People with autism also
exhibit repetitive behaviors, some of which can interfere with their
ability to learn and function. Most scientists agree that autism is
caused by a combination of genetic susceptibilities that interact with
environmental risk factors.
Autism is no longer considered a rare condition. It affects about 1
in 88 children, including 1 in 54 boys. Let's compare autism's
prevalence to that of some other conditions:

Pediatric AIDS - 1 in 300;
Type 1 diabetes - 1 in 400; and
Childhood cancer - 1 in 2,000

This year, more children will be diagnosed with an autism spectrum
disorder than AIDS, diabetes, and cancer combined. The prevalence of
autism has risen dramatically over the past several decades; in fact,
statistics show a ten-fold increase in 40 years. Although broadening of
the diagnostic criteria for autism and increased awareness account for
some of this increase, experts estimate that approximately 50 percent
of the increase remains unexplained. Many in the autism community use
the word ``epidemic'' when describing autism.
Based on metrics used by the World Health Organization, autism
represents a significant public health challenge. It is a highly
prevalent and chronic condition with an early onset and is associated
with significant functional impairments and costs. Its burden is higher
than childhood leukemia, cystic fibrosis, and type 1 diabetes--an
estimated $137 billion per year.
Of course, the impact of autism cannot be measured in dollars
alone. Autism takes a significant toll on families. Compared to the
families of children with special health care needs other than autism,
the families of children with autism are more likely to:

cut back or stop working;
spend 11 or more hours per week providing care;
pay more than $1,000 annually in out-of-pocket medical
expenses;
experience financial problems; and
avoid changing jobs in order to maintain health
insurance.

According to a national survey, only one in five children with
autism has adequate health insurance coverage, receives coordinated,
ongoing, comprehensive care within a medical home, and had at least one
preventive medical visit in the past 12 months.
Military families with a child on the autism spectrum face the
added burdens of stress associated with their service. Relocating to a
new duty station can cause gaps in care with lifelong consequences.
When one parent is deployed, the other may bear the full
responsibilities of child care. When a parent returns from deployment,
the family may have the additional challenge of combat-related mental
or physical health problems.
screening, diagnosis, and treatment
The care of a child with autism often begins with a sense by a
family member or health care professional that the child's development
is not typical. It is now possible to screen for autism at 12 months of
age, and autism can be reliably diagnosed by 18 to 24 months of age. In
2007, the American Academy of Pediatrics recommended that all children
be screened for autism at 18 and 24 months of age and that appropriate
referrals be made if autism is suspected. Yet, the average age of
diagnosis in the United States remains close to 5 years. Children from
ethnic minority backgrounds are at a particular disadvantage. Research
shows that these families have to go to the doctor many more times
before receiving a diagnosis, and the age of diagnosis is much older.
Fortunately, there are effective treatments for autism that can
change a person's course and outcome. Controlled clinical trials have
shown that early intensive behavioral treatment significantly increases
IQ, language abilities and daily living skills, while reducing the
symptoms of autism. In fact, a 2010 randomized controlled trial funded
by the NIH and published in Pediatrics reported that 50 percent of
children with autism who received early treatment for 2 years had a 15
point increase in IQ (1 standard deviation). One third of the children
showed an increase in IQ of greater than 30 points (2 standard
deviations). This means that treatment changed these children's life
trajectories, setting them on a course that increased their chances of
living productive and satisfying lives. This is not only good for the
individual; it results in significant cost-savings for society as
children and adults need fewer services and can become productive
members of society.
Among the many treatment methods available, behavioral treatments
that use the methods of applied behavior analysis (ABA) have become
widely accepted among health care professionals as an effective
treatment for autism. Mental Health: A Report of the Surgeon General
states, ``Thirty years of research demonstrated the efficacy of applied
behavioral methods in reducing inappropriate behavior and in increasing
communication, learning, and appropriate social behavior.'' Study after
study has provided evidence for the efficacy of early intensive
behavioral treatment based for improving outcomes of children with
autism.
Let me say a little more about ABA. Treatments based on behavior
analysis use a scientifically validated approach to understanding
behavior and how it is affected by the environment. Through decades of
research, the field of behavior analysis has developed many techniques
for increasing useful behaviors and reducing those that may cause harm
or interfere with learning. These techniques bring about meaningful and
positive changes in behavior. Success in an ABA program is measured by
direct observation and data collection and analysis. Early behavioral
treatment based on ABA is provided by highly trained licensed/certified
professionals with expertise in ABA and involves one-on-one treatment
with the child typically for 25-40 hours per week for at least 2 years.
This early intensive investment in treatment results in significant
cost savings in the long run, as many children with autism who receive
such treatments can now carry on a normal conversation, enter a regular
classroom, and form friendships with their peers.
the growing trend towards comprehensive autism coverage
Autism Speaks is committed to passing insurance legislation that
provides access to behavioral health treatments for people with autism.
Back in 2001, only the State of Indiana required insurance coverage of
effective therapies like ABA. Now 30 States (representing over 70
percent of the country's population) require coverage of ABA treatment
as a medical care.
Large employers like Microsoft and Home Depot provide coverage for
autism therapies, as do universities such as Ohio State, Harvard, and
Princeton and health care facilities like the Mayo Clinic.
After conducting an internal review earlier this year, the U.S
Office of Personnel Management (OPM) concluded there is enough evidence
for OPM to classify ABA as a medical therapy. This means that Federal
Employees Health Benefits Program (FEHBP) carriers may propose 2013
benefit packages that offer behavioral treatments based on ABA. In
communicating this decision to Autism Speaks, OPM stated, ``This
decision reflects our perspective that families covered under the FEHBP
should have access to medical treatment that is safe, effective for
their individual diagnosis, supported by sound medical evidence, and
delivered by appropriate providers.''
In contrast to the benefits that will be made available to the
Federal civilian workforce, TRICARE--the health care program for
uniformed servicemembers and their families--currently provides only
limited coverage for ABA treatment. TRICARE classifies ABA as an
educational intervention and makes it available only through the
Extended Care Health Option (ECHO), a supplement to the basic TRICARE
program. ECHO benefits are cumulatively capped at $36,000 per year
which may not adequately cover the early years when intensive treatment
is needed. ECHO is restricted to dependents of active-duty
servicemembers. Dependents of retirees--including dependents of wounded
warriors retired due to injuries sustained in combat--are unable to
access ABA treatment under TRICARE. Guard/Reserve families receive
intermittent care as they move between active and non-active duty
status.
Families report that the ECHO $36,000 limit on care does not
address the need for intensive ABA services. Using TRICARE billing
rates, $36,000 pays for an average of 11 hours of ABA therapy per week,
whereas the recommended number of hours is between 25 and 40. Many
children with autism, especially those who are newly diagnosed or who
face severe challenges, need this level of initial treatment. The out-
of-pocket costs associated with this additional medical care are
unaffordable to the military family. Even the limited available benefit
is difficult to access for some eligible families, who report
significant enrollment delays and a lack of TRICARE authorized
providers.
Without access to needed services, many military families depend on
State Medicaid waiver programs. A change in duty station, however, may
move a family to the bottom of a long waiting list and force a stark
choice: incur significant debt or do without treatment for their child.
Given all our military families have shouldered for the last
decade, they deserve better. The warfighter in Afghanistan should not
have health care inferior to that of the civilian employee working
within the Pentagon. We owe more than this to the families who are
making tremendous sacrifices for our country.
This is not a matter for further study. Action is needed to provide
the quality of care our military families deserve and have earned. On
behalf of the thousands of military families affected by autism, we ask
that Congress require TRICARE to provide behavioral health treatment,
including ABA, to military families regardless of duty status and
without a dollar cap.
Thank you, Chairman Webb, Ranking Member Graham, and members of the
subcommittee, for your time, for your commitment, and for your
leadership.

