LIST OF PANEL MEMBERS AND WITNESSES

SHELBY:
(OFF MIC) come to order. I'm pleased to welcome our distinguished panel to consider the president's fiscal year 2021 budget request for the Navy and the Marine Corps. To--today, the committee will hear from the--fr--from Thomas M--Modly, the acting secretary of the Navy, Ad--Admiral Michael Gilday, the chief of Naval Operations, and r--General David Berger, the commandant of the Marine Corps. Gentlemen, thank you for appearing before the committee today, and thank you most of all for your service.

The Defense Department's budget request for 2021 is $705.4 billion and complies with the Bipartisan Budget Act of tw--2019. The request continues its focus on the national defense strategy by prioritizing resources to ensure that our military can compete, deter, and win in the 21st century against near-peer adversaries, such as Russia and China, if called upon. Subsequent to the president's budget submission, the Department of Defense delivered additional funding requests for unfunded requirements totaling nearly $20 billion--funding requirements not included in the 2020 budget request. For the Navy and the Marine Corps, these unfunded requirements amount to $6 billion dollars. In reviewing the base budget request, along with the request to fund additional requirements, the committee is interested in hearing how these proposals build on previous investments, Mr. Secretary, in modernization and lethality.

We also want to hear how the exclusion of these additional requirements impacts your ability to prepare, to plan, and execute your mission requirements. With only a modest increase in the 2021 budget, the Appropriations committee and Congress have a difficult task ahead here. We will have to prioritize resources and make difficult tradeoff as we work to ensure that our national security needs, including those resource--out--resource outside of the Department of Defense, will be met.

We appreciate your input as we weigh these. Senator Durbin is not here. I hear he's on his way. Anybody else have opening statement? Do you have opening statement, Senator Reed?

REED:
No, Mr. Chairman.

SHELBY:
Mr. Secretary, we appreciate you and Admiral, General, being here today. Your written statement will be made part of the record in its entirety. You proceed as you wish.

MODLY:
Thank you, Chairman Shelby, and Vice Chairman Durbin--when he gets here--Senator Reed, Senator Hoeven, other distinguished members of this committee. Thank you for your bipartisan efforts on behalf of the sailors, marines, and civilians in the Department of the Navy. It's an honor to be here today with Admiral Gilday and General Berger, both of whom have demonstrated gate--great commitment to each other and to each other's respective
naval service as they have worked collaboratively to lead our integrated American naval force.

Consistent with that spirit, we've taken a different approach to the written testimony this year. As you'll see, we submitted one unified document instead of three separate statements. Staying ahead in today's rapidly changing global and strategic environment demands that our naval forces commit to unified planning, clear-eyed assessments, and sometimes some very, very hard choices.

In this process, we must harmonize competing priorities, sustain our critical industrial base, and not allow our maritime competitive advantage to erode relative to global competitors and, more accurately stated, some very aggressive adversaries who wish to hasten our decline as a global force for liberty and for decency. In the end, this budget submission is a manifestation of the hard choices we had to make this year, but it is certainly--centrally
about the safety, security, and well-being of our sailors, marines, and their families. Ultimately, I ask that you recognize that in this submission we could not make trades that put our sailors and marines on platforms and with equipment that are not ready for a fight-- if a fight is what is required of them. While this budget slows our trajectory to a force of 355 or more ships, it does not arrest that trajectory. You have my personal assurance that we are
still deeply committed to building that larger, more capable, more distributed naval force within the strategically relevant timeframe of no more than ten years. I look forward to working with this committee and the entire Congress in the coming months as we develop realistic plans to do that.

Our budget also demonstrates a clear commitment to the education of our people as we implement the recommendations of the Education for f--Seapower Study that I led as the Under Secretary of the Navy over the last couple of years. We are establishing a Naval Community College for our enlisted personnel as part of a bold and unified naval education strategy that recognizes that the intellectual and ethical development of our people is critical to our success as a naval force. We are also stepping up our efforts to meet our solemn commitment to our military families through significantly more engaged oversight and accountability of our Public-Private Venture Housing program.

Finally, I would like this committee to understand that, as leaders of the Department of the Navy, we are both vocal and united in our determination to prevent sexual assault and sexual harassment throughout our force. Every sailor, every marine, and the Department of the Navy civilian deserves individual respect, dignity, and protection from this great naval institution. We have some work to do in this regard, but you have my personal commitment that we take it very, very seriously, and we're working hard at it every single day.

We are grateful to the entire Congress for passing this year's Defense Appropriations bill, which enables many of the priorities identified within this document. In passing this legislation, you've sent a strong signal of support to our people, and a very, very stern warning to our adversaries. We also appreciate the funding stability and predictability of the past several years. This has saved money for the American taxpayer and given our force the agility and flexibility to address emerging threats while investing in our integrated naval force.

We urge the committee to do what it can to continue this stability so that we can con-- continue to implement the reforms and investments required to meet great power challenges, protect the maritime commons, and defend the United States of America. Thank you for your time, and we look forward to your questions.

SHELBY:
Admiral, (INAUDIBLE). Admiral Gilday.

GILDAY:
Chairman Shelby, Vice Chairman Durbin, distinguished members of the committee, thank you for the opportunity to appear before you today with Secretary Modly and General Berger. I'm also joined today by my wife, Linda, and our son, Brian. We are thankful for your enduring support of the Navy-Marine Corps team.

Three carrier strike groups and two amphibious ready--ready groups, along with nearly 40 percent of our fleet are deployed around the globe today. Your Navy-Marine Corps team needs no permission to operate at sea and their power does not rest in any one location, but rather in their ability to ma--r--maneuver anytime, anywhere the seas reach, operating across the spectrum of military operations.

Without question, our sailors remain our most important asset. We have taken a hard look at what they need to be successful--the equipment and the training that they need to fight and win, as well as the support required to take care of them and their families. Over the past eight months, we have engaged in a deep examination of these issues. Our balanced approach and our budget submission provides a Navy ready to fight today while committing to the training, maintenance, and the modernization to provide a Navy ready to fight  tomorrow.

