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Public Statements

Hearing of the Strategic Forces Subcommittee of the House Armed Services Committee - Fiscal Year 2010 National Defense Authorization Budget Request for National Security Space and Missile Defense Programs

Chaired By: Rep. Ellen Tauscher (D-CA)

Witnesses: General C. Robert Kehler, Commander, Air Force Space Command; Lieutenant General Patrick O'Reilly, Director, Missile Defense Agency

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REP. TAUSCHER: (Sounds gavel.) Good afternoon, this hearing of the Strategic Forces Subcommittee will come to order. Today, the subcommittee will receive testimony on the president's fiscal year 2010 budget request for National Security Space and Missile Defense programs.

Traditionally, the subcommittee would have held separate hearings on both of these topics, after all, unclassified National Security Space programs account for over $11 billion of the president's request, and the total request for Ballistic Missile Defense programs tops $9.3 billion.

Unfortunately, the timing of the budget submission, and the committee's legislative schedule, have made it impossible to hold two separate hearings before our mark-ups. That said, the good news is that the subcommittee has held four hearings and two briefings on specific aspects of these programs already this year.

Appearing before the committee this afternoon are two well-known witnesses. Both of them are well-equipped to address the two major elements of the president's defense budget. First, General Robert Kehler, the commander of the Air Force Space Command will address the National Security Space aspects of the budget. Second, Lt. General Patrick O'Reilly, director of the Missile Defense Agency, will discuss the missile defense budget request.

I want to thank both of you -- both of our distinguished witnesses who are appearing before the subcommittee today. And I especially want to thank, on behalf of the committee, all of the men and women that serve with you, both in the military and in the civilian ranks; and especially the people sitting right behind you, who I know have worked very hard on this testimony that you've submitted well before the deadline, and we very much appreciate how comprehensive it is.

But, you certainly represent the services that have the most people involved in these programs. They are very excellent people and they're very patriotic Americans, and we want you to please extend to them, on behalf of this committee, our very heart-felt thanks for their service.

Before turning to our witnesses I would like to briefly identify some of the key issues we hope the witnesses will address in the course of their testimony today. National Security Space systems provide a wide variety of capabilities to our warfighters, by offering global access unhindered by geographic or political boundaries, and unrestricted by surface or air defenses.

While the funding requests for most major Space programs remains consistent with (past plans ?), the fiscal year 2010 request contains several consistent -- several significant programmatic shifts. First, it recommends terminating the Transformational Satellite Communications System, or TSAT Program; second, it expands funding for other military satellite communications systems; and finally, the request provides a significant increase for Space Situational Awareness programs.

During the past decade, most National Security Space programs have experienced significant cost increases and schedule delays. General Kehler, I would ask you to discuss how the budget before us today will help deliver satellite systems in a more timely and cost- effective manner.

More specifically, what are the administration's plans for ensuring that the warfighter will have sufficient protected communication bandwidth in the next decade, after the termination of the TSAT program? And what will happen with the engineering and technical talents who have focused on this problem?

The subcommittee has also focused significant attention on the vulnerability of space-based systems in recent years. In that regard, General Kehler, how will the budget before us address the increasing vulnerability of our satellite systems?

Turning to the issue of missile defense, Secretary Gates has incorporated key decisions into his budget that, in my view, refocus the program to its original purpose and to the most pressing threats to the security of the United States and our deployed troops and allies. In 1999 Congress passed, and the president signed, H.R. 4. That law established the policy of the United States to, quote, "deploy, as soon as technologically possible, an effective national missile defense system capable of defending the territory of the United States against limited ballistic missile attack, whether accidental, unauthorized or deliberate.

Secretary Gates announced three decisions to refocus the program on their original goals and to address the most pressing threats. First, he has proposed capping the deployment of long-range missile defense interceptors deployed in Alaska and California at 30, arguing that these 30 interceptors would be more than sufficient to counter rogue threats or unauthorized launches for the foreseeable future.

Second, he proposed cancelling three programs -- the Multiple Kill Vehicle, the Kinetic Energy Interceptor, and the second Airborne Laser Prototype Aircraft. These are programs that have been pursued to counter long-range missile threats that could develop in the future. Each has experienced technical challenges and some are unlikely to be cost-effective if deployed.

Finally, the secretary has recommended a $900 million increase in funding for theater missile defense programs, such as the Aegis Ballistic Missile Defense System, and the Terminal High Altitude Area Defense system. This decision will better protect our deployed forces, allies and friends against the existing short- and medium- range ballistic missile threat, and it is consistent with the demands of our combatant commanders for more interceptors for theater defense.

General O'Reilly, in the course of your testimony today, could you describe how the secretary reached these decisions? Were you consulted in the decisionmaking process? Did the Missile Defense Agency recommend these actions? And do you have any reservations about the secretary's decisions?

As we -- (inaudible) -- into the details of the budget, I would also like to hear about your new plans for exploring ascent-phase intercept technologies to hedge against more complicated threats in the future.

With that, let me turn to my good friend, the distinguished ranking member of the subcommittee, Mr. Turner of Ohio, for any comments he may make.

Mr. Turner.

REP. MICHAEL TURNER (R-OH): Thank you, Madame Chair. I appreciate your holding this hearing, and, of course, your continued leadership in this.

And I've been assured by staff that even though we all know that you're awaiting confirmation with the State Department, that we're going to -- that that process will continue and you'll continue to chair our subcommittee. I want to ensure that we get ample time to be able to congratulate you in another hearing just prior to your departure. So, please ensure that we get that opportunity, and we know we don't have to do it today.

REP. TAUSCHER: (Off mike.) Thank you.

REP. TURNER: But, thank you for your leadership.

Well, we have two very thoughtful and accomplished military leaders with us today -- General Kehler, General O'Reilly, welcome back. Thank you for appearing before this subcommittee. Thank you for your leadership. You're both experts in your field and we thank you for your contributions to our national security.

We have an usual task before us today. In a single hearing, we must cover two broad areas -- space and missile defense, that under normal circumstances could equally merit their own hearing.

We also have an unusual budget request to consider this year. During last week's full committee hearing with the secretary of Defense, we heard of profound changes in the budget that not only occurred outside the Quadrennial Defense Review process, but were arrived at without what appears to be a -- (inaudible) -- level of rigorous analysis.

As our full committee ranking member, Mr. McHugh, said, "the only unifying theme in this year's budget is that the (aggregate ?) fits within the top line. This appears to be an apt description of the missile defense budget this year.

During our recent subcommittee hearing on the nuclear security budget request, we learned that major program decisions at NNSA would not be made until the completion of the Nuclear Posture Review. Yet, over in the Department of Defense sweeping missile defense decisions have been made ahead of the QDR, and prior to the administration's completion of its missile defense policy and strategy review.

By making such decisions now, is the department prejudicing the outcome of these reviews? We just observed yesterday a determined Iran test of its 2,000-kilometer solid-fuel Sajjil-2 ballistic missile that Iran's president suggested was linked to its ongoing nuclear program. There is a clear desire by some actors to emphasize the development of longer-range missiles.

How good is our intelligence? We know short-range systems well. In many cases, they're based on decades-old technology. What concerns me, however, is our level of knowledge about rogue nations' longer- range systems. This detailed intelligence information is critical to having effective missile defenses. When such uncertainties exist one usually compensates within increased margins, and more diversification, not less.

Given this growing threat, I am puzzled by the department's decision to stop deployment of ground-based interceptors at 30, rather than 44; reduce the GMB program by 35 percent and curb its development. I have not seen any analysis or formal force structure requirements to justify this decision. Nor have I seen any changes in the intelligence community's threat assessment that would indicate a decreasing threat.

Furthermore, what are we to make of the disconnect between Secretary Gates' testimony that the department will, quote, "continue to robustly fund research and development of GMB to improve its capability," and MDA's budget overview which states, "we intend to curtail additional GMB development?"

MDA's budget overview also calls for rigorous testing, which I agree with, but I don't see more GMB flight testing in fiscal year 2010. I hope that we can address these basic questions.

We've also been introduced to a new concept this year, "ascent- phase intercept." It sounds promising, but it also sounds a lot like parts of boost's and parts of mid-course. I would like a better understanding of what this entails. It would seem risky to move away from ABL, KEI, and MKV, for this as yet unproven concept.

General O'Reilly, I would ask you to address what gives you confidence that ascent-phase intercept is more technically feasible, effective and affordable.

During our last missile defense hearing we reviewed an independent study on MDA's roles and missions requested by this committee. It recommended that MDA's mission should be refocused on RDT&E, and that science and technology should receive renewed emphasis and increased funding.

However, I'm hard pressed to find such emphasis in this year's budget. How does MDA advance our missile defense technologies and foster innovation and ingenuity when (now ?) reductions are made to the future capabilities, like ABL, KEI, MKV, and STSS? I'm unconvinced that a $126 million decrease in special programs adequately captures what we lose with a nearly billion-dollar cut to future capabilities.

There's one area in the budget where Congress did see rigorous analysis. In previous hearings we noted a joint staff study which had recommended increasing the inventory of Aegis and THAAD interceptors. The budget request is responsive to these requirements, and I am pleased with that.

However, the joint study only looked at these two systems. How do we know the force structure requirements for other missile defense elements? Also, why does an increase in Aegis and THAAD have to come at the expense of GMB and European missile defense systems designed to protect the U.S. homeland and our allies?

(We did cross ?) the $1.2 billion cut to MDA. I believe that we have been presented with a number of false, either/or choices. We can do better.

In contrast, the budget requests for space appears relatively balanced. Important acquisition programs such as AEHF, WGS, GPS, SBRIS and -- (inaudible) -- are provided with stable funding. The only substantial change is that the TSAT -- is TSAT termination. The Air Force decided instead to fund two more additional AEHF satellites and one WGS satellites and acknowledge the importance of sustaining the industrial base.

However, these two satellites are not a long term solution to addressing the military's increasing communications requirements. Without insight into out year plans and funding, I find it difficult to have confidence that the Air Force has adequately committed to and budgeted for these capabilities. The budget request for space situational awareness, SSA, has doubled. It appears that a large portion of this increase is allocated to the joint space operations center. General Kehler, I'd like to better understand under the department's effort to improve SSA, space protection and our space intelligence capabilities.

Additionally can you discuss why operationally responsive space in on the Air Force unfunded priorities list?

Lastly Air Force Space Command is in a state of transition. Can you discuss the status and challenges of divesting your -- (inaudible) -- and inheriting the cyber mission?

On a final note, I would like to acknowledge the men and women serving in the organizations you lead. These are two worthy fields to have a career in and we are proud of their service and accomplishments.

Thank you Madame Chair for presiding over this important hearing. We look forward to the testimony of the witnesses.

REP. TAUSCHER: Thank you Mr. Turner. We will begin with General Kehler. We've received your prepared statement in advance and it will be entered into the record. We welcome your remarks. General, the floor is yours.