Senator Webb. Thank you very much, Dr. Dawson.
Mr. O'Brien, welcome.

STATEMENT OF MR. JOHN O'BRIEN, DIRECTOR OF HEALTHCARE AND
INSURANCE, U.S. OFFICE OF PERSONNEL MANAGEMENT

Mr. O'Brien. Chairman Webb, members of the subcommittee,
thank you very much. Thank you for the opportunity to make a
statement on behalf of the FEHB program administered by OPM. We
appreciate the subcommittee's interest in our program and its
support of families whose children have special needs,
specifically those with ASD.
We understand that the subcommittee seeks information on
our recent reclassification of ABA as a medical therapy. In
contrast to the single provider model of TRICARE, the FEHB
program contracts with 91 separate insurance carriers to offer
health plans to over 8 million Federal employees, annuitants,
and families. All plans are required to provide basic services,
and may propose and negotiate to offer a range of additional
benefits. All FEHB plans are required to provide children with
autism access to pediatric care, physical therapy, occupational
therapy, speech therapy, mental health treatment, and
medications.
However, during the current 2012 contract year, the FEHB
benefit--ABA is not an FEHB benefit because it is classified
for the FEHB as an investigational or educational intervention,
and, therefore, is subject to a blanket exclusion. That means
that children of a Federal employee cannot access ABA services
through their health insurance regardless of whether the plan
they have selected would have normally considered such a
treatment as medically necessary and provide it to its non-
Federal subscribers.
Beginning in 2010, Members of Congress, families, and other
stakeholders asked OPM to reexamine this blanket exclusion. The
OPM Benefit Review Panel evaluated the status of ABA for
children with autism. Previously, ABA was considered to be an
educational intervention and not covered under the FEHB
program. The Benefit Review Panel concluded that there is now
sufficient evidence to categorize ABA as a medical therapy.
Accordingly, plans may propose a benefit package that include
ABA.
The insurance marketplace in which the FEHB operates is
changing rapidly with regard to ABA therapy. At present, 30
States require some health insurance coverage of ABA. In a
week, that number will be 31. Had I been before this
subcommittee in June 2010, the number of States requiring ABA
would have been 14. In June 2008, just 4 years ago, the number
would have been two.
OPM has made the decision to reclassify ABA as a medical
therapy rather than as an educational service based on the
evolving body of clinical research and the maturing provider
infrastructure to deliver this modality under a medical model.
This reclassification does not presume medical necessity, and
does not specifically require FEHB plans to add ABA service to
their basic benefits package. Rather, it allows plans to
propose ABA as an additional benefit under conditions where
medical necessity is satisfied and appropriate and qualified
providers are available.
Medical necessity criteria are evaluated by each health
plan in FEHB, not by OPM. Plans assess whether a proposed
treatment is safe, supported by sound medical evidence,
effective for an individual, more effective than alternative
treatments, and conforms to relevant standards of medical
practice. Our decision only applies to the FEHB and not to
TRICARE programs, and accordingly, was published as technical
guidance to our carriers.
The evidence is not yet sufficient to support an official
OPM position requiring coverage by all FEHB carriers. In the
interval, our administrative change will allow FEHB plans that
choose to make ABA services available as the research and
provider base matures. OPM will periodically re-review ABA as
the research develops.
We are grateful for the subcommittee's support of Federal
employees and their families. Thank you for this opportunity. I
am happy to answer any questions you may have.
[The prepared statement of Mr. O'Brien follows:]
Prepared Statement by Mr. John O'Brien
Chairman Webb, Ranking Member Graham, and members of the
subcommittee, thank you for the opportunity to make a statement on
behalf of the Federal Employees Health Benefit (FEHB) Program,
administered by the U.S. Office of Personnel Management (OPM). We
appreciate the subcommittee's interest in our program and its support
of families whose children have special needs, specifically those with
Autism Spectrum Disorders.
We understand the subcommittee seeks information about our recent
classification of Applied Behavior Analysis (ABA) as medical therapy.
In contrast to the single provider model of TRICARE, the FEHB program
contracts with 91 insurance carriers to offer health plans to over 8
million Federal employees, annuitants, and families. All plans are
required to provide basic services, and may negotiate to offer a range
of additional benefits. All FEHB plans are required to provide children
with autism access to pediatric care, physical therapy, occupational
therapy, speech therapy, mental health treatment, and medications.
However, in 2012, ABA is not an FEHB benefit because it is classified
as an investigational or educational intervention. This means that the
child of a Federal employee cannot access ABA through their health
insurance regardless of whether the plan would normally consider such
treatment medically necessary and provide it to its non-Federal
subscribers.
Beginning in 2010, Members of Congress, families, and other
stakeholders asked OPM to re-examine this blanket exclusion. The OPM
Benefit Review Panel evaluated the status of ABA for children with
autism. Previously, ABA was considered to be an educational
intervention and not covered under the FEHB Program. The Benefit Review
Panel concluded that there is now sufficient evidence to categorize ABA
as medical therapy. Accordingly, plans may propose benefit packages
which include ABA.
Over the last 2 years, the infrastructure to support the delivery
of ABA has matured rapidly. Today 30 States require at least some
health insurance coverage of ABA, and 14 have licensure procedures for
ABA providers. ABA providers most frequently have a graduate degree in
Psychology with additional training in ABA, leading to formal Board
Certification in Behavior Analysis. States often exercise their
supervision of certified or licensed providers through the same pathway
which oversees other health care practitioners, such as a Board of
Medicine or Psychological Examiners. It is also common practice to
require a physician's or Psychologist's prescription before a health
plan will approve ABA for a specific child.
OPM made a decision to reclassify ABA as a medical therapy rather
than an educational service based on the evolving body of clinical
research and the maturing provider infrastructure to deliver this
modality under a medical model. This reclassification does not presume
medical necessity and does not specifically require FEHB plans to add
ABA services to their basic benefits package. Rather, it allows
families of Federal employees to receive the same treatment as families
of non-Federal employees by allowing plans to propose ABA as an
additional benefit, under conditions where medical necessity is
satisfied and appropriate, qualified providers are available. Medical
necessity criteria are evaluated by each health plan in FEHB, not by
OPM. Plans assess whether a proposed treatment is safe, supported by
sound medical evidence, effective for an individual, more effective
than alternative treatments, and conforms to relevant standards of
medical practice. Our decision applies only to FEHB, and not to TRICARE
programs, and accordingly, was published as technical guidance to our
carriers.
The evidence is not yet sufficient to support an official OPM
position requiring coverage by all FEHB carriers. In the interval, our
administrative change will allow FEHB plans that chose to do so to make
ABA services available as the research and provider base mature. OPM
will periodically re-review ABA as the research develops. We are
grateful for the subcommittee's support of Federal employees and their
families.
Thank you for this opportunity, I am happy to address any questions
that you may have.

