Thank you Chairman, Vice-Chairman. I also want to send my prayers to the families, and to the Soldiers and Marines who lost their lives during yesterday's training. Their resolve and commitment to this Nation shows why we must ensure that our forces are properly resourced and equipped.

Today, the international security environment continues to be challenged by transnational extremist organizations as well as by the aggressive actions of several Nation-States. We face the ruthless behavior of ISIL in Iraq and Syria; and persistent threats in Yemen, in Libya, and in other parts of North and Central Africa.

Russian aggression pressures the resolve of both the European Union and NATO; while in the Pacific, China and North Korea alarm our allies and concern our regional interests. We also continue to have ever-evolving threats to our homeland.

This is not the time to be divesting of our military capabilities and capacities.
But over the last three years, we have done just that, decreasing the Active Component end strength by 80 thousand and our National Guard and Reserves by 18 thousand.

We have deactivated 13 Active Duty Brigade Combat Teams, and we are in the process of eliminating three active component combat aviation brigades. We are reducing the Total Aviation Force by 800 aircraft, with almost 700 coming out of the Active Component. We have slashed our investments in modernization by 25%. We've purged our most-needed infantry fighting vehicle modernization and scout helicopter developmental programs.

The unrelenting budget impasse has also compelled us to degrade readiness to historically low levels. Today, only 33% of our brigades are ready, when our sustained readiness rate should be closer to 70%.

The compromises we have made to modernization and readiness, combined with reductions to our force size and capabilities, translates into strategic risk. We are unable to generate residual readiness to respond to unknown contingencies or to reinforce ongoing operations. We have fewer soldiers, the majority of whom are in units that are not ready; and they are manning aging equipment at a time when a demand for Army forces is much higher than anticipated.

The President's Fiscal Year 16 budget submission recognizes these challenges. But even the President's Budget represents the bare minimum needed for us to carry out our missions and execute and meet the requirements of our defense strategy.
In order for this budget to work, all of our proposed reforms in pay and compensation must be approved. All of our force structure reforms must be supported, to include the Aviation Restructure Initiative. And we must be allowed to eliminate a half a billion dollars per year of excess infrastructure capacity that is currently in the Army.

We can undertake the proposed reforms or we can accept increased risk. If not approved, this equates to a potential $12 billion shortfall in our budget: comprised of $6 billion in reforms and $6 billion in costs that are masked in OCO funding that must ultimately transfer into our base budget.

If BCA caps come back, I want to emphasize, again, that it would render us unable to meet the defense strategy. Sequestration would compel us to reduce, even further, the Army end strength--forcing out another 70 thousand from the Active Component, 35 thousand from the National Guard, and 10 thousand from the Army Reserves. We would cut out 10-12 additional combat brigades. Modernization would come to a standstill, training would go unfunded, and readiness rates--both unit and individual--would fall to very low levels.

Anything below the President's Budget compromises strategic flexibility.
It inadequately funds readiness. It further degrades an already under-funded modernization program. It impacts our ability to conduct simultaneous operations and shape regional security environments. It puts into question our capacity to deter and compel multiple adversaries.

But even as the Army confronts a fragile budget and looming BCA caps, we do continue to seek efficiencies while adapting to an unstable world.

• We have taken advantage of our wartime reset program to reduce Depot Maintenance by $3.2 billion dollars.
• We are reducing our reliance on Contractor Logistics Support, which will result in nearly $2 billion in cost savings.
• We have identified and are avoiding costs in excess of $12 billion through our Aviation Restructure Initiative.
• We have eliminated 12,000 positions by reducing all 2-star and above Headquarters by 25%.
• We have reorganized our Brigade Combat Teams, eliminating overhead and maximizing combat capacity.
• And we continue to achieve individual and collective training efficiency as we move forward.

Sexual Harassment and Sexual Assault Prevention remains our top priority. While recent reports are clear that we have made some initial progress in sexual harassment and assault prevention, we still have much work to do. Our men and women deserve to be treated with dignity and respect, and should expect a work environment that is free of harassment, assault, and retribution. A culture of inclusion and of mutual and shared trust is essential.

Chairman, I continue to be inspired by the unparalleled experience and professionalism of the men and women of the United States Army. They demonstrate unwavering dedication and commitment to the mission, to the Army, and to the Nation.

We have units engaged in Afghanistan, Iraq, Jordan, Kosovo, and across the African Continent. We have rotational forces in Europe, Kuwait, and throughout the Pacific, to include Korea. We owe it to them to ensure they have the right equipment, the best training; and the appropriate family programs, health care, and compensation packages commensurate with their sacrifices.

The decisions we make today and in the near future will impact our Soldiers, our Army, and our Nation for the next 10 years. The burden of miscalculation and under investment will directly fall on the shoulders of our men and women who we will ask to defend this Nation.

We simply cannot allow this to happen. I look forward to working with you to solve these difficult problems, and I look forward to your questions.

Thank you very much.