Below is a transcript of the hearing:

TESTER:

The subcommittee meeting, order. Let me begin by welcoming our witnesses. Acting Secretary Harker, this is your first appearance before the Senate Appropriations Committee, and I welcome you. Admiral Gilday and General Berger, you were both here last year for the last live hearing before the pandemic, so welcome back.

It's good to host you in person. I think we can all agree that China is a current pacing threat. And that pace is a run if not a full-out sprint. So how are we keeping up? The Navy and Marine Corps are facing the current challenges with different approaches. On one hand, the Marine Corps has taken major steps to reshape its force for the future based on General Berger’s strategy to self-fund the reforms.

On the other hand, the Navy is faced with the balancing act between the substantial cost of maintaining a fleet of nearly 300 ships and the additional cost of modernizing to meet the threats of the future. The Navy's 2022 budget protects readiness in order to deliver a combat credible force. As for the future, the path is less clear.

Secretary Harker has reported -- has reportedly found that plans to design new destroyers, submarines, and jets all at the same time are unaffordable. So how do we increase our pace to keep up with the threat? For the Navy, I understand there are ongoing reviews on what the fleet of tomorrow should look like.

I would add that no matter what you find in those studies, holding people accountable, whether it's government or civilian, for delays in ship deliveries or increase in weapons costs has to be part of that solution. The committee is eager to work with you to find the right balance between modernization or between modernizing and maintaining the force and fleet that we have.

Once again, I want to thank the witnesses for their testimony that they're about to give today and look forward to hearing from each one of them. With that, I'll turn it over to you, Senator Shelby.

SHELBY:

Thank you, Mister Chairman. I'll try to be brief. Welcome. I welcome you, too, Mister Secretary, Admiral, General Berger. Thank you for being here. We all look forward to hearing about the Navy and the Marine Corps' budget proposal for 2022. This discussion is particularly important, I believe, because the Navy's budget proposal reflects a meager 1.8percent increase from fiscal 2021 while reducing end strength and procurement investments.

The reductions are proposed despite the need to maintain readiness and make progress on key modernization priorities like the Navy's leg of the nuclear triad and the introduction of a new weapon system. In addition to other deficiencies in the Navy's budget proposal, I believe this budget fails to include funding to support the multiyear procurement contract for the DDG-51, which reflects poorly, I believe, on the department's view of its commitments to Congress and its long-term shipbuilding plans.

It also calls into question the seriousness with which this administration approaches defense-related funding decisions given that the DDG-51 appears as the Navy's top priority on its unfunded requirements list. You're all very well aware that our adversaries, including China and Russia, pose new and increasing threats.

And they will grow. They're making unprecedented investments in their capability and capacity. Investments that this budget does not even come close to matching. I believe that this budget, which fails to even keep pace with inflation, sends the wrong message to our allies and our adversaries. I'm interested in hearing how the 2022 budget request fully meets, if it does, the needs of the Navy and Marine Corps while maintaining our advantage over our adversaries.

It'll be an interesting discussion. Thank you, Mister Chairman.

TESTER:

Thank you, Senator Shelby. We'll start out with you, Secretary Harker.

HARKER:

Chairman Tester, Vice Chairman Shelby, distinguished members of the committee, thank you for your bipartisan support of -- on behalf of our sailors, Marines, and civilians. I'm honored to be here with General Berger and Admiral Gilday. I support their eff orts to build a more integrated, all-domain, naval force through the Nav Plan and the Force Design 2030.In order to move these plans forward within existing resources, we've had to make some very hard choices in this budget.

But that's exactly what the American people expect us to do. Every dollar is a strategic asset that must be maximized to stay ahead of the pacing threat of China and the many other challenges facing our fleet and our nation. Every investment must be done in a balanced and sustainable manner to ensure we maintain the readiness of our current fleet while building the capacity and the capability we will need in the future.

The cost of readiness is increasing. Personnel and maintenance costs have grown at a rate that is well above inflation. This growth squeezes the rest of our budget. In order to maintain our readiness, we've had to delay some of our planned ship purchases to future years. In order to invest in a superior future force, we've had to divest of less capable assets.

These were not easy choices, but we cannot create a hollow force that does not train our sailors or Marines or which leaves holes in units or does not provide for sufficient crew rest. We have learned those lessons through the tragic mishaps that have occurred over the last five years. In order to ensure future availability and readiness of our fleet, we are prioritizing investments in our physical infrastructure, including full commitment to the Shipyard Infrastructure Optimization Program.

I have visited all four of our public Navy shipyards, as well as most of the private shipyards and other commercial facilities. It has been an inspiration to shake the hands of the men and women who are building and maintaining our fleet. I've had the opportunity to speak with every level of labor and management about the issues they face and the need for consistency in funding and demand.

That's why we're increasing the capability and resiliency of these century-old installations, increasing the size and capability of our dry docks, and equipping our 40,000-personworkforce with the tools they need to maintain our new, more lethal assets. To ensure our resources reach the warfighters who need them, we're demanding rigorous self-assessment and responsive accountability in every part of our enterprise through the Performance to Plan initiative.

This eff ort has improved our readiness of our strike fighters and is being rolled out successfully across the fleet in other areas. As good stewards, we are on the right path towards obtaining an audit opinion for the Navy and Marine Corps General Funds and the department's working capital fund. We are the only military department that has eliminated audit material weaknesses, three in the Navy, one in the Marine Corps, and are leading the way in this critical effort.