Senator Webb. Thank you very much, Mr. O'Brien. Let me
begin by thanking all of you for your extraordinary breadth of
experience that has been reflected in your testimony today,
both written and oral.
Just as an immediate reaction, before we get into some of
these more complex issues that are being addressed with respect
to ABA therapy, I think that, Mr. Hilton and some of the
others, you raised some very valid points about inconsistencies
in the ability to get treatment, and the eligibility
requirements when people move. I think that is something I am
going to right now encourage staff to pursue further. These are
things that could be handled administratively perhaps working
with DOD on these sorts of issues.
I remember what it was like to move around when I was a
kid. I remember at one point I went to nine different schools
in 5 years between the 5th and the 10th grade. We were in
England, Missouri, Texas, Alabama, California, and Nebraska. I
remember what it was like to be at the bottom of the pile in
these types of things. We did not have Medicaid waiver programs
when I was a kid. I do not think we had Medicaid when I was a
kid. I do not remember any of it.
But certainly there are issues that have been raised that
could be dealt with in a more immediate sense just by working
with DOD to see if we cannot iron out some of those matters
that have been raised.
As I mentioned in my opening statement, let me begin with
this. There is a lot of debate with respect to the OPM
determination that you, Mr. O'Brien, discussed. I would like to
start by getting a better understanding of the factual nature,
the specific nature of the treatments. Maybe the best place to
start would be with Dr. Tait and Dr. Dawson. If you could help
us understand the difference in current practices that are
regarded as medical therapy in these cases as opposed to what
have been educational interventions. Just in basic terms, what
are the differences? Dr. Tait, maybe we will start with you.
Dr. Tait. Thank you. When I am thinking about and when we
are talking in terms of whether this is medical versus
educational, unfortunately, when we are looking at any therapy,
whether it is occupational therapy, physical therapy, speech,
ABA, it has both educational and medical effects. I think maybe
the best way that if I could give some examples of that.
If you are looking at ABA, as I mentioned in the testimony,
it certainly affects cognition or thinking. It affects
language. It affects academics. That is the school piece of it.
But if you look at children who have ASD, many of them have
specific medical issues that have to be dealt with through a
behavioral approach. Examples of that would be self-injury.
Many of the children actually are involved in self-injurious
behaviors.
Another example would be eating. One of the things that we
look at, some children at the extreme of ASD really have such
very specific eating habits that unless you look at it
behaviorally, they can be malnourished. That is the medical
piece of it. They can have what we call Pica disorder, which is
eating other objects that you should not be eating, and then
you go to the doctors for that.
Another piece of that is, behavior can be such a part of
what we are talking about that they cannot get the basic needs
they need, like going to a dentist, or getting the medical
needs that they have addressed unless they are sedated.
All of those are behavioral in one sense, Senator, but they
are also educational. When I am thinking in terms of ABA, I
think that it certainly is medically-based. It is also
educationally-based.
Senator Webb. Just for clarification here, in terms of
programmatically what is now funded and what is considered
educational intervention, what type of program is now funded
that does not reach the ABA area? Programmatically, when we say
there are certain practices that are acceptable, and at the
same time we are saying that the ABA is educational
intervention and, as a result, not funded, what are we treating
and what are we not?
Dr. Tait. The way that I look at this is if you look at
therapies that are funded--maybe that is the best way to
approach it. The therapies that we know that are funded are
things like occupational therapy, physical therapy, speech
language pathology. If you look at those therapies, they are
very specific and individualized with respect to the children
that need them.
Those therapies are not as behaviorally-based where you set
up a specific behavior program that has to be carried through
at home, at school, by the family. You are looking at
different, what we call, trials, where you look at behavior
changes and trials. I think that is why when we are looking at
this, you are saying it is educational because it is looking at
the cognition, language, academic performance, and adaptive
behavior. But all of that rolls into the medical piece of it
too.
Not all children need 40 hours of ABA per week that have
autism, and that is why we were saying it has to be
individualized. You look at the therapy that is appropriate.
Senator Webb. Dr. Dawson?
Dr. Dawson. One way to look at it has to do with who
delivers the treatment and the scope of the treatment. When we
think about an educational service, it is typically provided in
an educational context by educators. When we think about ABA
treatment, early intensive behavioral intervention, first of
all, it is often prescribed by a physician. Second, it is
delivered by either a licensed clinical psychologist or a board
certified behavior analyst, not necessarily a special educator.
Then, third, it requires many hours of intensive intervention
that is not accommodated within an educational program.
Educational programs simply do not offer either the level of
expertise in this area or the number of hours and intensity. It
really goes beyond the scope of a typical educational program
that we might offer. Even a child with special needs would not
be offered these kinds of services typically in an educational
program. So it really goes beyond the scope of what we think of
is education.
The other thing to point out is that it has an impact on
brain development. In fact, there is study in press right now
that shows that it not only impacts things like IQ and language
ability, but can change the pattern of brain activity in these
children to normalize them over time. It is much more of a
whole medical intervention than we think of as restricted
specifically to an educational activity.
Senator Webb. I want to finish this thought with Mr.
Hilton. In your own experience with the program, what does it
cover, and what does it need to be covered? How does the
$36,000 annual cap fit into that?
Mr. Hilton. Sir, I am just going to back up for a second
and piggyback on something that the lady said and give you an
example. A lot of these children, for whatever reason, are
runners, meaning they run and run. Another thing, they like
water for a reason I do not understand.
We lost a little girl, a little Army girl, 7 years old in
May, who had autism. She ran and they ended up finding her in a
pond not far from the family. This is documented in a variety
of different circumstances. So from our perspective, for a lot
of our families, this is life or death. I do not think that
qualifies educational. That qualifies as medical.
To answer your specific question, what my friends and what
I have seen is that particularly when you are talking about
younger children, 2- to 5-year range, or the children who need
much more intensive therapy, that $36,000 simply is not enough
to cover their costs. I have a friend who is a Navy commander.
I served with him a long time ago. He has a child with autism,
and this is an 05 that you would think might be able to cover
this therapy. He has had to take out a second mortgage on his
house. That just gives you an example of what an 05 has to deal
with. Imagine an E3 or E4. They are simply just going without
the therapy.
Senator Webb. Mr. O'Brien, we have been told that DOD has
asked OPM to see the studies and the basis for OPM's decision.
Is OPM going to share that study with DOD?
Mr. O'Brien. Yes.
Senator Webb. Good. Senator Begich.
Senator Begich. Thank you very much, Mr. Chairman.
First, Mr. Hilton, congratulations again on your award as
Military Spouse of the Year. I know you corresponded off and on
with my wife by e-mail. I thank you. We really appreciate your
effort and your lead and your leadership today in representing
families in a very succinct way. I will have some questions for
you in a second, but I just wanted to acknowledge that I really
appreciate your being here today.
I am actually going to take the question that the chairman
just asked. If the answer is yes, the question is obviously how
long will it take you to review it? When will you do it? That,
to me, is very simple.
Dr. Guice. When we get the information, we will put it in
our normal review process and evaluate it according to our
requirements by statute and by regulation as to whether or not
it serves as medical care according to our criteria.
It may take us very little time, 6 months. It just depends
on all the information that we get. We invite others to submit
information as well if they have credible evidence, peer review
publication of studies, that would help us, inform us about a
better or a different coverage decision, we would be delighted
to receive those as well, sir.
Senator Begich. Can you do that administratively? In other
words, once you review and if you determine you can move it to
medical therapy, can you then do it?
Dr. Guice. Yes, sir. If it is deemed to be appropriate
according to our criteria, and statute and regulations that we
evaluate evidence by, then it can be made a coverage decision.
Senator Begich. Okay. Here is the question I have. I guess
if I am able to do it right, because I am under one of your
policies somewhere in the mix because I pay a bunch of money. I
know that despite what people think, we actually have lots of
premiums as senators. I think I had my co-payment premiums at
$6,000 last year. So if I wanted to buy additional coverage for
one of my policyholders or one of the folks I have under
Federal insurance, that is covered as additional, I can get it,
correct?
Mr. O'Brien. Assuming the plan offers service.
Senator Begich. Right.
Mr. O'Brien. But it is not a required part of our basic
benefit plan. We are offering plans the opportunity to propose
this benefit. So this does not guarantee anyone would get this
benefit.
Senator Begich. I understand that. I understand, but it is
now offered where several years ago we had a couple only that
offered it, correct?
Mr. O'Brien. Right. As of today for the 2012 contract year,
there is no child in the FEHB program who is receiving ABA. It
is under a blanket exclusion as we have identified it as an
educational service. We have removed that blanket exclusion.
Senator Begich. Because the evidence is telling you
something, and it is worthwhile to ask the question for
policyholders to consider, correct?
Mr. O'Brien. In our benefit review panel, we went back
there. We considered the evidence, and the evidence has said
this is a promising therapy. There is also a wiggle around it.
Additionally, we looked at the costs and we looked at what the
evolution of the provider infrastructure and the insurance
market.
Senator Begich. Let me ask you. What have you done there,
do you do that frequently?
Mr. O'Brien. We have other services we are going to be
doing in the future. This is a relatively new process we are
doing.
Senator Begich. That helps me because you have a standard.
You are not just doing it for anything. You are reviewing it,
and then you are moving it to the next stage. Then it could
move to the next stage. Is that fair to say?
Mr. O'Brien. Yes, that is fair to say.
Senator Begich. Okay. Your process, once this information
and other information may come in, you may have 6 months or so
to review. Then at that point, you will determine if it fits
your criteria. If not, you will identify what those gaps are.
Is that fair to say?
Dr. Guice. Yes, sir.
Senator Begich. Okay. You will keep, I am assuming, the
chairman, the subcommittee informed on that process?
Dr. Guice. We will be happy to.
Senator Begich. Great. Mr. Hilton, you brought up a lot of
good questions. I am going to take one which the chairman
mentioned that I want to follow up on, and that is the Medicaid
waiver.
It is interesting. We do not know what the Supreme Court is
going to do in the next 4 or 5 days, but under that new
program, we pay--when I say ``we,'' I mean the Federal
Government--when it is all done and said, all new entrees into
Medicaid at a certain level, we pay 90 percent to any State. So
it seems logical to me that there should be probably a veteran
or an Active Duty military Medicaid program because we are
going to pay 90 percent of it anyway, that is portable.
So you serve in one community, because the way it is going
to work--I think this is the way it is going to work. Let us
say you are in Alaska. You serve a year or 2. You get
transferred. You go to another State. You are going to be a new
member on their Medicaid roll. You are going to be a new entry.
So, therefore, we are going to pick you up at 90 percent. So,
