Thank you, Chairman Young, Ranking Member Visclosky, all the other distinguished members of the committee. Thanks for being here today.

I do want to also thank you for the continued support you've had for our soldiers and families, especially over the last 12 years of combat operations. You've always been here for our soldiers and families, making sure they have what they need.

I also want to thank the committee for its hard work in passing the FY '13 Consolidated Appropriations and Further Continued Appropriations Act. That helped us with about $6 billion of funds that enabled us to at least get after part of the shortfall that the Army had, about one-third of the shortfall that we had. So we appreciate the action that was taken and the support that we were given in '13.

I am humbled, as I know the Secretary is, to be representing the 1.1 million soldiers, 266,000 Army civilians, and 1.4 million family members that represent the United States Army around the world and in our nation. Their continued commitment, their sacrifices, their professionalism, continue to allow us to do so many things that we're asked to do around the world.

I remind everyone that as we sit here today we have nearly 80,000 deployed. Just under 60,000 in Afghanistan, over 10,000 to Kuwait, soldiers deployed to Qatar, Turkey, Jordan and other places around the world supporting our security needs. And we most recently deployed within a two week span a THAAD battery to Guam in reaction to some of the issues going on in Northeast Asia. And that's a new system. We were able to deploy that very quickly. That's a credit to our great soldiers who were very quickly able to deploy anywhere in the world if needed.

The Secretary covered this, but I'll just say just one more time is that we still face more than a $13 billion operation-maintenance shortfall. The reprogramming will help us a little bit. We think we'll be able to solve some of that problem, but we're still going to have somewhere near a -- after we do more reprogramming -- a significant shortfall of about $3 billion or more, plus the cuts in sequestration, which is another $7.8 billion, which we are paying down here in the last six months of this fiscal year.

So because of that we've curtailed our training by 80 percent of all the Army. We're making sure that those who are deploying are fully trained. Those who will next deploy will be trained, but that's at the expense of now the training of the rest of the Army. And the way I try to qualify it is what we've done so far over the last, we've built readiness up, but we've now consumed readiness and we're no longer able to build readiness up under the current budget constraints that we have.

So my concern is our readiness will continue to degrade throughout this year, and it will continue to degrade into fiscal year '14. We've had to cut seven combat training center rotations, which is the foundation of our certification of our brigade combat teams. We've had to cancel nine exercises that we certify joint task force and division and corps capability to provide command and control in emergencies around the world.

So the cost of these actions is clear. We are sacrificing readiness to achieve reductions inside the short period of the fiscal year. And unfortunately, readiness can't ever be brought back, because there is a time component of readiness. So we are now going to go through a period where we have to make sure that we're able to buy back as much readiness as possible, or we're going to have a severe problem over the next 2 or 3 years of readiness inside of the Army, especially if the sequestration legislation continues as we move forward.

I would implore us all to work together so that we can receive the FY '14 National Defense Authorization and Budget on time. This will allow us to plan for and mitigate the risk associated with the declining defense budgets. It's imperative that we gain predictability in our budget process. If we don't, we'll be unable to efficiently and effectively manage the resources that you give us. And it will be impossible for us to make informed decisions about the future of the Army.

I also think it's in the best interest of our Army, the Department of Defense and our national security to avert sequestration. It's not just the size of the cuts, but it's the steepness of the cuts required by sequestration, especially close in, which make it impossible to downsize the force in a deliberate logical manner that allow us to sustain the appropriate balance between readiness, modernization and end-strength.

Because we cannot take end-strength out fast enough, it will cause us to cut modernization and readiness, which is the start and beginning of a hollow force when you have structure that cannot be properly trained or equipped. And because of the steepness of these cuts and in the next couple of years, you cannot take manpower out fast enough to match the modernization readiness problems. And that's our concern as we go forward. I hope we can work together to try to help us to solve this problem.

So therefore, what I would request is that, although I believe the level of sequestration cuts are too large, if we backload them into the later years, it at least allows us the opportunity to properly plan to sustain the right balance. It's also, in spite of fiscal unpredictability and the impacts of sequestration, it's our responsibility to take action now to reshape the Army of the future. As we look at fiscal year '14 and beyond, our foremost priority is to ensure that our soldiers are deployed, and operational commitments are trained, ready and able to execute their missions.