Naval power is critical to implementing the national defense strategy, and decisive naval power requires having a ready, capable, and lethal fleet sized to deter and, if necessary, to fight and win. Our number one priority is the columbia-class ballistic missile submarine. This request also heavily invests in our readiness accounts, such as ship and aircraft depot maintenance and modernization, manpower, live virtual constructive training, steaming days, and flying hours. It invests in new systems to make our fleet more lethal, including increasing our weapons inventory, bolstering the range and the speed of those weapons, exploring directed energy weapons, and incorporating new technologies, like hypersonics. This request grows our fleet in size, generating sustainable, capable capacity. Importantly, naval power is not just determined by what we fight and operate with, but how we operate and fight. We are pursuing an integrated approach with General Berger and our Marine Corps shipmates in fleet operations and exercises, in war games, and in experimentation. The net result, we believe, is integrated American naval power.

I could not ask for a better partner in this endeavor than our commandant, General Berger. Thank you all for your support, which has allowed us to make significant gains in readiness and lethality already. It allows us to answer the nation's call every day. On behalf of your active duty, reserve, and civilian sailors and their families who serve our nation, I thank you and I look forward to your questions.

SHELBY:
General Berger. Welcome.

BERGER:
Chairman Shelby, Vice Chairman Durbin, distinguished members of the committee, I appreciate the opportunity to testify on the posture of your Marine Corps and our priorities for the future. I'll start by echoing S--Secretary Modly and Admiral Gilday's thanks for the timely funding, as well as your enduring commitment to Marines, sailors, and their families through efforts like last year when the hurricane recovery, which you responded, helped us through, all the way through the revisions to the Private-Public Venture Housing program. Your bipartisan support--critical to ensure that we continue to prioritize people, as the CNO mentioned, as our greatest resource.

Thanks to predictable funding over the past few years, the Marine Corps has made significant progress restoring both availability and readiness. We're now at an inflection point. We have to pivot now toward modernization while sustaining the readiness that this committee has resourced. This pivot cannot wait, in my opinion, until next year or the following. We must move now or risk overmatch in the future by an adversary, and that is a risk we will not take.

As the national defense strategy directs, and as Secretary Modly recently emphasized in his first vector to all hands, we must pursue urgent change at a significant scale. Marines have always sensed when it's time to move out smartly. We don't hesitate. And this is that time. Realizing the bold direction of our strategic guidance requires acknowledging fundamental changes in the operating environment and how we must organize, train, and equip the force.
I believe most leaders recognize that significant changes are required, yet the scope and pace of necessary change is seemingly at odds with some historical resource allocations and some of our major acquisition programs, which predate the national defense strategy. This budget submission marks the beginning of a focused effort to better align resources that you provide with our strategic objectives.

Our future budget submissions will build on these investment decisions with informed recommendations for force design, modifications, and adjustments to our programs of record. Together, in partnership with my teammate, Admiral Gilday, and under the direction of Secretary Modly, we are committed to delivering the integrated naval and fleet Marine forces our nation requires.

As always, I welcome the opportunity to discuss our findings along the way and keep you and your staffs informed as we progress. We will be frugal with the resources we are given. We will ask for no more than we need. With Congress's commitment and support, we will ensure that your Marines continue to have every advantage when we send them into harm's way. I look forward to your questions, sir.

SHELBY:
Thank you. Mr. Secretary, I'll start with you if I could. The 2021 budget request for new ships is $4 billion below the 2020 enacted level. We also understand that the Navy is only planning to buy 7 ships in 2021. You currently have--it's my understanding--have a fleet of 290 ships. In 2016, the Navy conducted a force structure assessment that shows a requirement of 355 ships. And, while Congress has not received an updated assessment, the budget request suggests, perhaps, that the Navy is reducing the number of ships it needs. Is that accurate?

MODLY:
Senator, thanks for the question. It's a--been a big topic in various hearings that we've had so far--

SHELBY:
--But it's important to the existence of the Navy, isn't it?

MODLY:
Yes, it is. And I will say that we are not coming off our commitment--

SHELBY:
--Okay--

MODLY:
--To a larger Navy. We need a larger Navy--

SHELBY:
--Thank you--

MODLY:
--It's--

SHELBY:
--Go ahead--

MODLY:
--Yes, and so we are--we are--we are focused on how we can make that happen. Right now, that force structure assessment from 2016, which pegged it at 355 is the ri--as the force mix--

SHELBY:
--Mm-hmm--

MODLY:
--We're currently looking at that. We've been through the process--both General Berger and Admiral Gilday--conducted something called the Integrated Naval Force Structure Assessment over the last several months. Those conclusions came to me. I forwarded them to the Secretary of Defense. He is reviewing those right now and wants to do a deeper dive. I will say, whatever comes out of that deeper dive, I believe it's going to be more than 355
ships. It'll be somewhere north of that number when we consider some of the new types of platforms that we need. The challenge we have is a flat-budget environment, so--

SHELBY:
--We have that challenge with you--you--didn't you know?

MODLY:
Yes.
(LAUGHTER)
Yes, sir. I understand. We are trying to figure out how we can dig within our own budget--

SHELBY:
--Uh-huh--

MODLY:
--To free up resources to fund this--this program, but at the end of the day, it is going to require more topline to get to that number.

SHELBY:
Mr. Secretary, Navy leaders here before this c--subcommittee have repeatedly told Congress that stability and predictability are key to successfully managing the shipbuilding industrial base and ensuring that ships are delivered on cost and schedule. What's the impact of your shipbuilding plans on the industrial base, which a lot of us believe is so important to the future?

MODLY:
Well, it's absolutely critical, sir, because we--we cannot--we--we have to have a stable industrial base in order to not only ramp up for the future--

SHELBY:
--Mm-hmm--

MODLY:
--But also to sustain the employment and the skill levels that we have. We in--have invested a lot over the last several years in building up skills in the various shipyards, particularly in the nuclear enterprise. We have to be able to sustain that. And I've said to the teams before, you can't just turn that on and off like a faucet. We have to have more stability in that program, but we have to understand where we're headed as well. And that's what the process that we're going through right now is to determine.

SHELBY:
Mr. Secretary, I'll address this to you and to Admiral Gilday. Any discussion about the acquisition of new ships, I think, would be incomplete without a discussion about maintaining and modernizing our current fleet. The Navy has faced persistent challenges in maintaining its fleet by underestimating, we think, as maintenance needs and that--and the time and resources required to address them. You want to pick that up--tell us where we are and what the problem is there?