GEN. KEHLER: Well Madame Chairwoman and Representative Turner, distinguished members of the subcommittee, it's a real honor for me to appear before you today, both as an Airman and as the commander of Air Force Space Command. Thanks very much for your continued support not only for the United States Air Force but for the capabilities that we contribute to the joint force. I will certainly take the words that you have given us today about your appreciate for the service of the men and women of the military across the board, specially Air Force Space Command. I'll take that back and Madame Chairwoman and the rest of the members of the subcommittee I know you know this, but that resonates with them and they deeply appreciate that when they hear from the representatives of the American people the appreciation of the American people, so thank you for those words, and I will definitely take those back.

It's also a great pleasure for me to appear with the director of the missile defense agency. I am very proud to lead 39,000 active duty Guard and Reserve airmen, government, civilians and contractors who contribute to our nation's strategic deterrence and who deliver persistent space based capabilities to America and its war fighting commands around the globe. Our mission is to provide an integrate constellation of space and cyberspace capabilities at the speed of need. All over the world as we sit here today in space operations units in space launch and range facilities, in missile alert facilities, in acquisition centers and of course in our forward deployed locations around the world, the men and women of Air Force Space Command are proud and pleased to be answering their nations' call.

Our airmen are focused on three main areas: first and foremost we operate, secure, and maintain our nation's land based strategic deterrent with perfection as the standard.

Second, we assure access to space, protect our freedom of action in space, and provide joint war fighting capabilities from space.

And finally we are improve cyber space capabilities by establishing an operational cyber space command which will be designated 24th Air Force to meet the demands of the 21st Century national security environment. Today's soldiers, sailors, airmen, Marines and Coast Guardsmen navigate with accuracy, communicate with certainty, strike with precision, and see the battlefield more clearly because of space based capabilities.

It's our job to put those capabilities directly into their hands. And we are constantly mindful of those joint team members who are in harm's way. We're very proud of our accomplishments. We have a long string of successful launches. We are exceeding performance standards in critical operations areas like GPS, satellite communications, weather support, and missile warning. But, we're very much aware of where we need to improve. We need to get better at acquisition. We need to restore the nuclear enterprise, and we need to deliver new capabilities to the joint team on time.

We also understand clearly our important role across the spectrum of joint operations, from routine activities to irregular warfare to deterring major conflict with regional powers. The demand for space capabilities is going up. And the same time, the threats and challenges in this operational domain are increasing. The fiscal year '10 budget continues our progress in the number of key investment areas, you've pointed out some of those already. It continues our assured access to space. It helps improve our situational awareness and our space protection and it continues modernization of GPS, our satellite communications systems, missile warning, operational responsiveness, and other areas.

If there's a thought that I could leave you with, it is this one. Make no mistake about it, the men and women of the Air Force Space Command and the men and women of the United States Air Force are in today's fight every minute of every day. We thank you for your past support. We look forward to continuing the discussions that we've been having over the last several months and I stand ready to answer your questions, happy to take them on whenever you're ready. And I was diligent I think in taking notes so I'm ready to go whenever you are. Thanks for having us today.

REP. TAUSCHER: Thanks very much General Kehler. General O'Reilly we have received your prepared statement in advance and it will be entered into the record. We welcome your remarks. General O'Reilly, the floor is yours

GEN. O'REILLY: Good afternoon Madame Chairman, Congressman Turner, other distinguished members of the committee. It is an honor to testify before you today on the proposed fiscal year 2010 budget for the Department of Defense's Missile Defense Program.

During fiscal year 2008 and fiscal year 2009 to date, the Missile Defense Agency has achieved many accomplishments in the development of the ballistic missile defense system, including the execution of successful standard missile 3 block 1A, and standard missile 2 block 4 interceptor salvo flight tests; the delivery of 28 additional SM-3 block 1A interceptors -- including deliveries to Japan; a ground-based midcourse defense intercept utilizing the entire sensor and command and control suit deployed in the Pacific; and placement of two other ground-based interceptors and refurbishment of two other ground-based interceptors at Fort Greely, Alaska.

Deployment of the --

REP. TAUSCHER: General O'Reilly, can you put the mike a little closer to you, please?

GEN. O'REILLY: Oh.

REP. TAUSCHER: Thank you.

GEN. O'REILLY: Deployment of an AN/TPY2 to Israel; the execution of an experiment involving the closest data collect to date of a boosting missile from a satellite; the safe destruction of a malfunctioning U.S. satellite; repeated demonstrations of the atmospheric laser beam compensation during the airborne laser flights; delivery of the first terminal high altitude area defense or THAAD unit for testing; three THAAD interceptors, including of the launching of a salvo of two THAAD inceptors using operational firing doctrine.

Earlier this month, we also successfully placed in orbit the space tracking and surveillance system advanced technology risk- reduction satellite to serve as a pathfinder for the next generation space sensor technology.

However, in addition to our successes we also faced challenges developing the BMDS. During fiscal year 2008 and fiscal year 2009 to date, we experienced nine significant flight-test delays, four target failures out of 18 target launches and one interceptor failure in flight. These and other contributing factors have resulted in a $264 million cost growth and further, we have incurred over 252 million (dollars) in unplanned costs and 25 weeks of scheduled revisions due to unplanned operational deployments of our systems under development.

In response to those challenges, we have worked with our leadership and stakeholders to engage our management oversight, strengthen or relationship with the war fighting community and improved BMDS acquisition and test planning. We've adopted a series of initiatives to improve acquisition and oversight of the contracts we'll reward over the next 18 months. I am also signing memorandums of agreement with the services to institutionalize the Missile Defense Agency and services roles and responsibilities for development and sustainment and fielding of the ballistic missile defense system.

In fiscal year 2010, we are proposing approximately 7.8 billion (dollars) for missile defense in response to Secretary Gate's guidance. As Secretary Gates announced on April 6th, this budget was the result of a holistic assessment of capabilities, requirements and risk and means for the purpose of meeting the secretary's vision to institutionalize and enhance our capabilities to enhance the wars we are in today, and the scenarios we are most likely to face in the years ahead, while at the same time providing a hedge against other risk and contingencies.

The secretary further said we will restructure the program to focus on rogue state and theater missile threats. Today there are 5,900 ballistic missiles and hundreds of launchers in countries other than NATO, China, Russia or the U.S. Ninety-three percent, or 5,500 of those missiles are short-range ballistic missiles with ranges less than 1,000 kilometers. Six percent, or 350, are medium-range ballistic missiles with ranges between 1,000 and 2,000 kilometers; and less than 1 percent are intermediate or intercontinental ballistic missiles or ICBMs.

Both Iran and North Korea are showing significant progress in developing ICBM technology, but their number of launch complexes which exist limits the number of missiles they can simultaneously launch. I assess the technical risk is low, that 30 fully operational ground- based interceptors or GBIs in silos is a sufficient number to counter the simultaneously launched rogue nation ICBMs over the next decade.

Additionally, indications are early and prominent as the number of rogue nation ICBM launch complexes increases. Although we are proposing to limit the number of GBI in silos to 30, we are storing additional silos and we are continuing the production of the remaining 14 GBIs on contract to maintain the ability to produce additional GBIs for testing, refurbishment, future upgrades and to allow programmatic flexibility to respond to the Quadrennial Defense Review, the congressionally mandated Ballistic Missile Defense Review and other policy direction.

In contrast to our rogue nation ICBM defense, I assess the technical risk is considerably higher, that the previously planned inventory of theater missile defense interceptors and units can be overwhelmed by the large number of short and medium-range ballistic missiles today. Thus, to better protect our forces, allies and friends from short and medium-ballistic missile attack, we propose to add 700 million (dollars) to fill more theater high-altitude area defense and standard missile 3 interceptors.

We also propose to add 200 million (dollars) over three years to fund the conversion of six additional Aegis ships to ballistic missile defense capabilities. Furthermore, as a hedge against future advanced threats, we propose 368 million (dollars) to leverage our emerging missile defense fore structure and accelerate the development of capability to destroy missiles at all ranges in the highly advantageous early phases of flight.

To more effectively hedge against future threats, we propose to cancel the second airborne laser or ABL-prototype aircraft, terminate the multiple kill vehicle or MKV and kinetic interceptor or KEI programs in lieu of more operationally efficient alternative technology architectures.

We will continue the research and development effort with the existing ABL aircraft, including the first attempted shoot down of a ballistic missile this fall to address affordability and technology issues while addressing the program's operational role.

The MKV technology program was established to address complex countermeasures by identifying and destroying all lethal objects in a cluster using a single interceptor. MKV was in the early stages of a long development process extending until 2018 and required significant research and development and very immature technology. We plan to transfer the knowledge gained from MKV to our kill vehicle technology base. As stated previously, destroying missiles earlier in flight before countermeasures is a better hedge against advanced future threats than trying to kill all the countermeasures after they've been deployed.

The original KEI mission grew from a boost-phase-only mission to a boost-and-midcourse mission. The development schedule grew from five-and-a-years to 12 to 14 years, depending on the spirals. Program costs grew from 4.6 billion (dollars) and the missile average unit production cost grew from 25 million (dollars) to over 50 million (dollars) per interceptor.

Technology issues delayed the first booster flight-test date by over a year and we assess the probability of this flight test occurring this year as very unlikely.

Additionally, KEI size limits it's ability to be operationally deployed without dramatic changes to our military infrastructure and significant reduction of our firepower. Affordability and government requirements growth -- not contractor performance -- was the main contributor to KEI's execution problems.

Given the above facts -- and only 15 percent of the 8.9 billion (dollars) worth of contract till 2018 had been accomplished, the Secretary of Defense terminated the KEI program. Recently, KEI contractors indicated they can complete their flight test by the end of September '09 in a matter that accommodated our legal liabilities for program termination. I will assess their proposal.

Like MKV, we will review the KEI products and expertise developed to date to determine follow-on applications to a ascent-phase intercept mission.

The Missile Defense Agency, Joint Staff, combatant commanders, armed services have intensified their collaboration on the development of the missile defense capabilities and judgments. As announced by Secretary Gates in response to the warfighters priorities, we are making ballistic missile defense more affordable and effective by one, reshaping our program to enhance protection of our deployed forces, allies and friends against existing threats; two, continue to develop and maintain the ground base midcourse defense capability to defeat a limited long-range rogue state attack or accidental launch against the United States; and three, prepare to leverage emerging ascent-phase intercept technologies to hedge against the threat growth and realize the greatest potential for reducing cost and increasing operational effectiveness of missile defense.

The rationale is based in part on a Defense Science Board study in 2002, which emphasized the benefit of ascent-phase intercepts. The study noted that the technological and operational challenges of intercepting threat missiles in the ascent phase -- the phase after powered flight and prior to apogee -- is significantly less challenging than boost phase.

Ascent-phase intercept would allow us to intercept early in the battle space and optimize our ability to execute a shoot-look-shoot tactic and defeat the threat before countermeasures are deployed -- minimal potential impact of debris and reducing the number of interceptors required to defeat a raid of threat missiles.

