Chairman Lieberman, Senator Cornyn, members of the committee, good morning.

Thank you for holding this hearing. Thank you for your leadership and your dedicated efforts to better prepare our Army-our nation\'s Army-to defend our country, our Allies, and our national interest-to meet the challenges ahead of us.

In your letter of invitation, you asked "whether the Army is properly sized, organized and equipped to respond to the most likely missions over the next two decades while retaining adequate capability to respond to all contingencies along the spectrum of combat."

That question and our answers, in a variety of forms, should drive everything we do as your Army's leadership. It should drive our budget decisions, our acquisition and personnel decisions, and our policy decisions. And I welcome the opportunity to work with this Committee and the Congress to provide answers to that question-recognizing that future we face is not static. Nor can be the answers.

As I reflect on the question, I am humbled by my personal experience in seeing the future-looking over the horizon. I was in the House of Representatives from 1989 to 1997 and served on the Armed Services Committee for much of that time. I shared in the euphoria when the Wall fell when our Coalition forces triumphed in the First Gulf War. I served in the House under Republican and Democratic majorities, with Armed Service Committee chairmen as philosophically diverse as Ron Dellums and Floyd Spence. And I served during both Republican and Democratic administrations.

As a Committee, as a Congress, and as a nation, we made some decisions that do not hold up well when judged with the benefit of 20/20 hindsight. Smart, hard-working and dedicated people did their best to predict the future, but the future surprised us nonetheless.

I voted with the overwhelming majority of my colleagues to cash the peace dividend. I participated in drawing the active duty Army down from 781,000 to 482,000 troops. I supported policies that made the Reserve components-the Army Reserve and National Guard together-55 percent of our total Army, by necessity changing the reserve component from a strategic reserve into an integral part of the operational force. We built an Army that could not go to war without the reserve component. Yet we failed to develop policies or make the investments in the reserve component commensurate with its new and expanded role.

I am reminded that Donald Rumsfeld, in his confirmation hearing as Secretary of Defense, neither offered testimony nor was asked about Afghanistan. The same with Dick Cheney and Iraq. And Robert McNamara and Vietnam. And we were caught flat-footed by the North Korean attack on the South.

In spite of our limitations, we must look decades into the future-it takes years to shape a 1.3 million-person organization of Soldiers and civilians. It takes decades to design, build, and deploy new weapons systems. Whatever we plan and do now, we will live with for a long time. Our Abrams tanks, Bradley Fighting Vehicles, and our Black Hawk and Apache helicopters are the progeny of the 1970s-older than most of the Soldiers operating them in combat today.

What are the challenges of the next two decades' Certainly counter-insurgency warfare, for which we organize the majority of our combat forces today. But the list of other threats is long-near-peer competitors; a loose-nuke scenario; the proliferation of nuclear weaponry; chemical, biological, or nuclear attacks on the homeland; increasing radicalism in regions of the world with a history of antagonism to the United States-to highlight a few.

How do we best plan for our uncertain future'

A foundational principle for your Army leadership is that the years ahead will be years of Persistent Conflict. And we must organize our programs and policies to reflect that reality. We must prepare the Total Force-active, Guard, and Reserve-as well as our Army families for that reality.

For your Army to be prepared for whatever is out there, we must enhance our strategic depth and build full spectrum readiness. We will continue to work with the Congress to accomplish this goal.

Can we transform and modernize our Army and fight a war at the same time' Yes, we can-and we are. The demands of the war and the threats over the horizon give us no choice in the matter. And the demands of the war give us opportunities to make hard decisions about the future we would never make in peacetime.

We must grow the Army. And we are working to do that, adding 65,000 Soldiers to the active-duty force, 8,000 to the Guard, and 1,000 to the Reserve over the next five years. We must remain flexible to adjust the numbers and the growth rate as circumstances and our vision of the future require.

We cannot allow the demands of the present to rob the future. We must modernize the Army. The Future Combat Systems-spinning into the force now and over the next two decades-will provide our Soldiers the training, technology, and tools to remain the world's preeminent land power. The future is now. The Soldier is the centerpiece of the FCS. We must not use FCS as a bill payer for today's critical needs. We do not want to ever find ourselves in a "fair fight."

We also must build the capacity of our international partners and allies. We cannot face the challenges of the future alone.

Just as FDR invested in the "Arsenal of Democracy" to defeat the Axis powers during World War II, actions enabling our partners to share the burdens of the Global War on Terrorism can produce the same results in the future we face. We must invest in partner nations who know the culture, language and geography of our enemies. The President's budget includes vital funds for that effort.

There is much about the next two decades we cannot predict. But let me close with a few facts-undeniable certainties.

FIRST, as Senator Warner reminded us a couple of weeks ago, the All Volunteer Force is a national treasure. It is a treasure that must be protected. He cautioned us to be careful-it can be squandered.

Half of our Soldiers are married. And the health of the AVF depends upon the health of those families. We must provide those Army families a quality of life commensurate with the quality of their service, and reflective of their sacrifices for our nation. It is the right thing to do. Further, our ability to recruit and retain our Soldiers depends on the health of those families. And our readiness requires it.

We are asking much of the Army family-and we must do more for them.

SECOND, the Reserve Component-the Guard and Reserve together-are no longer a strategic reserve. They are a part of the operational force. We are one Army. We cannot go to war without them. We must organize, train and equip the Guard and Reserve so that we can train and fight as one Army.

They must be ready to meet the needs of our Governors and our Combatant Commanders.

Policies and budgets must reflect that reality-that fact.

THIRD, we have 134,000 Soldiers in combat today. We must plan for the future but can never take our eye off that ball. We owe those Soldiers and their families everything we can do to help them succeed in the mission they are shouldering for our nation. They are the best-they deserve our best.

Secretary Harvey and Chief Schoomaker have led our Army well-modernizing business practices, transforming the Army from a division-based to a modular brigade-based organization, building a campaign-quality expeditionary Army, and making needed investments in the present and the future readiness. Under their leadership, and working with the Congress, we built the best-trained, best-led, best-equipped Army our nation has ever fielded.

As the Acting Secretary of the Army, standing at the side of George Casey, our Chief of Staff, I see our job as working to sustain their momentum-to build on their successes. Just as Secretary Harvey and General Schoomaker were part of a great Army team, so General Casey and I are part of that team-an Army Strong team. We look forward to working with you in our service to our Army.