17 APRIL 1997

Mr. Chairman, members of the committee, thank you for the opportunity to discuss Navy readiness with you today. We share a common goal - keeping your Navy ready to protect our national security and American lives and interests around the world, today and tomorrow.

Your Navy is the best in the world and remains ready to meet all commitments, whether in peace, crisis or war. Your Navy's preeminence rests on three critical ingredients: highly trained and motivated professionals, the most modern and advanced systems available, and extensive worldwide presence to provide rapid response to national tasking. In the past year, U.S. Naval forces responded to National Command Authority tasking on numerous occasions. In March, the carriers Nimitz and Independence moved into the South China Sea in response to heightened tensions between the People's Republic of China and Taiwan; in April, Guam's Amphibious Ready Group, with 22d MEU embarked, steamed to the coast of Africa in support of emergency evacuation operations; and in September, the Carl Vinson battle group was the center of a coordinated strike in response to Iraqi aggression. The Navy's ability to carry out these taskings depended on a continued high state of readiness.

Readiness remains a top priority and plays a critical role in our budget decisions. We use numerous tools to monitor readiness including: the Joint Monthly Readiness Review (JMRR); the Quarterly Readiness Report to Congress (QRRC); and the Status of Resources and Training Systems (SORTS) data base. Each of these reports indicates our current readiness is satisfactory. Yet the fragile nature of readiness requires us to remain on the lookout for indicators and trends. The Navy leadership is committed to such vigilance.

Our commitment to readiness remains, even as available resources shrink. In this environment we are faced with the significant challenge of maintaining a complex balance between four areas: adequately funding current operations; modernizing existing assets, protecting quality of life initiatives for our Sailors, and procuring new platforms to recapitalize the force and remain the preeminent maritime force in the world.

We have been vigilant to ensure budget constraints do not lead to a hollow force. Our commitment to current readiness has been fulfilled at the expense of modernization and recapitalization accounts. We cannot continue this practice without compromising the readiness of tomorrow's Navy.

Our challenge is to strike the correct balance between current and future readiness. The budget before you does exactly that. For example, in aviation, the flying hours program provides the funds to train and maintain qualified aircrews and achieves the Navy's goal of 85% Primary Mission Readiness (PMR) in all eleven carrier air wings. For non-deployed ships, funding is provided to achieve a ship OPTEMPO goal of 28 underway days per quarter. We have reduced this requirement from 29 to 28 days beginning in FY 1997 as a result of management efficiencies in underway training.

As in prior years, deployed ship operations are budgeted to provide extensive global presence by our carrier battle groups and amphibious readiness groups. The budget funds our OPTEMPO goal of 50.5 underway days per quarter for deployed forces. This goal is considered the minimum OPTEMPO to meet global forward deployed operational commitments and overseas presence requirements as requested by the unified Commanders-in-Chief and approved by the Secretary of Defense.

Because we are forward deployed, incremental costs for Naval response to contingency operations, such as those I outlined earlier, can be relatively small. However, unfunded contingencies that require deployment of additional ships and aircraft squadrons cause reductions in other O&M accounts. Diverting programmed O&M funds negatively impacts the balance of current readiness across the force. Such diversions can delay vital equipment repairs and disrupt quality training.

This year's budget establishes an important transition period. Although we project that our available resources, adjusted for inflation, will remain constant in the coming years, continued efficiencies associated with downsizing and reducing supporting infrastructure will make a larger proportion of allocated funds available for investment. Accordingly, our acquisition accounts reflect an increasing investment for recapitalization and modernization.

Looking to the future, the Navy is planning increases in procurement and research and development accounts to guarantee future readiness. For example, the Arleigh Burke (DDG-51) class Destroyer multi-year procurement will provide 12 ships over the next four years, even as we investigate an innovative SC 21 design for the next century. Funding is provided in the Future Years Defense Program (FYDP) for the construction of CVN-77, an affordable transition carrier for a new concept CVX. Similarly, the F/A-18 E/F will provide a bridge to a new Joint Strike Fighter, while ensuring air superiority and strike capabilities until 2015. New Attack Submarines and San Antonio (LPD-17) class amphibious ships will replace their aging predecessors in the near term. The V-22 Osprey and theater missile defense round out essential long-term investments. In short, we are moving aggressively to give the Sailors of today and tomorrow the tools they need at an affordable price. We appreciate your continued support for these important programs.

Where considered most cost-efficient, current systems are being remanufactured or given service-life extensions, such as the EA-6B Prowler and P-3 Orion aircraft. We are examining innovative ideas to reduce overhead costs substantially. "Smart Ship" and "Smart Base" are initiatives to find ways to reduce personnel requirements aboard our ships and bases. Similarly, we hope to use innovative technologies to improve efficiency and reduce crew size in new ship designs such as CVX and Arsenal Ship. Regardless of whether we are giving new life to existing systems or taking a technological leap into systems of the next century, proper funding of modernization accounts is critical to ensuring our continued operational primacy --- and future readiness. Striking the correct balance between current and future readiness is vital. I believe this year's budget achieves the correct balance.

As we work hard to provide the platforms and systems of the future, we must never forget that the most critical ingredient for success remains our Navy people. It is our Sailors who will navigate the sometimes turbulent seas we encounter. The men and women of today's Navy are the finest that have ever sailed the oceans. They have stayed the course during the uncertainty of downsizing. Our future readiness demands attracting and keeping the motivated, trained, quality Sailors we possess today. The quality of life initiatives outlined in the President's budget are critical to retaining our superior force. Our operational primacy depends on the unwavering commitment of these men and women. They deserve similar commitment from us. While they spend their days and nights securing our national interests, we must work together to secure the quality of life they so richly deserve.

The amount of time our people spend away from home is of great concern. Maintaining the proper balance between work and family is a quality of life issue that warrants our utmost attention. We have worked extremely hard to stay within the CNO's PERSTEMPO guideline of six month port-to-port deployments. Additionally, we are committed to improving the environment in which our Sailor's work by creating a climate of excellence. To this end, we are dedicated to operational primacy, leadership, teamwork and pride through our core values of honor, courage and commitment. By instilling these values in our people, it enriches them, our society, and our Navy's readiness.

To ensure readiness, both today and tomorrow, we must continually assess our status. The Navy has been working closely with the Office of the Secretary of Defense and the Joint Staff to integrate and improve existing readiness assessment systems and processes. Continuous self- analysis ensures we will continue to provide accurate measures of readiness.

Well-trained people, operating modern, well-maintained equipment in the right numbers, constantly patrolling the world's trouble spots, are the trademarks of your Navy. Readiness is ultimately the foundation for maintaining the credibility of our forces as an instrument of foreign policy and national resolve. Today, our Navy remains forward deployed and ready to protect America's interests both at home and abroad. Our Naval forces are poised to transition instantly from maintaining peace to deterring crises to resolving conflict. We believe that our readiness is well understood by potential enemies and will give them pause; thus accomplishing our most important objectives, the deterrence of conflict and the preservation of peace and stability.

Mr. Chairman, I would be happy to answer any questions the committee might have.