Chaired By: Representative Bob Stump (R-Az)
Location: 2118 Rayburn House Office Building
Witnesses: Newt Gingrich [jump to Gingrich's remarks] and Gary Hart, Members, Commission on National Security/21st Century John Hamre, President, Center For Strategic And International Studies And William Kristol, Chairman, Project For The New American Century

REP. STUMP: (Sounds gavel.) The meeting will please come to order. Good morning. Today the committee meets to hear testimony regarding America's national security for the next decade and beyond. Because budgets must flow from and support strategies, this hearing is intended to begin laying the groundwork for the consideration of the fiscal 2002 defense budget. This will be the first defense budget presented by the new administration and will reflect its views on how best to prepare our military forces to meet the challenges of the 21st century.

Ten years after the demise of the Soviet Union and the end of the Cold War, we're still grappling on how to characterize this period in history. Most analysts continue to refer to it as the "post-Cold War period." I believe this reflects the uncertainty regarding the nature of today's threats and how to deal with them.

The last administration's national security strategy was characterized by the term "engagement" and "enlargement." In implementing this strategy, the U.S. military was called upon to keep the peace in many volatile regions of the world. U.S. military deployments abroad increased dramatically, while the size of our forces declined. The resulting strain on our military's war-fighting capability led to significant shortfalls in readiness, deferred equipment and modernization, and declines in the quality of life for our nation's finest and brightest. Currently, the Bush administration is conducting a strategic review of U.S. defense policies and programs. There has been much speculation about what this review will conclude. One thing, however, is certain; the results of that review and the policies and programs that it recommends will play a major part in reshaping America's proper role in the world. erica's role in the world and the circumstances in which we use military force to accomplish our strategic objectives and protect our national interests will remain a subject of considerable debate. Should our strategy be expansive? Should we use military might to keep peace and foster freedom and democracy around the world? Or should we focus on our efforts to defend our homeland and now allow our allies and friends to carry more of the burden of managing the crises abroad?

Some analysts have referred to this point in history as a period of "strategic pause" that gives us the opportunity to accept more near-term risk in order to transform and adapt our military to future challenges. There has been some talk recently about skipping a generation of technology. In light of the uncertainty in today's international security environment and the growth of the new threats, is this a realistic option? Do we need to retain the capacity to fight nearly two simultaneous major theater wars? This committee will need to debate this issue as we consider the adequacy of the administration's defense budget request.

To help us grapple with these issues, our witnesses this morning are: Newt Gingrich, former speaker of the House and member of the U.S. Commission on National Security/21st Century: Gary Hart, former United States senator and co-chairman of the commission; John Hamre, president and chief executive officer of the Center for Strategic and International Studies; and William Kristol, chairman of the Project for the New American Century.

Gentlemen, we welcome you. The committee looks forward to your presentation. But before you begin I'd like to turn to our committee's ranking member, Mr. Skelton, for any remarks he may wish to make.

Mr. Skelton.

REP. IKE SKELTON (D-MO): Mr. Chairman, thank you very much, and I join you in welcoming our very distinguished witnesses. We look forward to hearing from them.

Before turning to today's subject, however, I want to sound a note of strong concern over the welfare of our soldiers, sailors, airmen and Marines. I do not believe that the president's defense budget, which is barely above the level of the Clinton administration, for fiscal year 2002 can accommodate his announced priorities for missile defense, research and development, and quality of life improvements without cutting other vital programs. And I sincerely hope we will see requests from the administration for supplemental appropriations in the very near future. I'll say more about that in a moment.

The debate over America's national security and national military strategies is perhaps as intense now as at any time in our nation's history. And it should be. Since the demise of the Soviet Union no true peer competitor to the United States has emerged on the global stage. Instead, there are many varied threats to our national security. They tend to be more numerous and less well-defined than during the cold war. The current strategy based on the Quadrennial Defense Review calls for our military to be prepared to fight and win two nearly simultaneous major theater wars. But the change in administrations, the start of another QDR, Secretary Rumsfeld's new independent review of our defense policy, and recommendations from the Hart-Rudman Commission all prompt us to re-examine both our national security strategy and our national military strategy.

From my perspective there are certain responsibilities that go along with being the world's lone superpower. We can't shirk them. I don't believe we can simply withdraw from our global commitments and ignore requests from other countries for assistance when our presence in a region can foster peace, advance democratic principles of government, or increase geopolitical stability. But the increase in unconventional and terrorist threats argues in favor of a more restrained national security policy, more focus on real threats to our homeland, and more measured American presence on the global stage.

At this time, Mr. Chairman, I want to acknowledge the good work that the Hart-Rudman Commission has done in articulating these domestically oriented threats and for making constructive suggestions for how we might address them as a nation.

As to our national military strategy, regardless of whether all the new studies recommend that we adhere to the two-major-theater war strategy or not, as I see it, the fundamental and overriding issue is the mismatch between strategy and resources.

The greatest military strategy in the world won't matter if we don't provide enough resources to execute it. I know that we aren't adequately resourcing the Department of Defense to execute our current national military strategy, and the president's budget for the coming fiscal year won't get the job done, either. I said that last year, and it's still true today.

Adjust the Bush administration defense proposal for fiscal year 2002 for inflation, take into account the 3.9 billion must-pay bill for military retiree health care, and it comes out just $100 million more than the budget projected by the Clinton administration for the fiscal year 2002. In the context of a $310.5 billion defense budget, a $100 million increase is just the Clinton budget plus a nickel. A hundred million dollars will buy only 1/45th of an aircraft carrier. It'll barely cover the cost of a badly needed new gymnasium at West Point. The cost of repairing the USS Cole alone is $243 million.

This marginal increase for our defense budget falls short of the Bush administration's promise that "help is on the way." It would make executing almost any national military strategy difficult, at best. This isn't an enlargement or an engagement; it isn't even "shape, prepare, respond." The strategy this budget supports is "stay home all the time."

