Thank you, Mr. Chairman, for holding this important hearing this morning.  The Army is the first Service to testify before the full Senate Armed Services Committee on their FY18 budget request. 

I would like to welcome Acting Secretary Speer and General Milley to today’s hearing.  We commend you for your service to our country, and for your steadfast leadership of the Army.  In light of the many challenges facing the Army, from rebuilding readiness and modernizing the force, it underscores how important it is that we confirm a permanent Secretary of the Army. 

The President’s FY 2018 budget submission for the Department of the Army includes $166 billion in total funding of which $137.1 billion is for base budget requirements and $28.9 billion is for Overseas Contingency Operation (OCO).  This represents a roughly $5.1 billion increase over the FY17 request.

As the Committee considers the Army’s funding request, we must always be mindful of our national security challenges.  It is highly unlikely that the demand for Army forces will diminish in the near future.  Currently, more than 180,000 soldiers, Active, Reserve and Guard, are serving in over 140 countries.  And while we continue to field the most capable fighting force in the world, 16 years of sustained military operations, focused almost exclusively on counter-terrorism, has taken a toll on the readiness of our soldiers.  Today, less than one quarter of our nation’s Army is ready to perform their core wartime missions, and some critical combat enabler units are in far worse shape. In addition, the evolving threat facing our nation impacts readiness as the Army needs to train to fight a near-peer competitor in a full spectrum environment.  Unfortunately, while additional funding is important, it is not the sole solution to restoring readiness levels.  It will take both time to rebuild strategic depth and relief from high operational tempo. 

I applaud the Army for making readiness their number one priority and General Milley, I look forward to your thoughts on the Army’s progress.

While readiness is vital, we cannot neglect investments in the modernization of military platforms and equipment.  The Army’s Fiscal Year 2018 budget requests $27.8 billion for modernization efforts, which includes $18.4 billion for procurement and $9.4 billion for Research, Development, Test, and Evaluation (RDT&E) activities.  I would like to know if our witnesses feel confident that the funding for modernization is adequate. 

A recent focus of this committee has been to improve DOD acquisition processes, as the Chairman mentioned, to help reduce costs and to deliver the best new technologies and systems to our operational forces more quickly.  I hope we can hear more about Army successes in improving acquisition, what role the Chief is playing in those changes, and what, if anything, this committee can do to be supportive. 

In the area of personnel, the budget requests the same active-duty end strength as enacted in the 2017 NDAA, while again seeking measures to slow the growth of personnel costs.  The President’s budget requests a pay raise of 2.1 percent, modernization of the military health care benefit, including increased cost-sharing fees, and further implementation of the blended retirement system, which will begin in 2018.  I hope to hear from our witnesses their views on the cumulative impact these changes will have on the Army and its ability to recruit and retain the best for military service. 

I applaud the Army for its integration of women into all of its formations, without restriction, including combat and special operations units, an evolution that I believe will greatly enhance the Army’s ability to fill the ranks with the very best.  The Army will need to recruit from all corners to meet the higher end strengths, and it is imperative that the Army not lower standards.  

I understand there may be calls by some to increase the Army’s active duty end strength in 2018 above the President’s budget request.  I caution that there must be a plan in place to use these additional personnel, and to pay for them.  Training and readiness are important, even paramount, and maintaining and enhancing the fighting ability of the force we have must take precedence over recruiting a larger force that may not be ready. 

Finally, as I have stated previously, enforcing budget discipline through the Budget Control Act is ineffective and shortsighted.  I believe the Senate, in a bipartisan fashion, should repeal the BCA and establish a more reasonable limit on discretionary spending, in an equitable manner, that meets our domestic and defense needs.  But while sequestration is the law of the land, budget requests that exceed the spending caps are not useful because they allow the military to plan for funds that are likely not forthcoming, adding to the uncertainty DOD seeks to avoid. 

There are many urgent issues to discuss this morning.  I thank our witnesses for appearing before the Committee, and I look forward to their testimony.

Thank you, Mr. Chairman.