CASEY: Thank you, Mr. Chairman, and I would associate myself with your comments about Secretary [John] McHugh.

Before I start, Mr. Chairman, I'd like to do two things. I'd like to add my praise to the farewell of [Congressman] Neil Abercrombie, and I'd like to introduce four men and women who are representative of the 1.1 million Soldiers of this great Army.

First of all, Congressman Abercrombie: it's no secret that you and I differed, fundamentally, on some important issues. But our conversations were always issues-based, never personal, and always focused on doing what was right for the men and women [of the Army] as rapidly as we could. And you can't ask for anything better than that. So, although I never quite thought I'd say this, I will miss you. Good luck to you. (LAUGHTER)

Now, Chairman, I'd like to introduce four men and women who are representative of this great Army. First of all, Kimberly Hazelgrove.

Kimberly's husband, Brian, was killed in Iraq six years ago in a helicopter crash. She was a staff sergeant in the Army at that time, and now she's left the Army to raise her four children, and as you can see, she is very active in the Gold Star Wives organization.

Thank you. (APPLAUSE)

Next to her is Staff Sergeant Christian Hughes. He was wounded in Afghanistan last October, and he's recovering here at Walter Reed from his wounds and looking forward to rejoining his unit as quickly as he can. (APPLAUSE)

Next is Sergeant First Class Shana Tinsley. Shana's husband, Arthur, leaves for Afghanistan today, and she will remain here, working for us in the Pentagon and raising her two small children.

Thank you, Shana. (APPLAUSE)

And lastly, Sergeant 1st Class Jeff Lawson. Sergeant Lawson has recently completed our Master Resilience Training program at University of Pennsylvania, one of only 600 Master Resilience trainers we have trained as part of our Comprehensive Soldier Fitness program, which I will talk about here later in my presentation. He's got three tours in Iraq.

Thank you, Sergeant Lawson. (APPLAUSE)

Thank you.

Now, Mr. Chairman, as you said, for the last three years, I have said that the Army is out of balance. That we were so weighed down by the current demands that we couldn't do the things we know we need to do to sustain this force for the long haul, and to provide the strategic flexibility to do other things.

I can tell you that with the help of this Committee, we've made progress over the last three years to get back in balance, but we're not out of the woods, yet.

That said, this '11 budget contains the procurement funding to finish the modular conversion that we began in 2004, and the growth that we began in 2007. It also contains the military construction funding to complete the 2005 BRAC realignment.

So your continued support will allow us to meet the goals we set six years ago to build an Army more relevant to 21st Century challenges, and to restore balance to this great Army.

You'll recall that we centered our plan to get back in balance on four imperatives. We felt we had to sustain our Soldiers and Families -- the core of this volunteer force. We had to continue to prepare our Soldiers for success in the current conflict. We had to reset them effectively when they returned, and then, we had to continue to transform for an uncertain future.

Let me just give you a quick update on how we're doing.

Our first objective was to finish our growth, and you'll recall that January 2007 we were instructed to increase the size of the Army by 74,000. Originally, we were going to do that by 2012. With Secretary Gates' help, and the help of the Committee, we actually completed that growth last summer. And, when that didn't prove to be sufficient, we received another temporary increase of 22,000 Soldiers. We intend to evaluate whether we need the full 22,000 later this year.

This growth, coupled with the drawdown in Iraq, allowed us to meet the additional increase of troops in Afghanistan without having to go to 15-month deployments, and [without going back on] Stop-Loss.

Our second key objective was to increase the time our Soldiers spend at home, and I must tell you, after almost three years on the job, I am convinced that this is the most important element of getting us back in balance.

It's important from several perspectives. First, our Soldiers need increased time at home to recover from the repeated combat deployments. What we continue to see across the force are the cumulative effects of these repeated deployments.

We've recently completed a study that tells us what we intuitively knew: that it takes two to three years to completely recover from a one-year combat deployment. And that's why it's so important for us to achieve the objectives we set three years ago, to get to one year out, two years back for Active Soldiers, and one year out, four years back for Guard and Reserve Soldiers. We are on track to meet that for the majority of the force by 2011.

After that, as demand decreases, we plan to move to more sustainable ratios of three years home and five years home, respectively.

The second reason it's important to spend more time at home is it gives you more stable preparation time to prepare for the current mission, and it allows us time to prepare to do other things, to restore some of the strategic flexibility that you talked about, Mr. Chairman.

I recently visited a unit that had eighteen months at home, and I can tell you that the difference in pace between twelve months at home and eighteen is striking. The additional time at home will allow us to have more units trained for the full spectrum of operations, and we will gradually rekindle some of the skills that have atrophied over the past several years, and regain some of the deterrent effect, again, that you talked about, Mr. Chairman.