With this budget, we'll also continue to execute to the fullest extent of the law the Upper Tier European Capability Program to counter long-range attacks from Iran. We will execute a rigorous test program to build the confidence of the U.S. and allied stakeholders in the BMDS, bolster deterrents against their use and send a powerful message to potential adversaries on looking to acquire ballistic missiles. This testing figure prominently in our proposed budget of fiscal year 2010.

Furthermore, we are collaborating with the service operational test agencies and the support of the director of operational test and evaluation to restructure our test program to improve confidence in the missile defense capabilities under development, and ensure that capabilities transferred to the warfighter are operationally effective, suitable and survivable.

In conclusion, the proposed FY '10 budget rebalances the development of our missile defenses to improve our ability to meet the threats we face today and provide a cost and operationally effective hedge against future ballistic missile threats facing our deployed forces, allies, friends and our homeland. I greatly appreciate your support, for the opportunity to testify today. I request that I submit the remainder of the statement in writing for the record, and I look forward to answering your questions.

And, ma'am and sir, I greatly appreciate also your compliments to our workforce that works tirelessly to deliver this capability. Thank you.

REP. TAUSCHER: Thank you very much, General O'Reilly.

General Kehler, I'm going to begin the questioning with my first question. As you know the National Polar Orbiting Operation Environmental Satellite System, or NPOESS program, has an experience, serious schedule and cost problem. The estimated launch date for the first satellite has slipped by over three years to 2014, and the total part run costs have grown from $6.5 to $13.5 billion.

And according to what our staff is hearing, the tri-agency acquisition arrangement between DoD, NASA and NOAA is largely dysfunctional.

What are your thoughts about how the nation should proceed in the acquisition of new weather satellites?

GEN. KEHLER: Thanks, Madam Chairwoman. First of all, the requirement to provide weather data both of the earth and the earth's atmosphere and of the space environment every day from a combatant commander perspective remains very high. It's very important for our troops to understand the weather, for all the obvious reasons; very important for our airmen to understand the weather; our sailors, and the list goes on.

We right now have three military weather satellites left on the ground. One will launch later this year, and that leaves us with two. We are managing the timeframe of launching those two remaining satellites that we've already constructed so that we can hedge our bet basically here about what might happen with NPOESS.

In terms of the NPOESS program itself, we are not happy either. I think that all of us understand there have been some significant issues here. There have been issues with the construction of the sensors in some cases were stretching in terms of the technology. In other cases we were stretching, or the program was stretching anyway in terms of the number of sensors we were trying to integrate on the same platform, etcetera.

A number of studies have been done about what to do. There's one going on now that is about to outbreak within the next week or so. I understand they have made some recommendations. I have not seen those. We're looking forward to getting that and see what their recommendations are, both in terms of program content and, as importantly, in terms of program management. So I can't give you a better answer today, Madam Chairwoman, than we're waiting to see what this latest review tells us.

I know some have seen pieces of it. I have not. We're looking forward to that, and when we do I think it's important for us to come back and explain to you what we think the right way forward is.

REP. TAUSCHER: Do you think that you'll see that review before the mark-up of the bill on June 11?

GEN. KEHLER: I have heard one answer that says that they are ready to report the results as early as next week, so I would hope that we would have information before you mark.

REP. TAUSCHER: Well, I would direct the staff, we are going to be back in our districts next week for the Memorial Day recess, but we come back on June 2. So as soon as we come back if you have been briefed and you can brief us, we will gather the subcommittee and try to accomplish that as soon as we can.

GEN. KEHLER: Yes, ma'am. And it's, actually it's a larger group that you probably need to invite than just me because there are others with equities in this decision as well.

REP. TAUSCHER: We will do that.

GEN. KEHLER: I'd be happy to come.

REP. TAUSCHER: I have a second question. Recently the GAO found that the Air Force is struggling to build the GPS 2F satellites within cost and schedule goals. I actually was watching one of the cable shows this morning, and they had this whole big thing about, you know, GPS and are we going to be able to turn on your GPS and get from where you're supposed to go? So I think this has hit the major media.

The program has overrun its original cost estimate by about $870 million, and it's launch of its first satellite has been delayed to later this year, probably November of 2009, almost three years late. GAO has also raised questions about the Air Force estimate for the GPS 3A schedule and the possibility that delays could result in a gap in the GPS constellation in the future.

Would you describe the current health of the GPS constellation, the status of both GPS 2F and 3A acquisition programs and the prospects that we might experience a gap in the GPS signals sometime in the future?

GEN. KEHLER: Well, let me answer the final question first. I am highly confident that we will be able to sustain at least, and I believe more than the minimum 24 satellite constellation as far as we can see. I am highly confident that we can sustain more than 24 satellites.

Let me start with that. Now let me backtrack. GPS is critically important, not just to the U.S. military, not just to the citizens of America -- by the way the taxpayers who pay for it an doffer it free of charge to the rest of the world. But it's important to the entire world. We are responsible for it, and we take that responsibility very, very seriously. Right now on orbit we have the largest and most capable constellation we have ever had. We have 30 active satellites, we have another one that we've launched that's still in checkouts and new signals are being checked out. And we have three additional that are not right now an active part of the constellation but are available.

We understand the issues that the GAO has raised. In some cases, you know we're not taking exception to them. I would take some exception to the fact that I think some of what is being reported is old news. We have been working on these problems for quite some time. We understand what the issues are. We are about to launch the first of the GPS 2F satellites. That will occur late this year. We have other launches that have to go in sequence, and so I can't give you a specific such and such a date. We've got issues there that we're trying to work through, but that's not bad news. That's actually good news.

The GPS3 program at this point is proceeding very well. It is still in development of course, but because of the problems we had with 2F we have taken more time, in some cases deliberately, to get 2F right before it goes to orbit. And then we said we would buy a finite number of those and get on with GPS3, which has been a program we've started with all of the acquisition reform features built in from the start.

So I have a lot of confidence in GPS3. I'm also confident in the ground system that we've put together. Why the reporting is going on today, it's because it is based on a very, very conservative analysis that is done for planning purposes. That conservative analysis suggests that we might have a problem here. But what that does not take into account is the real steps that we take to manage the constellation through times like this.

Those steps, when we take those steps and when we get to the next launches, give me the confidence that would say we are going to be able to sustain more than 24 satellites on orbit. And all the indicators that we have with the on-orbit constellation supports what I'm telling you here.

When you take those measures into account, those real steps that we take to prolong the life of the satellites that are on orbit, when you factor those into the same analysis it doesn't show the same kind of problem. So I have high confidence. Let me say this again. I have high confidence that we are going to be able to sustain greater than 24 satellites.

As we continue to upgrade GPS we are committed to retaining that as the gold standard for the world, and we have a commitment to do that, and we understand what our commitment is.

REP. TAUSCHER: General, the reason you say 24 is because?

GEN. KEHLER: That's the minimum requirement to give high accuracy signals, and again as I say today there are 30 active in the constellation, and we expect to be able to sustain 24, greater than 24 is what my projection would be. I just can't tell you how many.

REP. TAUSCHER: I hope your statement today goes a long way to giving confidence to people that rely on GPS for many different reasons.

I have questions, more questions for you, General Kehler, and I certainly have some questions for General O'Reilly. But I want to give my distinguished colleague the ranking member from Ohio, Mr. Turner, a chance to ask some questions. So I'm happy to yield to you, Mr. Turner.

REP. TURNER: Thank you, Madam Chairman.

General O'Reilly, you have a tough message. And many people in looking at your budget recommendations are very concerned because they don't see that the world has changed much in the past couple months or that the analysis that DoD has been completed in the past couple months that would justify a significant change in policy that you're bringing in front of us.

And I wanted to ask you a couple questions about that. Many times when we're faced with issues of guiding a program, you complete a strategy and then you undertake a budget. As our ranking member McHugh said, it looks as if this is a budget that its only common theme is it fits under the top line, and that you have a budget and under which we're constructing strategy. And that's of a great deal of concern when the issue of missile defense is so important and goes right to the issue of our national security.

Every day in the news the public is more and more aware of what the actors of rogue nations and other nations are doing to be able to get greater reach and greater precision, greater ability to impact the United States and our allies.

And as you look at the capabilities that we've accomplished, that your agency has worked so diligently, and others, to accomplish, it seems as if we're retreating. You and I have had conversations about my concern of the issues of innovation in that when we're advancing in technical areas and then we step away from funding the research and development, we're losing the concept of what is the next generation of innovation that could be in front of us?

So many people have questions about how these budget decisions are being made and why and whether or not this is prudent. The department appears to be making profound missile defense program and budget decisions prior to the administration's completion of its missile defense policy and strategy review. We don't as a committee seem to have any information in front of us that would justify the switches that are occurring in each of the programs.

One such switch is the issue of the switch from long-leg missiles focus and we don't have intelligence or information here that would indicate that people are not trying to get greater reach to impact our country.

I have several questions that I want to ask you about specific programs that I know that members on this side of the aisle have specific questions about them. But could you talk first a moment about the issue of how this budget is put together? Because although you have answers as to comparatives, why one program over another, it appears that in overall strategy is missing as to why we're undertaking the cuts of programs that before, just a few months ago, appeared to be pretty important.

GEN. O'REILLY: Thank you, sir. First of all, this reflects, this budget proposal reflects a process that's been developed over the last several years that I believe the most profound impact on the budget was the participatory involvement of senior decision makers and especially the combatant commanders, the joint chiefs, and the services in order to have the strategy that you refer to today in those analysis versus the strategy before was based primarily on technical judgments by the Missile Defense Agency without the greater involvement.

So, number one, I don't believe it's so much of a strategy change as a process change. This process has now come to fruition. There was more involvement by COCOM commanders and the war fighters than I've seen before. There also was an intense involvement by senior OSD leadership and the analysts that work to support them than has been in the past.

So this is a process that was started several years ago, and I believe this is the first budget which was produced from that process as the Missile Defense Executive Board chaired by the under secretary of Defense of Acquisition and Logistics and Technology. I chaired that board with the full participation of the under secretary of Defense for Policy and the director of Operational Tests and Evaluation, the service chiefs. The Joint Chiefs were very involved in this. This was not an isolated decision. In fact it was the most comprehensive that I've ever seen in the missile defense area.

Again, the two aspects—number one is, the programs we're referring to are aimed at 1 percent of the threat; whereas, we are very concerned also about the other 99 percent of the threat that we—you're exactly right, sir. We're concerned about the research and development that it's going in to counter that more deployed, more advanced threat as far as a threat to our deployed forces today.

This is not done at the expense of the long range threat. The reduction of the missile silos actually employs a process then that allows them to be more operationally ready than they are today. So we believe this actually enhances that capability by focusing on those 30 and building a refurbishment process and so forth for the missiles that didn't exist before.

