Thank you Senator Inouye, Senator Stevens, members of the committee.
It is my first appearance here, and I do welcome the opportunity to speak with you today, and to provide some context for this fiscal year '09 budget that we're presenting to you today.
Our country's in our seventh year at war, and your Army remains fully engaged around the world and at home. I believe, as the secretary mentioned, that we are in, and will be in, a decade or so of what I call persistent conflict. And I define persistent conflict as a period of protracted confrontation among state, non-state and individual actors who are increasingly willing to use violence to accomplish their political and ideological objectives.
And as I look to the future, that's what I see for us, and that's the future that I believe that we, as an Army, and we as a nation, need to prepare for.
Now, on top of that, as I look at the international security environment, I see some trends that will actually exacerbate and prolong this period of persistent conflict.
For example, globalization: There's no question that globalization is having positive impacts around the world. But, unfortunately, those positive impacts are unevenly distributed. And it's creating an environment of have and have-not states.
And if you look primarily south of the Equator -- South America, Africa, Middle East, South Asia -- you see what I mean. And what happens is, that these have-not states create further recruiting bases for global extremist groups.
Technology is another double-edged sword. The same technology that is pushing knowledge to anyone in the world with a computer is being used by terrorist to export terror around the world.
Demographics are going in the wrong direction. By some estimates, some of these developing countries are expected to double in population in the next 10 to 20 years, and some projections are that 60 percent of the world's populations are going to live in these sprawling cities in 10 or 20 years. That will create, again, breeding grounds for extremist recruitment.
Two trends that worry me the most -- weapons of mass destruction. We know there's over 1,200 terrorist groups around the world. Most, if not all of them are working hard to get weapons of mass destruction. And there's no question in my mind that if they get them they will intend to use them against a developed country.
And the second thing that worries me the most are safe havens -- ungoverned space or states that allow terrorists to operate from their territory, that can be used to plan and export terrorist operations, much like we saw in Afghanistan.
So facing that future and having been at war for seven years, we believe that our Army must be versatile enough to adapt to the rapidly -- rapidly to the unexpected circumstances that we'll face. And we are building, and have been building, an agile campaign-capable expeditionary Army that we believe can deal with these challenges.
Now, as the secretary said, the cumulative effects of six-plus years at war have put us out of balance. And let me just describe what I mean by that. Basically, the current demands on our forces exceed the sustainable supply. We were consumed with meeting our current requirements and, as a result, are unable to provide forces as rapidly as we would like for other things, and we're unable to do the things we know we need to do to sustain this magnificent all-volunteer force.
Our reserve components are performing magnificently, but in an operational role for which they were neither organized nor resourced. The limited periods of time between deployments necessitate that we focus on counterinsurgency training at the expense of training for the full spectrum of operations.
Our soldiers, our families, our support systems and our equipment are stressed by the demands of these repeated deployments. So, as the secretary said, overall, we're consuming our readiness as fast as we can build it.
Now, I wrestled hard to find the right words to describe the state of the Army. Because it isn't broken, it isn't hollow, it's a hugely competent, professional and combat-seasoned force. But, as I think we all acknowledge, we are not where we need to be.
Now, with your help, Mr. Chairman, we have a plan to restore balance and preserve this all-volunteer force, and restore the necessary breadth and depth to Army capabilities. And we've come up with four imperatives that we believe that we need to execute to put ourselves back in balance: sustain, prepare, reset and transform.
Let me just say a few words about each of them.
First and foremost, we have to sustain our soldiers, families and civilians. They are the heart and soul of this Army, and they must be supported in a way that recognizes the quality of their service. The secretary mentioned some of the initiatives that we're taking, and these will continue with your support.
Second, prepare: We cannot back away from our commitment to continue to prepare our soldiers for success in this current conflict and give them the tools that they need to be successful. They must have an asymmetric advantage over any enemy that they face.
Third is reset: And, reset is about returning our soldiers and their equipment to appropriate conditions for future deployments and contingencies. In fiscal year '07, you provided us the resources to properly reset the force. And, as a result, we've made significant strides in putting capabilities and systems into the force. But resources for reset are the difference between a hollow force and a versatile force for the future.
