had the Secretary of the Air Force. A parade of witnesses, if you will, has marched by.

Listening to that parade as it marched by, it would appear that the only one in step with you would be Secretary Lehman. How do you explain that everybody else is opposed to your legislation with the exception of Secretary Lehman?

Mr. COURTER. I would argue that they are familiar with the present setup and they are simply, very frankly, not bold enough to make a real review of the problems that we have. They will recognize the problems and they will agree there has been mismanagement, there's been poor accountability in the Defense agencies, particularly DLA. But I think, generally, they are just familiar and comfortable with the present situation so they don't have to be bothered with the small task of buying all sorts of small items for the Army or for the Air Force.

I think John Lehman looks at this thing a little bit differently than the others. He is less willing to allow the bureaucracy to control the situation. I think, philosophically, he's correct. I recognize that people disagree, but I think, as I mentioned before, Congressman, that when you examine smart corporate management techniques, they are always concerned about accountability. They are always concerned about authority. It goes without saying that these agencies, filled as they are with civil servants, are outside the scope of accountability of the service Secretaries, outside the scope of accountability to the Secretary of Defense or the Joint Chiefs of Staff, and, very frankly, outside the control of the Congress itself. That is not a healthy situation.

Mr. HOPKINS. I think in the testimony of the Secretary of the Navy, he said he felt like he could absorb these positions and that, as a matter of fact, they were already doing many of those things under the Department of the Navy. As I recall-and I don't have the figures in front of me-he had something like 860 people on his staff, compared to 250, we'll say, for the Department of the Army. Do you feel the Army could absorb their job with only one-fourth of the amount of personnel that they have compared to, say, the Department of the Navy?

Mr. COURTER. It may require, in the Army, increased personnel for this function. But, on the other hand, the legislation requires the elimination of 46,000 positions.

It would be my argument

Mr. HOPKINS. In other words, one would not have to transfer 46,000 people to the Department of the Army?

Mr. COURTER. That's correct. You have real savings, a real reduction in the bureaucracy, a real reduction in payroll, and better efficiency.

Mr. HOPKINS. I yield back the balance of my time.

Mr. NICHOLS. Mr. Carney.

Mr. CARNEY. Thank you, Mr. Chairman. Thank you, Jim, for your fine presentation.

Staying on that trend of thought, section (c) prohibits personnel increases in the services. Am I to assume that these people now are assigned to DOD, these 49,000 people? Do they work for DOD or do they work for-

Mr. COURTER. They work for the agencies. The 49,000 people work for the Defense Logistics Agency.

Mr. CARNEY. They are not part of each individual service, with a cap on civilian employees?

Mr. COURTER. I don't know.

Mr. CARNEY. That's a significant thing. What you're saying, then, is that they will not have any lateral transfers or any type of transfer at all into the individual services? Those 49,000 people are unemployed 180 days after the bill is passed?

Mr. COURTER. The purpose of the legislation is to focus on a very significant and real problem. There is a growing awareness-newspapers such as the Wall Street Journal have editorialized, saying that we have a real problem with a lack of accountability with the increased centralization.

The purpose of the legislation is to have a focal point, a beginning point, a framework. If, through the testimony, and your deliberations amendments or modifications have to be made, that's fine. It is not a perfect approach and it's not the end design.

Mr. CARNEY. I understand.

Mr. COURTER. It's an attempt to change, radically, the philosophy and approach that we have existed under for a long period of time. Mr. CARNEY. I completely understand that and I'm very sympathetic with that view. Philosophically, you and I would agree on much of our approach to the problem that we're faced with. I am just trying to understand the mechanics that would take place if this were to pass in its present form. I am trying to settle in my mind whether or not these people who are in the agencies now are part of the individual services.

Are they civilian employees of the Army? If you were to abolish their jobs, would they still be civilian employees with the Army or would they be RIF'd?

Mr. COURTER. I am not positive. I would imagine that the civilians are not part of the services and they would be RIF'd. There are military people inside DLA and they are probably accountable and assigned to the individual services. I do not know the mix. Mr. CARNEY. OK. I will not continue to pursue that. But I would ask staff if they could identify that for me, because we start to get into the mechanics of RIFS and that type of thing. Mr. LALLY. Mr. Carney, I believe that these agency employees are not attributable to the independent services, that they are agency employees, and that in the event of a termination they would all be terminated and would not go laterally to the Army, Navy, or Air Force.