do we not just figure this out now because within a 2- or 3-
year period, every military person who needs a service and a
Medicaid waiver will be actually a new entry onto States'
rolls, which we pay 90 percent of. So why not just cut through
it all and create a Medicaid waiver program for military that
will actually go into play anyway? Your thoughts on that?
Mr. Hilton. Sir, I think I would be obviously supportive of
that.
Senator Begich. Yes, I thought that would be the case.
Mr. Hilton. In my written testimony, I list the Medicaid
waiver website. There are 423 different Medicaid waiver
programs in the Federal Government at the various States. So
you can see why we sometimes get confused as we move from State
to State. However, as I note in my testimony, there has to be a
way to figure out how to serve our military families.
Senator Begich. Just sitting here listening to you and
thinking about the law by the example I just gave, every
military person who needs the Medicaid waiver will
automatically become a Medicaid new entry in the State they go
to. Those are people we are going to be covering 90 percent of
under the new law. So why not just do it? That is just a
thought that I wanted to share.
I am giving it through the chairman and the staff, and
maybe some thought there because I think you bring up, if I can
in my last minute here, Mr. Hilton, what other things do you
think we in the Federal Government can do? You mentioned a
couple in your testimony, and I appreciate that--that we can do
to better really serve families that have children with
disabilities and special needs?
Mr. Hilton. Sure. If I had to prioritize the variety of
things I put in my written testimony--it was pretty lengthy--I
would obviously put high on the top of the list the ABA issue.
We have been admiring this problem----
Senator Begich. To get it classified as a medical----
Mr. Hilton. Yes, sir, as medically necessary. I will be
honest with you. I hear medical therapy, but not medically
necessary. I hear educational. I hear sea lawyer combined with
insurance adjuster, to be honest. That is what our families
hear, and that would be at the top of the priority list for me.
Obviously, getting in place appropriate policy to
standardize the EFMP process such that, exactly as the chairman
said, as we move from base to base, it is consistent. From my
perspective, disabilities do not care what uniform you wear,
and it is one of those things where we all scratch our head and
wonder why are we receiving different services.
Senator Begich. Very good. Thank you very much. Thank you,
Mr. Chairman.
Senator Webb. Thank you, Senator Begich. Before I call on
Senator Gillibrand, let me just say to her that I was talking
well about her before she got here. She was really one of the
principal motivating forces behind having this hearing. So we
welcome her, and she is now recognized.
Senator Gillibrand. Thank you, Mr. Chairman, and thank you
so much for holding this hearing. Thank you to each of the
witnesses. This is so helpful because this is not an issue that
I think gets enough sunlight, enough discussion, and one that
so urgently does for families that have children that are
suffering. That is what I am really worried about.
I am worried that this would take 6 months; 6 months is a
long time. That could be a whole half year for a 1-year-old or
a 2-year-old where those therapies are the difference between
whether they will ever reach their God-given potential. I think
that is too long.
I am very concerned because the prevalence is so high. One
in 54 boys today are being diagnosed with autism. The fact that
these therapies actually work is the greatest hope that we
have. We should not be denying them to any child, certainly not
children of military families, certainly not children of
wounded warriors or veterans. We have to do better, in my view.
Now, I was very interested in both of the doctors'
testimonies because what you described to me sounded very much
like psychological therapies that are similar to what we do for
post traumatic stress disorder (PTSD). So I want to go to our
first witness, Dr. Guice. Could you tell us, when we look at
PTSD, are those therapies covered as medically necessary?
Dr. Guice. Those are covered as medically necessary, yes.
Senator Gillibrand. What is the difference between the
types of therapies, because as Dr. Dawson described, she
described them being administered by psychologists, by people
who have specific training for these needs, very similar to
PTSD.
Dr. Guice. The difference is when we looked at providing
ABA back in 2010, the evidence at that point in time convinced
us it was still considered a behavioral intervention, and as
such could not be covered under our statutory and regulatory
requirements for determining medical care that is medically and
psychologically necessary to treat a disease or an illness.
Senator Gillibrand. So, even as you just described it, that
perfectly describes PTSD therapy, something that is
behaviorally necessary that actually is an intervention that
actually does help these men and women in life and death
situations.
Dr. Guice. The treatment actually treats the underlying
condition of PTSD. It is designed to treat PTSD.
Senator Gillibrand. Exactly. That sounds exactly what
behavioral therapies for ABA are. So I feel that if you did
reexamine it, where the literature is today, and since studies
are being published every month that show that it is
scientifically and medically necessary, that it actually
affects the brain and the development of the brain, I think
every criteria that you have been using for all these other
diseases and disorders and treatments, it will match up
perfectly just from the testimony I have heard today.
My question is, how can we do this more quickly? Is there a
way for us as the Senate Armed Services Committee, as we do
this authorization legislation, to write something that allows
you to do this immediately, and to have the resources put in
place to understand the literature immediately, to be able to
say this is a psychologist offering medical treatment so
children can develop their brains, their behavior, their
abilities properly?
Dr. Guice. We have it separate. We have a very defined
process through which we look at these potential coverage
decisions, and we use that routinely and standardly. It is
about getting information and assessing it according to our
criteria. We will do it as expeditiously as we possibly can.
Senator Gillibrand. I would like to turn my attention now
to Mr. Hilton. I want to thank you, sir, for your service. The
men and women who serve and their families are the greatest
Americans we have. They are some of our best and brightest, and
certainly sacrifice more than anyone else. So I want to thank
you for coming to this panel to tell us about what the lives of
these families are actually like.
Can you describe to me, to the extent you know, and if Dr.
Dawson or Dr. Tait can amplify this, I would be grateful.
Explain what happens when a child is newly diagnosed? How do
they navigate the current system? Please tell me how they
navigate whether you are Active Duty or whether you are
recently separated or whether you are injured and in wounded
warrior status. What are the differences for each of those
types of members of our military families, and what needs to be
addressed for each person?
Mr. Hilton. That is a pretty big question.
Senator Gillibrand. Take your time.
Mr. Hilton. I will just tell you part of our experience
from our daughter being in born in 2002. In 2004 to 2008, we
moved five times. That was due to deployments, regular PCS. My
wife was in training. During that period of time, every time
you move, I would start preparing for the next move 6 months
prior to. I can consider myself a pretty decent advocate for my
daughter, and we only had one daughter at the time. As you are
going through the normal PCS process and you are dealing with
the deployment, it takes probably 6 months from getting to the
next duty station for you to get all the pieces of the puzzle
back in play.
Reading through some of the testimony or some of the notes
from the parents, and you are talking about the retirees or the
veterans or the wounded warriors particularly, I cannot even
imagine frankly dealing with those situations and having a
child with autism or another developmental disorder.
Senator Gillibrand. Because they are not eligible at all?
Mr. Hilton. Correct. If you think about that, going from
something to nothing is like hitting a brick wall for these
families. For that child, and again, I would really encourage
everyone to read their stories. You read again and again how
devastating that is for the family and the child.
Senator Gillibrand. Dr. Dawson, could you speak a little
bit to what is the difference for a child that you are treating
that they have now 11 hours covered a week. Imagine it is a
child that you have actually prescribed 40 hours a week. What
is the difference for that child's future to the extent you can
describe it?
Dr. Dawson. First of all, it is important to keep in mind
that the National Academy of Sciences did convene a group. It
has been a while now, but they convened a group to look at how
many hours should be standard of care. At that point, and this
was actually a number of years ago, 2001, it could have even
changed now. But standard of care was a minimum of 25 hours a
week for a child during the pre-school period.
Senator Gillibrand. That was a decade ago.
Dr. Dawson. That was a decade ago, and the difference is
really in IQ points, language ability, and adaptive behavior.
So even in the last few years, there have been studies that
have examined the difference in IQ, language, and adapted
behavior of a child who gets fewer hours versus more, and it
does make a difference.
If we want children to have the best possible outcome, then
they need to have access to the number of prescribed hours. It
is important to keep in mind that that can vary, and it should
be looked at by each physician working with a family, as Dr.
Tait has said. For some children, it is going to be 40 hours,
particularly early on. Other children may only need 10 hours,
and that needs to be an individual decision so that that child
has the best outcome.
Senator Gillibrand. Thank you, Mr. Chairman.
May I submit a statement for the record that Senator
Lieberman asked me to submit?
Senator Webb. That will be entered into the record at this
point.
[The prepared statement of Senator Lieberman follows:]
Prepared Statement by Senator Joseph I. Lieberman
I would like to lend my strong support for expanded coverage for
military families affected by autism. I am struck by the figures
provided by our witnesses that show how autism has reached near-
epidemic levels in our country: one out of every 88 children, including
one out of every 54 boys, is affected, far beyond the rates of
childhood AIDS, diabetes, and cancer combined. The Department of
Defense estimates that 23,000 military dependents have an autism
diagnosis, and I have heard the deeply moving personal stories of but a
few of them. It is clear that this is a growing problem that we as a
country have yet to address.
Studies have shown that early diagnosis and intensive therapy are
the keys to effectively mitigating the effects of autism in children.
Therapies informed by applied behavior analysis (ABA) can significantly
help the development of life skills for those affected. The efficacy of
these methods has been recognized by the U.S. Surgeon General, and 30
States recognize ABA as a medical treatment that should be covered by
private insurance. Most notably, the Office of Personnel Management has
concluded that ABA is a medical therapy that can be covered in Federal
Employees Health Benefits programs.
Unfortunately, TRICARE is behind the curve in this critical area.
Unlike the rest of the Federal workforce and a growing majority of the
private sector, servicemembers, veterans, and their families continue
to face restrictions on these effective autism treatments under
TRICARE's Extended Health Care Option (ECHO) program, which I believe
place an undue burden on our military families with autistic dependents
and thereby affect overall readiness. TRICARE classifies ABA as a
nonmedical educational service. Under TRICARE's current allowances for
nonmedical services, members can receive limited financial help that is
capped annually at $36,000, sharply limiting the allotment of
behavioral analysis hours to less than half what it recommended to make
a real difference in the life of an autistic child. Furthermore, the
classification of ABA as a nonmedical service limits provision of even
this limited support to Active Duty members, leaving retirees and even
those who have been separated due to combat wounds.
I believe that our military families should be provided with the
best available care, and it is clear to me that behavioral analysis-
based therapies constitute the best available means to address autism.
The time to address this critical gap in TRICARE is now. I look forward
to supporting legislation to address this issue when the Senate takes
up the National Defense Authorization Act for Fiscal Year 2013.