GILDAY:
Yes, Senator. Thanks for the question. So, in this particular budget request, the $5 billion dollar decrement in procurement is actually being pivoted towards manpower, $2 billion for--

SHELBY:
--Ah--

GILDAY:
--For readiness maintenance and modernization, and then another billion for R&D and technologies like hypersonics. On the--on the maintenance and modernization piece, readiness is our number one priority. And, so, as I said in my opening statement, we need a ready, capable, lethal fleet today. And, so, in terms of maintenance and where we're going,

we've seen in the past--almost the past year an increase of 60 percent in terms of the numbers of ships we're getting out of the shipyard on time--60 percent--actually 35 to 40 percent. So, instead of getting 35 percent of our ships out of the shipyard on time, right now we're getting above 60 percent--

SHELBY:
--Okay--

GILDAY:
--And we expect that to go to 80 percent by--

SHELBY:
--(INAUDIBLE)--

GILDAY:
--The end of the year. Our goal is zero delays by the end of FY '21.

SHELBY:
But online that depends on maintaining that industrial base, doesn't it?

GILDAY:
It--it does and we--and we look very closely at that, sir--in terms of both our--both our public and our private shipyards.

SHELBY:
General Berger, shortly after you took over as the 38th commandant of the Marine Corps, you issued planning guidance that calls for a significant redesign of the Marine Corps to ensure alignment with the national defense strategies--part of it. What progress have you made to--in identifying the changes to the Marine Corps' force structure in view of the needs today? And what adjustments do you plan to make that you can talk about here?

BERGER:
Sir, we took the last seven months to project out what we thought that nation's Marine Corps would look like in 2030. We're done that first portion of the homework. And, at this stage, I am--I've--g--I've explained what our results were to the--Secretary Modly and the Secretary of Defense, and I'm now having a dialogue with the senior leadership in the House and the Senate to make sure that they understand the assumptions that went into it and what the
conclusions were.

So, in terms of where we are with that, the first step is done. Now let's explain to the leadership what the outcomes were, take their advice on the best way forward, and move. And this last part, sir, we'll--this is not a one-time thing because we have an adversary that's moving. We have technology that's moving. So, we will need to continually look at how we're built for the future.

SHELBY:
You have to keep up with it, don't you?

BERGER:
We have to stay in front of it, sir.

SHELBY:
(INAUDIBLE)

BERGER:
Yes, sir.

SHELBY:
Senator Durbin.

DURBIN:
Thanks, Mr. Chairman. General Berger, you and I have had a conversation in--in my office with your colleagues about the fact that the first man I ever worked for in the United States Senate was Paul Douglas--senator from Illinois--proud marine who served in World War II-- and that when he was elected to the Senate in 1948. A few years after that, there was a national debate about whether we needed a Marine Corps and whether there would be a future for the Marine Corps. He, of course, was on the side of the Marine Corps and fought successfully to preserve the Marine Corps after World War II. H--he took great pride in that, probably as much as anything he achieved in public life.

I s--I sense from your testimony today that, as you say, the Marine Corps is at another inflection point--a pivot. And the language which you said in your testimony about modernizing the Marine Corps for an era of great power competition will require significant adjustments to long-term service investments, new integrated naval war-fighting organizations, and concepts of employment, better training, and education for marines-- changes that only Congress can help us realize.

You go on to say something of great significance to an appropriations committee. You say, I seek no additional resources for this effort. Explain this to me. How can you make a significant change in the mission of the Marine Corps, as you've described it here? What is the future of amphibious assault? Has it been redefined or understood today in different terms? And how can you achieve this significant change without additional resources?

BERGER:
There comes a time, I think, military or in the corporate world--in the civilian private sector- -where the periodic are we doing the right things, are we built right for the competition--it's clear that minor adjustments on the edges are not going to do. That's where we are. That's where we are as a service--as an institution. We're built okay for today. We are clearly not built for where we think we will need to be 6, 7, 8, 9 years into the future.

That means we need to make some assumptions about where our pacing threat would be in 2030. Some assumptions about technology and some assumptions about the fiscal resources that we would have to work with. So, our assumption on the fiscal side--sir, to get at your point--we assume we would have no growth fiscally because if we're constrained-- self-constrained by that, then we're going to build the best force we can based on the budget we have today. Now, that may be a different picture 10 years from now, but our assumption going in is it's not going to grow.

So, how do we do that? We need to get rid of--we need to divest of capabilities that have served us well in Korea and Vietnam, and the Persian Gulf, but are not a great fit for what the nation needs us to do in the future.

DURBIN:
If I can ask you--and perhaps you can answer this, perhaps you can't--tell me what unique mission the Marine Corps has that cannot be served by another branch of our armed forces in your vision statement.

BERGER:
Against a peer adversary--I think against a smaller adversary, you can take a different approach. But, if you believe in great power competition--I do and it's going to be enduring for a while--then what you don't want to do is, in all cases, match up symmetrically against that adversary. In other words, blunt force against blunt force.

So, you have to understand--what are--where are the areas where we have a unique advantage as a joint force? Where does the naval force has a unique advantage? Where does the Marine Corps fit into that picture? To your point, sir, we have an advantage in that we have been doing expeditionary amphibious operations for 70 years and have a h--huge head start on the rest of the world. We need to maintain that margin of asymmetrical advantage. It will not be laying two brigades over a beach against a--an--a foe--an adversary that's built up defenses and ready force (INAUDIBLE)--

DURBIN:
--The classic south pacific World War II--

BERGER:
--Not going to do that. That's correct. So, now, we need to fight as a--as a distributed maritime force across a much greater area--smaller forces, more capable, more lethal--not f- -not land two brigades across a beach.

DURBIN:
I'm running out of time here, but I wanted to ask the secretary--I'm concerned about the report that the--there's a 40 percent chance that the Columbia-class submarine, which is one of your highest priorities, will not meet cost objectives and we have reduced the request in this next year from two Virginia-class submarines to one. That does not seem--those two statements do not seem consistent with the stated goals of expanding the size of the fleet, especially on the submarine side. Could you address it?

