Chairman McCain, Ranking Member Reed, and other distinguished members of the Senate Armed Services Committee, thank you for allowing us to speak with you.
I think it is still imperative that I repeat again that today we are experiencing a diverse and complex array of threats that are unprecedented through a combination of transnational extremist organizations and Nation-States. We continue to witness an increase in the velocity of instability around the world that was unforeseen just a few years ago.
In Iraq and Syria, we continue to see the ruthless behavior of ISIL and the smoldering of sectarian conflict; which is threatening regional stability and the potential to escalate international terrorism. Order within Yemen has splintered. Anarchy, extremism, and terrorism are running rampant in Libya and other parts of North and Central Africa. In Europe, Russian aggression and its intervention in Ukraine challenges the resolve of both the EU and NATO. Across the Pacific, China's military modernization efforts alarm our allies and concern our regional interests, while North Korean belligerence continues. And we continue to have ever-evolving threats against the homeland.
In my opinion, this should not be the time to divest of our military capability and capacity, but that is what we are doing. We have already taken a significant decrease in active component end strength which has been said by both the Chairman and the Secretary of the Army.
We have deactivated 13 Brigade Combat Teams in the active component. We are in the process of eliminating three complete combat aviation brigades out of the active component. We are taking 700 aircraft out of the active component. We are taking another 100 aircraft out of the National Guard.
We have slashed our investments in modernization by 25%. We have already purged our much-needed infantry fighting vehicle modernization and scout helicopter developmental programs. And we have considerably delayed other upgrades for many of our systems and aging platforms.
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%. Under our current budget, Army readiness will, at best, flat-line over the next three to four years.
The compromises we have made to modernization and readiness, combined with reductions to our force size and capabilities, translates directly into strategic risk. Today, we are generating just enough readiness to meet our day to day needs for immediate consumption. We are unable to generate any residual readiness to respond to unknown contingencies or to even reinforce ongoing operations.
This is a dangerous balancing act. 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 demand for Army forces is higher than we originally anticipated.
Our Soldiers and leaders continue to perform superbly though. Just look at how busy our Army is around the world today. They are engaged in Iraq, Afghanistan, and Jordan; Kosovo, the Korean Peninsula, and across the African continent. We have rotational forces in Europe, Kuwait, and the Pacific.
We are conducting a wide range of missions from humanitarian assistance to training and advising forces in contact; to reassuring our allies with dedicated presence. This is the reality we face as we discuss Army posture.
The President's FY16 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.
It is in fact a tenuous House of Cards. In order for PB16 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 $1/2B per year of excess infrastructure that we have in the Army. We potentially face a $12B shortfall in our budget. If BCA caps remain, that adds another $6B in potential problems.
We can no longer execute the Defense Strategic Guidance. Sequestration would compel us to reduce end strength even further that's been noted by several different people here today, which is of great concern to all of us.
Anything below the President's budget compromises our 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. And if the unpredictable does happen, we will no longer have the depth to react.
We continue to work on achieving efficiencies within our own budget. We have taken advantage of our wartime reset program to reduce Depot Maintenance by $3.2B. We are reducing our reliance on Contractor Logistics support, saving nearly $2B this year. We have identified and are avoiding costs in excess of $12B through the Aviation Restructuring Initiative. We have reorganized our Brigade Combat Teams throughout the force, eliminating overhead and maximizing our combat capacity. We have eliminated nearly 12,000 positions by reducing all 2-star and above Headquarters by 25%. And we continue today to look at ways to achieve individual and collective training efficiency. I would ask that we also look hard at our acquisition reform to re-address the role of the service chiefs and also the role of life-cycle management and logistics. We must address the expansion of the bureaucracy, which has added so much time and costs to all of our programs.
We also continue to work very hard at sexual harassment and sexual assault. It remains our top priority. While recent reports show indication that we have made some initial progress, we 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 to the Army.
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 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 the 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 will be asked to defend this Nation in many places around the world. I want to lessen that burden on our Soldiers and ensure that they have all the equipment and readiness in order to accomplish their mission.
Chairman, I look forward to your questions.