Senator Gillibrand. Thank you, Mr. Chairman. Thank you,
witnesses.
Senator Webb. Thank you, Senator Gillibrand.
Let me make one point, if I may, just as a follow-on to
Senator Gillibrand's comments about PTSD. I was committee
counsel on the House Veterans Committee many years ago when we
did the initial studies on PTSD. If I were to see a parallel
here--first of all, let me be careful. I know there are a lot
of frustrated people out here, but I do not think this is a sea
lawyer syndrome. I do not think that is fair to the people who
have the burden of having to make these determinations.
I think it is more that the process of trying to figure out
how to take care of people is an evolutionary process. We went
through this back in the late 1970s and early 1980s with
respect to PTSD. I think the question is a legitimate one in
terms of evaluating the methodology in order to determine
whether a particular therapy is medically effective. That is
what our challenge is here. I think Senator Gillibrand has
given our subcommittee a great shot in the arm in terms of
putting this issue in front of the subcommittee.
With that, Senator Blumenthal.
Senator Blumenthal. Thank you, Mr. Chairman, and thank you
for having this hearing, and to all our witnesses for being
here, and all who have been such effective advocates for
families in this situation.
Dr. Dawson, I have read a lot of materials and witness
testimony regarding ABA. My impression is that ABA is a widely
accepted, successful set of tools that can be used in assisting
people who are facing the challenges of being diagnosed with
autism and other developmental disorders. You have immensely
impressive background experience, as do all of our witnesses
here today. I would like to ask you to describe how ABA is
being used to assist in the treatment and the effectiveness of
this treatment in relation to autism. If you could highlight
the differences between the TRICARE coverage of ABA and the
coverage in the civilian sector.
Dr. Dawson. Let us first look at the evidence in terms of
what is the impact of ABA on children's outcomes. There have
been numerous clinical trials that have been conducted and
published. There was a study that was funded by the National
Institutes of Health. It was published in the Journal of
Pediatrics. This is the flagship journal of the American
Academy of Pediatrics, and it was published in 2010, that
showed that the impact of the early intervention for 50 percent
of the children, they had a 15-point IQ gain, and for 30
percent of the children, they had a 30-point IQ gain. That is
to standard deviation.
So the majority of children who received this treatment
actually moved from a status of intellectual disability into
the normal range of cognitive functioning. We know that in
terms of predicting long-term outcome, that IQ is the strongest
predictor.
Also, let us think about the cost to society. The current
estimates, based on an analysis that was conducted this year,
are that the costs are $137 billion annually to care for people
with autism in the United States. Most of that cost is based on
adult care. The average cost per individual is reduced by about
half if they do not have intellectual disability.
Imagine now that we provide this early intervention. You
change the life course. This individual has either less severe
intellectual disability or none at all, and they have a chance
now to go to a regular classroom, form friendships, have
language, go on to have a job, and be productive members of
society. From a cost benefit analysis, it saves taxpayers a
tremendous amount of money.
In terms of TRICARE, the issues are several. One is the
fact that they limit the amount of coverage to cover about 11
hours of ABA. For some children, particularly in that early
period, they need more than that in order to get the kind of
gains that I am talking about. The parents are not getting
adequate medically prescribed treatment, what the physician
would recommend.
The second has to do with the status, and this has to do
with when you retire, you no longer have access to treatment.
Or if you are in the National Guard, you are going to have
intermittent access to treatment. So if you can imagine your
child is doing well and they are in intervention, and then you
change your status, and suddenly the treatment program is gone.
What happens is that families will do anything. They will
mortgage their home. They will give up their other children's
college savings in order to get treatment because they know
that these are effective. They are aware of the literature. The
idea of a parent, after learning about a diagnosis and then
rising to the challenge, and then finding that the treatments
that we know are effective and that can make a difference for
their child are not available to them, it is just not something
that we should be doing. We really need to do better by these
families.
Senator Blumenthal. It strikes me as I listen to you Dr.
Dawson, and I want to thank you for your service, this hearing
room is a very colorless, antiseptic, majestic, but still very
abstract setting to talk about what a parent faces in this
situation. Since many of us--I have four children--are parents,
if we were called in the middle of a family emergency out of
the most important hearing in this room or the most important
vote ever, we would all be gone in a flash.
The instinctive reaction that you have described to
disregard cost and to sacrifice almost anything to mortgage
homes, to, in effect, put a family's future under a severe
financial cloud, is one that I think we need to understand. We
as a Nation, we as a Congress, need to understand.
The hopes offered by ABA, I think, are very impressive.
Maybe I can ask others who are on this panel whether they have
any comments on what we have just heard.
Dr. Tait. If I may comment for just a moment, thank you so
much. I was just keying off of some of the things that have
been said thus far, and I think whether you are looking at PTSD
or whatever we are talking about here. We spend a lot of time
not separating our head from our body. So when we are talking
about health of children, that includes the behavioral health.
That includes the physical health.
For a child to be healthy and learn and grow, we have to
look at all of those issues, and that is exactly what parents
want. They just want their kids to have the services that they
need to be able to have them fulfill their potential. I know
that is what you all want too.
I just wanted to comment on the navigation of families
within systems. I can remember when I have talked to families,
and one mother said to me, I want you to know that I spend all
my day trying to navigate the payment system and nine care
coordinators. I coordinate the care coordinators. They do that
willingly, and day-in and day-out so that their children can
receive the services that they need.
From the perspective of this hearing, what we want is to
make that as successful and easy to the families as we can make
it. If they have to worry about what is getting paid or what is
not getting paid and not concentrate on the children and the
families, then that just puts extra stress on a family that is
already stressed for a number of reasons. Thank you.
Mr. Hilton. Sir, if I could offer one other thought.
Looking through these 80-plus testimonies of individual
military families, I realize it is not a scientific study, so
you cannot rely on it exactly. But there is no one in here in
this enormous population that says, ``oh, we tried ABA and it
did not work out.'' Literally in every story, they say ABA--and
it has been beneficial through the ECHO program, and we are
thankful, I will admit. It is an amazing program, and it has
been helpful to a lot of families.
Every one of them then says, ``what we are worried about is
retirement,'' and retirement is one of the stories. It is
literally a week away for this family, and they are looking
forward to retirement after multiple deployments, after many,
many years. I know families that have put off retirement for a
variety of reasons when they would like to, and they simply
cannot.
Senator Blumenthal. Thank you. Again, thank you, Mr.
Chairman. My time has expired, but I am going to continue my
interest. I would like to, again, thank the chairman for being
very much attuned to this issue, and my colleagues, especially
Senator Gillibrand, for being so active and attentive to it.
Thank you.
Senator Webb. Thank you, Senator Blumenthal. Again, let me
emphasize that I do not think there is any disagreement in this
room about wanting to help the people who are in need, and
particularly for us at this moment, family members and people
who are serving and who have served.
Our question, our burden, is evaluating the methodology in
order to determine whether this therapy is medically effective.
If it is, in those cases where it should be applied, there
should not be any question about what we do. But that is the
question that is before us.
I understand there are people who would like a second
round. Senator Begich?
Senator Begich. No, I am good.
Senator Webb. Okay. Senator Gillibrand, I know you want to
ask questions or have other comments.
Senator Gillibrand. I would like to go back to the
conversation about specifically what we can do to hasten the
re-review process. I would like guidance to this subcommittee
about how we can help you legislatively.
Dr. Guice. I do not believe at this point that we would
require additional legislation to do it. I think it is just
getting the evidence and having the time to sift through it.
I would like to add, though, I think one of the witnesses
said that TRICARE limits the ECHO or the payment available for
ABA therapy to the $36,000 per year. That limit is set by
Congress.
Senator Gillibrand. We could change that. What would the
limit have to be to cover the prescribed ABA therapies, Dr.
Dawson or Dr. Tait?
Dr. Tait. We have looked at some of those costs, and they
run anywhere from $30,000 to $50,000 depending on where you are
and whether you need the 40 hours versus the 20 hours. I
believe that it is in that range, and that is generally what we
are asking at the State level per child, of course.
Dr. Dawson. I think that is the way to look at it. Think
about it from the point of view of a physician making a
prescription, and I do not think many children would go above
40 hours. One would look at the range that would cap at 40
hours a week and what that would cost, particularly during that
early intensive period. Obviously, when children are entered
into school and they are spending the majority of their time in
school, they are not going to require 40 hours. So it would
over time, that amount would be lessened. But to have that
option during the early period is what is critical.
Senator Gillibrand. Is there a way to facilitate, both Dr.
Dawson and Dr. Tait, getting the studies that you mentioned
today to DOD so that you can have immediate answers on trying
to prove the case to DOD so when they do their re-review, they
have those studies on hand and those peer review studies?
Dr. Dawson. Absolutely. In fact, just to point out, since
the evaluation was done, which I think was based on 2010, there
have been well over a dozen studies that have been published
since then. I can certainly provide that literature. Even the
Agency for Healthcare Research and Quality (AHRQ) report, which
I think was referred to in the testimony, is historically
already out of date, and also very limited in its scope. It
only looked at 10 years worth of literature, and the literature
now that actually began in 1987 was the first clinical trial
that was published. None of those studies were included in that
particular report.
I think we really need to include the breadth of knowledge
in the review that is available today.
Senator Webb. If I may, as chairman, if there are studies
that have not been provided to our staff along those lines, I
think we would appreciate being able to look at them as well.
Senator Gillibrand. I have at least an informal commitment
of this group of people to be a working group to coordinate
data, coordinate studies, get it done. To the extent this
subcommittee asks for a recommendation in the near future from
DOD, that might be a way to formally, at least, request that
this process continue as quickly as possible. We could either
do that by letter or put something as an amendment into the
authorization bill. I would like to work with you on how that
should be requested in the way most effective to help your team
apply the proper resources to do it now.
Dr. Guice. We would appreciate that. Thank you.
Senator Gillibrand. Thank you very much. Thank you, Mr.
Chairman.
Senator Webb. Thank you, Senator Gillibrand. Again, I
appreciate all of the testimony from a very wide breadth of
knowledge and experience, and it has been extremely useful to
us.
Your written testimony will be reviewed in very thorough
detail as well. Thank you, Senator Gillibrand, for being the
motivating factor in having this hearing. I think it has been
very useful for us.
This hearing is now adjourned.
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Scott P. Brown
applied behavior analysis
1. Senator Brown. Dr. Guice and Dr. Posante, recently the Office of
Personnel Management (OPM) stated there is enough evidence to classify
Applied Behavior Analysis (ABA) as a medical therapy rather than an
educational service. Can you please explain how the TRICARE Management
Activity continues to rely upon information regarding ABA that it
gathered in 2010?
Dr. Guice and Dr. Posante. The TRICARE program medical benefit
coverage determinations are governed by separate statutory and
regulatory mandates not applicable to the insurance plans that
participate in the Federal Employees Health Benefits (FEHB) Plan.
Currently, the TRICARE program has no authority to provide coverage of
educational services, behavior modification modalities, or other
nonmedical services under the Basic Medical Program. The authority and
scope of the TRICARE program to cover medical treatments under the
Basic Medical Program are defined by statute.
In addition, any proposed TRICARE Basic Medical Program benefit
characterized as a drug, device, medical treatment, diagnostic, or
therapeutic procedure must be determined to be safe and effective in
accordance with the longstanding, reliable evidence criteria set forth
at Title 32, Code of Federal Regulations Part 199.4(g)(15). The
Department of Defense (DOD) has used this published ``reliable
evidence'' standard for the TRICARE Basic Medical Program benefit
coverage determinations since 1997 (see 62 Federal Register 625, 629,
January 6, 1997). The requirement to use peer-reviewed evidence of
safety and efficacy allows DOD to ensure the benefits our beneficiaries
receive are tested and proven safe and effective in either the
diagnosis or treatment of an injury, illness, or disease.
It should be noted that apart from the medical benefits provided
under the TRICARE Basic Medical Program, DOD is authorized to provide
additional non-medical services to dependents of Active Duty
servicemembers eligible for and enrolled in the Extended Care Health
Option \1\ (ECHO) to reduce the disabling effects of a qualifying
condition. This program was created to support the readiness of Active
Duty members who might have a dependent with special needs not
otherwise covered under the health plan ECHO supplements other public
resources for Active Duty dependents that are subject to geographic
relocations based on their sponsor's duty assignment.
---------------------------------------------------------------------------
\1\ ECHO is a supplemental program to the basic TRICARE program.
ECHO provides financial assistance for an integrated set of services
and supplies to eligible Active Duty family members (including family
members of activated National Guard or Reserve members). There is no
enrollment fee for ECHO; however, family members must have an ECHO-
qualifying condition, enroll in the Exceptional Family Member Program
(EFMP) as provided by the sponsor's branch of Service, and register in
ECHO through ECHO case managers in each TRICARE region.