The other aspect of the military strategy debate that I have to note is the new administration's priorities. President Bush has announced that his defense budget priorities include $1 billion for military compensation; $400 million for an across-the-board pay raise; $400 million for military housing; and $2.6 billion for research and development programs. While we have no administration figure yet for funding national missile defense, the Ballistic Missile Defense Office estimates that the cost of the current program for fiscal years 2002 through 2007 is about $30 billion. GAO estimates the 10-year cost at 60 billion.

But all this is somehow supposed to fit into a $100 million in the top line.

I'm from the Missouri, the "show me" state. And I wish someone in the administration would show me what we're going to cut, what important programs are we going to sacrifice in order to accommodate these new priorities.

And finally, it's beyond dispute that we have vitally important defense needs going unmet right now. We don't need a review to tell us about it. Family housing roofs are leaking. Spare part bins are empty. Training is being cancelled or curtailed. The Joint Chiefs have already told us that our national ability to continue full military operations is in jeopardy. They have at least $7 billion in unfunded requirements for fiscal year 2001, and that was testified to right here in this room last year. The cost of meeting the real property repair and maintenance backlog for all the Department of Defense facilities approaches $27 billion.

Where is the request for supplemental appropriations from the administration? Norm Dicks, Norm Sisisky, John Spratt and I have introduced a bill, H.R. 576, calling for badly needed supplemental appropriation for this fiscal year so we will be able to execute our national military strategy of which we speak about today. But it should not come to this. The administration should make good on its promises and show leadership so that we will be able to meet our national security and national military strategy requirements.

Mr. Chairman, I welcome and look forward to the testimony of our very distinguished witnesses. I know they will be able to shed some light on how we can develop appropriate strategies for the future. I hope that, just as importantly, they'll tell us how to ensure that we have resources to implement those important strategies.

Thank you.

REP. STUMP: Thank you, Ike.

Gentlemen, let me thank you once again for agreeing to appear before us today, and also for all the time and effort that you've put into producing this report, and we appreciate it very much. As usual, your entire statement will be printed in the record. If you care to summarize for 10 or 15 minutes, we would appreciate it very much. I think it would help maximize the question-and-answer period, and therefore the younger people--or the newer people, I should say, would probably get a lot more out of it. I thank you very much.

And Mr. Gingrich, the floor is all yours.

MR. GINGRICH: Thank you very much, Mr. Chairman. And I thank the ranking member for his statements. We spent a good bit of time together over the years trying to work on a stronger defense.

I also want to thank the committee. I remember testifying here 16 years ago on what became ultimately the Goldwater-Nichols reform bill and the effort by the Congress to modernize the military, sometimes against the opposition of some of the senior leadership.

The Hart-Rudman Commission grew out of an effort to create an intellectual framework much like that which led to the Goldwater- Nichols reform, which was driven in part, I might say, by the Center for Strategic and International Studies. I'm delighted to see Dr. Hamre here today. The Hartman-Rudman Commission was created out of a conversation that President Clinton and I had in 1997, and then strongly supported by Secretary Cohen, to bring together 14 Americans from a very diverse, bipartisan background.

We spent three years looking at the world and looking at the future. All of our materials are available at nssg.gov. And, in fact, over 200,000 people have downloaded our last report on structures and strategies.

Let me start by saying that Gary Hart and Warren Rudman gave us great leadership, and that I think the commission by meeting for three years really grew into a common understanding about very serious things. I want to start, however, by just stating my own personal view, which other commissioners may or may not agree with, but I believe in reinforcing what Mr. Skelton said, that we are--if we are serious about leading around the world, we are a minimum of $40 (billion)-$60 billion a year short of where we need to be in the defense budget. And that doesn't count--and that assumes very major reforms.

I don't think money alone will buy the solution. But the commission didn't agree on a specific dollar value; this commission did agree we would need more resources. My personal view is it's somewhere in the $40 (billion)-$60 billion a year level, assuming you reform procurement, assuming you reform the reporting requirements that Congress has put I think some 500 reports now on the Defense Department, which surely should be shrinkable to 30 or 40. Some reform has to occur in this building, not just across the river. But even assuming all the reforms, you cannot sustain both modernizing the military, the operations tempo, the personnel requirements simultaneously as the leading power in the world within anything like the current budget. That's my personal view.

Let me come back and also say that I believe--and I think the commission would agree--that President Bush and Secretary Rumsfeld were exactly right to move first to review before money, we think that taking a serious look at the entire system is the right way to go. We also believe that the reforms that were announced by National Security Adviser Rice in moving the National Security Council to more of a coordinating nature and less of an operational nature was, in fact, precisely what the commission recommended. And we think that that's exactly the right direction.

The commission also believes that you, the Congress, should legally move the QDR to the second year of an administration. If you think about it, it is sort of nutty to have the services work from the bottom up to justify their current structure, their current budget, their current programs and then have a brand new administration come in and try to paper over whatever its strategic direction is in part of a document that has essentially been written from the bottom up by people who do not have any strategic goals.

And, in fact, it should be the opposite; a new administration ought to have a full year to design a strategy from the top down, to suggest how they want to meet America's role in the world, what structures they want for that, and then to say to the services, Given this direction from the commander in chief, what do you need and how should you review the defense system? But right now we do it exactly backwards and, I think, get a result which is at best slightly destructive and at worst locks the systems into obsolete models.

The commission itself came up with a series of very specific recommendations:

First, that homeland security for the first time is a major American concern. We have to expect the possibility of a weapon of mass destruction or a weapon of mass disruption being used in the United States. Mass destruction will be chemical, biological or nuclear; we are not today prepared to deal with the consequences of a city having a weapon, probably delivered by a terrorist, to go off in one of our cities. Second, none of us have any real experience today--in fact, there's an article in the paper this morning about the FBI's concerns that none of us understand what a weapon of mass disruption in terms of cybernetics, the--taking down, let's say, our telephone system or taking down our electricity system or the FAA system, what that effect would be.