MODLY:
Sir, they--the question about the Virginia class, I mean, that is a sub that came out of our plan at the--at the--at the endgame--decisions made above our levels. We--we wanted to keep the sub in, but there were some trades that had to be made at the Secretary of Defense level. We--it's at the top of our unfunded priorities list for that reason. With respect to the Columbia, right now I have not seen that report--the--in terms of the odds of it coming in over budget. I do--what I'd--what I have seen on it is that there is very little margin in that program right now. And, so, we have to maintain the industrial base--we have to maintain the throughput into that program to ensure that we don't have those types of cost overruns, so.

DURBIN:
Thank you, sir. Thanks, Mr. Chairman.

SHELBY:
Senator Hoeven.

HOEVEN:
Thank you, Mr. Chairman. Secretary Modly, are you still committed to growing the M--the MQ-4C fleet--the Triton?

MODLY:
Yes, we're still committed to that program. Yes, sir.

HOEVEN:
Okay. And talk about your use of--and, Admiral, certainly you can jump in here as well--but the use of the unmanned as well as your manned ISR.

MODLY:
Well, I--

HOEVEN:
--And it's value--

MODLY:
--I--I'll start and then I'll turn it over to the CNO, as well. But unmanned is a h--is going to be a huge part of our future. It's the types of things that General Berger was talking about. How do we distribute our force more? How do we put ISR assets out there where we don't have people at risk? How do we do it at a lower cost? So, unmanned is a critical element, not just unmanned aerial vehicles, but unmanned ships as well. We're looking at all those scenarios for the future.

GILDAY:
Senator, in terms of MQ-4, we've just accelerated the deployment of our first two out to Guam. And, so, they're on station and on mission right now in the western pacific. The capabilities that the MQ-4 brings to the fleet are game changing in terms of long-range ISR, at altitude with sensors that we haven't had supporting the fleet before. We're also developing the MQ-25, which is an unmanned platform aboard our aircraft carriers that both refuel our--refuel our wing while it's in the air, as well as providing an ISR-sensing capability as well.

HOEVEN:
How about survivability?

GILDAY:
Survivability of both of those airframes?

HOEVEN:
Yeah.

GILDAY:
Yes, sir. I think it depends--it--it--it--it's totally dependent upon a threat. And, so, we--we certainly wouldn't put those assets in a position where they would--where they would be shot down or they would be undefended.

HOEVEN:
What about survivability? This is one of the things the Air Force has brought up because they're not buying more of the RQ-4. One of the issues being concerns about survivability flying into--over countries with advanced air defense systems.

GILDAY:
Yes, sir. So, the--the--the intention in using those systems wouldn't be to put 'em in a position where they would be subjected to, you know, high casualty rates and a heavy--and a heavy anti-air environment. So, we would use those ISR assets further back--further back. But, based on the senses that they have, they do have an extended range.

HOEVEN:
So, describe when you use manned ISR and unmanned, and the relative benefits of each, and how you deploy them together in a way that, you know, provides the m--the maximum benefit for your force--

GILDAY:
--So, a--a lot of it--a lot of it is--is dictated by the threat environment. And, so, the environment that you're going to--that you're going to operate in, and then how you're going--how are you going to use those assets, lets say, on multiple vectors, and you're going to do it in conjunction with other assets in the joint force, whether they--whether they be terrestrial-based Army or whether they be air-based Air Force assets. So, it'll be a mix. So, it's difficult to give you an an--I don't mean to be evasive, but it--but it's difficult to give you a precise answer. It would be based on the threat. It would be based on all the tools that would be available from the joint force.

HOEVEN:
But, it's important, in your opinion, to maintain, enhance, develop, and continue that unmanned ISR, as well as the manned. You can't go simply back to the manned.

GILDAY:
Absolutely. Unmanned is the future, sir.

HOEVEN:
Alright, Gener--General Berger, same question for Marine Corps and your use of the unmanned ISR assets.

BERGER:
It will become even more important. It does augment--compliment the F-3--not augment but compliment the manned ISR platforms like an F-35, which is a flying sensor platform. Especially critical for the forward force, sir. In other words, the Marine Corps expedition-- the Navy-Marine Corps expeditionary team that's up forward as a stand-in forward force. That's your eyes and ears.

You--the joint force has to have a picture of what's in front of them. So, I would expect, 4, 5 years from now, much more unmanned ISR and, 10 years, exponentially more than that. This--this is how you sense--this is how you understand the picture in front of you.

HOEVEN:
And small, medium, large--groans, your comments there?

BERGER:
We need--we need a family of all. At this small unit leader--now, we have the means for a sergeant to launch, recover, control, and not--a handheld, unmanned platform. And we--he needs that information, but he also has to be linked into medium and high altitude, longer endurance, as well. Either kinetically to engage something for target or just to collect information.

HOEVEN:
So, even with manned ISR and satellite, you still feel the need is there for the unmanned sweep.

BERGER:
We assume that a threat is going to come after all those sensors, including our command and control network that stitches it all together. We need redundancy and we need resiliency, both. Yes, sir.

HOEVEN:
Thank you.

SHELBY:
Senator Reed, I'm--I'm--just before I call on you--I was looking at the secretary of the Navy, the commandant, and the admiral, and I was thinking, you as a West Point graduate and former Army officer, bring a little committee equilibrium here.
(LAUGHTER)
Thank you. Senator Reed.

REED:
Mr. Chairman, I am doing my best to be polite today.

SHELBY:
You're outnumbered, though, aren't you?

REED:
I am completely outnumbered.
(LAUGHTER)
Well, I'm--I can't go any further because it'll--
(LAUGHTER)
--Revive a--. Thank you, Mr. Chairman, and I have a great deal of respect for the a--Navy and the Marine Corps, and these gentlemen in particular. Let me go back to the Virginia class submarine. Block 5 acquisition, 9 ships in a 5-year period--2019 through 2023--with an option for 1 more.

The option was in the Navy budget until the very last moment, as the secretary has said. I'm concerned, though, that the window for exercising this option will be lost if we don't move quickly. In fact, the number one priority--unfunded priority of the CNO is the Virginia-class submarine. So, Mr. Secretary or Admiral Gilday, i--if the Congress does not fund this second ship today, it--will it be unlikely we'll ever get it because of pressures going forward in the next 5 years?

MODLY:
Sir, I--I--I--I would hope that's not the case. I would hope there would still be an opportunity to recover that at some point in the future, but it will be much more difficult if we don't get it this year.