Our third objective was to move away from our Cold War formations - to organizations that were more relevant in the 21st Century. In 2004, we set out to transform all 300-plus brigades in the Army to modular organizations - organizations that could be rapidly tailored to fit the situation that existed, rather than just sending a unit that was designed to do something else. Today, we're almost 90 percent complete with that conversion, and these formations are demonstrating their relevance and their versatility on the ground in Iraq and Afghanistan every day.

We also set out to rebalance the skills within the force, to move away from skills that were necessary in the Cold War to skills more needed today. This involved converting, retraining and equipping around 150,000 Soldiers from all components to new jobs. By way of example, in the last six years, we have stood down 200 tank companies, artillery batteries, [and] air defense batteries - and we have stood up a corresponding number of military police, engineers, civil affairs, psychological operation and Special Forces companies.

Together, this rebalancing and the modular reorganization is the largest organizational transformation of the Army since World War II, and we have done that while deploying 150,000 Soldiers over and back to Iraq and Afghanistan.

Fourth, we are moving to put the whole Army on a rotational cycle, much like the Navy and Marine Corps have been operating on for years. This model will allow us more effectively and more efficiently, to provide a sustained flow of land forces that are trained for the full spectrum of operations, so that we can prevail in today's wars, but also hedge against unexpected contingencies. And, we can do both of those things at a tempo that is sustainable to this All-Volunteer Force.

Our fifth objective was to complete our re-stationing - and we're just over halfway in these efforts. We're on course to complete the 2005 BRAC realignment by the end of 2011. These moves will affect over 380,000 Soldiers, Family Members and [Army] Civilians. And while this is a great deal of turbulence, new construction on our military installation is greatly improving the quality of life of our Soldiers and Families.

The bottom line in all this, Mr. Chairman, is that we have made good progress in the past year toward restoring balance, but we're not out of the woods yet.

Now, I'd like to conclude with three priorities for us that I hope [are] also priorities for this Committee. First of all, sustaining our people.

This budget contains money for housing, barracks, childcare, youth centers, Warrior Transition Units, and Surviving Spouse programs - all critically important to sustaining our Soldiers and Families. It's important to get them through this period in which our country is asking so much of them.

In general, we are strengthening the programs to add resilience to our force, and to help our Soldiers and Families deal not only with the problems and challenges from the past, but to prepare them for the future.

We've all seen manifestations of the stresses of 8.5 years at war: elevated suicide levels, increased demand for drug and alcohol counselors and behavioral health counseling, increased divorce rates, [and] increased numbers of Soldiers temporarily non-deployable from nagging injuries from previous deployments. We've been aggressively moving to give our Soldiers and Families the skills they need to deal with these challenges.

In October, we began a program that we had actively working on with some of the best [psychology] experts in the country. The program is called Comprehensive Soldier Fitness, and it's designed to give mental fitness the same level of attention that we give to physical fitness. We intend to provide our Soldiers and Families the resiliency skills that they need to succeed in an era of persistent conflict.

The program consists of four components. First, an online assessment to help them identify their resiliency strengths and weaknesses. This assessment has already been taken by over a quarter of a million Soldiers.

Secondly, there are online self-help modules that Soldiers and Family Members can take in the privacy of their own home to increase their resiliency skills.

Third, we are training Master Resilience Trainers for every battalion in the Army, like Sergeant Lawson, to assist Soldiers in developing their resiliency skills. Over 600 Master Resilience Trainers have already been trained at the University of Pennsylvania.

And, finally, we will incorporate resiliency training in every Army leader development school. This program shows great promise, and I look forward to discussing it further in the questions and answers.

Second priority -- the reset of our equipment -- will become increasingly important as we complete the drawdown in Iraq over the next two years, ... and for two-to-three years after the end of combat operations.

I think it's important to note how key the reset has been to the high operational readiness rates that we have sustained over time in Iraq and Afghanistan. This budget provides almost $11 billion to reset our equipment, and sustained funding for reset will be essential to the long-term health of the force.

Finally, this budget contains a significant adjustment to our modernization strategy. I believe that we are in a period of fundamental and continuous change, as we have to adapt to ever-evolving enemies.

And so, in close consultation with the Secretary of Defense, we've transitioned from the Future Combat Systems program to what we believe is an achievable, affordable modernization strategy for our Brigade Combat Teams. This program leverages the lessons we've learned at war, and from the Future Combat Systems program itself.

It includes four elements. First, incrementally modernizing our network to take advantage of rapidly developing changes in technology. Second, incrementally fielding capability packages to put the best equipment into more of the force as rapidly as possible. Third, incorporating MRAPs into our force, and fourth, rapidly developing and fielding a new Ground Combat Vehicle that meets the requirements of the 21st Century Army. We intend to make this program a model for the Weapons Systems Acquisition Reform Act, and we look forward to working with the committee on this.

I'd like to close by saying how proud I am of what the men and the women of this great Army have accomplished at home and abroad. We have made progress in restoring balance, but we still face a tough road ahead, and so, Mr. Chairman and members of the Committee, we couldn't have done this without you. Thank you, and I look forward to taking your questions with the Secretary.