Mr. CARNEY. As an agency employee, then, are they employees of the Department of Defense?

Mr. LALLY. Yes, sir.

Mr. CARNEY. In other words, we would have a budget cut for personnel of 49,000 people out of the Department of Defense, and those people are prohibited by the law from being absorbed into the individual services, unless, of course, the individual services were not up to their cap, so they could be absorbed. Is that correct? Mr. LALLY. With the exception, as Mr. Courter pointed out, that there are a small percentage of military personnel in there who would revert to the services. But the civilian personnel would not.

Mr. CARNEY. And the civilian component of the individual services would quite specifically be prohibited from absorbing-not from absorbing, I don't want to use that term-the term would be to increase their organizational tables to accommodate, never mind the people, but the functions? Is that correct?

Mr. LALLY. That's the bill's provision, as I read it.

Mr. COURTER. That's correct.

Mr. CARNEY. Fine. Very good. I think, now, that has become clear to me.

I thank you and I yield back the balance of my time, Mr. Chair

man.

Mr. NICHOLS. Thank you, Mr. Carney.

Let me ask the gentleman from New Jersey-I am in general support of what he is trying to do, to reduce the bureaucracy. I am not sure the persuasion of the committee will be to go as far as he wants to go. I can't tell.

I wonder if you have had an opportunity to look at the provisions that we have placed in the bill that we introduced today addressing that particular issue, and if you haven't, may I read them to you? Mr. COURTER. Please read them.

Mr. NICHOLS [reading]:

The Secretary of Defense shall conduct a study of the functions and organizational structure of the Defense agencies. The study shall determine the most appropriate means of providing supplies and services now provided by these agencies. The study shall analyze methods to improve the performance and responsiveness of the Defense agencies with respect to the entities to which they provide those supplies and services, particularly with regard to the unified and specific combatant commands.

The bill also directs the service secretaries themselves, and the Joint Chiefs, each to conduct a similar study of functions and organizational structure.

What I'm asking the gentleman from New Jersey is, in the event that his bill was not incorporated in the subcommittee markup, I just wonder if he would be satisfied with this language.

Mr. COURTER. It is better than nothing because it recognizes the problem, and we all do. Mine is obviously a direct attempt to solve it in a philosophically consistent way. The study may reveal that I'm correct; it may reveal that some modification in my proposal is the appropriate way to go. If there is no support for my proposal, I would at least hope your proposal passes. I would support it, yes, but to me, it sounds like another study-not to denigrate it.

Mr. NICHOLS. Well, I don't want to intimate that there is no support for your proposal because I think there definitely is support for it, both at the Pentagon level and at the congressional level.

The thing that I think is of some concern to us is that we don't have any tangible figures at hand to really put any yardstick or measure on what you're talking about doing, abolishing DLA, and putting those responsibilities into the respective services. Mr. Lally, do you have any questions?

Mr. LALLY. I have no questions, Mr. Chairman.

Mr. NICHOLS. Mr. Barrett.

Mr. BARRETT. No, sir.

Mr. NICHOLS. Thank you very much.

Mr. COURTER. Thank you, Mr. Chairman.

Mr. NICHOLS. We appreciate your being with us.

Our next witness is an old friend of this committee, Gen. Jack Vessey. Let me say there is no military man, in service or retired from the service, for whom I have greater respect than the gentleman who is going to present testimony to us now.

I, along with a number of members of the committee, attended General Vessey's retirement. I recall one thing that he had to say when he made the decision to retire. He said that he had promised his wife to get her back to Minnesota before the first snowfall. General, I hope you made good on that commitment.

I want to say to the committee also that, because of restrictions and travel allowances under Gramm-Rudman, the committee did not pay General Vessey's way here. I don't know how he got here. Maybe he hitchhiked. But we're delighted to have you, General.

Mr. CARNEY. If I may, Mr. Chairman, we were just discussing the travel arrangements that General Vessey had to make to get here. He told me it is quite a difference in lifestyle than the last time he came. He said it was a lot easier to be punctual when he was the Chairman of the Joint Chiefs than it is today.