This has enabled us to improve cybersecurity in our business systems. Since 2017, the Marine Corps has closed 41 out of 110 IT findings, 17 of which were cybersecurity-related. We are also increasing investment in the department's oversight functions while maximizing the return on our investment in the performance audit process.

Effective use and management of data is key to our digital transformation and will change how we will fight and win at every level. This requires the modernization of our information technology infrastructure, which is a critical warfighting priority for our department. We're also prioritizing the mental health of our force, speaking out at the senior level about the benefits of counseling, and ensuring the availability of counselors, chaplains, and other professionals.

We appreciate the committee's attention to this vital issue and your support in providing additional mental health support to our sailors and Marines and our forward operational units. We're fighting the scourge of sexual harassment and sexual assault through efforts like the Watch List, a tool that uses Navy and Marine Corps data to alert commanders to conditions in their units that may lead to these toxic behaviors.

We are increasing investment in this area, focusing on the prevention of and response to sexual harassment and assault. In this FY '22 budget, we've added over 200 personnel across the Navy and Marine Corps focused on prevention. The majority of these personnel will be placed at Navy and Marine Corps installations, working with sailors and Marines.

We're also adding an additional 80 sexual assault response coordinators for the Marine Corps, as well as 18 Navy criminal investigative service personnel dedicated to sexual assault, prevention, and response. Secretary Austin's 90-day Independent Review Commission has completed its work and we look forward to implementing the secretary's forthcoming recommendations to make meaningful and lasting progress in this area.

Around the world and around the clock, the sailors, Marines, and civilians of our integrated naval force stand the watch and execute the mission. On behalf of each of them and their families, I thank you for your time, oversight, and appropriations. I look forward to your questions.

TESTER:

Secretary Harker, thank you for your statement. Now, we'll go to Admiral Gilday.

GILDAY:

Chairman Tester, Vice Chairman Shelby, distinguished members of the committee, thank you for the opportunity to testify today along with Secretary Harker and General Berger. I am thankful for the enduring support that this subcommittee provides the United States Navy. I believe that this hearing comes at a critical time in our country.

The competition at sea is intensifying. China and Russia are rapidly mobilizing their militaries. They are attempting to undermine our alliances and degrade the free and open order. The Chinese battle force is the largest in the world, and it is growing. Backed by a robust industrial base and the biggest shipbuilding infrastructure in the world, they command a modern fleet of surface combatants, submarines, aircraft carriers, amphibious assault ships, and next-generation fighters.

Furthermore, they are strengthening their space capabilities and stockpiling an arsenal of long-range missiles to hold us and our allies and partners at risk. China is deliberately modernizing for the 21st century, building all-domain capabilities that rival our own. Make no mistake, our fleet, your fleet can control the seas in conflict and project power ashore today, but we will be increasingly challenged to do so in the future unless difficult choices continue to be made.

The results of analysis over the past five years inside and outside the Pentagon have been consistent and they've been clear. America needs a larger, more capable fleet. Importantly, our latest study gave us the headlights not only for the size but also for the composition of that force. We need to transition away from older, less capable platforms and deliver the platforms, weapons, and systems that provide overmatch.

At the same time, I think that we need to grow. However, the Navy currently faces the task of recapitalizing our strategic nuclear deterrent, something we have not done in four decades, making a once-in-a-century investment in our public shipyards and preserving the current readiness so that our fleet can confidently operate forward and be relevant.

Nearly 70 percent of the ships that we have today will have a decade from now. We have to take care of the ships that we own, but the price tag and that readiness is rising. Over the last20 years, manpower operations and maintenance costs, which make up over 60 percent of our budget, have grown at a rate 2.4 percent above inflation.

Meanwhile, our buying power is less than it was in 2010. Back then, we had 288 ships. Today, we have 296. Given these factors, if the Navy's top line remains flat or goes down, the size of our fleet will shrink. Nevertheless, we are determined to deliver the most ready, the most capable, and the most lethal Navy we can with the budget that we are given.

To do this, we are improving maintenance in our shipyards and aviation depots. We are ensuring our ships are properly manned. Our magazines are filled with ammunition. Spare parts are in our storerooms. And our sailors are getting the steaming days and the flying hours they need to hone their skills. We are working hard on a more robust, resilient network infrastructure as part of JADC2. We're investing in long-range precision fires like hypersonics and tactical Tomahawk, and we're developing directed energy systems, lasers to improve fleet survivability.

Our eye is on the larger hybrid fleet. We're determined to build affordable capacity, including a deliberate approach to uncrewed vessels. And we're making sure every sailor can outthink and outfight any adversary by scaling our 21st-century training framework, Ready, Relevant Learning, as well as our investment in Live, Virtual, Constructive training.

Senators, the average age of a Chinese fleet is 11 years. Ours is 21. It's time to move decisively and build the future Navy. We must modernize now in this decade or risk falling behind while we maintain a forward posture that keeps America safe and prosperous. I'm extremely proud of our sailors, our Navy civilians, and our families who've endured sustained historic high up-tempo in the midst of this pandemic.

They are the source of our strength. As are the patriots in our shipyards and our aircraft depots and our partners in industry, companies large and small, who keep the production lines moving. Again, I am grateful for this subcommittee's support to our Navy and Marine Corps team, and I look forward to answering your questions.

Thank you.

TESTER:

Thank you, Admiral Gilday. Next up, it's you, General Berger.