2. Senator Brown. Dr. Guice and Dr. Posante, how is TRICARE
Management Activity able to rely upon dated information regarding ABA?
Dr. Guice and Dr. Posante. The TRICARE program medical benefit
coverage determinations are governed by separate statutory and
regulatory mandates not applicable to the insurance plans that
participate in the FEHB Plan. Currently, the TRICARE program has no
authority to provide coverage of educational services, behavior
modification modalities, or other non-medical services under the Basic
Medical Program. The authority and scope of the TRICARE program to
cover medical treatments under the Basic Medical Program are defined by
statute.
In addition, any proposed TRICARE Basic Medical Program benefit
characterized as a drug, device, medical treatment, diagnostic, or
therapeutic procedure must be determined to be safe and effective in
accordance with the longstanding, reliable evidence criteria set forth
at Title 32, Code of Federal Regulations Part 199.4(g)(15). DOD has
used this published ``reliable evidence'' standard for the TRICARE
Basic Medical Program benefit coverage determinations since 1997 (see
62 Federal Register 625, 629, January 6, 1997). The requirement to use
peer-reviewed evidence of safety and efficacy allows DOD to ensure the
benefits our beneficiaries receive are tested and proven safe and
effective in either the diagnosis or treatment of an injury, illness,
or disease.
It should be noted that apart from the medical benefits provided
under the TRICARE Basic Medical Program, DOD is authorized to provide
additional non-medical services to dependents of Active Duty
servicemembers eligible for and enrolled in ECHO to reduce the
disabling effects of a qualifying condition. This program was created
to support the readiness of Active Duty members who might have a
dependent with special needs not otherwise covered under the health
plan ECHO supplements other public resources for Active Duty dependents
that are subject to geographic relocations based on their sponsor's
duty assignment.

