Senator SHAHEEN. Good afternoon, everyone. Welcome. I'm sorry to be a little late; I'm not quite on military time yet, so you have to bear with me.
At this point, I'd like to call the hearing to order and point out that this is the--this subcommittee's first hearing of the year. And I'm very pleased to be taking over as chair of the Readiness Subcommittee and sharing the leadership with my colleague from New Hampshire, Senator Ayotte. And I hope that--and I'm confident-- that we'll continue to lead the subcommittee in the strong bipartisan way in which she and Senator McCaskill did when Senator McCaskill chaired the subcommittee. And I'm sure you will be pleased to know that we will bring you, from time to time, concerns we have from the Granite State of New Hampshire. [Laughter.]
So, that, I'm sure, won't come as any surprise to any of you.
I think it's also important to note that we are continuing the successful partnership of having the chair and ranking member of this subcommittee both be women. And I think that's fitting, since New Hampshire is the first State to send an all-female delegation to Washington.
So, we're very pleased to be joined this afternoon by General John Campbell, who is Vice Chief of the Army--Vice Chief of Staff for the Army; Admiral Mark Ferguson, who is Vice Chief of Naval Operations; General John Paxton, assistant Commandant of the Marine Corps; and General Larry Spencer, Vice Chief of Staff for the Air Force.
So, gentlemen, we very much thank you for coming this afternoon, and look forward to a fruitful discussion. And I should say, at the start, that we also very much thank you for your service to this country and for the job that you do for the men and women who serve under you. Thank you.
The Readiness Subcommittee meets today at a pivotal moment to discuss the current readiness of our forces. Our men and women in uniform continue to be burdened by sequestration cuts enacted by the Budget Control Act of 2011, which, if they remain in place, as I'm sure you all will testify today, will significantly impact the services' ability to conduct training, maintenance, and to sustain their readiness.
Currently, the DOD will incur several billions of dollars in reductions to its vital operation and maintenance budget accounts in fiscal year 2013. As we've learned from our many past Readiness Subcommittee hearings, for the last several years readiness rates have consistently declined. However, I worry that this new crisis represents an even greater loss of surge capability, risks the grounding of pilots who may lose flight certification, erodes aircrew readiness, and foreshadows the hallmarks of a hollow force if our ground troops can't train above the squad level.
It's important to note that the impact of sequestration will be felt, not only in our Active components, but also in our National Guard and Reserve.
As we know, our uniformed personnel are not the only ones at risk under sequestration. The Department has announced that it will furlough civilian employees up to 14 days. I understand from the Navy that, while these furloughs may garner about 308 million in sequestration reductions, it would also delay shipyard maintenance availabilities approximately 85 days and risk putting our ships behind schedule and possibly not available for deployment when we need them. Even worse, for the Navy, several accidents over the past year require unscheduled and unbudgeted repair work, such as with the USS Miami, which we're very familiar with because of its location at the Portsmouth Naval Shipyard, the Guardian, the Porter, and others.
The capital investment for the modernization of our shipyards will likely continue to suffer over fiscal year 2013. I know I speak for Senator Ayotte when I say we eagerly await the shipyard modernization plan that we required in the National Defense Authorization Act for Fiscal Year 2012. We're interested in hearing from Vice Admiral Ferguson--from Admiral Ferguson on its status and how much risk you and all of you vice chiefs plan to take in your installation sustainment accounts.
In addition, we'd like to hear whether or not the Navy and the other Services funded the 6 percent of capital investment program, as required by law, in the fiscal year 2014 budget requests.
We've recently learned that the agency responsible for purchasing fuel for the Department of Defense, the Defense Logistics Agency, will increase the price of fuel on May 1 from $156.66 per barrel to $198.24 per barrel. This fuel bill will cost DOD an additional $1.8 billion. The fact remains that fossil fuels continue to be a strategic and financial vulnerability, not only to the DOD, but also to our Nation.
Perhaps the most overlooked aspect of sequestration is that the cuts are not short-term savings for DOD, nor are they realized savings for the taxpayers. In reality, sequestration merely increases operational and strategic risk by deferring vital maintenance and canceling necessary training. I believe the consequences of sequestration will, unfortunately, end up costing us more in the longrun. And I remember the testimony of Deputy Secretary of Defense Ash Carter, when he talked about the fact that the unit cost of everything we purchase through DOD will go up as the result of sequestration. We are unnecessarily making it harder on our forces to prepare for deployment by reducing flying hours for our squadrons, delaying maintenance, and reducing training.
I understand that there are no easy tradeoffs for the witnesses here today. Chasing resources to meet military requirements is nothing new. And I'm not advocating that it's financially responsible to have unlimited military spending. But, as we all know, sequestration was designed to be onerous because it was never supposed to get enacted. We should solve the problem now, before we reach a time when our ships, aircraft, troops, and equipment can no longer train or deploy.
However, I know there's also hope. There are always ways to improve the way we operate, and there are many initiatives that continue to succeed. For example, the continued to--commitment to pursue greater energy efficiencies and renewable energy sources offers an enhanced combat capability to the DOD. I had the opportunity to see some of the efforts that are underway--the more efficient generators, the solar blankets, the installation energy investments--last year, when I conducted a hearing down at Norfolk on the USS Kearsarge. And it was really impressive what all of you are doing in each branch of our military to save on energy and to move to alternative sources of energy. I think that these energy policies should not be partisan. They reduce the burden upon those in combat. And I thank you, General Campbell, for all of the great work that the Army is doing, along with all of the other branches, in this regard.
So, even in these challenging times, I remain confident and encouraged that we still have the most resilient fighting force in the world today. I remain optimistic, because, even after a decade of war and the severe stress from all angles, each of you find ongoing ways to improve how you operate. For the past 11 years, our military has consumed readiness as quickly as they've been able to create readiness. We're beginning to see some operational relief as we draw down from Afghanistan.
I thank all of you, particularly the Army and the Marine Corps, for recommitting to training for the full spectrum of operations in your fiscal year 2014 budget request.
Again, I sincerely thank each of you for being here. I thank your hardworking staffs for taking time to join us in this critical readiness discussion. And we ask that you include your full statements for the record and, if you would, summarize what you have to say, hopefully within a 7-minute timeframe, so we can have more time for discussion.
So, thank you all very much. I'll turn the discussion over to my colleague Senator Ayotte.