Mr. NICHOLS. The Chair recognizes Gen. John Vessey.

STATEMENT OF GEN. JOHN W. VESSEY, JR., U.S. ARMY (RETIRED), FORMER CHAIRMAN, JOINT CHIEFS OF STAFF

General VESSEY. Thank you, Mr. Chairman. It is a pleasure to be here and perhaps to give you some help with the very important issues that you're trying to deal with in defense organization.

I got your letter, the letter to me, and also a copy of the letter that you sent to the Secretary of Defense. I don't have a prepared statement. But I do have a couple of remarks that I would like to make. Then I will be open to questions.

In your letter to the Secretary of Defense you said some very important things. Finally, you say:

While we pray for peace, we can never forget that organization no less than a bayonet or an aircraft carrier is a weapon of war. We owe it to our soldiers, our sailors, our airmen and our marines to ensure that this weapon is lean enough, flexible enough, and tough enough to help them win if, God forbid, that ever be

comes necessary.

I just want to say to you that in that sentence is the key, in my mind, as to how you deal with the issues that you're going to deal with.

I would like to say that as we look at defense organization, we need to remember it is people who get things done. Organizations are tools for people, and sometimes they are tools to help people get things done efficiently, and sometimes we construct the organization to keep people from doing things we don't want them to do. I would suggest to you that the peacetime defense organization has a little bit of both of that in it, and the Congress has aided and abetted in that structure. When you structure an organization to keep people from doing things you don't want them to do, you inhibit the other part, that is, the efficiency in doing things that you do want to do. So you have to strike a balance someplace.

The other thing I would like to open with is to say let's not forget we have the best Armed Forces in the world, that man for man, weapon for weapon, outfit for outfit, whatever it is, ours is

better than the Russians, they're better than the Germans, they're better than the Israelis, better than the British, better than the Chinese, and they didn't get that way by accident.

So the organization is not a complete disaster. It is a typically American organization. It is structured from this great democracy of ours.

Somebody asked me early this morning what I thought of the Philippines and what happened there. I said my only inclination is to get down on my knees and thank the Lord for the institutions that we have and the strength of those institutions that keeps us from getting in that sort of position.

The way we have structured our defense organization comes from a democratic society, a very democratic society, in structuring its organization. That means it is not necessarily going to be as efficient as we would like it to look, particularly as we look at parts of it. As we look at the whole, then we have to ask ourselves, is it what we want?

So I would tell you that, in examining changes to the organization, it is important that we keep our overall objectives in mind. In peacetime, our objective is to maintain the peace. The peacetime defense budget is an insurance policy. It is peace insurance. We want good insurance; we want a good strong outfit that provides adequate insurance. But like every other insurance policy we buy, we want to buy it at the least possible premium. So our arguments in peacetime generally hinge around that-how much insurance, what is adequate, and what is the least cost premium, and where have we skimped too much on the premium and where have we over-bought for our insurance.

In wartime, on the other hand, we have a different goal. Our goal is to preserve the Nation, and particularly its most precious resource, its people, both the people in the Armed Forces and the people in the civilian population, and then to end that war as quickly as possible and, as is now fashionable to say, on what are acceptable terms. We used to say win it as quickly as possible, but that isn't very fashionable any more.

There is a great difference between the peacetime objectives and the wartime objectives, and we have to understand that. So the organization we build for peacetime has to be one that can make the transition to war, but that still keeps those premiums down reason`ably low in peacetime.

I think George Marshall testified before the House Armed Services Committee in about 1942. He made a statement that exemplified the difference when he said we used to have all the time in the world, but no money; now we've got all the money but no time.

Now, I don't want to imply that a $300 billion defense budget is no money. But I do want to tell you that if we fail, if we buy the wrong insurance with the $300 billion defense budget, it will look like no money when we have to pay the price of war. So as we deal with these questions we have to remember that we're dealing with very important questions and they are not simple and easy questions. It is easy to look at one little facet, as Mr. Courter did, and say this doesn't work as well as it ought to-and that may well be, and it might be that it ought to be fixed. But we also have to look