3. Senator Brown. Dr. Guice and Dr. Posante, can you please explain
the reasons behind why children of DOD civilians have greater access to
ABA rather than children of the men and women we send off to war?
Dr. Guice and Dr. Posante. For DOD civilians, OPM's
reclassification of ABA as a medical therapy rather than an educational
service is an administrative decision and does not require FEHB plans
to add ABA services to their basic benefits package. Rather, it allows
plans to propose ABA as an additional benefit, under conditions where
medical necessity is satisfied and appropriate, qualified providers are
available. Those plans that include ABA may adjust their premiums
accordingly.
The ECHO program for Active Duty servicemembers that allows DOD to
help our beneficiaries minimize the disabling effects of Autism
Spectrum Disorder (ASD). Importantly, the ECHO program exists to
supplement other public resources for Active Duty dependents who are
subject to geographic relocations based on their sponsor's duty
assignment. Beneficiaries are required by law to first seek services
from the State in which they reside, but DOD realizes the requirements
of military service are demanding and may, at times, place a family in
a State with more limited State benefits. The ECHO program allows us to
augment public services to assist special needs dependents of our
Active Duty servicemembers.
To increase access to ABA services, DOD implemented, within ECHO,
the Enhanced Access to Autism Services Demonstration in March 2008. The
demonstration expands the opportunity for access to ABA through a
variety of provider types, including tutors. TRICARE extended the
demonstration to March 2014, pending inclusion of the demonstration
model as a permanent benefit within ECHO.