 BERGER:

Chairman Tester, Ranking Member Shelby, and distinguished members of this committee, thank you for the opportunity to testify on the posture of your Marine Corps this morning, our priorities and the resources required to fund it all. Over the past two years since becoming commandant, I've come to better understand and appreciate the bipartisan support of this committee, which I think is critical to creating and sustaining the force we have today but also the force we're going to need for the future.

I realize they're competing national priorities you must wrestle with, and that's going to put pressure on defense budgets. But I'm also confident that you appreciate the severity of the security environment today. The global competition, which the chairman and ranking both mentioned, with China and Russia is accelerating.

Your military is going to need more advanced capabilities to effectively compete to reassure our allies and partners, and to deter war. Force Design 2030 is the Marine Corps' answer to creating the cutting-edge capabilities that'll better enable the fleet and the joint force to deter, to compete, and to respond with ready forces to any crisis anywhere on the globe We're roughly two years into our Force Design effort.

And while I'm encouraged by our progress, I'm not satisfied by the pace of change. We must move faster. To accelerate our modernization, we as a service need to do a better job of explaining the details of Force Design 2030, yourselves, and to your staff. And that is my responsibility as your commandant.

It's important that this committee understands that the capabilities we seek are not the stuff of science fiction. They are already programs of record based on proven technology. And while we don't have sufficient time this morning to address the full scope of our Force Design eff ort, I do want to highlight three key capabilities.

First is long-range precision fires for sea denial and sea control. Over the past several years, we've proven that our existing HIMARS vehicles can hold naval vessels at risk with ground-based anti-ship missiles. Through aggressive experimentation, we can -- we have further enhanced that capability. This year, we successfully launched a naval strike missile from a modified unmanned Joint Light Tactical Vehicle, hitting a target at sea underway.

This system which we call the Navy and Marine Expeditionary Ship Interdiction System, or NMESIS, is exactly the type of capability that combatant commanders are calling for to enhance their deterrent posture. Second is unmanned ISR. In 2020, we began to transition to a mixed capability of long-range ship and ground-based unmanned aerial systems to include the MQ-9 Reaper.

The Reapers have proven capability that'll significantly expand our organic ISR and enable us to better support fleet and joint operations, including anti-submarine operations. We've also initiated a partnership with the industry to develop a future autonomous, long-range, unmanned surface vessel that's going to significantly improve the reconnaissance capability of our Marine Expeditionary Units or MEUs. Third, we're investing in loitering munitions.

These swarming aerial munitions, which employ automatic target recognition have proven exceptionally lethal in recent global conflicts, most recently in Europe. Our own tests have also demonstrated this technology to be effective with five of five successful shots during testing. We plan to equip our infantry and reconnaissance Marines with this loitering capability mounting those munitions on both ground vehicles and long-range unmanned surface vessels, the one I mentioned earlier.

And we will make a final decision on vendors this year. And with that brief update in mind, a fair question I think might be to ask, how do you plan to pay for all these new capabilities and other force design investments? Recognizing today's budget environment, the Marine Corps has, for the past two years, and we will continue pursuing a cost-neutral approach to Force Design We will self-fund our modernization.

To ensure the success of this approach, I will ask for your support in reducing the total procurement of some platforms commensurate with the recent reductions in our end strength. The fact is today's Marine Corps is significantly smaller than it was a decade ago, about 24,000 Marines smaller. That means we won't need as many ground vehicles.

We won't need as many aircraft as we thought we did when the initial procurement decisions were made decades ago. It's just simple math. And with the reductions outlined in our Force Design report, I believe we will have sufficient resources to create the modern capabilities required for competition, deterrence, and crisis response without a further reduction in our end strength.

That approach, however, relies 100 percent on this committee's confidence in allowing the Marine Corps to retain and reallocate the internal resources we generate through end-strength reductions, cutting legacy platforms, and rightsizing previously set programs of record for new capabilities like the F-35, the CH-53K, and the Joint Light Tactical Vehicle.

My promise to you as commandant is to remain the very best steward of taxpayer dollars. And I ask for your continued support to ensure your Marines, which are the nation's force and readiness, remains ready to respond to any crisis anywhere in the world today and into the future. Like the acting secretary mentioned, I welcome the opportunity to work with this committee and I look forward to your questions, both in this hearing and in the weeks to come.

TESTER:

Thank you, General Berger, and I appreciate all three of your statements. I think it is critically important that you continue to communicate with this committee so that you're prepared to fight the next conflict, not the last one. So, thank you all very much for your statements. General Berger, your top priority has been the implementation of Force Design2030. You've talked about it in your opening statement as a plan to modernize the Marine Corps and ensure it remains the world's most effective naval expeditionary force.

When we consider what it will take to serve as a credible deterrent to China, and if necessary, fight and win future wars, it is essential that our Marine Corps can successfully modernize and meet the challenge. This subcommittee is strongly supportive of the strategic concepts associated with Force Design.

We must ensure that the Force Design priority program stays on schedule and responsibly use taxpayer dollars. So here's my question, General Berger. Your unfunded priorities list contains several items that would accelerate the Marine Corps' long-range fires program, increase troop mobility, improve command-and-control capabilities, where does the unfunded priority list provide us opportunities to accelerate Force Design implementation?

BERGER:

Part of the challenge, Chairman, as you are well aware, is that in a pacing-threat environment like we're at right now, both of us are moving. Add to that the speed at which technology is developing. So, the items on our unfunded priority list, as you mentioned, Chairman, that's what we need to ensure we stay in front.