REED:
And that's your view, too, Mr.--

GILDAY:
I--senator, I think if--if it's not in the--in the next budget, I think it becomes increasingly difficult just because the shear capacity at--at the shipyard, particularly with Columbia coming online. So, in my view, it's a capacity issue and now is the time to go after it if we can get it.

REED:
And let me also say, I think everyone recognizes that the growing threat in the sea is significant, both from the Chinese and the Russians. Technologically from the Russians, but also geographically, in terms of their extended cruisers, makes this--this--these submarines much more valuable than they were. And they are probably the most valuable asset we have, but I'm not objective when it comes to this topic. I--if we do fund a second cla--second F-- Virginia-class boat, are you in a position toward the option this year? Can you do that?

MODLY:
In--in--in discussions I've had with Secretary Geurts who looks at this program very deeply, he feels confident that the schedule that--and it had been lagging a little bit on the Virginia class--but was it--behind by about 6 to 8 months--he feels like they're back on track and that we could exerci--we could actually execute if it were done.

REED:
Thank you very mu--and let's turn to the Columbia. They--y--y--y--you would need, and are requesting, incremental funding authority for the boat in FY '21. If--and if you don't get that, you're going to have to ask for an additional $5.7 billion dollars. Is that fair? Or--

MODLY:
That sounds--that sounds correct.

REED:
It sounds correct. So--so, basically, the incremental funding will give you the flexibility to fund the--the ship, keep it on l--a progress--and it's necessary that we do that. So, if we don't give incremental funding, you won't save that money. You'll have to--you'll have to take more money out of your hide. Is that correct?

MODLY:
I believe that's--that sounds correct, sir. I can give you a--

REED:
--Please. Verify for us--

MODLY:
--Better answer on that later, sir.

REED:
The other point--and it was eluded to in--during--succinctly and well by Senator Durbin and I think by the chairman who also mentioned that the industrial base--we have problems in every industrial base, not just the submarine industrial base, etc. But we've created the National Sea-Based Deterrence Fund. And that is being used very aggressively to go down, not to the primes, but to the small contractors and others, and improve the quality. And one of the reactions I have to sort of the compression of the schedule is that some of the subcontractors need additional assistance in industrial base--training people, cybersecurity issues, techniques, etcetera. So, w--we would be well-advised to reinforce the national defense b--budget. In this case, the Sea-Based Deterrence Fund.

GILDAY:
Yes, sir. I--I think so. I'd be strongly in favor of that. We're tracking all the parts for Columbia. I just sat through a two-hour review yesterday where we're taking a look at those vendors that are most ri--most at risk with respect to being able to provide parts on time, and working very closely with them along the areas you mentioned. But one other thing I'd add, sir, is that we will likely be coming in with a legislative proposal that gives us--that we would request the authorities to be able to have the flexibility to spend money in case there's a CR, so get back that incremental funding so that we--in a program where we have to stay on schedule to get that boat on patrol in 2030--that we make best use of the money that we have.

REED:
That's gra--and, in fact, if we do--if we do a CR--since the--the Columbia will be a new start- -you can't do anything, so we would have to have an anomaly. Is that correct?

GILDAY:
That's exactly right and that's exactly the--the answer that we're looking for, sir. Thank you.

REED:
Well, thank you very much, gentlemen. And, Mr. Chairman, a--a--as a West Point--as I said, I really love the Navy except for one sad day in December--

(LAUGHTER)
--So, I--I want for the record to show that.

SHELBY:
Thank you. Senator Collins.

COLLINS:
Thank you, Mr. Chairman. Welcome to our witnesses and thank you very much for your service. Mr. Secretary, last week Admiral Kilby testified that the DDG 51 Flight III with its advanced radar is the ship that the Navy must have in order to keep up with our adversaries. Secretary Geurts said that the Flight IIIs are needed to be a firm backbone for the Navy if we're going to compete on a global scale.

In a letter to me dated Jul--January 27th, you, too, talked about the critical role that the DDG 51 Flight III is playing, and that's why I was so surprised and alarmed when the budget came out and showed, as the chairman has indicated, deep reductions in the DDG 51 procurement in the future years' defense program. It seems to me that these cuts are contrary to the testimony we've heard about the vital importance of these ships, that they undermine the president's commitment to a 355-fleet Navy, and they also cause instability in the industrial base, and we've heard that from a number of our colleagues today. It's important that we continue to add Flight III capability to the fleet while also avoiding these up and down peaks and valleys in our industrial base that end up squandering the

expertise and training of skilled workers at shipyards like Bath Iron Works. It also frequently causes cost increase--increases in the long run. So, I would urge you to avoid this abrupt change in the number of ships that you plan to procure. I also want to ask you, this morning, about where we are on an additional follow on multiyear contract for Flight IIIs. Wouldn't that help to continue to add important capability to the fleet, save us money, and help ensure that stability in the industrial base that's so important?

MODLY:
Senator, I agree with everything you said. The DDG Flight III--51 Flight III is critical. It's going to be a critical part of our future force. In the '21 budget, we had to make some tough choices in '21 that were base--basically focused on readiness and the safety of our sailors that are on these ships.

And, as you know all too well, a couple of years ago we had some very horrible tragedies on a couple of these ships, largely because they were being overworked. We didn't have enough people on them. So, we're trying to bring up the number of crewmembers. That costs money. So, we had to make some choices in '21. The long-term future for the DDG-51 Flight III is going to be a--a critical part of our future fleet. And, as we're looking at this new integrative force structure assessment, it is part of that, too. So, we need to do a bit of a reset here in '22, as we look at '22, and we do that POM, in terms of how we do the types of things you're talking about. How we develop stability in the industrial base so we don't have these perturbations every other year. And using these multiyear contracts, which we've done for the submarines--we've done it for the carrier--they're very, very helpful because not only do they provide stability to the industrial base, they drive the cost down for us, as well. So, yes, we're looking at all those factors.

COLLINS:
Well, a-a--again, I think that it's very evident where you look at where our ships are deployed today that there's stress on our sailors, there's stress on our ships, and we need more of--of both. Admiral, I appreciate your recent visit to the Portsmouth Naval Shipyard in Kittery, Maine, which is often called the gold standard of public shipyards because of its efficiency and high-quality work. And I appreciate the Navy's attention of the modernization needs of our shipyard.