Second, the commission unanimously agreed that the challenge to us in scientific research and in math and science education is a greater national security problem than any likely conventional war in the foreseeable future. And I really want to emphasize this. It's something Eisenhower said in the '50s under the impetus of Sputnik; I think we're right back at the same stand. The revolution in science requires larger investments in basic research; we are not getting the money today. Second, the inability of the United States today to produce enough high school graduates who can do math and science is a long-term national security issue. We cannot assume that we will be able to import enough people to meet our science and technology demands for the next generation. The report's pretty clear it's a very major challenge for us. And I would hope that this committee would look at the National Science Foundation budget, the NASA budget, the Department of Energy labs as integral national security investments over and above the Department of Defense, but as literally integral to our ability a decade from now to produce high technology capabilities.

Let me just with one or two sentences each mention what I think are six specific challenges that evolved out of our discussions.

One, the United States has to learn to do a much better job of leading coalitions. And I think we should be very concerned about the European Rapid Reaction Force as a symptom of the beginning of the drifting apart of the U.S. and Europe. And we need to think both in our industrial base strategy and in our diplomatic style about how to bring our allies together with us. I mean, our great strength in part is not just technology, but the fact that we have the widest alliance in human history.

Sustaining that alliance without a Soviet Union is a real challenge. When we were bad in the past, when we were clumsy the past people could put up with us because the Soviets were always worse. There's now no natural pressure to remain allied with the United States. And I think we have to really think about how we develop a much more sophisticated alliance coalition policy.

Second, terrorism is a much more profound threat than we have responded to. It should trouble every American that we've been trying to get bin Laden since 1993. You just mentioned the cost of repairing an American warship damaged by terrorists. We should all be concerned that we don't have the intelligence to know where they are, the ability to preempt, or the capacity to punish. And in fact, we have people who routinely go around the world holding press conferences explaining they're at war with the United States.

This is a serious strategic challenge to us.

Third, the Defense Department refuses to engage in developing conflict below the theater level. We are brilliant at air/land battle doctrine on a theater-wide basis. Colombia does not require that, Rwanda does not require that, Kosovo does not require that. We suggested that part of the problem was the two major-theater-war requirement was blocking the development of the kind of forces you need for the kind of conflicts that are the most likely. And here I think oversight is necessary.

Fourth, we have a genuine problem, starting at the national command authority, with the reality that you have simultaneous, real- time, world-wide requirements where the president has to be worried on the one hand about the Argentine economy, on the other hand about negotiations between the Palestinians and Israel, with whatever Saddam is doing, whatever the problems are this morning between Macedonia and the Albanians, whatever is happening in Colombia, we don't have a mechanism today for integrating that many different things simultaneously, and it's a very, very real challenge.

Fifth, there is a true revolution in scientific affairs, starting with nanoscale science and technology, quantum mechanics and physics, and biology, which will swamp the current revolution in military affairs. And I think it's very important for this committee to work with DARPA to understand the basic research level, and to get briefed by the National Science Foundation on the scale of the change which is coming, which in my judgment, after 2-1/2 years of being out of this body and going out and listening to people, is probably as much change in the next 25 years as in the entire 20th century.

And I would particularly commend to the committee to go to the Ames NASA Laboratory and just spend a half day getting briefed on what they're doing combining supercomputing, nanoscale science and technology, and biology, which is, I think, the most interesting single facility in the United States. It's at Moffett Field near Stanford.

Finally, I think that it's important for this committee to look at the service budgets and insist on deep experimentation now with new technologies. One example. We have a capacity in remotely piloted vehicle technology which should empower every ship to know several hundred miles inland what's going on by using non-piloted vehicles with very long loiter capability in a way which just dramatically expands our intelligence capability.

The services continue to finance the systems that they're comfortable with, continues to finance the systems that maintain the rhythm of the past, and it is very difficult to get them to push money into these systems. And let me just say, before anyone starts complaining about the tight budgets, go back and look at experimentation in the 1930s with budgets that were literally 15 to 20 times tighter than these budgets. The system simply has to force itself to set aside a significant percentage of each annual budget to finance military-oriented, real experimentation with the technology of the future.

In conclusion, let me just say, the challenges are different, the technologies will be different, the strategies must be different and, therefore, the structures have to be different. And I think if you look at our report at nssg.gov, you'll see how much, after three years, we put into beginning to lay out that scale of difference.

MR. HART: Mr. Chairman, may I, on behalf of the commission, thank you and the members of this committee for the opportunity to be here today.

I think to understand the work of this commission you have to put it in context.

This is the most far-reaching and broad and deep review of U.S. national security since 1946-47. That's why it took 2-1/2 years and a tremendous amount of person-hours, not only on behalf of commission members themselves but a very large staff of full-time and part-time advisers.

Of course, the reviews that went on post-World War II and up to and the beginning of the Cold War led to the passage of the National Security Act of 1947, which has been the statutory basis for the defense of this country for the past half-century. We took note of the fact that the world in which we were living today and will live for the next 25 years is not the world of 1947.

As much as we would like to hope that we could continue on with the same kind of force structures, same kind of strategies, tactics and doctrines, the circumstances of the world simply won't permit it. We're in the middle of enormous revolutions simultaneously--globalization of the economy, internationalization of finance, a technological revolution, continuing post-colonial disintegration of artificial nation-states, and all of these things happening virtually simultaneously. What we tried to do was look a quarter of a century out, and that was about--arbitrarily about as far as anyone that we could talk to could look. And in the context of that new world, we then attempted--and that was phase one of our effort. Phase two was, in this small document, to lay out the principles of a new national security strategy given all those new realities. And then, of course, phase three, which just came out January 31st, is, in fact, filling in the implementation of the principles of the strategy.