As of May 31, 2012, there were 3,793 beneficiaries
enrolled in the demonstration, 1,881 ABA supervisors, and 9,201
ABA tutors across all three TRICARE regions.
DOD's evaluation of the results of the demonstration
concluded that it increased the number of and access to the
services of authorized ABA providers, as evidenced by the
sustained 3 to 5 percent monthly growth in the number of
demonstration enrollees since implementation in 2008.
Parents of dependent children with autism who
responded to a DOD survey reported that improved access to ABA
contributed to improved military family readiness and
retention.
A proposed rule to establish TRICARE coverage under
ECHO of ABA for the Assistant Secretary of Defense was
published in the Federal Register, Vol. 76, No. 250 on December
29, 2011. Upon final implementation of this rule, DOD intends
to categorize ABA as an ``Other Service'' and adopt a tiered
ABA services delivery and reimbursement methodology.

4. Senator Brown. Dr. Guice and Dr. Posante, with the eventuality
that ABA is considered a medical therapy, I realize there may be some
challenges that will need to be worked through to make this change a
reality. One is the possible shortage of qualified professionals
available to provide. How do you suggest this issue be addressed?
Dr. Guice and Dr. Posante. The National Defense Authorization Act
for Fiscal Year 2007 directed the Secretary of Defense to develop a
plan within the authority of the ECHO program to provide services to
military dependent children with autism. The legislation mandated that
DOD develop: (1) requirements for the education, training, and
supervision of autism service providers; (2) the ability to identify
the availability and distribution of those providers; and (3)
procedures to ensure that such services provided by DOD supplement
those available through other public sources. In response to Section
717, DOD submitted the required plan (DOD 2007) to Congress in July
2007. In addition to meeting the requirements of Section 717, the
report outlined a proposed demonstration that would test the
feasibility of expanding the types of providers authorized to deliver
autism treatment services to include those not meeting the strict
requirements of the then-current departmental regulations. However, the
requirements for establishing TRICARE-authorized providers coupled with
the relative newness of the Behavior Analyst Certification Board (BACB)
and the ABA profession resulted in a shortage of qualified providers
available to TRICARE beneficiaries with autism. To mitigate this
shortfall, TRICARE has used its authority in ECHO to use non-
professional ``tutors'' to provide ABA through the Enhanced Access to
Autism Services Demonstration. The demonstration has been extended to
March 14, 2014. The demonstration expands the provider model by
including tutors under the supervision of a TRICARE-authorized ABA
provider to deliver the hands-on therapy. The supervisor retains all of
his/her other responsibilities.
To be eligible for the demonstration, the Active Duty family member
must be registered in ECHO. Eligible beneficiaries can receive ABA
services under ECHO but that program recognizes only ABA providers who
are State-licensed or certified or are certified by the BACB. Under
ECHO, those providers are responsible for developing a behavior plan,
providing periodic beneficiary assessments, and delivering ABA therapy.
TRICARE continues to increase access to ABA services and is leading
the Nation in fielding an effective ABA provision model that overcomes
the national shortfall in available BACB credentialed providers.
Regular reports to Congress demonstrate increasing participation by ABA
supervisors, tutors, and TRICARE beneficiaries. Based on positive
results from the demonstration (as noted in the response to Question
#3), a proposed rule to establish TRICARE coverage under ECHO of ABA
for Assistant Secretary of Defense was published in the Federal
Register, Vol. 76, No. 250 on December 29, 2011. Upon final
implementation of this rule, DOD intends to categorize ABA as an
``Other Service'' and adopt a tiered ABA services delivery and
reimbursement methodology. However, reducing or eliminating the
national shortfall of board-certified providers of ABA will require a
concerted national effort that falls outside of DOD's mission area and
might best be led by other departments.
______

Appendix A

[The prepared statement of the National Military Family
Association follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Appendix B

[The prepared statement of the National Council on
Disability follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

[Whereupon, at 3:55 p.m., the subcommittee adjourned.]

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