But primarily, sir, I must say that, yes, the secretary of Defense did give us clear guidance to focus on the rogue threat and the theater threats. But at the same time there was involvement that I haven't seen before by senior war-fighting commanders. And they set the priorities in which I was responding to. And then it was approved up through the secretary.

REP. TURNER: Well, I have a series of questions regarding the change from 44 GBIs to 30 GBIs. General O'Reilly, do you believe that Mr. Altwegg, your executive director, as he does, that, quote, I believe this is his statement, "The risk may go up," close quote, by stopping GBI deployment at 30 interceptors. So although you say the analysis has been done, I think the committee members were a little concerned as to how exactly the process we're going to take to go from 45 to 30. I don't think we have from you the analysis that would justify or explain that. And as I think you're aware, Mr. Altwegg in a May 7 press conference on the budget commented that, quote, "The risk may go up somewhat but our intelligence data and the threat at the present time permits us to restrict the number of emplaced missiles to 30."

I'm not familiar with that information. Could you comment on his statement?

GEN. O'REILLY: Yes, sir. As a director, as a new director of the Missile Defense Agency I asked for exactly what you're asking for, the analysis to show 44. Why was there 44 missiles? I have yet to see that yet. We have looked at projections from 2002 of what the threat would be today. Those were off by a factor of 10 to 20 in that regard.

So that also underscored with the war-fighter input senior combatant commanders. Also the lack of an analysis as you are saying for the 44 put us into a position where there was an operational risk assessment done. And the operational risk assessment was deemed to be low for the fact that how many simultaneous missiles this system would have to engage in any one time now or over the next decade, and what would be the intelligence indicators to say that there was a surprise growth due to the fact that it takes so long to build one of these launch complexes, due to the fact that there wasn't a strategy that I had presented and my agency knows of about—again, we believe it was a judgment in the past done on a threat. But the analysis we've done until now and the assumptions in which that original judgment was made on is off by a factor of about 10 to 20.

REP. TURNER: And saying the 44 was arbitrary, I'm not quite confident that the 30, that the reduction that you've chosen isn't arbitrary also. I look forward to you providing to the committee whatever information that you have that would justify the 44 to 30. I understand your position that the 44 was arbitrary, but again we're seeing increasing threats in this area, not decreasing, and yet we're seeing decreasing investment.

On May 13th the secretary of Defense testified that, quote, "We will continue to robustly fund research and development to, quote, "improve G&D." And on page 10 of the DoD budget overview for MDA he clearly states, quote: "We intend to curtail additional GMD development."

How should we interpret these two statements that appear to be a disconnect? Please describe for us—"robust R&D efforts for GMD (unclear) continued in this budget request?"

GEN. O'REILLY: Sir, the reference in the overview was in the area of the ground system of curtailing the development or the deployment of the ground system. However, at the same time we are expanding the research and development, as I said, for the entire architecture, which the G&D system benefits. One of the benefits of a cent phase intercept is if you're going to strengthen that GMD automatically benefits from having early sensors, robust command and control, robust communications in secure (sp) which is necessary.

Besides that, we also have funded a refurbishment program to take the oldest interceptors out, replace them with new ones, also to upgrade those interceptors with technical risks that we found in the original deployment.

That will be done over the entire fleet over a period of time.

We also are expanding the test program, which is part of the development. And we are continuing to expand the command and control and the algorithms necessary to meet the war-fighters' requirements for better command and control of the system during an attack, and also to plan for it.

We have others that I can provide for the record of efforts that we are continuing on in GMD. But I did not mean to convey that, in fact, the 30 missiles that we believe is sufficient for silos is going to halt the development of the ground-based interceptors. In fact, we will continue on with the two-stage interceptor development, which, again, brings a new (fresh ?) of avionics to the GBIs and also their industrial base.

REP. TURNER: There continues to be a concern on support for the European missile defense. The budget request includes only $51 million for a European capability. Does this low funding level indicate a change of the administration's position or lack of support for European missile defense?

GEN. O'REILLY: Sir, the Quadrennial Defense Review, I know, is going to address that. But in the meantime, the logic behind the FY '10 budget was that I have significant restrictions based on the law, the appropriation and -- or authorization act of last year on how much I can spend for the construction and the development of the missile systems proposed in Europe and the European mid-course radar.

Due to those restrictions, primarily the need for ratification of the ballistic missile defense agreement in the Czech Republic and Poland, the $51 million was the most we could see that we could expend this year with those restrictions still on us.

And then there's a second one associated with the production of further GBIs for the European mid-course -- or the European capability that's limited by the number of flight tests we have to occur first for a two-stage GBI, which we are proceeding with. But in sum, sir, the limitations from last year's laws is the reason why we were limited to $51 million.

REP. TURNER: So, then, should I interpret your answer to mean that there is still significant support from the administration for the European missile defense system?

GEN. O'REILLY: Yes, sir. The instructions to me was is to continue with that deployment, that planning, to the greatest extent possible, allowable by law, which equated to the $51 million for the development of the sites and the planning. And also we're continuing the development of the two-stage GBI.

REP. TURNER: Thank you, Madame Chair.

REP. TAUSCHER: Thank you, Mr. Turner.

I'm going to recognize members for five minutes by their appearance before the gavel. And first we have Mr. Andrews of New Jersey for five minutes.

REP. ROBERT ANDREWS (D-NJ): Thank you, Madame Chairwoman.

Thank you, General, Lieutenant General, for your service and for excellent testimony today.

I don't think either of you made a major change in your assessment of the threat that the country faces. I do think you made a major change in the way we assess the evidence in these programs; frankly, switching from a faith-based approach to these programs to an evidence-based programs, which we agree with.

In looking at the budget (sent over ?), it's interesting. If you look at some zeroed-out and significantly cut programs -- BMD intercept, multiple-kill vehicle, the three European programs -- they're reduced by a little over a billion-one. And then if you look at what's increased -- procurement of THAAD, Aegis RDT&E, Aegis procurement, and (CMBC ?), they're increased by almost a billion-one. So there's a balance between those two approaches.

And I do think that the evidence supports the balance that you have struck. And Lieutenant General O'Reilly, obviously it's more directed at you, although the same is true of the space-based programs.

I wanted to ask you a little bit about (the evidence ?) of the multiple-kill vehicle. My understanding is that the emphasis on the mission has changed rather substantially when our strategy is what the multiple-kill would have done. On page 25 you say, "Instead of the initial purpose of the MKV to integrate into mid-course interceptors, we're now assessing the feasibility of destroying threat missiles early in flight, before countermeasures can be deployed as a hedge against advanced future threats."

Is it fair to say that, you know, the old rationale for the multiple-kill vehicle doesn't fit the new strategy?

GEN. O'REILLY: Sir, the mission of the multiple-kill vehicle -- if we're successful with what we're trying to do with this proposed budget, we would not need that mission.

REP. ANDREWS: And it's also true on schedule, isn't it, that the initial schedule for the MKV was five and a half years; it's now grown to somewhere between 12 and 14 years? Is that right?

GEN. O'REILLY: Sir, that's the kinetic interceptor program.

REP. ANDREWS: Okay.

GEN. O'REILLY: But the MKV program, sir, was on a 2018 time frame.

REP. ANDREWS: Where is it now?

GEN. O'REILLY: Well, that's, yes, in the very beginning of the program.

REP. ANDREWS: Right. And am I correct that the cost has, according to what I've read, gone from $4.6 billion to $8.9 billion?

GEN. O'REILLY: Again, sir, that's the kinetic interceptor program; yes, sir.

REP. ANDREWS: Right. And the first booster flight test was due in what year?

GEN. O'REILLY: Sir, we re-baselined the program in 2007 for the first booster test last year.

REP. ANDREWS: Did it happen last year?

GEN. O'REILLY: No, sir. The --

REP. ANDREWS: Do you think it's going to happen this year?

GEN. O'REILLY: No, sir. I don't believe it's going to happen this fiscal year. Our schedule assessment --

REP. ANDREWS: I understand there's some issue about September of 2009 possibly happening.

I want to compare that to the judgment you made about THAAD and Aegis. I note that THAAD procurement is up by $316 million. Aegis RTD&E is up by $578 million. Procurement for Aegis is up by $112 million. It's my understanding that the THAAD tests basically batted six for six. Is that right?

GEN. O'REILLY: Yes, sir.

REP. ANDREWS: And it's also my understanding that the system has proved so effective, there's already a foreign sales component with the UAE. Could you tell us a little bit about that?

GEN. O'REILLY: Yes, sir. They have made a request for several billion in investment and procurement of THAAD.

REP. ANDREWS: My understanding is from your testimony it's at $6.9 billion, at least the potential for that.

GEN. O'REILLY: Million, sir, or billion?

REP. ANDREWS: Yeah.

GEN. O'REILLY: It's -- I know it's well over $5 billion, sir.

REP. ANDREWS: Right. And Aegis also has a similar record on successful testing. Could you tell us a little bit about that?

GEN. O'REILLY: Yes, sir. Between -- well, THAAD has had six for six, as you said, sir. But what's also important is five of those intercepts were against actual threat targets.

REP. ANDREWS: Right.

GEN. O'REILLY: In the case of Aegis, they've had a successful string of -- out of nine intercept attempts, they've had seven intercepts. But one of them, the missile didn't launch because there was a command-and-control issue of the configuration by the soldiers. But for the ones they launched, it was eight for seven.

REP. ANDREWS: Within the constraints of the fact that we're in a public setting, within those constraints, is it a fair conclusion that each of those two systems I just mentioned, properly positioned, would have a high degree of probability of success against the rogue missile threats that you assess exist today?

GEN. O'REILLY: Sir, against the vast majority, the 99 percent I was referring to, yes. Against the longest-range ones, ICBMs, the way we are configured today, no. But that's what we're proceeding with on the ascent-phase intercept, to give them that capability so they could handle missiles of all ranges.

REP. ANDREWS: Thank you. My time has expired. Thank you very much.

REP. TAUSCHER: Thank you, Mr. Andrews.

I'm happy to yield to the gentleman from Colorado, Mr. Lamborn, five minutes.

REP. DOUG LAMBORN (R-CO): Madame Chair, before we start the questions, I have to make an unfortunate announcement. (Inaudible) -- the first female Air Force Academy graduate to die in combat was killed by an IED near Kabul, Afghanistan. So I would ask if you could ask for a moment of silence.

REP. TAUSCHER: I think that's appropriate. The committee will have a moment of silence in honor of the lost airman.

REP. LAMBORN: Lieutenant Roslyn Schulte.

(Moment of silence.)

REP. TAUSCHER: Mr. Lamborn.

REP. LAMBORN: Okay, thank you.

General O'Reilly, here's a question about KEI. I'm concerned with the decision announced on May 7th to cancel KEI -- Kinetic Energy Interceptor -- in FY '10, followed by the Missile Defense Agency issuing a stop-work order on the program. Likewise, it is troubling that these decisions to immediately halt the program and disallow the rest of the '09 funding, which had been approved and directed by Congress, was made without a chance for congressional review.