Our approach was to create the perspective by looking at what kind of world we were going to be dealing with; second, to lay out the principles, as I've said and then, in fact, plan the implementation, how to carry out this new strategy. Let me quote from just two sentences of the prepared statement because I think it's important. "No U.S. national security strategy that meets the needs of the world we now live in can be designed and implemented without significant changes to the national security apparatus itself. That is to say, we could not devise a new national security strategy without also looking at the institutions of our government, Department of State, Department of Defense, National Security Council and the homeland security agencies and others as well, and imagining how those have to be changed to deal with this new world."

The topic of this hearing today really relates to phase two of this report, and therefore, Mr. Chairman, with your permission we would like to submit that for the record. It's just a 15, 16-page document. We would encourage all members of the committee to review it.

This was a bipartisan commission. We concluded with 50 specific recommendations, not only for institutional reform but, as Speaker Gingrich has said, for creation of a new national homeland security agency, investment in the industrial and scientific base of this nation and the human capital of this country. And every one of those recommendations was supported, albeit in varying degrees of intensity, by all 14 members of this commission. I did see literature saying that we were equally divided between seven Democrats and seven Republicans. I'm still looking for one or two of those Democrats.

We feel that what this government has to do is think strategically. And that starts in the Oval Office and works downward and outward. This is not just a slogan. Thinking strategically has some content to it.

It means, in traditional and classic definitions of strategic thinking, first of all, setting priorities and then matching resources to those priorities. We feel, certainly in the post-Cold War decade that has passed, that that activity has not taken place. It's not been driven by the White House or the president, and it's certainly not been incorporated into the thinking of previous administrations. We are not today thinking about what our priorities are and how to match resources to them.

We see the world of the next 25 years as one of both benefits and instabilities. And quoting from our statement, may I say that the same ideas that are spreading free minds and free markets in the world today are the cause of much of the tumult we witness, as well. This seems like a paradox but, in fact, it is a core, central reality that the more we open up the world, both to markets and democracy and so on, the more, in a way, we destabilize old regimes and old institutions. Now, that's not all bad, but it simply means we have to be prepared to try to manage that change, and we do not feel that we are currently prepared to do that.

Speaker Gingrich has mentioned the absolute need to seek greater cooperation of other nations. We specifically focus on Russia, China and India as major players in their regions, and powers, to some degree, to be dealt with in perhaps different ways than we would deal with ordinary nations. Of course, two of those powers and, arguably, part of the third, are in the same region of Asia.

We think that global markets, the opening up of economies, the internationalization of finance, offer us tremendous strategic opportunities that we should be prepared to take advantage of, both by incorporating economic thinking into strategy, but also using diplomacy differently and better than we have in the past.

Speaker Gingrich has focused on the danger of terrorism. In our first report, we said something rather dramatic that I don't think the media quite picked up on. We said that some time in the next 25 years Americans will lose their lives on American soil, possibly in large numbers. That has not happened since 1812. This is a startling and striking threat to this nation's security and we hope--we know--this committee and the Congress will focus upon it.

Finally, we identify five kinds of military capabilities. Those include the strategic deterrent, our nuclear capability; the homeland security agency, which we advocate creating; conventional capabilities of some size to be determined after debate; expeditionary, or intervention, capabilities such as we used in the Gulf War; and then, finally, a constabulary force that is prepared to help other nations in the world, and our allies, in peacekeeping.

Mr. Chairman, in phase three of our commission that came out in January, we gave very detailed recommendations for the reform of the Defense Department; not simply the traditional focus upon procurement and so on, which obviously needs to be changed, but institutional changes in the Defense Department that will almost mandate that planners in the department begin to think strategically in a way that they have not been doing, at least for the last decade.

For 45 to 50 years, we had the luxury of having a very simple foreign and national security policy that could fit on a bumper strip. It was called "containment of communism." We no longer have that luxury.

Thank you very much.

REP. STUMP: Thank you.

Dr. Hamre?

MR. HAMRE: Good morning, Mr. Chairman, and to all members of the committee. Thank you for inviting me. If I say something stupid today, which is likely, I've got a good excuse; I fly coach on "Cattle Air" these days, and flew on a red-eye through the night, to come back from California.

But I wanted to be here because I've told my parents for several years that I hung out with guys like Newt Gingrich and Gary Hart and Bill Kristol. They never believed it, but now I can prove it. So I--that's why I wanted to be here.

Mr. Chairman, I'll be very brief, just say I think we're starting to enter the sixth epoch of Americans' national security history. We've had five distinct epochs or periods in the past. I think we're now entering the sixth distinct period. I think the transition is over.

While it's still a little foggy to say what the character of this new epoch is going to be like, I think we know the major landscape features. I think it's one where we aren't threatened with existential opponents, like we did during the Cold War. But I think we now have lots of very nagging, very difficult skirmishes, none of which represents a threat to the existence of America, but all of which--not all, but many of which have the ability to unseat and unhinge the international order that we really depend on for the health and vitality of our economy.

Second, and as the speaker and senator have said, we're living now with the residue of the Cold War. You know, our opponent built enormous inventories of chemical and biological and nuclear weapons, and built an industrial and a scientific infrastructure to build all these terrible things, and it's all left. And what we have is this terrible cocktail of privation and knowledge, dangerous knowledge. We've got people that know how to build very bad things, and they don't know how to make a living, and that's a very dangerous environment for us to live in.

I totally agree with the observations of the two previous witnesses that we're going to have a terrorist incident in this country, involving a chemical or biological or--I hope not, but fear--a nuclear event.

We should remind the committee we have had biological terrorism in this country. It was seven years ago when a goofy group spread salmonella on a salad bar in the Pacific Northwest. You know, it's happened already in this country. It's going to happen, and we have to get ready for that. And I think that this residue of the Cold War that we're going to have to live with, especially when you combine it with the emergence of non-state transnational actors that have resources that rival what some states in the past used to have, and the whole issue about how do you deter entities like that in this new era--this is a very problematic feature of this new epoch.