We're very ready today, but those items will allow us to be ready in the future in front of our adversary with some margin of error, which I believe we must have. So, things like ground-based anti-ship missiles, the G/ATOR radar, the CH-53K. Those -- the MQ-9 Reaper. Those will allow your forward force, your stand-in force to deter effectively forward in the future as well.

TESTER:

Are you confident the programs you're requesting funding for in FY '22 can deliver results quickly?

BERGER:

Absolutely, yes.

TESTER:

OK. And how are you balancing the need to move quickly on strategic concepts while keeping those costs affordable?

BERGER:

We're small enough that we could not set aside an experimentation force in the Marine Corps. So for example, Chairman, what we did is -- we have three Marine divisions in the Marine Corps. We pick one battalion in each division, outfitted differently, organized differently, equipped differently, trained differently.

And for the next 18 to 24 months, we'll experiment with all three. And the rationale behind that is that's how we're going to learn faster, that's how we're going to introduce the results of experimentation in wargaming into our Force Design process at speed.

TESTER:

Thank you. Admiral Gilday, recent media articles suggest that the Navy is expecting to face a challenge in next year's budget request and will have to make some difficult funding decisions on how to proceed with the Navy's Modernization Act. These funding decisions will only become more difficult in the future as the Navy continues to modernize and introduces new weapons systems, and programs like next-generation submarines, surface combatants, and aircraft.

So Admiral Gilday, we never are going to have enough money to do everything that we'd like to do. That's a fact. Which generation systems and programs should be prioritized in the upcoming budget request?

GILDAY:

Sir, thank you. So big picture, what my intention -- or our intention to do with our investment strategy is to afield the most capable, most lethal, most ready force that we can, given the top line that we have. And so, we have not come off of our priority to continue to invest heavily in the readiness and training of the force that we have today because that force needs to be forward to be relevant.

With respect to modernization, key programs include hypersonics. We have doubled our investment in hypersonics and R&D. I think that is a very reasonable investment strategy based on the fact that we are ahead or on track with every milestone in that program, including a very successful multi-thousand-mile test last year, and a successful new-generation engine burn just a month ago, working very closely with both the Army and the Air Force on that particular project.

Likewise, on the defensive side, directed energy is an important investment for us with respect to fleet survivability. I mentioned upfront in my opening statement that the major investments by the Chinese are in space and missiles. We have to have a way to -- we have to have a way to defeat those missiles.

And I think an afford -- the most affordable way to do that is a Defense in Depth-type of framework that includes laser energy. We have those systems now at sea and are fielding them.

TESTER:

So, I just want to flesh that side just a little bit more. All four -- all four defense committees are going to be making decisions soon on what changes we're going to make to the 2022budget request. What views do you wish to share about your investment priorities today, so that we might avoid disagreements on what systems deserve more funding?

GILDAY:

Yes, sir. So if I start in the undersea, that's our most survivable strike platform in the United States Navy, and arguably, in the U.S. military is our underwater superiority over the Chinese. We must maintain that overmatch. With respect to surface, continuing investment in new ships. We know that we -- we know that our cruises are nearing 35 years old.

We need to replace those. We're going with a smaller, more distributed force. The frigate investment is really important, as are the long-range weapons we're investing to put at sea, and hypersonics on our first -- on our Zumwalt-class ships by '25. If I -- it needs to be balanced across the three domains, sir.

Under the sea, on the sea, in the air. The fourth and fifth-generation mix of aircraft that we're fielding by -- we're fielding now this summer with our first deployment. But by 2025, we'll have five to six squadrons, and by the end of the decade, we'll have all nine squadrons that have that mix of fourth and fifth.

We want to keep that on track as well.

TESTER:

Thanks, Admiral. Senator Shelby.

SHELBY:

Thank you. Thank you, Mr. Chairman. Secretary Harker, the administration's budget proposal includes a request for a new language to authorize multiyear procurement contracts for multiple ship classes, including the destroyer, while at the same time breaking the current multiyear contract for the destroyer.

The question is this, how does the Navy, sir, plan to measure the impact of its proposal to breach the current destroyer multiyear contract on the cost to future multiyear procurements? In other words, how can Congress and the industrial base trust the Navy to fulfill its commitments to multiyear contracts, which I think are important?

HARKER:

Thank you, sir. Yes, multiyear contracts are very important to us. We do intend to sign another multiyear for DDGs starting in '23 through '27 and continue that procurement into the foreseeable future. DDG-51 is a very valuable asset for us. We really struggled with the decision to take that out of this year's budget.

It was the hardest decision we made, and we would love to have been able to include it going into this next year. We are committed to multi years for our submarines and for DDGs. The -- over the last multiyear period, it was a 10-ship multiyear over a five-year period. With the assistance of the committees and the Congress, we were able to purchase 10 ships, so the one that's in our budget this year will be an 11th ship.

That gave us the ability to not buy the DDG this year, but it was a very difficult decision for us, sir.

SHELBY:

Sir, do you believe it's very important for the industrial base to believe that the Navy is going to fulfill their contracts?

HARKER:

Yes, sir. I do. Very much so. It's critical for our industrial base, and we believe that we have a strong working relationship with them.

SHELBY:

Sir, in the final year of a five-year multiyear procurement contract for Arleigh-Burke class destroyers, this subject here. Despite the multiyear contract, in 2022, the budget request includes only one destroyer, rather than the contracted two. This is perplexing because of the Navy's No. 1 unfunded requirement is $1.7 billion for the second destroyer.

Seems like a contradiction. Admiral Gilday, why did the Navy remove one destroyer from its'22 budget proposal? Is it no longer needed or is that just playing with the budget and the numbers?