But would you still consider proceeding with the planned KEI missile test this fall, inasmuch as the engine set has been built and already delivered to the test site? Over a billion dollars in taxpayer funds have already been invested in the program, and the completion of such a test would likely yield important scientific data that could prove useful in future missile defense R&D efforts.

GEN. O'REILLY: Sir, first of all, the motivation for the stop- work was we have a legal liability for termination of over $39 million. Since no money was proposed for FY '10, I've got a responsibility to ensure that I can have enough funding in FY '09 to cover the termination agreements I have with Northrop Grumman and the other companies involved. So that was first of all. I have to protect that.

And that wasn't sufficient under the existing plan proposed by the company in order to also pay for the flight test.

Second of all, there was three tests that were required as the contractor proposed prior to the flight test, and again they have had technical difficulties with components and so forth the program, the original schedule proposed two years ago they're a year behind in that and when we looked at the remaining activities they have, including the additional ground testing, we did not see that it was feasible, our estimate was it would be done at earliest if everything was successful would be December. But I have modified the stop work order and asked the company to propose to me so we can evaluate is there a proposed way in which they believe they could execute the tests in the timeframe within the funding and still cover the legal liabilities that I have.

Also I have asked in the stop work order to have a thorough review of the program, a lot of the technologies developed in KEI are directly applicable to what we're referring to in the Ascent phase so we want to ensure we leverage that technology and expertise and the follow on work that then would benefit not just KEI but all the missile systems we're deploying.

REP. LAMBORN: Okay. Thank you. What are the Department of Defense's plans for ground based missile defense and why should Congress have any confidence that NDA can support -- (inaudible) -- as the secretary of defense has talked about to improve ground based missile defense including plans for testing years into the future when budget priorities reshift money away from ground based missile defense in the future?

GEN. O'REILLY: Sir, the limitation we're proposing on GBI is the 30 silos because it was related to the rate at which we need to launch interceptors and the number of interceptors we need to put in the air to counter any rouge nation threats that are in the air at the same time. However, it is dependant on an extensive architecture, the GBI program and all of those other areas we are upgrading those programs and they will be feeding better discrimination data, command and control data and so forth for the interceptors. We designed the missile so the basic missile itself had a large capacity for new software, we can upload that software in the missiles in the silos, it was done as forethought ahead of time, so we will continue the laboratory, the lab work of our testing, the command and control work, the development of the additional nodes that tie into the GMD system and for example our forward based radars and our sea based X band radar, all of those upgrades also directly feed to the GBI's capability of killing a target.

REP. LAMBORN: Okay. And lastly in light of the $1.2 billion decrease in NDA funding, can you identify any under funded programs that would strengthen missile defense if you had additional dollars and would put them next in the list of priorities?

GEN. O'REILLY: Sir the part of the missile defense architecture that we can benefit the most from is our ability to see threats as early as possible and get an accurate track. So we are launching two satellites in August on a Delta 4 out of Cape Canaveral and we are planning on utilizing them in future intercept tests over the next couple of years. What we need is a constellation or would be a significant benefit to the missile defense architecture if we have a constellation that provided persistent surveillance and cold body tracking of cold bodies after they've boosted. And that is one area.

Another area is the development of airborne sensors and we're working very closely with the Predator office and UAVs looking at how can exploit that capability in order to again get early surveillance. But the interceptor would give us some improvement, but early surveillance and persistent surveillance would give us the greatest leverage.

REP. LAMBORN: Thank you.

REP. TAUSCHER: Thank you Mr. Lamborn. I'm happy to yield five minutes to the gentleman from New Mexico Mr. Heinrich.

REP. MARTIN HEINRICH (D-NM): Thank you Madame Chair. General Kehler, General O'Reilly, I want to thank you for joining us today. I want to address my first question to General Kehler. General, as you know operationally responsive space's headquarters is in my district in Albuquerque as well as the space development and test wing. And I was very pleased to hear of the successful launch of the Tac-Sat-3 on Tuesday night and I certainly congratulate you, Director Weigner(ph) and all those involved with that launch on that successful launch.

Earlier this week the Air Force released its unfunded priority list which listed ORS as number three out of 20 and I wanted to ask you if you could explain specifically what you think could be accomplished by funding this priority?

GEN. KEHLER: Yes, sir, we're delighted as well with the successful launch of Tac-Sat-3, it's another step in what we believe is very promising a way forward for smaller satellites with highly capable payloads, it'll be useful for the war fighters. What we are doing now that we have launched Tac-Sat-3, we are already on to the construction of the next ORS like vehicle called Boris Satellite number one or Sat 1, and the difference is the Tac-Sat series has been developmental if you will. ORS 1 is actually now taking a need from one of the combatant commanders and trying to apply operationally responsive principles to assembly and launching that.

We've given ourselves a fixed time to do that in, we've given ourselves a fixed budget to do that in. We've also given ourselves some off ramps where we can make decisions. Part of that unfunded requirement would be the next increment, if we get to the right decision point and then decide to go forward with this ORS satellite number one and we can actually make it within the kinds of very aggressive parameters that we've set up.

And then assuming that's right, the next piece is for the second of those satellites which would complete the combatant commander's needs in a certain orbit. We can't cover everything they need covered with one satellite, I know you know that.

But we would need to put a second one on orbit, that's what this does. It completes the first one, goes to the second one.

REP. HEINRICH: So I actually think you've probably answered my second question which related to consulting our combatant commanders in terms of what might be included on that OSR Sat 1.

GEN. KEHLER: Yes, sir, in fact this is answering specifically a need from central command. They have identified among a number of intelligence surveillance and recognizance shortfalls that they have that we're addressing for example an even bigger picture in the Air Force with increased global hawk Predator orbits et cetera. They've also asked us to do some things that are best done from space, and those are infrared coverage and that's what we will do.

REP. HEINRICH: All right. Well thank you General Kehler. I want to ask and sort of move to a different topic for General O'Reilly. You know I'm a believer in maintain a multi layered missile defense structure and one of the programs that we've invested a lot over the years and because of my background in directed energy that had a real interest in is the airborne laser which I think presents a lot of value in areas of directed energy research as well as potential in both the boost and ascent phase.

I wanted to ask you if you could discuss sort of what the department's plan is for applying ABL's work to other directed energy efforts and what plans are in store for the program after the forthcoming tests and shoot down this fall.

GEN. O'REILLY: Thank you sir. First of all the achievement of the airborne laser last year was truly revolutionary. We were able to fire a laser to a target that was 80 kilometers or farther away in the earth's atmosphere and the system normally shoots upward so this is more difficult. We were able to measure the diffusion of the laser beam over this range and receive a return off the target and then compensate for that defocusing by the atmosphere like your glasses and we actually fired the laser then using adaptive optics with a defocused laser and we used the earth's atmosphere to focus it.

So what happened was we had a very precise laser, and we've done it 12 times, so we've convinced ourselves that that break through technology is directly applicable for any time a high powered laser is fired in the atmosphere. And we did it repeatedly. That gave us the confidence to move on to take the high powered laser, the 1.3 megawatt class coil laser, we've installed it in the aircraft, the aircraft has flown for several weeks now, it's going through flight check out and we are updating the optics on it, but we are convinced that we have solved the largest fundamental problem.

We've also fired that large laser on the ground at Edwards Air Force Base over 70 times and at full power. So it's a matter of integrating them onboard the aircraft, and that gives us the confidence for this year. However, we still, this is revolutionary technology, we still must prove it.

So we have a shoot-down planned in the fall against a couple of targets. And then, if we're unsuccessful, this budget supports another attempt later on in the wintertime. If that's unsuccessful, a third attempt in the springtime. If that's unsuccessful, I will go back to the secretary of Defense and propose either termination or some other decision. If it is successful, we will continue to use it as a research and development platform. It has given great indications that it can be put on military aircraft of a smaller size and be much more deployable. So those are the type of things we'd like to pursue before we begin a (tail two ?) type development.

REP. HEINRICH: You meant when it's successful this fall, right? Sorry.

GEN. O'REILLY: Yes, sir.

REP. HEINRICH: Thank you very much, Madame Chair.

GEN. O'REILLY: We do want to prove it.

REP. HEINRICH: Yeah. Absolutely.

REP. TAUSCHER: Thank you. Thank you, Mr. Heinrich.

I'm happy to yield five minutes to the gentleman from Arizona, Mr. Franks.

REP. TRENT FRANKS (D-AZ): Well, thank you, Madame Chair. And Madame Chair, I guess the first thing I'd like to do is just to identify with the ranking member's comments in his opening statement and also with Mr. Heinrich's comments and inquiries related to the Airborne Laser. I think it's very insightful.

Let me thank both of you for being here. I never want to forget that while those of us on this panel talk a lot about freedom, it is people such as yourselves that give all of your life to it and sometimes literally give your life for it. And you're the most noble people we have in our society. And oftentimes I think it's probably the most manifest in that you take whatever we do, improvement or not, and you do the very best you can to protect this country. And I'm very grateful to you. I have two little babies, so I'm more grateful than I've ever been to what you do, because what you do today certainly affects generations to come.

One, perhaps, example that I might mention -- General O'Reilly, in your testimony, you talked about some of the legal impediments in the law in the last Congress that perhaps has impeded progress on the European sites. And I continue to believe that missile defense and especially -- (inaudible) -- European site could potentially have the ability to devalue a nuclear program in Iran and help some of our other ancillary efforts to keep that country from going nuclear, which I feel is an imperative of the highest priority and may keep us from facing, you know, jihadist terrorism in our own country.

So with that, General O'Reilly, let me direct my first question to you, sir, a pretty basic question. Do you believe that the threat from long-range missiles has increased or decreased in the last six months as it relates to the homeland here?

GEN. O'REILLY: Sir, I believe it's increased significantly. And I base that assumption on the intelligence information. I'm a customer; I don't develop intelligence, but I use it. And the demonstration of the capability of the Iranian ability to put a satellite in orbit, albeit small, shows that they are progressing in that technology.

Additionally, the Iranians yesterday demonstrated a solid rocket motor test, which is much more feasible to deploy and sustain in the field, and that is disconcerting.

Third, the North Koreans demonstrated -- even though their attempt to put a satellite in orbit failed -- they had a first and second stage that performed fairly well, which, again, shows that they are improving in their capacity. And we're very concerned about that.

REP. FRANKS: Yes, sir.

And I know that the reports that you mentioned show a difference in strategic emphasis from 2002 to 2010. And I'm hoping, just for the ability to educate the committee, that any reports or data that you are able to release to the committee that would help us understand, for instance, the -- related to the ground-based nuke force. I think that some of your testimony is very compelling and I would hope that any information or studies that you referenced in your testimony, would that be possible to give that to the committee?

GEN. O'REILLY: Yes, sir.

REP. FRANKS: All right. Thank you.