Finally, I think we--and this is something that Senator Hart referred to--we've evolved a set of business practices over the last 10 and 15 years that frankly create enormous opportunity for American productivity, but also create a great deal of vulnerability. The best way to attack America's infrastructure is to become a customer to an American company, because that company is going to give you the tools it takes to enter into your ordering system, your scheduling system, whatever, so that they can lower their transaction costs.

But it's the easiest way that you're going to get it. If you want to re-direct trains to a new destination or if you want to ship new packages or if you want to bollix up the transshipment, you know, at least--we're going to give you the opportunity by opening up the infrastructure. And you do that by becoming a customer now in America. Now, you can't stop that, because we are not going to change our business practices. So we have to be much more clever and inventive in the way we think about our national security. And it requires a partnership between the national security and intelligence instruments and the private sector that really doesn't exist today. So we need to focus on that.

Now, I've laid out four things that I think ought to be an element of a new national strategy, and I'll be very brief.

First--and both of the speakers have said this--we have to have a strong economy. If we don't have a strong economy, we will not have a strong defense. Period. Now, I think that that's so obvious that we don't think about it.

Now, there are two sub-elements that I'd like to bring to your attention and hope the committee will focus on this year.

Our defense industry's financial health is very fragile. I mean, you talk to Wall Street right now, they would rate our defense companies--these are enormously sophisticated companies in terms of the technology. But they rate them as being somewhat more than farm equipment manufacturers and somewhat less than being machine tool manufacturers. The capitalization rate for our defense industry is less than 1 percent of the Standard & Poor's 500. That's the industrial underpinning for our defense. And it's too fragile. And frankly, you all need to spend some time thinking about what we need to do about that.

The second thing, I am of the view that our cold war technology control and export control procedures are now starting to become counterproductive. They're driving a wedge between us and our allies. They are forcing our allies to find sources of goods other than the United States because it's too darned hard to get a license for goods in the United States. We're creating a protected enclave, a market for foreign competitors that we're denying U.S. companies from competing because of our approach right now. We need to start tackling this problem. And frankly, this is one that you all have to lead on.

Second, I think we need to have a full spectrum defense capability. I totally agree with the five features that Senator Hart laid out. I would add a sixth, which is we always have to make sure our side has superior equipment in every contingency. And that's the one thing that's at risk right now with the budget we have: we are not buying enough new equipment.

Third, I think it's crucial--and I can't tell you how gratified I was to hear Speaker Gingrich with his ringing endorsement--we have got to find more sophisticated ways to stay connected to our allies. That is a great risk right now. We're drifting apart. And if we do drift apart, it's going to be to our loss.

Now, we can't use the old formula just because we helped--well, frankly, won World War II. They're tired of hearing that excuse. We've now got to find new reasons to be leading this alliance. And I think that's crucial. I strongly agree with this characterization of that.

Finally, I think it's crucial that we find ways to modulate the security environment that we live in; more obviously, by doing it with security alliances. That changes and shapes the security alignments around the world, to our advantage. We have to keep forward-deployed forces. And I know there's a lot of pressure to say, Pull the troops back from--from Asia, for example. That is providing stability that's crucial for our future.

So don't give in to those that say bring the troops home, we don't need to spend money to keep them overseas. It's shaping our international environment that's so important right now.

Third, dollar for dollar, the best money we spend is in military- to-military exchanges. And that's not adequately appreciated, I think. I think it's not seen for what it is, which is we have the world's gold standard when it comes to the military. I believe we've perfected the way that civil society, democratic society, manages the instruments of violence in a society. It's never been done better than this. And this ought to be the model for the world. And we ought to proudly show it as the model to the world. And I think military-to-military exchanges is a fine way to do that and should really enjoy stronger support from the committee.

Finally--and I know this is a theme that the speaker brought up, and slightly different--I, frankly, hope that we encourage more foreign students to come to school in the United States. I go around when I travel now, and I'm amazed at how many of the executives for international corporations and the leaders of other countries went to graduate school in the U.S. It's a tremendous advantage for them to have had a chance to see what this society is like. I mean, we won the Cold War not because we fielded a bigger military, but because we have superior values. And that's part of what we ought to be promoting now in this new era. And I think we could do that by resuscitating and bringing back a great imperative to invite the world's best and brightest to come and study here. And I would just offer that as a final concluding comment.

Thank you very much, Mr. Chairman.

REP. STUMP: Thank you, Doctor.

Mr. Kristol.

MR. KRISTOL: Thank you, Mr. Chairman, for the invitation to appear today and to appear with such distinguished colleagues. I learn something from each of their remarks, though I'm particularly struck by Dr. Hamre's account of the salmonella on the salad bar, which, since I tend to get lunch from the grungy salad bar right near our office, I've sort of lost my appetite for the next couple of days.

I'm appearing as chairman of the Project for the New American Century, a think tank that I started along with two veterans of the Reagan administration, Bob Kegan (sp) and Gary Schmidt (sp), in 1997. Our goal has been to defend and advocate a Reaganite foreign and defense policy, one of military strength and forceful advancement of American interests and principles around the world. The initial document setting out the principles of our project was signed by, among others, Dick Cheney, Don Rumsfeld and Paul Wolfowitz. And I'm gratified by that fact, and they've gone on to better, or worse, things, I suppose. John Bolton (sp), our project director, is joining the administration, assuming he's confirmed on the other side, as undersecretary of State for arms control and nonproliferation.

My remarks today and the statement I submitted are based on the Project's defense report, authored--the principal author of which is Tom Donnelly (sp), who we stole from your committee staff a couple of years ago. The report which I ask be submitted into the record, was published past September. This report actually followed the advice everyone gives the Defense Department, which is to act quickly and cheaply, and it was done in only a year, I think, and without any government money, and, I think, lays out a sound, broad strategic approach along with specific policies and programs that would allow us to execute that approach in the Defense Department, in our military and in the world.

The fundamental premise underlying the report, and the main point I would make today, is one that I think my colleagues have made. We are in a position of American global leadership, it is good that we're in such a position of leadership, we acquired that position of leadership in large part because of being willing to spend what we needed to spend on the military and in large part because we had a foreign policy that stood strong in the world for American principles and interests.