GILDAY:

No, sir, it wasn't playing with the numbers. So I go back to the thesis of our budget proposal, which is to feel the best, most capable, and most lethal fleet that we can, that's 296 ships, and make it the best that we can, including a modernization plan that gives us increased capabilities and then growing the Navy at an affordable rate.

And so it was a balance across those three areas, sir. And as the secretary said in his opening statement, based on incidents like the collisions in '17, we are unwilling -- at least my best advice, sir, to continue to prioritize training and readiness is our top priority.

SHELBY:

I believe it's a given by this Committee on Appropriations Defense to not to shortchange the Navy, not to shortchange readiness and also future weapons. And if we do it, we do it at the peril of the -- of this country. Would we not?

GILDAY:

Yes, sir. I believe so.

SHELBY:

General Berger, I'll direct this to you, sir. In 2019, the U.S. Marine Corps' unfunded requirements list totaled $235.9 million. In 2020, it was $2 billion. In 2021, it is 769.8million. This year's unfunded requirements list from the Marine Corps is as much as all three years list combined, totaling nearly $3 billion according to our committee.

General Berger, has the Marine Corps been resourced adequately to support your force design and maintain pace on modernization priorities and readiness? In other words, sir, what is the impact of such a significant unfunded requirements list to the Marine Corps if left unfunded?

BERGER:

If left unfunded, I think for all of our unfunded requirements list, it equals risk, probably the simplest way to categorize it. We are learning as we go with Force Design. We didn't know two years ago exactly what the Marine Corps would need to look like a decade out. We have a much clearer picture now.

So in order to give the committees a larger menu to select from -- with a clear picture of where the Marine Corps is going, we added to the unfunded priority list, but those things near the top that are not funded equal risk -- equals strategic risk.

SHELBY:

And I'll direct this -- my last question to you, Admiral Gilday. The submarine industrial base topic. Construction of the new Columbia-class submarine is now underway at shipyards that are already working on the Virginia-class submarine. You know all of this. The schedule for the Virginia boats has fallen off of the two-year period delivery cadence of the Block III boats and current ships under construction are as much as two years behind delivery.

So, I don't understand it. Admiral, what is the Navy doing to get to delivery cadence of the Virginia back on track as work on the Columbia begins to pick up? And has this – the investment in the so-called integrated enterprise plan paying off in terms of industrial base readiness and cost reduction to our submarine program?

GILDAY:

Sir, in terms of capacity, I think it's fair to say that our submarine industrial base has probably never been as busy as they are today. We have 12 boats under construction right now. We're going to deliver two this year. I think we'll [Inaudible] over by the end of July. Right now, we are moving at a pretty good pace to put -- to build two per year in terms of subcomponents.

That then needs to go to the larger components, and they need to be able to build at the rate of two submarines a year as well. The investments that the private yards are making include hiring more people, the training that's associated with that, the advanced funding that the Congress has given us that's allowed us to buy spare parts and materials to help neck down or reduce that delay in those submarine builds.

We are watching a Block IV Virginia-class very closely. Those delivery dates are not where they need to be, but they are moving in the right direction to the left.

HELBY:

Thank you, Mister Chairman.

TESTER:

Thank you, Senator Shelby. Senator Schatz.

SCHATZ:

Thank you, Mister Chairman. Thank you all for your service. Good to see you all. I'm going to start with General Berger and talk a little bit about Marines in the Pacific as part of the Defense Policy Review Initiative. The plan to realign Marines began with a series of conversations between the U.S. and Japanese governments in 2002. It became official in2006. There were some changes in 2012. And stipulating to the fact that as Senator Mike Mansfield says -- said, excuse me, that the bilateral relationship between the United States and Japan is the most important bilateral relationship that we have, bar none, and that we should keep our commitments to our greatest ally in the region.

It still seems to me that whether it's Lift, whether it's the difficulty in finding a Futenma replacement facility, whether it's the challenge of construction on Guam, whether it's beddowns on Oahu, that -- and maybe more importantly, that the whole region has changed. I would like to be reassured that we're striking the right balance between maintaining our ironclad commitment to the Japanese government and still maintaining the flexibility to make sure this thing makes any sense at all.

BERGER:

I think, Senator, your characterization, I would see it exactly the same way. That agreement that was made nine years ago did not account for, to your point, where the world is right now. I think this is the driving force behind the secretary's eff ort right now to do a global posture review because it's not set right for the future.

I think he senses that, and he's driven us to undertake a global posture review. Within the Pacific, I think the view from Japan, to your point, and the view from the U.S. is the threat from PRC from the PLAN, their military, is significantly different than it was in 2012. We have to have forces stationed forward and deployed forces if we're going to have a best chance of preventing the next conflict.

But the laydown of DPRI is worth revising, is worth looking at because it was set under different conditions. This is going to be led, as you know better than me, by diplomacy, by an eff ort with the State Department to work with Japan on what's the best way forward. 

SCHATZ:
Thank you very much. And Secretary Harker, the Navy's reliance on fossil fuels contributes to a vulnerability. The president issued an executive order to all federal agencies, including the DOD, to use their procurement authority to move the country towards carbon-free electricity by 2035. So can you talk about the new things that the Navy is doing pursuant to that?

And as you probably know, I've been tracking this issue for a while, so I'm not as interested in pilot projects or separate programs related to clean energy, but more importantly, how we're integrating the president's EO in all aspects of bases, installations, fuel, forward deployments, the smart grid, all of that.