Let me shift gears here on you. I think probably related to GBI, there's been a lot of questions that I won't repeat -- but the manufacturing line, the industrial base continues to be a great concern in any situation that we face. When does the line go cold for the second- and third-tier suppliers, and how will this affect your ability to keep options for the future production of ground-based interceptors?

GEN. O'REILLY: Sir, the -- for the lower-tier suppliers, the last procurement of the current 44 GBIs was made in 2008. And there was some long lead procurements before that. So their deliveries are occurring this year.

One area that we are looking at is to upgrade the avionics of the missile fleet, and those are the type of initiatives the secretary is referring to, is continuing that work so that we have flexibility to respond to the decisions of the QDR and others, the ballistic missile defense review. So we were -- we have attempted to be as flexible as possible from a programmatic point of view on those ultimate decisions, so that we are not prematurely limiting our ability to have an industrial base to produce GBIs.

Also, the refurbishment program does replace a large part of the missile avionics system and other components. And so by having a refurbishment program also keeps the supplier base active to supply us those components.

REP. FRANKS: Again, I thank you both very much for your service to the country. And thank you, Madame Chair.

REP. TAUSCHER: Thank you, Mr. Franks.

I'm happy to yield five minutes to the gentleman from South Carolina, Mr. Spratt.

REP. JOHN SPRATT (D-SC): Thanks very much -- (audio break) -- talk about the significance and size of this program. If you take it back to the -- (inaudible) -- bring that money to a current day -- (inaudible) -- we've probably spent $150 billion trying to master the threat of missile defense, the threat of other missile attacks. And clearly, the threat is out there, but there are additional threats on top of that.

Thank you, sir. Shows you my technical expertise.

Let's go straight to the BMD or the GMD and the way you diminished that program with faint praise by cutting it from 44 back to 30. Is this because you've reassessed the threat posed by rogue enemies? Or is it because the system itself has limitations and there may be better options? And if the SSTS (sic: STSS) turns out to be successful and proves that we can master the track and also that we can discriminate, is there -- is there a freedom -- is there a future for this system that is beyond the size that you have in mind right now?

GEN. O'REILLY: Sir, for the GMD system, sir, we are -- we believe that the threat continues to grow, but what we're watching is the rate at which these missiles can be launched, the range size, how many can be launched at one time.

REP. SPRATT: Sure.

GEN. O'REILLY: That is critical to us to determine what size missile field do we need to respond. That's one.

Second of all, the STSS program is a pathfinder for what we are exploring as a satellite system that's focused on basic functionality so that we don't run into the pitfalls we've seen in other satellite programs of cost and schedule overrun and so forth. And I know General Kehler can respond to that better, but we're trying to narrow the requirement so that it delivers exactly what we need in a manner that uses proven technology for that program. So --

REP. SPRATT: We've been following the systems, the SBIRS High and SBIRS Low and now STSS for a long time. And their potential is always just over the horizon. Are you confident that we're about to know whether or not it can perform a mission? If not, we may have to look elsewhere for something of this --

GEN. KEHLER: Yes, sir. We're going to launch those satellites, those demonstrators, those two in August. And we have a robust test program for the next year and a half to demonstrate all of its capability. And that may be its shelf life, but traditionally they last on orbit much longer than that. And we're going to take advantage of every possibility we can to test this system and use it in different ways to prove out the benefit of a satellite constellation system for ballistic missile defense surveillance.

REP. SPRATT: General O'Reilly, you testified before there's been an increase of -- to -- 5,900, I believe, of various missiles, but they're -- the vast majority of those, 93 percent, I believe, are short-range and medium-range missiles. Are we putting our money in the right place when we're developing systems like -- adequate systems like the THAAD and the PAC-3 to counter the threat? Or is there something else? Shouldn't this be where we're putting substantial resources, since this is where the threat primarily resides right now?

GEN. O'REILLY: Sir, our intent is -- this is an FY -- this is an FY '10 budget, but our intent is to increase the production capacity for both those systems so that we can -- in our out years, we are exploring to triple the number that we previously were going to procure for the very reason you said, sir, so we have a near-term greater capability against those shorter-range threats to cover our deployed forces and our allies.

REP. SPRATT: Thank you very much for your testimony.

GEN. KEHLER: And Madame Chairwoman, if I could just add a point -- Mr. Spratt, sir, just as a point of reference, the first two SBIRS payloads are, in fact, flying. Payload number one --

REP. SPRATT: SBIRS High?

GEN. KEHLER: Yes, sir. Well, it's the elliptical orbit, but, yes, sir, it's a part of the SBIRS High program. The first two are flying. The first one is performing exceptionally well, has been handed over to the commander of Strategic Command for use. The second one is also flying and about two-thirds of the way through check-out and looks very promising, just as a point of reference.

REP. TAUSCHER: Thank you, Mr. Spratt. I'm happy to yield five minutes to the gentleman from Washington, Mr. Larsen.

REPRESENTATIVE RICK LARSEN (D-WA): Thank you, Madame Chair.

And if the gentleman will -- I'll start with General Kehler this time.

With the termination of the TSAT leaves open the question of the future of protected communications on the move and the increase from four to six satellites for AEHF as well as the addition of the seventh for advanced procurement for WGS brings home the question whether -- you know, whether or not we're going to continue to have what we projected to be a TSAT capability; is it going to migrate to AEHF or WGS? I'm just curious, I think in terms of thinking ahead of this, what the answer to that might be.

GEN. KEHLER: Yes, sir. The decision on TSAT was really made in the context of all of the budget decisions. The requirement to provide for protected communications on the move remains; protected communications across the board, really, the requirement remains.

REP. LARSEN: Sure.

GEN. KEHLER: But when you have to get to the sorts of capabilities that TSAT was going to bring is really the question. And in the context of the other budget decisions, some of the big demand for protected communications on the move has slipped to the right with the other budget decisions. That's given us an opportunity to continue on a pathway that we have just really started. First of all is WGS, which is wide-band unprotected, but very wide-band, highly capable pipes that we're putting up in the sky.

REP. LARSEN: Right.

GEN. KEHLER: The first one of those is flying, has been turned over to the combatant commander for use. The second one is on orbit and in check-out, and it looks like that's going to be a highly successful program.

We then will continue to fly for a little while longer the Milstar system until we can put the first of the Advanced EHF satellites on orbit. It looks to us like we can -- the decisions that Congress made last year to go to a fourth AEHF now gives us an opportunity to harvest some of the technology out of TSAT, bring that into Advanced EHF and potentially WGS. The same time, we'll be still relying at some level on commercial satellite communications. The question for us to come back and answer to you is what that mixture looks like and how quickly we can pull into the protected piece of this some of those technologies we've already invested in in TSAT.

REP. LARSEN: So I guess a baseline -- bottom line on that or a (hemline ?) from that is that it may be early to make a decision on whether -- on where that potential capability should migrate to -- the TSAT capability.

GEN. KEHLER: I think we are -- well, what we know is that we will infuse some of that technology into Advanced EHF. The question is -- and perhaps WGS as well -- the question is how and in what kind of blocks. What we don't want to do, sir, is make the mistake that we've made in the past about having requirements that we can't quite get our arms around at this point. We need to go deliberately. We need to use our block-build approach. And we need to pull in those things that make the most sense.

REP. LARSEN: And I suggest to you that we don't want to help you make those mistakes as well.

General O'Reilly, the MDEB was constituted in this past year, and I think that -- was it January 21st of '09 was when it first really came into -- it doesn't matter -- it came into place?

GEN. O'REILLY: Actually, it was July of the previous year.

REP. LARSEN: July of '08. Can you -- was MDEB involved, then, in this year's -- in the development of the FY '10 missile defense budget?

GEN. O'REILLY: Yes, sir. They reviewed the budget and provided the input to it twice. And I presented to the -- to the Missile Defense Executive Board -- that was well attended -- the proposals and then their input went forward to the secretary of Defense.

REP. LARSEN: And so this was the -- was this the first time in the history of the agency, the Missile Defense Agency, that the budget was then developed with that additional oversight, as opposed to MDA going directly to the SecDef and then to, you know, OMB and then the president and then us?

GEN. O'REILLY: Sir, this was the first time we had the benefit of not only the process but also the products that -- for example, the combatant commanders -- STRATCOM is required in this process to provide a prioritized capabilities list, which I responded to. And then they even evaluated my response and provided a capability assessment report, which had a strong influence on this budget of what they rated as red, yellow, green on responding to their priorities. And that input was also provided to the MDEB.

So the products and the subcommittees were all working throughout this process.

REP. LARSEN: Thank you very much. I see that my time is up. But the point I want to make is just that there is -- and around this debate about missile defense and I appreciate it as well -- but it's really not just a matter of your debate -- I'm sorry, your budget showing up to us from the secretary of Defense; it sounds like a more robust review even before it got to that level than we've seen before, it sounds -- it sort of sounds like to me, the internal review within the department.

GEN. O'REILLY: Yes, sir.

REP. LARSEN: Thank you very much.

REP. TAUSHER: Thank you, Mr. Larsen.

I'm happy to yield five minutes to the gentleman from Rhode Island, Mr. Langevin.

REP. JAMES LANGEVIN (D-RI): Thank you, Madame Chair.

General Kehler, General O'Reilly, thank you for your testimony here today. I have a couple questions.

The first one, more in a broad sense on how you make your decisions, how robust is your effort in conducting an analysis of alternatives as other technologies mature and then being able to incorporate them into existing programs? We spend a lot of money in DARPA developing cutting-edge technologies. I'm always -- I'm always skeptical of expensive weapons systems and their ability to adapt to new technologies that emerge, you know. For example, the ABL using a chemical laser, and it would -- to be -- advances in solid-state lasers, could you or would you be able to adapt to incorporating that type of technology on ABL, for example, even though you invested so much time, effort and money into developing a chemical laser? So talk to me about your robust effort in doing analysis of alternatives. How does that process work?

GEN. O'REILLY: Sir, that's a maturing process that's associated with the establishment of the Missile Defense Executive Board, run by the undersecretary of Defense for Acquisition, Logistics and Technology. The expectation in that board, though, is that the analysis that's done to support these decisions is on par with the analysis that's done in other milestone decisions.

Again, this is a maturing process for the Missile Defense Agency. A good example would be we're looking at extending the range of the THAAD missile. Before we do that, though, we're in a very collaborative analysis of alternatives and assessment by the Army, the Joint Staff, the Missile Defense Agency all reporting out to the Missile Defense Executive Board. So that adds a level of scrutiny at that level that hadn't existed before in a formalized process.

Also, I am the acquisition executive for the early stages of development. And although we are exempt from 5,000 -- the DOD processes for acquisition -- I am reviewing the use of a milestone process for my sake in order to conduct extensive analysis and evaluation of alternatives before we initiate contracts in the way that you're referring to, sir. And that's for the initial milestones. The full-scale development, I am soliciting the participation of the service acquisition executives that I'm going to -- that is ultimately going to receive this capability so that together we are reviewing these programs before we execute large contracts.