I noted that in this year's budget request, the Navy is seeking authorization and partial funding for the $715 million-dollar multi-mission Dry Dock 1 extension. And p--the Portsmouth Naval Shipyard is expected to receive $160 million dollars. I know that's going to be funded in increment. Could you talk about how important these investments are in order to ensure that the Navy's submarines are maintained on time and can be deployed?

GILDAY:
Senator, I agree with you that--that the public shipyards that we have--the four yards--are really the--the--the crown--jewel in the crown of the du--industrial base. It keeps our--keeps our fleet operating. Up in Portsmouth and the other yards, the--on--the average age of these yards is 76 years old, where p--

COLLINS:
--Portsmouth's is 200, by the way--

GILDAY:
--Y--y--y--

COLLINS:
--It's the oldest--

GILDAY:
--Yeah.

COLLINS:
--One in the country.

GILDAY:
--And--and, so, the infrastructure we've neglected honestly for a long time. It's fair to say that the condition of the infrastructure across those 4 yards is poor, hence our investment of $20 billion for the--for the integrated optimization plan. We have 3 projects ongoing this year. One of them is at Portsmouth. We have 8 MILCON projects in the '21 budget. 2 of those are for Portsmouth and they're spread across the other yards, as well.

And, so, we consider those--we would like to keep that investment strategy on track and continue to put money against it for--for--for all the reasons that--that you stated, ma'am. The other thing, in terms of the workforce, is we've paid very close attention to--to optimizing the flow of work across those yards so that we keep those--those folks employed because we can't face the situation again where we actually reduced that workforce to our detriment down the line, because we cannot--takes 40 years to--to get a master shipbuilder- -to--to actually build one--to--o-over--over 4 decades. And, so, we're not going to hire somebody off the street.

COLLINS:
Thank you, Mr. Chairman. Thank you, Admiral.

SHELBY:
Senator Murray.

MURRAY:
Thank you very much, Mr. Chairman, Ranking Member, really appreciate the opportunity to be here today. And thank you to all of you for all the work you're doing. Mr. Secretary, I--I wanted to start with you, and I wanted to talk about coronavirus. My home state of Washington is really an epicenter of this right now, but it's coming to everyone. In my state, there has now been 24 deaths since counting, and the number of people--we're not even saying anymore because it's growing so much.

This is really a serious crisis and every government entity has to be equipped for a really--a comprehensive response. It's not something we can do on the fly or last minute. We have to be prepared. We have to be prepared now and, frankr--flan--frankly, the lack of preparedness I've seen from a number of federal officials j--i--is really disconcerting to me. So, I wanted to ask you today how you are assuring sold--sailors and their families who are  stationed in my state and really across the country and around the world now--how is the Navy prepared to deal with this virus as it continues to grow?

MODLY:
So, thanks, senator, for the question 'cause it's--it's obviously a top of mind right now for all of us. We--at the Department of Defense--we've been engaged on this since probably the second week of January, in terms of how we can assist, how the Navy can assist. And--and in the initial phases of this, we opened up Miramar Naval--Marine Corps Air Station for patients that were there in quarantine for a couple of weeks. We've done it again, now, for another 300 coming off the cruise ship. So, we've been engaged in--in the interagency. In terms of our own process for our own people, we have been very communicative with them in terms of what they need to be doing. We're passing along all of the--the basic measures that the CDC is--

MURRAY:
--To your military bases?

MODLY:
To our military bases, exactly. And--and the Secretary of Defense, I believe last night, signed out something--I hadn't seen it yet--that basically puts out some mandates for personnel moves, etcetera, to the various countries--in and out of various countries. We are waiting for that to follow on his guidance so that we can flow the same guidance down to our folks as well. So, we--we are very engaged in this. It's a--it's a big part of what I do every day.

MURRAY:
Do you have a plan for testing availability, for isolation, for anything that--beyond just it's coming to you?

MODLY:
All the individual bases are going through that process in terms of how they would handle it on their individual bases. Some of them have unique circumstances like the Naval Academy, for example. All of our midshipmen are on spring break right now. And, so--

MURRAY:
--They'll all come back--

MODLY:
--We s--we--we stop them from going to certain countries for spring break, but they're coming back here at the end of this week. The superintendent there has already set up facilities there if we need to do isolation for those and--and testing for people who have symptoms. They're going to do a very extensive interview and--when every midshipman comes back--to ask them, where have you been? Who did you speak with? All those types of things. So, each base is doing different things depending on the population that they're dealing with.

MURRAY:
Are you talking to them about social distancing? Are you talking about--

MODLY:
--Yes, ma'am. All that--all tho--all that type of guidance is going out. I've already put out two vec--I put out a vector message to the fleet every Friday. I've already done that twice in the last couple of weeks, in terms of guidance that (INAUDIBLE)--

MURRAY:
--And what about a--pr--protective equipment? Do you have what you need?

MODLY:
I'm going to turn that to CNO. I know if--do you have an answer to that one?

GILDAY:
We do have protective equipment. In terms of, you know, we would prioritize the issuance--

MURRAY:
--Gloves, masks--

GILDAY:
--Prioritize--

MURRAY:
--Ventilators--

GILDAY:
--The issuance of it. I think, ma'am, you know, wi--with--with the absence of a vaccine and then we do have testing--we do have facilities that--that actually can conduct a test for us, but, as you know, nationally, we're trying to increase the amount of testing kits that we distribute.

And, so, until we do that, we're really trying to minimize the risk of anybody contracting it and then transmitting it. And, so, we've taken a number of steps, as--as Secretary Modly just--just mentioned--and the Secretary of Defense I expect will come up with top-down guidance today. The joint chiefs just met a day and a half ago and provided him our best advice. And, so, I--I--I--I would expect that we will see even more top-down guidance today.

MURRAY:
Okay, if it--cu--can that guidance be shared with us?

GILDAY:
I'm sure it'll be public, ma'am.

MURRAY:
Okay.

GILDAY:
There's--is no reason why it wouldn't.

MURRAY:
Do you have the resources you need to deal with this?

MODLY:
I think right now we have the resources that we need to deal with it. We have not seen significant outbreaks anywhere in--in our force. I think ul--right now, I think we only have two or three people in the service that have tested positive. So, I think we are--we're okay right now, but that may change.

MURRAY:
Okay. Do--I--I understand that DoD has started to shut down some of the schools and childcare centers that are on the installations. That obviously places a burden on families. How are you dealing with that?