It is in our interest and the world's interest for us to preserve that position of leadership and to extend it as far into the future as possible.

This was articulated quite well in 1992 in the draft Defense Policy Guidance prepared under Paul Wolfowitz's direction for Secretary Cheney. Unfortunately, in my view, and I say this as someone who was in the Bush White House, the Bush White House backed off that guidance under some pressure, political pressure of the campaign and other things. We might have saved everyone a lot of trouble if we had embraced it enthusiastically and laid a groundwork, perhaps, for the Clinton administration and for the Congress to move forward and, I think, to have a clear understanding of what the principles guiding our foreign policy and our defense policy should have been for these past eight years.

But we've made it through the past eight years, not without cost, I would say. We have let our military budget go far too low and let our military be dragged down, as Mr. Skelton said, to an almost irresponsible level. We're now below 3 percent of gross domestic product in spending on defense; the lowest level since Pearl Harbor. And the main point I would make is simply that it's not enough, and I think there there is agreement in this panel. I was very happy to have Newt Gingrich's endorsement of the 40 (billion) to 60 billion- dollar figure. Bob Kagan and I wrote a piece in Foreign Affairs five years ago saying we needed to spend, I think, 60 (billion) to 80 billion dollars more, but we can compromise on 60 (billion). That would take us up to, what, 3.4 percent, something like that, of GDP, which is amazingly low, by historical standards. But it is good that there is this consensus, if maybe a slightly belated one, on the need to spend more on defense.

The Clinton administration, in my view, lived off of the Reagan buildup and particularly was able to do some of the things that needed to be done in the world--I support many of the things, the interventions they did lead--but we did so at great cost in terms of procurement and research and development for the future. The current tendency, I think, might be to make the opposite mistake, which is to try to skip a generation of weapons, embrace a revolution in military affairs, a transformation in the military. These are all good things, but they should not be embraced at the cost of meeting our responsibilities today and tomorrow and for the rest of this decade.

And those are real responsibilities, and it's very nice to imagine a world of 2020 with all kinds of wonderful technological weapons, a totally revamped Defense Department, 20 reports to Congress a year instead of 500, and all of those things; but the fact is, if we don't adequately defend ourselves, our allies, and advance our interests in the world this year, next year, for the next five years, for the next 10 years, we'll be in such trouble 15 or 20 years from now that whatever now looks like ambitious spending programs on research and development and procurement won't be enough, and the price we will have paid will be very, very great.

We cannot short-change the present at the expense of the future. We can't short-change the future at the expense of the present. We need to do both. We could afford to do both if we were to spend 3.5 percent of gross domestic product on defense. That would give us the $60 billion that Newt Gingrich mentioned and that I've previously talked about and that our defense report talks about. Three point five percent is an incredibly low percentage, as I say, by post-World War II standards, of spending on defense.

I believe as--we can talk about $60 billion of increases, you know, phased in, presumably, over a few years. But there's no time like the present, and I do believe that one can judge the seriousness of the administration and the Congress and, therefore, of this nation, about whether we are really going to meet our defense needs or not by what we do now.

Will there be a defense supplemental this year? There is now no quarrel that it is needed. It's needed simply to keep ongoing operations going at a responsible level, leave aside all the interesting disputes we can have about what weapon systems could be cancelled or changed, or what new ones should be invested in.

I believe that it would be hard to say that we're really serious about meeting our responsibilities on defense if we shirk the responsibility to adequately fund the Defense Department in this year, and certainly if we shirk the responsibility to adequately fund it for next year. I think the Budget Committee is meeting today, and I don't know what number they will stick on defense in the budget resolution, but there needs to be a substantial increase in defense spending--we say in the report $15 billion to $20 billion, minimum, over the Clinton-Bush number, which is, of course, identical at this point for FY 2002.

And I am deeply dubious of talk about transformation and talk about future increases if there's no present increase. We're not going to have a bigger budget surplus, I don't think, two or three or four years from now. It's not going to be easier to do it next year or in 2003 or 2004. We're not going to learn anything from the defense review--and I'm happy that Secretary Rumsfeld is conducting the review--we're not going to learn anything that's going to save us from having to spend this money. We know what much of the money needs to be spent on, and we need to do it now. I think it's a real test of our seriousness, frankly, the Bush administration's seriousness, and of this Congress's seriousness, and of our nation's seriousness about meeting our role and our responsibility as a world leader. Now, if we want to step away from that role and responsibility, that's a debate we can have and should have as a nation. I think the consequences would be disastrous for us and for the world. But that is what we would be doing, and we should face up to that.

I commend this committee for consistently, over the past few years, trying to get your colleagues here on the Hill, and members of the administration, to face up to this fact that you have faced up to, and I hope you have more success this year, and I think you probably will have more success this year than in the recent past.

I endorse much of what's been said about the need for new thinking and, obviously, for transforming the Defense Department, I hope Secretary Rumsfeld's review. The report lays out certain programs we think can be cancelled, others that need to be intensified and backed up much more seriously. I won't go into that here. Again, I'd just say that there's no way to do it, there's no way to be a world leader on the cheap, and the cost of giving up global leadership would be very, very substantial.

Secretary Cheney actually said it very well in 1992, when he was defending the Defense policy guidance against its critics then. And this is nine years ago. He said, "We can either sustain the armed forces we require and remain in a position to help shape things for the better, or we can throw that advantage away, but that would only hasten the day when we face greater threats at higher costs and further risk to American lives."

Thank you.

REP. STUMP: Thank you.

The chair recognizes the ranking member, Mr. Skelton.

REP. SKELTON: Thank you very much. I'll do my best to be brief because I know others have questions.

But, Senator Hart, you mentioned that you're looking forward to the next 25 years in your recommendations. I might point out that I counted the significant military engagements that we have had in the last 25 years, and we've had 13 of them, which means, as we look to the future, there are going to be a handful of bumps along the way, which, number one, will cost money; number two, will strain whatever strategies we think we have.