We do work with DARPA. And we've had exchanges with them. And we are investing in solid-state laser on the side as a technology program.

REP. LANGEVIN: Thank you for your answer, General.

General O'Reilly, I know some of these things you talked about in your opening statement; some members have touched on them. But just to -- again, for my comfort level and -- the budget request increases funding to the Aegis BMD and THAAD programs by $900 million while terminating the Multiple Kill Vehicle, Kinetic Energy Interceptor and the purchase of the second Airborne Laser prototype. Can you talk a little more about the department's rationale for the significant increase in funding in these two programs and cutting back on the other three?

And also, why were these decisions made prior to the completion of the administration's missile defense policy and strategy review? And finally, does this reflect a shift in focus from long-range threats to more short and medium-range threats?

GEN. O'REILLY: Sir, the Missile Defense Executive Board process allowed the warfighter a strong voice on what priorities of capabilities they need and what risk assessments are out there.

The joint staff -- or the joint staff at the Joint Requirements Oversight Council over a year ago approved a study that showed that we were deficient in the number of Aegis and THAAD missile systems. And so that was an endorsed study from the previous two years ago, and so therefore, with the scrutiny that that study has had and the endorsement it's had, we moved forward with those procurements, because the threat to those forces exist today. And we wanted to, as quickly as possible, respond to both those requirements that were endorsed by the vice chiefs of the services and meet the threat that we saw out there.

The other shift, though, is primarily -- part of the Missile Defense Executive Board is it does review the threat and it does review the intelligence and so forth. And we are aiming the research and development, along with the deployment of the most mature systems we have, to respond to the large preponderance of the threat, which is in the short and medium ranges.

REP. LANGEVIN: And the issue of the -- waiting for the administration's -- the completion of the administration's missile defense policy and strategy review?

GEN. O'REILLY: Sir, there's a lot of decisions that we did not make, such as to keep the GBI line -- to terminate that line. We did not. And there's an example of we are maintaining programmatic flexibility awaiting for those decisions, those policy decisions, to be made later this year and announced through the QDR and the Ballistic Missile Defense Review.

So we wanted to be as responsive as we could, as quick as we could, to the combatant commanders' request for missile defense capability, at the same time allow programmatic flexibility for those policy decisions that'll be made later on this year.

REP. LANGEVIN: Thank you, General.

I yield back.

REP. TAUSCHER: Thank you, Mr. Langevin.

I think we'll go into a second round of questions.

General O'Reilly, the United States and Israel are jointly developing an upper-tier missile defense system to engage potential ballistic missile threats to Israel at longer ranges. Israel's preferred alternative is to develop a new missile, the Arrow 3. However, I understand that successful development of the Arrow 3 system is considered a high risk.

What are the key risk areas? Are we exploring alternative ways of assisting Israel to meet its upper-tier requirement? And how likely is it that Arrow 3 will be able to meet the schedule of deploying an initial capability by 2014?

GEN. O'REILLY: Ma'am, the design for the Arrow 3 missile system shows it will be an extremely capable missile. It's very advanced. It is a more advanced design than we have ever attempted in the United States with our programs. That is due to the way that the seeker has great flexibility and it has other propulsion systems. It will be an extremely capable system.

However, associated with that advanced development is the schedule that goes along with that. And the time lines in which we saw, we're not in a position to say they can't achieve those technical accomplishments, and we hope they do, and we're very supportive of that process. But we saw -- particularly the schedules in which they were proposing, I had deemed and I've had independent studies that deem as very high risk for a missile development program.

So our assessment is that it is unlikely that they can meet the schedule which they have laid out to accomplish all of these technical achievements at this time.

REP. TAUSCHER: Thank you.

Mr. Turner.

REP. TURNER: Thank you, Madame Chairman.

It was our understanding that Mr. Rogers from Alabama was going to have an opportunity to speak after the first round, but since we're going to wait --

REP. TAUSCHER: No one consulted me with that. If they had consulted me, I would have said that having two different hearings at once would have made it difficult to do that.

REP. TURNER: That's absolutely fine. It was really a staff communication to us, so we understand, Madame Chairman, that that was not your call. But in order to facilitate his schedule, I'm going to yield to him a portion of my time.

REP. MIKE ROGERS (R-AL): I thank the ranking member.

Generals, thank you both for being here and thank you for your service.

General O'Reilly, I want to pick up on our conversation from last week about these GBIs. You stated earlier -- well, first of all, when you were talking to Mr. Langevin, I thought you said you're delaying the decision on the GBIs till later, the termination of that.

GEN. O'REILLY: Sir, that's the production line. We have not proposed that we would stop the production line or any potential for future buys of GBI.

REP. ROGERS: That's --

GEN. O'REILLY: What we had stopped was going beyond 30 missile silos.

REP. ROGERS: Okay. So, then, as far as tests are concerned, I know that of the 44, you're going to use 10 for testing. So you're not -- at least on this date, you're not planning to discontinue production so that you'll have some future interceptors for tests.

GEN. O'REILLY: Yes, sir. We are, in fact, in parallel to this effort, going through a test review with the Director of Operational Test and Evaluation and the service operational test agencies. And we are identifying quite a number of tests that we're going to need in the future that will require GBI participations, including salvos of GBIs. So that -- we're completing that work now, and that will be another indicator of the number of ultimate GBIs we would need for the purpose of testing.

REP. ROGERS: Great. You talked earlier, when the ranking member was asking you about the logic for 30 as opposed to 44 being deployed, and you basically said you -- (inaudible) -- 44, you never got an answer.

GEN. O'REILLY: Well, sir, it was -- the best I can tell -- I've not seen an analysis, but the best I can tell, it was a judgment based on where the threat would be today, driven by how many rogue nation intercontinental ballistic-type missiles could be launched at one time, in this time frame. And, of course, it's very hard to judge risk or the threat. And that was a judgment done many years ago, but that was the best understanding I have today of how the number got to be 40 at that time.

REP. ROGERS: Well, I understand your interest in the ascent- phase interceptor, and I like that idea. I just don't understand why we would diminish -- (inaudible) -- of our current capability while we're waiting on that exciting technology to mature.

GEN. O'REILLY: Sir, in the GBI assessment or analysis, we did go back and look at what we know today and what the intelligence community can identify as the ability for the threat to launch multiple. We need a GBI capability. We realize that. And we need to have one that's sustained for decades. We realize that. And we have not shut the door to that at all.

In the area of the execution of those other programs, which we terminated, their execution was delivering very late. It was very high-risk. We want that capability. But although a boost-phase capability would be ideal, our assessment of the risk of achieving that is very high.

Yet very close to boost phase is ascent phase, and we thought it was much more achievable. And we want to have enough interceptors so that we can respond in volume with a large number of interceptors responding back to those threats. And so we're trying to explore and we are pursuing ways to take our given force structure today and make it more powerful and more of a deterrence to these type of launches.

REP. ROGERS: How much money is in the budget for those phase technology developments?

GEN. O'REILLY: Sir, if you look at what we're strictly going to be investing in, it's focused at about $368 million this year. But it leverages the interceptor work and over $1.5 billion that is going on in the development of the rest of the system that the ascent phase adds that first layer of defense.

So it's going to be working with -- it's going to be developed in consonance with that other $1.5 billion. So I didn't advertise $1.8 billion in that area because I believe that's not a fair assessment, but there's $368 million that's going directly to give us this type of capability to use the rest of the system this way.

REP. ROGERS: Well, thank you very much. I appreciate that.

I yield back.

REP. TAUSCHER: Mr. Larsen, do you have any second-round questions for five minutes?

REP. LARSEN: Not at this time, Madame Chair.

REP. TAUSCHER: Mr. Lamborn for five minutes.

REP. LAMBORN: Thank you, Madame Chairman.

General Kehler, how does the $136.4 million increase in space situational awareness funding in the FY '10 budget reduce the vulnerability of our space assets? And will the increase enable the DOD to share SSA data to prevent accidents like the Iridium collision in February?

GEN. KEHLER: Sir, with the increased importance of space comes some interesting issues, one of which is an increased need for us to have better situational awareness of what's there. Space becomes more crowded all the time. We look at over 19,000 objects that we actively track on orbit. There are hundreds, certainly -- thousands, perhaps; perhaps even more than that -- more that are there that we don't see -- nuts, bolts, washers, screws, things that have been part of the cost of doing business on orbit. And so it's important for us to increase our situational awareness.

In the '10 budget, the increases that we've asked for for situational awareness are not because of program overruns. They're not because of difficulties that we're having. We're looking to target that FY '10 investment at being able to use our existing sensors better.

And that means being able to understand the data, collect more data from the existing sensors, put it together better, and -- and put it to better use.

In the meantime, as we are working our way down this -- this road, we are increasing our computing capability today as well as the number of human beings who are analysts who can look at the data and decide when a collision might occur. That money is actually being spent right now today. It's not a -- by budget standards, it's not a huge amount of money. We expect to have much better capability to predict potential collisions by the end of this year.

We're better today than we were when the collision occurred back in February. We'll be better tomorrow than we are today. But that's (at ?) using the data that we already have and -- and being able to use it better. As we go into '10, we'll begin to pull more sensors into that mixture and I think we'll be able to do better sooner not by worrying about new sensors, although there's some of that in that budget.

We'll put a new sensor on orbit here later this year that will allow us to observe objects on orbit better. But by and large, this near-term investment is to make our operations center better, they can process the data better, display it better, and -- and give human beings some better understanding of what they need to do and how they need to go about it.

REP. LAMBORN: Okay. Thank you. General O'Reilly, the budget request includes only $51 million for a European capability. Does this low funding level indicate a change of administration position or lack of support for European missile defense?

GEN. O'REILLY: Sir, it does not. It reflects the legal restraints I had from last year's authorization and appropriation act. Fifty-one million (dollars) is the -- about the extent I can execute this year without the ratification of the ballistic missile defense agreements of the Czech Republic and Poland. We are continuing the (two states ?) GBI development, which also was -- is part of the European capability, and the development of and deployment of forward- based radars, which are also part of that architecture. But I'm limited to that amount -- that that was my estimate is how much I could do without these other constraints being met.

REP. LAMBORN: Okay. Thank you. On Tuesday, a Washington Post article referenced a study by the EastWest Institute, an independent think tank based in Moscow, New York, and Belgium that concluded the proposed European missile defense system is, quote, "ineffective against the kinds of missiles Iran is likely to deploy," end quote. Do you know -- O'Reilly, you don't agree with that assessment, do you?

GEN. O'REILLY: No, sir. I do not.

REP. LAMBORN: And why not?

GEN. O'REILLY: Sir, a lot of the assumptions they use in these type assessments are not accurate and they don't reflect our true capability -- our specifications, what we've demonstrated. Also, what we know of the threat for what I have access to in intelligence it does not correlate to the basic assumptions that they use in that study and others I've seen like that.