And, lastly, transform: Several of you mentioned, the chairman and the co-chairman mentioned, that, even as we're working to put ourselves back in balance, we can't take our eyes off the future. And we fully agree with that. We must continue to transform our Army into an agile campaign quality expeditionary force for the 21st century. And, for us, transformation is a holistic effort. It's adapting how we train, how we fight, how we modernize, how we develop leaders, and how we take care of our soldiers and families.
To guide our transformation, we're releasing the first adaptation of our doctrine, our basic operations doctrine, since September 11, 2001: the FM 3 Operations. We expect this to guide our transformation. And it describes, one, how we see the future security environment, and, two, how we believe Army forces should operate for success in that environment.
Let me just give you five key elements that are represented here in this manual. First, it describes the complex and multi-dimensional operational environment of the 21st century, an environment where we think war will increasingly be fought among the people.
Now, secondly, this manual elevates stability operations to the level of offense and defense. And the core of it is an operational concept called Full Spectrum Operations -- Army formations apply offense, defense and stability operations simultaneously to seize the initiative and achieve decisive results.
Third, it describes a commander's role in battle command that is an intellectual process, more designed to solving, developing solutions for the tough complex problems our commanders will face, than a process, a military decision-making process, to prepare operations orders.
Fourth, it emphasizes the importance of information superiority in modern conflict. And, lastly, it acknowledges that our soldiers, even in this 21st century environment, remain the centerpiece of our formations.
So we believe this doctrine is a great start point on which to build on the experience of the last seven years and to shape our Army for the future.
So that's our plan, Senators -- sustain, prepare, reset and transform. In the last two years you have given us the resources to begin this process of putting the Army back in balance. The fiscal year '09 budget, the war on terrorist supplemental that will accompany it, and the balance of the '08's war on terror supplemental will allow that process to continue.
We certainly appreciate your support. And I want to assure you that we have worked very hard to put the resources that you have given us here to good use.
And let me just give you a couple examples: first, we've made great strides through the Army Medical Action Plan in improving care to our wounded warriors. Secondly, we've initiated an Army Soldier Family Action Plan to improve the quality of support for our families.
Third, we are over 60 percent through our conversion to modular organizations. This is the largest organizational transformation of the Army since World War II. And these formations that we're building are 21st century formations. I've seen the power of them on the ground in Baghdad.
We're also over 60 percent complete a rebalancing of 120,000 soldiers from skills we needed in the Cold War, to skills more relevant to the 21st century. We've reset over 120,000 pieces of equipment. We've privatized more than 4,000 homes just last year, giving us over 80,000 privatized homes for our soldiers and families. And the depots of our Army Materiel Command have won industry prizes for efficiency. They won 12 what they call Shingo Awards from commercial industry for their efficiency.
So as you can see, we are not sitting still, and we are working hard to give the nation the Army it needs for the 21st century.
Now let me just close here, Senators, with a story about quality. Because I get, and I suspect we'll get today stories, questions on the quality of force. I was up in Alaska in December, right before Christmas. And I had the occasion to present a Distinguished Service Cross to a sergeant. It was Sergeant Greg Williams.
He was on a patrol with his Stryker in Baghdad in October of 2006. That patrol came into an ambush, and they were taken under fire from three different directions, and with a four explosively formed penetrator IEDs, and those are the armor-piercing IEDs that can be very, very lethal to our forces. They all struck simultaneously.
He was knocked out, eardrum burst. He awoke to find his uniform on fire and his Stryker on fire. He put his uniform out. His first instincts -- grabbed the aid bag and started treating my fellow soldiers. He did that. He didn't realize that his lieutenant was still on the burning vehicle. He ran back on the burning vehicle, dragged the lieutenant to safety, still under fire.
He was returning fire when he realized that the 50-caliber machine gun on the Stryker was not being manned. That was the most potent weapon in the squad. He ran back in the burning vehicle, which, oh, by the way, still contained about 30 pounds of TNT and detonating cord. He got on the 50-caliber, brought it to bear, broke the ambush and the squad escaped.
Now, that's the type of men and women that we have in the Army today, and you can be extremely proud of the job they're doing around the world.
Well, our success in the future will require more than the courage and valor of our soldiers to ensure that we can continue to fight and win the nation's wars in an era of persistent conflict.
It will require recognition by national leaders, like yourselves, of the challenges that America faces in the years ahead. And it will require full, timely and predictable funding to ensure that the Army is prepared to defeat those threats and to preserve our way of life.
So thank you very much for your attention. And the secretary and I will be very glad to take your questions.
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