I have two quick questions and I'd like, Mr. Speaker--Gingrich, if I may, address them to you. The first is, you mentioned terrorism and how--and you're correct on this--how we should all be concerned, and you mentioned that we don't presently have the intelligence that we should have. Do you have, in an unclassified manner, recommendations along the line how we can increase our intelligence capability?

MR. GINGRICH: Well, let me--thank you for your concern. Let me first of all say I want to repeat what Senator Hart said, and that is, I want to thank General Boyd (sp) and the staff, because I do think the depth of the effort was substantial and was not sustainable by the commissioners. It was an entire team effort.

I think the easier thing to look at--and I think--I know that you know this very well, from a classified standpoint--is that we for the last 20 years have had a bias in favor of satellites and against human intelligence. We've also had a legal structure and a pattern of staffing, particularly at the Central Intelligence Agency, which has made it harder, rather than easier, to penetrate groups that are very, very dangerous and often very, very closed. This is a very hard problem. It's a hard problem for the British in Northern Ireland. It's a hard problem for the Israelis. It's a hard problem for anybody who's ever tried to deal with it.

And so I don't think we should view it as something we can wave a magic wand, but it's clear that we do not--I'll just give you one example. And this is not an attack on the last administration, but when I was speaker, I--we were up in the intelligence room, and one of the senior members of the administration told me, with enormous pride, that as part of their cost-cutting, they had dramatically reduced what they called the CIA's "overemphasis" on Afghanistan. This was about three months before they announced that bin Laden was hiding in Afghanistan.

And to me it was a reminder of the point that Bill Kristol just made, and that is, we are a nation with worldwide interest. We need an intelligence capability that's worldwide. That requires, frankly, a substantial investment and a significant amount--I mean, a small percentage of the $60 billion that Bill Kristol and I have now compromised on. But a significant percent of that, probably in the neighborhood of 3 (billion) to 5 billion, ought to be in intelligence.

We do not today have the capacities--we don't have enough interpreters, we literally can't read much of the traffic, we don't have enough analysts, and we don't have enough deep agents who go out and spend the time to acquire the capabilities. And I just think this is an area that we absolutely have to look at.

And I want to come back to the fact--it is a fact that for eight years we have said bin Laden is a major force against us, and at the end of eight years, which is twice the length of our participation in the Second World War--at the end of the eight years, he held a press conference recently. Now this should say to us, if we were truly the leading power in the world, there is a zone here we're not doing very well, and it requires a new focus on it.

And I know those of you who served in the Intelligence Committee can in private comment to your colleagues about how much we need more resources, better structures, and a revision of the anti-intelligence legislation of the last quarter century.

REP. SKELTON: Thank you. I'll come back to you for my short second question.

But let me ask Dr. Hamre, would you comment on that, the intelligence aspect?

MR. HAMRE: The world isn't getting any smaller. Unfortunately, our combat forces are, so we've got to be much efficient in how we use them. And I think that means we have to have better intelligence. I agree with what the speaker said. I also would say I think that the--there's an enormous amount of information that's available through open sources which we don't--we tend to not give enough attention to because we're preoccupied with security. I mean, the first thing you do when you set up an intelligence program is get a bigot list and say who I'm not going to talk to and who I will talk to. That limits knowledge. In fact, there's an astounding amount of information that's now available through open sources. And I would add through an amendment to his comment that we really should be augmenting in ways that utilize much more of the open material that's widely available. But there needs to be more money, I believe.

REP. SKELTON: Thank you.

Speaker Gingrich, you mentioned--I'm not sure I caught it correctly, but that the Department of Defense does not concentrate its efforts on below the theater level. You don't mean education-wise, professional military education--

MR. GINGRICH: No, no. What I mean is that the number one focus coming out of containing the Soviet empire was winning a theater level conflict with very sophisticated equipment integrated across an entire theater. And we proved in Desert Storm is a remarkably elegant capacity to defeat opponents with a mismatch that was historic. We do that better than anybody in the world. There is zero reason to believe in the next 10 years anybody will be as good at that as we are. And it's what makes us feel comfortable. That's what we think of as the American way of war. It had no real effect in Mogadishu, it has no real effect in Kosovo and Bosnia, it has no capacity to deliver victory in Colombia, it has not been able to find bin Laden in Afghanistan. And I'm just suggesting that there is a zone of conflict that is smaller, slower and, at least in the technologies of theater war, not applicable. That doesn't mean you can't have a lot of technological fixes, because technological fixes would be more at a light infantry level, more at a helping-local-people-help-themselves level, which actually we have done historically pretty well when we pay attention to it. But it doesn't fit our current promotion structure, it doesn't fit our current investment structure, it's not what the military likes to do. I mean, I could find you a number of documents--and I'm sure Dr. Hamre's seen them--in which the basic response of the Pentagon is to analytically wish the problem away: "Gee, we'd like to restrict ourselves to fighting the wars we do really well." Well, I agree with your point. Of the 13 engagements you described, one was a theater level conflict which we won elegantly; the other 12 weren't. And guess which kind are more likely in the next 10 years?

REP. SKELTON: Thank you very much, Mr. Chairman.

REP. STUMP: The gentleman from New Jersey, Mr. Saxton.

REP. JIM SAXTON (R-NJ): Thank you, Mr. Chairman.

First let me say how good it is to see all of you here and to hear your observations of our current situation vis-a-vis our national security. Mr. Speaker, it's the first time I've seen you in a few months, and I enjoyed hearing your thoughts very much. Let me make an observation and then let me ask a question.

And the observation is this, that all of you articulated very well, I believe, your concerns and the direction that you think we ought to take. I would add one thing to the list of needs, the list of concerns that you all articulated, and that is that in a very real sense the American people, and their representatives here in Congress, perhaps are, in a sense, kind of a cloistered society.