REP. LAMBORN: Thank you. And Madame Chairman, I yield back.

REP. TAUSCHER: Thank you, Mr. Lamborn. Mr. Langevin from Rhode Island for five minutes.

REP. LANGEVIN: Thank you, Madame Chair. General O'Reilly -- O'Reilly, it has come to my attention that MDA has set aside money for -- for THAAD batteries but not radars. I was concerned that the goal of the administration to field more THAAD systems may be hampered by a limit in the -- (inaudible) -- radars in production to accompany the batteries. What's -- what is MDA's plan for dealing with the gap in deployable radars to the -- to the new THAAD systems and when does MDA begin that procurement of their radar to meet the administration's goals?

GEN. O'REILLY: Sir, we do not have a gap in the radar -- between the radars and the batteries. This radar is a multifunction radar. It can operate with the THAAD unit for tactical defense and it can also operate and stand alone as a forward-based radar for strategic type threats -- long-range, IRBM, ICBM -- on its own. So what we've procured is enough for the THAAD units today and additional radars to also produce in that same function. We are developing the software so that these radars can operate in one function or the other and are interchangeable.

So what they may be -- this concern may be the concern that they don't see a radar matched to a particular battery. We did that on purpose so that we have a pool of radars and any of them can support that battery. But we have the seventh radar being delivered this year and we have four THAAD units previously. With this budget we're proposing additional THAAD units at two more and with those THAAD units come radars.

REP. LANGEVIN: Thank you, General. That's all I had. Madame Chair, I yield back.

REP. TAUSCHER: Mr. Langevin. Mr. Franks for five minutes.

REP. FRANKS: Thank you, Madame Chair. General O'Reilly, earlier you had just mentioned briefly the -- the complexity of the Arrow 3, and this wasn't really going to be one of my questions but I was somewhat fascinated that potentially it has the potential to have some paradigm shifts in -- in missile defense capability and I -- I understand that there is at least an effort to make sure that that process (stays alive ?) to see if they make their knowledge points and to -- because the Israelis, as you know, certainly have shown the ability to shock the world many times, and I'm hoping that we can make sure that if that is to happen again it can be good for the United States and for Israel.

So I'm glad to see that there's still enough (up there ?) that see how they do with the Arrow 3. The committee -- in fact, you were excited the general -- (inaudible) -- general capability there -- the JCM study conclusion that -- (inaudible) -- the number of AEGIS and THAAD interceptors are required and -- and to the -- to the budgets, in my judgment, you know, they did that, and I think that's a credit to those who did. What studies have been done to identify the four structure requirements for the rest of the missile defense architecture (exactly ?) in our GMD or Patriot or radars and other sensors? Have there been other studies that to identify the force requirements?

GEN. O'REILLY: Sir, the -- over the past year, we've also had great success in establishing memorandums of agreements with the services, and in the case of the Army I signed one with the secretary of the Army in January. Part of that created a board of directors and which would review those exacts studies so that we have Army input, we participate with the Army, and we make joint decisions. The programs you mentioned are all Army programs and that's how we worked through the Army force development process of their Army staff to determine what are the force structure requirements for the Army.

REP. FRANKS: And again, without pressing you too hard, are there copies that would be available to the committee that would give us some clarification as to what the rationale was in many of those cases?

GEN. O'REILLY: Sir, I will have to go back and look at that but I -- I will go back to the Army and make that request.

REP. FRANKS: I would -- I would appreciate it, General. I sure would. Let me then shift gears again. You know, there have been at least one study which examine alternatives to the proposed missile defense system in Europe and the independent assessment conducted by the Institute for Defense Analysis, which was required by the fiscal '08 budget. Have you seen the alternatives to the current proposal that are more cost effective in providing defense of Europe and the U.S. in the existing plan?

GEN. O'REILLY: Sir, we -- we are going through that cost estimating process right now. There are several alternatives that -- again, it's driven by the assumptions -- a 30-year life, those type of assumptions. But the current proposal for an upper tier defense, which is what was proposed -- upper tier against long-range threats -- we haven't seen a proposal that is less costly than that. When you -- but we are also evaluating and the department is evaluating the protection of all of NATO and that is more costly when you bring in other units because you need shorter-range units to protect the southern tier from Iran, which is the focus of this. But for the upper tier, for the lowest cost of protecting for the upper tier would be the program of record at this time.

REP. FRANKS: Well, one of the alternatives that I've seen would provide protection for Europe but it wouldn't provide protection for the -- for the homeland, and -- and I just want to make sure, you know, that the protection of the United States is still a necessary criteria for the administration's plans for the European site. Is that still your understanding?

GEN. O'REILLY: Yes, sir, and there -- there are analysis going on and assessments by the department as part of the quadrennial defense review that haven't been complete yet. But from that point of view, the requirement I have had -- the guidance I have had is for the protection of the United States and Europe.

REP. FRANKS: General, I hope you're successful. Thank you, sir.

REP. TAUSCHER: Mr. Turner?

REP. TURNER: Thank you, Madame Chairman. Obviously, one of the questions that you're receiving today concerning the reduction of the 44 GBIs to 30 is a concern of not only the level of protection that we have but also looking forward in our capabilities to support our industrial base.

There's concerns in second and third-tier suppliers who, reports indicate, could be without work at the end of this year, which results in the issues of loss of capability and cost for restarting versus costs for maintaining.

You've indicated before that the 44 perhaps was arbitrary; you believe that you have some basis for looking at 30. But one of the issues that has been raised in the numbers that you're going to be reducing the ground-based interceptors to is the issue of sustaining flight testing. According to the budget request, 10 of the remaining 14 GBIs not deployed will be used for test assets. Assuming two flights per year and perhaps a salvo test, the expectation is that you'd run out of test GBIs before the end of the -- (inaudible).

Once these 10 GBIs are used up, do you see the need for further GMD flight testing? And then the context in which this information has been highlighted is the issue that currently, for our ICBMs and our SLBMs, you see they are two to three times per year that are flight tests. My understanding is that General Kehler has indicated that for the -- before the Senate Armed Services Committee, you'd like to go from three flight tests to four flight tests.

The concern is, obviously, is that with the reduction, you're going to run out of the ability to conduct tests of something that perhaps -- if you look at other programs, we will need a continuous sustainment, not just for determining whether or not it operates but whether or not there are upgrades and other types of testing to ensure that it's operational.

If you're going to run out of these, it does seem that there perhaps should be an effort to sustain our industrial base, both second and third-tier suppliers, so we don't incur a huge cost as we go forward with testing. Have you taken that issue into consideration and what are your thoughts?

GEN. O'REILLY: Sir, if I can, first is I don't believe I said the 44 was arbitrary; it was just I haven't seen the substantiating data that was used for that. I believe -- it appears to me to have been a judgment on risk and on an intel assessment of how many threat missiles would be available today or we would be threatened by for simultaneous launch. But -- so it was a judgment made on data; it's just that that data is still under assessment. And I know what they said and it's not the case --

REP. TURNER: Okay. I guess that's where -- I accept --

GEN. O'REILLY: I didn't mean --

REP. TURNER: -- I accept your correction. However, I guess the concern that everyone has is well, what is the change? Is the data on which it was based lost to you? I mean, you say you haven't seen it. Because what we would like to see is what has changed. Everyone's understanding of the changes of the environment we're in is an increasing threat, not a decreasing threat. And so that's why everyone is so concerned about your now proposing a decrease. So in the issue of picking that number, people have concern as to what data was used.

So if you do have an ability to look back at that and give us some comparative, we would appreciate it. But your thoughts on the issue of testing I'd appreciate.

GEN. O'REILLY: Yes, sir. For the -- this budget was developed without the benefit of the current test review, which is ongoing, that we've testified to before, Dr. McQueary, myself and General Maydu (ph). We are completing that review now; it has an increase in testing over what was previously assumed for the purpose of this budget. Those results will go to the Missile Defense Executive Board and we'll brief that out for judgments made by them in order to inform our PB11 for the next year.

In the meantime, my concern has been -- as you've stated -- to focus and ensure that we are addressing the obsolescence process -- or problems -- that do occur with any electronic system over time, and we are in a position in which to activate the production lines if they do go cold, or extend those production lines for those suppliers through a refurbishment process.

What this budget proposed which didn't exist before was a formal process where you have additional missile spares intentional and you recycle them through the fleet as a way of measuring their performance and understanding their aging. These are also fairly extensively tested missiles in their silos themselves; they were designed that way up front using the latest technology at the time, which was just a few years ago, which is much beyond the type of fleets of which we are compared to often, the older missiles systems that don't have the level of built-in tests and they're not monitored in the same way in their environment.

But even with that, we have an annual maintenance program; we have a quarterly program that goes out and looks and measures the performance of each missile. In the past we have pulled missiles and refurbished them because of the instrumentation which we have in these silos. So when we put that together, that is also going to be considered into the ultimate number of GBIs that we need to procure.

REP. TURNER: Okay. So I don't mischaracterize what you've said, let me see if I can get this right. You do believe that there could be increased flight testing requirements in looking at sustainment of the program. You're evaluating that and you're going to be making recommendations as to what that would be, and it might result in a shift in the number of ground-based interceptors that you're going to recommend, which could in turn then assist sustaining the industrial base?

GEN. O'REILLY: That's correct, sir, as we finish this review of what is necessary in order to fully characterize the GMD system.

REP. TURNER: And then -- excuse me if you said because I didn't catch it -- what is your timeframe for that?

GEN. O'REILLY: Sir, we had testified before we'd be complete by now. It is a very complex review involving the -- STRATCOM was added to the process, so we have a warfighter input. We thought that was important. But our timeframe is June, sir, next month.

REP. TURNER: So you think that the number of ground-based interceptors -- that you may have a different number as we move forward with this bill then, for us?

GEN. O'REILLY: Sir, we will propose it to the Missile Defense Executive Board, as the total results that come out of this testing program.

REP. TURNER: Okay. Thank you.

REP. TAUSCHER: Thank you, Mr. Turner.

I'm about to close the hearing, but I just wanted to make one clarification, General O'Reilly, because I think that there is clearly some confusion. Don't we already have a defense against any Iranian long-term threat in the Alaska system?

GEN. O'REILLY: Yes ma'am, we do.

REP. TAUSCHER: So the idea that we would have no threat -- no deterrent, no defense unless the European site was built is really leading people astray?

GEN. O'REILLY: Sir, the -- ma'am, the European site is focused on protection that we don't have in Europe today and redundant coverage of the United States, but it is redundant coverage of what we already have.

REP. TAUSCHER: Thank you. Well, General Kehler and General O'Reilly, thank you very much for being here. Once again, we extend our best wishes to people in your commands, both the civilian and the Guard and the Reserve and the folks that are working in active duty and we appreciate your being here. You have informed us very well on the number of issues that we have a lot of jurisdiction over. So we thank you very much. And the hearing is adjourned. (Sounds gavel.)

END.


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