Simultaneously we must draw down the force. We are on schedule to remove 80,000 soldiers from the active component by FY '17 due to the budget reductions levied by the 2011 Budget Control Act. So far, most of these cuts have come from our overseas formations, specifically Europe. We've reduced our formations by about 10,000 in Europe. In FY '14, though, future force reduction will affect almost every Army and joint installation across the United States as we continue to draw down the remainder of the 70,000. And we will release our plans for these reductions sometime later in June.

The key to the current drawdown is to maintain the right balance, as I said earlier, between end-strength readiness and modernization so we can properly size and have a ready force for whatever the country needs to have done. Such an even-handed approach is the only acceptable one while the world remains such an unstable place. In fact, in my opinion, the most unstable I've seen it in my nearly 37 years of service.

Full sequestration will dangerously steepen that drawdown ramp, and will also require us as a minimum to take out another 100,000 soldiers from the total Army, on top of the already 89,000 that we're taking out. This will result in a 14 percent reduction of the Army endstrength and an almost 40 percent reduction in brigade combat teams. These reductions will degrade support to combatant commanders in critical areas such as missile defense, special operations, cyber, logistics, intelligence, and communications as well. And cuts of this magnitude will leave us with excess infrastructure, making a future round of BRAC essential.

Sequestration will degrade our ability to take care of our soldiers and families who fought so hard and sacrifice so much over the last 12 years. Both those who are leaving the Army and those who are staying in the Army want to continue to serve. Sequestration will make it impossible to execute a responsible drawdown, and it will challenge our ability to support the 2012 Defense Strategic Guidance that we all approved last January.

Looking into the future, we are reposturing our force to be globally responsive and regionally engaged. We are aligning forces to geographical combatant commanders to provide mission-tailored, sized, and scaled organizations for operational missions, exercises and theatre security cooperation activities. For times of crisis, we'll maintain a global response force, capable of conducting forced entry on short notice. We will reinvest in our expeditionary capabilities to deploy forces quickly and efficiently anywhere in the world. And we are refining the integration of our conventional special operations forces and cyber capabilities to ensure we can handle a broad range of emerging threats. In this uncertain world we need an Army that conducts many missions at many speeds, in many sizes, under many conditions.

Going forward, the Army will evolve into a force that can deploy and sustain capabilities across the range of military operations anywhere in the world on short notice. It will have increased flexibility and agility in both its formations and its acquisition systems.

Our modernization strategy will center around the Army's strength, the soldier, making the most discriminately lethal weapon in the U.S. military. We will provide our soldiers with the network connections to give them unparalleled access to information and intelligence so they can make timely decisions. And we will provide our soldiers with the tactical mobility and survivability and lethality to take decisive action no matter what the mission may be.

As we prepare to operate in an increasingly complex and uncertain environment, our number one priority is to invest in our leaders. This spring or early summer we will role out a brand new leader development strategy, which will invest in our soldiers training, education and development. It will fundamentally change the way we train, educate, assign, assess and promote our leaders. And it will be the foundation of our future Army.

We will continue our efforts to take care of our soldiers. Twelve years of war has taught us the importance of building and sustaining the resiliency of our soldiers, civilians, and their families. Just this year we've rolled out the Army Ready and Resilient Campaign, a holistic effort to build emotional, mental, physical and spiritual health of our soldiers will pay dividends in all three components. Caring for wounded warriors and keeping faith with veterans is essential to honoring their service. Our Soldiers for Life Campaign will ensure that our soldiers transition successfully into civilian life and enrich American society with their experience.

With the support of Congress, we'll maintain a military pay and benefits package, including affordable high quality health care that acknowledges the burdens and sacrifice of service, while remaining responsive to the physical environment. Manpower costs make up 45 percent of the Army's budget. We'll need to work together to slow the rate of growth while meeting our soldiers' needs.

We are at a strategic point in the future of the United States Army in our military. We must strike the right balance of capabilities, both within the Army and across the joint force. Our history tells us that if we get out of balance our enemies will seek to take advantage.

Our soldiers are the finest men and women our country has to offer. Since 2001, more than 1.5 million soldiers have deployed and more than a half a million have deployed two, three, four or more times. More than 35,000 soldiers have been wounded, and more than 4,800 have made the ultimate sacrifice to defend this great nation. It is our responsibility to ensure we will never send soldiers into harm's way that are not trained, equipped, well read, and ready for any contingency to include war. It's our responsibility to honor their service and the sacrifices of our veterans, whether they remain in uniform or transition back to civilian life.

Thank you, Mr. Chairman. I appreciate the opportunity to speak to you this morning. I look forward to your questions.