And I think it's really important that we don't silo clean energy into some space called pilot projects and environmental initiatives, and bases, and installations and environment, but rather to understand this as core to the mission and therefore core to the way we do our procurement. I'm wondering if you can comment on that.

HARKER:

Yes, Senator, definitely. I -- I've looked into this since taking this job, and I've been to several of our bases where we've done a lot to improve our ability to provide a carbon-free energy footprint and to take more advantage of things like solar and wind generation. I was down at Parris Island on a trip there.

They've got a huge solar energy capability there that they've built on some old, abandoned runways. We've got other bases that have been doing that. It's something that we're focused-- where each installation has a climate installation plan focused to try to improve how we're doing in this area.

SCHATZ:

And are you integrating that into your requirements when you do the procurements of energy more generally? Again, establishing like a climate person at each base and installation, that's great. But what matters is your RFIs, your RFQs, your RFPs.

HARKER:

Yes, sir. I know there's projects that focus on this on the R&D side, and we are including it in future requirements.

SCHATZ:

OK. And final question. I want to talk to you about operational energy. What are we doing to make ship hulls more hydrodynamic and our combat aircraft more fuel-efficient?

HARKER:

So I'm going to ask the CNO to help you on that.

GILDAY:

So, right now, we're collaborating with industry on a new design for DDG(X), and then it will include taking a look at the latest industry best practices with respect to improve hull forms. It's the same thing as we look at a new class of submarine, we call SSN(X). The initial R&D that we're putting against that project, again, collaborating very closely with industry, is to look for a submarine that will travel higher speeds, and part of that is based in the shape of the hull.

SCHATZ:

Thank you.

TESTER:

Thank you, Senator Schatz. Senator Collins.

COLLINS:

Thank you, Mister Chairman. Secretary Harker, Admiral Gilday, let me start by thanking you both for coming to the great state of Maine to visit Bath Iron Works and the Portsmouth Naval Shipyard. I know that you saw that they are outstanding assets that are critical to the Navy and our industrial base. Nevertheless, let me be blunt in my assessment of this budget.

It is not close to adequate to meet the challenges that we are facing around the globe. It does nothing to help us counter the increase in the Chinese fleet. In fact, it goes in the opposite direction and the disparity will be even greater. And third, it jeopardizes our industrial base where we have only two yards building large surface combatants.

And the information I have is that if this budget is enacted, that 500 skilled jobs will be lost next year at one of those yards, and even more in subsequent years. So my question to you is also blunt and that is, was the DDG excluded from the budget simply because you were given an inadequate top line that you had to meet?

Secretary Harker, we'll start with you and then Admiral Gilday.

HARKER:

Thanks, Senator. I really appreciated the opportunity to tour both Bath Iron Works and the Portsmouth Naval Shipyard with you. The workers there were outstanding. The integration between labor and management at Bath Iron Works and at the shipyard was just a model for all of our shipbuilding and ship maintenance facilities.

And that's something that we definitely want to keep and invest in. We were unable to procure the DDG because of funding challenges. We did not have sufficient funds in the budget for us to be able to meet the balanced needs of providing a ready force today, the capability that each of the ships needed, and then the capacity of adding that additional destroyer.

So as we went through and we balance things out to provide the best budget we could, we did not have room for that destroyer in the budget.

COLLINS:

Admiral Gilday, do you have anything to add to that?

GILDAY:

Yes, ma'am. It was absolutely an affordability issue. We fought for that hull right to the bitter end. And if you take a look at where the money would come from to pay for that additional destroyer, we're decomming, or our proposal is to decommission 15 ships, old cruisers primarily, or we'll be taking money out of manpower, out of spare parts, out of ammunition.

And we've learned those lessons in the past that that's a bad place to take that money from. And so it really did come down to priorities. As difficult as it was to break the multiyear and to send mixed signals to industry, it really did come down to prioritizing the investments that we had to make right now in the fleet that we have today.

COLLINS:

And our job, I would suggest to the chairman and vice chairman, is going to be to look across the entire government and every department's budget as the full committee because when you see the double-digit increases for all of the civilian agencies and then you get to the Department of Defense and the Department of Homeland Security and essentially see a cut in real terms, it's just our priorities are out of whack here.

And I hope that we can remedy that. I just, Admiral Gilday, want to quickly touch on the shipyard infrastructure optimization plan that includes 250 million for the second increment of the Portsmouth Naval Shipyard's multinational Dry Dock No. 1 project. And that is really important as well. Could you explain to the committee what will happen if we do not provide that funding in terms of the ability to return submarines and sailors to the fleet?

GILDAY:

Yes, ma'am. It's my judgment that if we don't fund that project in '22 adequately, they will put at risk the ability to do our first availabilities on Virginia-class submarines beginning in FY '26. The project up there in Kittery -- at Portsmouth is absolutely critical for us to have that East Coast capability, we're simply not going to have it. We don't have dry docks large enough to put those ships, to put those holes in to do the maintenance on that --maintenance on them that's required.

COLLINS:

Thank you.

TESTER:

Thank you, Senator Collins. Senator Murray.

MURRAY:

Thank you very much, Mister Chairman. Thank you to all of you for being here today. Secretary Harker, let me just start with saying -- by saying that I was really pleased that the Navy decided to base the first new Constellation-class frigates at Naval Station Everett. As you well know, Everett is a really important base for the Navy, and we've got to continue investing in that base and the community for the long term.