MODLY:
Well, with respect to the--the--I--I'm not ex--that's another thing that's come up to the individual commanders to make that decision as to whether or not they want to do it. I know, with respect to the schools, they're looking at ways to possibly do teleschool for those--for those students, but--

MURRAY:
--I--I would suggest that a--all of your schools be ready with a plan should they have to shut down, with how they can do online learning, how they deal with childcare, how they deal with nutrition, all of those things. In my state, they're doing that seat of the pants and it-- having a plan in place for that ahead of time would be really important for all of your childcare centers, schools. And any other information you can get us on that (INAUDIBLE)--

GILDAY:
--Ma'am, so we're actually doing that right now in--in some locations with--with virtual training. We have a plan at the Naval Academy in case--a worse case plan--we'd have to stop classes. And, so, the graduating class we would--we would be in a place where you could actually graduate them on time or even early if we had to. And, so, we are looking at that. In terms of shutting down schools and childcare centers, we're doing that in the case basis.

MURRAY:
(INAUDIBLE)

GILDAY:
We're trying to--we're trying to ensure that we're stitched with the local communities, as well, so that we're not--we're not out of sync. And, so, that's an important consideration.

MURRAY:
Okay, great. Than--thank you very much, appreciate it.

SHELBY:
Senator Murkowski.

MURKOWSKI:
Thank you, Mr. Chairman. Gentlemen, thank you for your service. Thank you for your leadership. I'm just reading through my--my clips this morning from the state of Alaska and short little article here on interception--air--aircraft interception by U.S. and Canadian aircraft of--of two Russian aircraft that flew over the Beaufort Sea norther--near the northern Alaska coast.

NORAD is doing what NORAD is doing. We appreciate that a great deal. As you know, I'm very arctic-focused and I think appropriately so, and I will share with you this morning, I'm really somewhat surprised as I come in and--and look fully at this statement to see bare mention of anything arctic-related.

You have a recognition about China's investment in the arctic and go on to say investment in infrastructure needed to dominate the emerging arctic. Recog--you're recognizing the new trade routes opening up throughout the arctic. And, yet, as we--as we think about where the Navy is, where the Marines are, when it comes to the arctic, I worry that we've got a significant--a significant gap.

Mr. Secretary, as you will recall, Secretary Spencer leaned in very, very, very much--leaned in on the arctic in a way that was, I think, very encouraging for us, looking--looking long term about the issues as they relate to Russia, as they relate to China, but a level of awareness and--and preparedness. And, so, my questions this morning will be in this vein. First of all, I'd--I'd like to hear directly from you what you believe the--the role of the Navy should be in this emerging space. Some will say it is--it is the--it's the emergence of a brandnew ocean--the equivalent of the Mediterranean, only it's up in the high north. Do you believe that, from Navy's perspective, this has to be a priority for us? And, if so, how--how does this budget reflect that?

MODLY:
I'll take in two parts, senator. So, with respect to the prominence of the arctic and in terms of our thinking, it is very prominent in our thinking because, as you stated, the Navy has a responsibility for maritime security. And there's an whole--basically, a brand-new ocean opening up there because of the loss of the polarized caps up there. And, so--and, also, the very aggressive and well-stated intentions by both the Russians and the Chinese to make that part of their area of influence. And they're demonstrating that on a--

MURKOWSKI:
--Every day--

MODLY:
--Daily base--. Yes, exactly. So, part of the reason--part of the justification for why we look at our force structure assessment, it drives us to a number bigger than 355 as par--is--is that, because our responsibility for being able to operate in more places at mor--a--at--at more different times--at--at--at the same time--excuse me--requires us to have more ships. It's the only way you can do it. So, that's part of it.

The second part of it is, it is a joint problem as well. And, so, I've--just over the last couple of weeks--have had conversations with Secretary McCarthy and Secretary Barrett, and we're forming a tri--tri-department group to look at not just arctic, but how that would impact basing situations and decisions for the Alaska area, because it's a huge reas--as--I know I'm s--preaching to the choir here, I know. But it's a huge strategic asset for the country up there in that location. And we need to think how we can leverage each other in terms of our implementation of an arctic strategy so that we can make the best use of all the skills that we can bring and all the resources we can bring to bear up there, so we just started that--

MURKOWSKI:
--And it does have to be--excuse my interruption--

MODLY:
--Yeah--

MURKOWSKI:
--But I'm running out of time. It does have to be that joint approach and I appreciate that-- that focus on it. I'm going to be traveling with Secretary Barrett and have that opportunity for further discussion.

On the training side, I'm always worried--always worried that we're not doing enough coldweather training. We've got the facility in California. Last I checked, the weather is pretty decent there as opposed to what we're facing up north.

And we have had an opportunity to have the Marines out in Adak for a--for an exercise last year. I understand it was really tough and--and that's a good thing because you need to be tested in that--in that tough and really difficult Aleutian e--environment out there. General Berger, can you speak to--to the priority of arctic and cold-weather training for the Marines? Do you see further exercises in places like Adak or whether it's up at our--the cold weather
training center in Black Rapids? What do you see on the training side?

BERGER:
Viewed through two lenses, the way you broke 'em out. Homeland defense part and then maintaining the free and open commons--the commerce part. Both the Department of Defense--both--and the Naval Department fills a role.

For us, as you point out, training--operating in that environment is not the same as another one. Both in terms of equipment and the types o--how you will operate is different-- fundamentally different. And you have to experience that to under--really deeply understand it. We will continue to train in Alaska for those reasons. You can't replicate that in many other areas.

The last part of that, ma'am, as you're familiar with, the other value of going to Alaska, in addition to the environment, is the scale at which you can train. It's huge--

MURKOWSKI:
--Mm-hmm--

BERGER:
--And we ha--we have to be able to stretch the muscles of the joint force of the naval force over great distances--across water, across terrain. And there are very few places I know of on the earth where you can do that on a scale that you can do it in Alaska.

MURKOWSKI:
Well, we have the scale in the air, on the land, and in sea, as you know. And we want to make that training available. It's--it continues to be my understanding that the facility that we have there at Black Rapids, while good and solid, is underutilized, which I still don't understand why we can't do more with that. We have opportunities out in Adak and, again, we would encourage--encourage those opportunities because, as you point out, the--the training is--the experience is unparalleled. Mr. Chairman, thank you.