Very few of us take the opportunity to go understand other people. And as--the little travel that I've done, I've had some experiences that have taught me that the first thing that we all need to know is that everybody doesn't think like we do.

A few months ago--I guess it was a year ago now--time flies when you're having fun. About a year ago, some of my colleagues and I, from this committee, decided that we were going to go see what happened to the International Monetary Fund monies that we thought we were doing the right thing, or the IMF thought they were doing the right thing in sending the monies to Russia. So off we went to Russia to try to be helpful. When we got to Russia, we agreed to hold a public hearing with some members of the Duma, who spent the entire afternoon trying to embarrass the American members of Congress by suggesting that it was really the American banks who stole the money, not the Russian politicians.

And then as I observe the situation in the Middle East, I find another whole set of interesting questions that I think most Americans probably don't have a great understanding of, and that is exemplified by the fact that I recently read that the per capita income of the Palestinian people has been diminished by approximately 50 percent since the time that we started sending money to the Palestinian leadership. It raises an interesting question about the motives of the Palestinian leadership, which we all assume motives would be of a peaceful intent, and productive, and to try to do well for their people. And so we have a different concept of their pattern of thinking.

And I recently had a conversation with a colleague from the other body who spent a week in North Korea recently, telling a whole story about a whole different people and a whole different set of values.

And so my observation is that one of the things that we really need to do is to understand that other folks are different than we are; that while we haven't been attacked for 200 years on the homeland, that that is today a real possibility, and that there are those who have the motives to carry out that kind of an attack. And so as we move forward, I think that is one very basic thing that we need to look at.

I'd like to ask a short-term question, particularly of the senator and the speaker, and that is that we face a short-term issue here, relatively short term. We're supposed to be about the business of putting together the '02 defense budget. And as Bill Kristol pointed out, we find ourselves with a budget request and a process that we're going to move through in the next few months that should take into consideration two tracks; one track being the maintenance of our current force, which we need to do, and the second track being what you all have talked about, developing a program or a set of programs to meet our needs over the next quarter of a century. We need to do both those things at once.

And I'm curious, given where we are, what you think over the next four or five months this process ought to look like in getting to step one in maintaining our current force, and getting to step 2, perhaps, putting together a real legislative program that will take us into the next 25 years.

MR. HART: Congressman, if you use the 1947 analogy--and I went back and read--I think there were probably close to half a dozen reports of various commissions of one kind or another that came together to form the recommendations that became the National Security Act of 1947.

What those commissions tried to do, and what we tried to do, was not solve the immediate problem. They focused on the threat which, of course, at that time became Communism, and establishing institutions to deal with that--the Central Intelligence Agency, the United States Air Force, permanent Department of Defense, and so forth--and then got to the budgetary issues.

Speaker Gingrich and I were part of a movement in Congress 20 years ago called the "military reform movement," the principles of which were: Focus first on people. People win wars, weapons don't. Second, get your strategy, tactics and doctrine straight. And then, third, look at the weapons you need to implement that strategy and support those people, instead of the way it usually happens in the Congress--focus on the budget, focus on the money, focus on the weapons, and then fill in the strategy behind that. So what we tried to do was not get involved in the short-term effort because I think, frankly, we would have--the commission could not have stayed together. Different people would have wanted to pursue one kind of airplane and others a different kind of ship.

So what we have tried to do is provide you a framework for the mid- and long-term, and I think if you adopt the principles of the framework, then that will automatically affect your short-term decisions. I would simply conclude by saying I think the commission would recommend that major procurement decisions, if that's what is at issue here, and I think it is, not be made in a way that would lock us into an outdated strategy--that it would preclude the possibility of reforming and refining our strategy for a different world. So you might simply keep that in mind.

And one final comment, I couldn't agree more about the need to understand the world. This commission has been criticized for spending too much money. Members of the commission went to 25 or 30 countries. We obviously couldn't go to all. We tried to cover Europe, much of Asia, the Middle East, former Soviet Union.

The interesting thing is, when members came back and reported on their trip, the one common theme that everybody reported on was resentment; and this included from countries who are, at least nominally, our allies. It's a nameless resentment. It is our power, it is our popular culture, it is the way in which we deal with other countries. And none of us, being loyal Americans, was willing to accept this without comment. I remember standing before 100 leaders of the Cairo community, getting my brains beat out by people who were taking our money with their left hand while they criticized us. Much of the criticism was unfocused. They simply resented the United States. Now, we don't need to form our foreign policy based on that resentment, but it is a powerful force in the world that we need to take account of.

MR. GINGRICH: Let me build on that. Let me say, first of all, that I think Bill Kristol and I are in agreement, but we reverse the emphasis. I think you have to have more money, but I think in the absence of profound change, the money will be wasted. So I think you've got to do both. I don't think it's either/or.

Having said that, let me also say that when we talk budgets, the committee should go back and find out, at its peak in constant dollars, how much did DARPA have. If you'll remember, it was originally called ARPA, the Advanced Research Projects Agency. It is the base of the Internet. It had vastly more money in real value 20 years ago, it had more freedom, and it was more basic research. Over the last 20 years, we've gradually shoved it into basically supporting much more short-term goals. So part of the budgeting should include getting DARPA back up to its constant dollar value at its peak.

In addition, as I said a while ago, intelligence should be part of the dollar value. Having said that, I think you ask a very pertinent, practical question. If this committee does not include a significant increase in next year's funding, you are guaranteeing that you're going to have to have some kind of supplemental. And all of you know that, and the White House knows that. And it seems to me that sometime between now and taking a bill to the floor, there ought to be an agreement--I mean, a practical, minimalist position, if you take seriously trying to get a $60 billion increase over the next few years, would be to try to get 20 (billion) in this year, and then to send a signal downtown that you want at least 20 (billion) more next year and 20 (billion) the following year.

And that probably gets you to a sustainable minimum world leadership budget, taking into account both the research and the defense needs.

Let me also say I'll b