I wanted to ask you today what additional investments at Everett are going to be necessary to accommodate those new ships or additional sailors and their families?

HARKER:

I don't have that information with me, ma'am, but I know we're committed to making sure that we don't send our ships out there without the additional crew facilities necessary for both the crew and the families and so on. Sir, you may have additional points.

GILDAY:

Yeah, absolutely. So that work is ongoing right now. The holes go in the water in -- the first hole will be delivered in 2026, ma'am, in addition to things like housing, child care, training facilities that will need for those crews as well. So we'll look at it holistically so that we don't-- so that they don't cut those crews and their families short.

MURRAY:

Good. All right. Well, I look forward to working with you on that as it continues. General Berger, I did want to ask you, you are proposing the boldest rethinking of the Marine Corps role and structure in decades. And as part of that, you're proposing to cut and strengthen, have smaller units operating from inside the area our adversaries can strike.

How will training need to change to prepare our Marines for those missions?

BERGER:

Training will have to, one, take the individual Marine to a higher level than they are right now from recruitment. In other words, through their entry-level training to their first unit, we have to raise the bar because we're going to expect noncommissioned officers and
junior officers to make decisions.

That's two levels up they're making today. When we're more distributed, we're more spread out, then junior leaders are going to make the calls, especially if you're in a high-threat environment where they're kind of challenge your communications. They're going to make their decisions independent of probably great communications with their higher headquarters.

So our training for them has to get higher. We're lengthening, for example, infantry training right now by 50 percent this year. It has to be longer. It has to get them to another level. The same individual that now maybe three people have three different skill sets. We got to make sure one person has three skill sets, if you follow me. So that one person is in a car, and one person isn't a machine gun, and the next person is a sniper.

We got to have people with multiple skills. So I think we will rate -- we will raise the bar and in training to make sure that we can empower and train them to a level where they can make the decisions on the spot.

MURRAY:

How do you expect this to increase the operational tempo, and how are you going to support Marines families during more frequent or longer deployments that you envision?

BERGER:

A separate issue on the frequency of deployments, and that's really driven by what the nation needs year to year. But the difference in Force Design, ma'am, is from the beginning, our premise was we're going to build a force that's manned at 100 percent in the fleet Marine force. That's not the case right now. We take risk.

In other words, we man them at less than 100 percent, but we are buying -- we are building the Marine Corps manned at 100 percent. When you do that, then you can accept an increase, a surge for periods of time. But your point on the stress on the families, absolutely, so when we deploy forces, like we have right now, onboard naval ships, and it's a plan six or seven-month deployment, you know, that's tough.

When it's extended, it's to a whole other level because then you're into unpredictable land for them. All of which is manageable, but we need to run the machine at a pace we can sustain, which I think you're highlighting, ma'am.

MURRAY:

Thank you. And finally, of those on calls -- so let me just say this Secretary Harker, the Department of the Navy has been pursuing a number of actions that are -- I'm concerned are very harmful to workers in my home state of Washington, and which jeopardize the stability of the industrial base, and those include proposals to divest UAV and virtually brand new patrol boats, changing shipbuilding specifications to circumvent by America requirements in the corporation's law and a lack of clarity on the disposition of a dry dock.

I haven't gotten satisfactory answers on that. There's no time right now, but I want to know if there's -- what reasonable alternatives are considered, and I'd like to follow up with you and my staff on that.

HARKER:

Yes, ma'am, definitely. I'll follow up with you on that. I know I've been out to the dry dock there over in Bremerton, and I've talked with the shipyard commander there, and I'm fully committed to the shipyard infrastructure optimization eff ort to renew -- replace that drydock, and part of our eff ort to modernize that.

And then on the other areas, will definitely get back to you, ma'am.

MURRAY:

OK. I appreciate that. Thank you.

TESTER:

Thanks, Senator Murray. Senator Baldwin.

BALDWIN:

Thank you, Mister Chairman. We are very excited to be building the new frigate in the state of Wisconsin. However, even though this ship is based on proven hull design, new ship classes often experience is experienced challenges related to technical concurrency, cost overruns, or schedule slips. As you know, it's important that our acquisition programs account for these challenges, which means requiring things like technology maturation, systems integration, and full-ship tech data.

I believe these milestones should be achieved prior to bringing on any additional shipyards should the Navy want to increase thereby down the road. Similarly, to avoid affecting the production ramp-up, we must avoid any gap-year funding for the frigate. So can you -- this is to Secretary Harker and Admiral Gilday.

Can you commit to requiring these technical milestones are met prior to bringing on a second shipyard, and can you also commit to avoiding gap years in the procurement profile?

HARKER:

Yes, ma'am. So first, I've been out to Marinette and have been working with that shipyard for probably 20 years since I was back on the Coast Guard as a business manager for the buoy tender acquisition project. So I've got a lot of great experience, a lot of respect for the people that work at that shipyard.

As we go forward, it's definitely something that we want to do is make sure that we don't make mistakes by delivering ships that aren't fully mature and proceeding down that road. So I think there's definitely a need to make sure we get the technology mature and that's something that I believe just, you know, have some thoughts on it as well.

GILDAY:

Yes, ma'am. So we are -- with respect to risk and building that ship, I was just on a FREMM class over in Europe three weeks ago -- really, really impressive hull. So we've done this before to minimize risk where we've taken an existing hull and put a known combat system -- a weapon system on it. We did this back in the 80s and it worked out really well between the Ticonderoga-class cruisers in the Arleigh Burke DDGs. It's the same type of approach that we have up in Marinette.