SHELBY:
Thank you. Senator Baldwin.

BALDWIN:
Thank you, Mr. Chairman, and Ranking Member for holding this hearing. Thank you all for testifying and for your service. Mr. Secretary, I know that our chairman has already asked some questions about the FFG(X) Program. I want to extend that discussion a little bit longer. As the Navy transitions from the Littoral Combat Ship program to the Frigate program, I'm very concerned about the potential impact to Wisconsin shipyards and the Wisconsin shipbuilding industrial base.

As you know, Fincantieri Marinette Marine in Wisconsin has hired and trained a very dedicated workforce to build and deliver 12 of the littoral combat ships and has increased hiring to ensure competitiveness in the frigate selection process. As you look to transi-- transitioning to the frigate, and in light of cuts to shipbuilding in the president's 2021 budget, how are you going to ensure that the shipbuilding industrial base from shipyards to the supplier base will not be impacted?

MODLY:
Well, as you mentioned, ma'am, that the frigate is a critical part of our--of our strategy. It's a critical part of our new force mix, regardless of whichever assessment you take--the one that we recently did, the one the Secretary of Defense is working on. The frigate is a key element to that. It--it fills a--a hole in our sh--in our force mix that w--we currently can't fill.

So, I can't speak specifically to what's happening with the procurement. It is in a procurement decision now and, so, we have some good competitors in that process. One of the evaluation criterias they will make it the impact on the industrial base. They--they have to do that, so I'm sure that they will look at all the factors and--and make the best decision. And that is--and that will come to me for final approval.

But--but, in terms of the ship itself, we need that ship. We need--I--I believe we need a lot of them. And I think that eventually we will get on a path to doing that.

BALDWIN:
Additionally, Mr. Secretary--well, first of all, I just commend you for the work you've done to strengthen naval readiness and to keep Americans safe now and into the future. One part of readiness is ensuring a high quality of life for our sailors and another is about ensuring that future ships are designed to improve maintainability to prevent additional burdens on the Navy's ship maintenance backlog. How do you go about accounting for those factors-- quality of life and maintainability-- as you evaluate competing designs for the frigate?

MODLY:
I think all those factors will be considered, particularly as we're looking to put fewer and fewer people on our ships--on the platforms--because of just the cost of people, and the level of automation that we can have on them allows that to happen. So, what that does--it also translates into ships that are far more technically advanced--technologically advanced, which requires crews that are far more educated and--and those are harder people to keep because they have opportunities to go do things outside of the Navy. And, so, it's hardest to retain them.

So, you have to think about the quality of life. What's it like living on that ship? Why--you know, w--what type of crew comforts do you have? What type of cycles? How often are you having to go out to sea? All those things factor into it.
So, particularly as we start looking at--and this is across the whole force because we want-- we're--we're investing heavily in naval education for our force. We want very, very smart, agile-minded people and the opportunities for people like that outside the Navy in a-- specifically in a strong economy is difficult. So, we have to make sure that all those factors are part of our calculation in terms of what type of ship we buy, how we man them, how we crew them, etcetera.

BALDWIN:
Thank you. General Berger, I understand that the U.S. Marine Corps is in a transition period and that priorities do change, but I'm concerned with the misconception that the JLTV was designed only for Iraq and Afghanistan, and it doesn't fit within the National Defense Strategy. And, while this is mainly a problem I have with the Army's procurement plan, I'm concerned with the signal it sends to industry when any service begins using successful acquisitions programs as bill payers for other priorities in future years.

Now, I'll follow up with you in--in writing to get more detail, but leaving aside its various mission packages, wouldn't you agree that the JLTV's hull design would be useful against anti-vehicle and pers--personnel landmines that we may see in future conflicts and that we'd want to see a similar hull design required in future manned platforms anyways?

BERGER:
Absolutely. I--I've been where they--I've been up to the factory where they build them-- walked the line, seen what they've constructed. Beyond that, I was amazed that--on our own and working with Marines--took the chas--took the cab off it, mounted a--a elevated missile launcher and said we can--we can make this unmanned and have it--have it satisfy your need for a vehicle weapons system that can be anti-ship. They are--they are wor--they are--they're a phenomenal group there. We need that platform. Yes.

SHELBY:
Thank you. Thank all of you for your appearance here today and I have a number of written questions, and other senators may have, too, for the record that we'd hope you would answer. Mr. Secretary, thank you very much. Admiral. General.

UNKNOWN:
Thank you.

SHELBY:
The committee is--stands in recess until Tuesday, March the 24th at 10 a.m., where--w-- where we will then receive testimony from the Department of the Air Force. Committee is in recess.

List of Panel Members and Witnesses

PANEL MEMBERS:
SEN. RICHARD C. SHELBY (R-ALA.), CHAIRMAN
SEN. MITCH MCCONNELL (R-KY.)
SEN. LAMAR ALEXANDER (R-TENN.)
SEN. SUSAN COLLINS (R-MAINE)
SEN. LISA MURKOWSKI (R-ALASKA)
SEN. LINDSEY GRAHAM (R-S.C.)
SEN. ROY BLUNT (R-MO.)
SEN. JERRY MORAN (R-KAN.)
SEN. JOHN HOEVEN (R-N.D.)
SEN. JOHN BOOZMAN (R-ARK.)
SEN. RICHARD C. SHELBY (R-ALA.), EX-OFFICIO
SEN. RICHARD J. DURBIN (D-ILL.). RANKING MEMBER
SEN. PATRICK J. LEAHY (D-VT.)
SEN. DIANNE FEINSTEIN (D-CALIF.)
SEN. PATTY MURRAY (D-WASH.)
SEN. JACK REED (D-R.I.)
SEN. JON TESTER (D-MONT.)
SEN. TOM UDALL (D-N.M.)
SEN. BRIAN SCHATZ (D-HAWAII)
SEN. TAMMY BALDWIN (D-WIS.)
SEN. PATRICK J. LEAHY (D-VT.), EX-OFFICIO

WITNESSES:
ACTING SECRETARY OF THE NAVY THOMAS B. MODLY
NAVAL OPERATIONS CHIEF ADMIRAL MIKE GILDAY
U.S. MARINE CORPS COMMANDANT GENERAL DAVID H. BERGER