I went to Marinette myself, that was, you know, it was a great trip. Number one, I got to talk to the ship workers, but I will say that that risk is something that we are carefully trying to manage. We are not introducing new systems, trying to create success and miracles that have to all line up before the ship delivers in '26. So I'm highly confident that both the Navy and the shipyard are working very closely together to make sure we're not introducing any additional risk into that bill.

With respect to moving to a second yard, I am taking a very conservative approach myself with respect to anything that we would do in that regard. I understand the benefits of the industrial base, but we have to get that right and we have to leverage what we've learned from other builds like the LCS to make sure that we get that right.

The last thing I would say is that predictability with respect to budgets, especially shipbuilding is really important for the industry, and I recognize that. One of the things that struck me at Marinette was the amount of infrastructure that they're building to support the Constellation-class frigate. So if we change those numbers that -- those investments are going to be a waste.

I recognize that, ma'am, and again, take the formulation of the budget very seriously in terms of how I -- how we prioritize and the message that we send to the industry.

BALDWIN:

Thank you. I appreciate that focus on the industrial base. And I think we've observed that the shipbuilding industrial base has become more fragile over the last 25 years. Congress has invested significant additional funding to support submarine and ship-specific workforce and supplier expansion programs, which has really paid off for programs like Columbia, Virginia, and DDG-51. The same rationale for those industrial base programs holds true for the frigate.

So do you believe that these types of Congressional investments have benefited the Navy fleet, our industrial base, and our national security? And if so, do you agree that similar investments into the frigate industrial base and workforce will have the same positive results? And again, to you, Secretary Harker and Admiral Gilday.

HARKER:

So yes, definitely, investing in our industrial base is something that's critical for us. We use funds from the Defense Production Act authority to invest $50 million. And also, we've invested money in other places, and we've worked with the shipyards and other sources of funding to continue to invest in the industrial base.

We believe in a strong industrial base, and that's critical to our needs.

BALDWIN:

Thank you.

GILDAY:

Ma'am, as I answer this question, I'm going to speak more generally and not to Marinette, in particular. I do think that those investments are important. However, I also think it's important to set expectations. So you mentioned -- let's say, the Columbia class, which will be building out to 2035, or Virginia class, which we're going to be building out to late 2020.So when you have -- when the industry has that kind of set of headlights, as does Congress.

With respect to a commitment to building that many ships in the class for that long a period, I think it then becomes easier to justify those investments in private yard infrastructure. And so I think that they should be tied together so we shouldn't kid ourselves in terms of putting money down that we're not going to reap the benefits of.

BALDWIN:

Thank you.

TESTER:

Thank you, Senator Baldwin. Senator Moran.

MORAN:

Chairman, thank you. General Berger, as you look to shift the Marine Corps' focus from counter-insurgency eff orts to its original mission of naval expeditionary force, logistics will play a major role in the force structure. Your current CH-53E fleet continues to struggle with readiness issues, so I want to be certain the Marine Corps is prepared for a near-peer fight.

Can you describe the new CH-53K heavy-lift helicopter's contribution to your force structure redesign, particularly as it pertains to distributed maritime logistics and in a contested environment?

BERGER:

I can, Senator. It's a phenomenal aircraft. I flew on that aircraft maybe three months ago this past spring down in North Carolina because growing up in 53Ds and 53Es, you kind of knew what that platform was like. Hadn't been on a 53K other than in a simulator. A simulator doesn't do it justice. It is an incredible aircraft -- speed, lift capability, reliability, its fly-by-wire.

He hovered and picked up a weight hands-off. I mean, it's that kind of technology, it's a glass cockpit. Now, we just have to right size it for what we need. But distributing the force the way the CNO and I have in mind -- we're going to need the 53K, we're going to need the light amphibious warship in order to move the troops, supplies, and lethal aspects around.

It's critical.

MORAN:

How is this helicopter currently performing in preparation for the initial operational test and evaluation in July?

BERGER:

Probably like most programs in the areas we look closest to, it's performing -- it's meeting the requirements. There are some areas where flight crews have suggestions on how to improve it, as you would expect. But so far, on track, sir.

MORAN:

Great. Thank you for your answer.

BERGER:

Yes, sir.

MORAN:

And thank you for your service, all of you.

TESTER:

Thank you, Senator Moran. We appreciate all of your testimony here today and the answers to the questions. Senators may submit additional written questions, and we ask you to respond to them within a reasonable amount of time. This committee stands in recess.

List of Panel Members and Witnesses

PANEL MEMBERS:
SEN. JON TESTER (D-MONT.), CHAIRMAN
SEN. RICHARD J. DURBIN (D-ILL.)
SEN. PATRICK J. LEAHY (D-VT.)
SEN. DIANNE FEINSTEIN (D-CALIF.)
SEN. PATTY MURRAY (D-WASH.)
SEN. JACK REED (D-R.I.)
SEN. BRIAN SCHATZ (D-HAWAII)
SEN. TAMMY BALDWIN (D-WIS.)
SEN. JEANNE SHAHEEN (D-N.H.)
SEN. PATRICK J. LEAHY (D-VT.) EX-OFFICIO
SEN. RICHARD C. SHELBY (R-ALA.), RANKING MEMBER
SEN. MITCH MCCONNELL (R-KY.)
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
WITNESSES:
Acting Secretary of the Navy Thomas W. Harker
Chief of Naval Operations Adm. Mike Gilday
Commandant of the Marine Corps Gen. David Berger.