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1 Chairman Frelinghuysen, Ranking Member Visclosky, and distinguished members of the Committee, it is an honor to appear before you today. This is my first of hopefully many chances to discuss the future of the United States Navy with you, and as your Chief of Naval Operations, I look forward to continuing to work closely with you to ensure that your Navy is best postured to defend America’s interests around the globe.

Prior to my confirmation, I testified that my most serious concern was the gap between challenges to America’s security and prosperity and the resources available to protect them. In January of this year, I outlined this gap in more detail when I released A Design for Maintaining Maritime Superiority (the “Design”), which describes an increasingly competitive environment and the lines of effort the Navy will pursue to execute our mission in that environment. The thinking in the Design reflects inputs from leaders inside and out of the Navy and is guiding our way forward. It shaped our budget submission and shapes my testimony below.

The 2017 budget is this year’s best approach to solving the problems and seizing the opportunities that face the Navy today. The budget reflects some constants; America has been a maritime nation since we began. Our prosperity continues to depend on our maritime security -- over 90 percent of our trade is shipped over the seas -- and this linkage will only tighten in the future. Against the backdrop of this historical truth, current problems and opportunities are growing rapidly. The maritime environment has remained remarkably constant since man first put to sea thousands of years ago. The oceans, seas, shipping lanes and chokepoints are physically unchanged in the modern era, but the maritime system has seen explosive growth in the past 25 years. Traffic over the seas has increased by 400 percent since the early 1990’s, driving and outpacing the global economy, which has almost doubled in the same period. Climate change has opened up trade routes previously closed. Access to resources on the seafloor has also increased, both as Arctic ice has receded and as technology has improved. And just as it has in the past, our future as a nation remains tied to our ability to operate freely on the seas.

That maritime freedom is coming under increasing pressure and stress. For the first time in 25 years, there is competition for control of the seas. Nations like China and

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It is against this background that I consider the gravity of the Navy’s mission statement,

as reflected in the Design:

“The United States Navy will be ready to conduct prompt and sustained combat incident to operations at sea. Our Navy will protect America from attack and preserve America’s strategic influence in key regions of the world. U.S. naval forces and operations – from the sea floor to space, from deep water to the littorals, and in the information domain – will deter aggression and enable peaceful resolution of crises on terms acceptable to the United States and our allies and partners. If deterrence fails, the Navy will conduct decisive combat operations to defeat any enemy.” To me these words are not an abstraction, and are easiest to appreciate in the context

of what naval forces do every day. As just one example, there was a day last fall when:

● The destroyer USS Donald Cook transited the Mediterranean, following an 11nation multinational exercise in the Black Sea and a port visit to Odessa, Ukraine

- demonstrating our commitment to our NATO allies;

● Sailors at the Navy Cyber Defense Operations Command in Suffolk, VA monitored intrusion prevention sensors that actively mitigated almost 300,000 instances of unauthorized or adversary activity across the Navy network enterprise, including more than 60,000 threats to afloat networks;

● The Kearsarge Amphibious Readiness Group, with the 26th Marine Expeditionary Unit aboard, participated in a Turkish-led amphibious exercise, demonstrating our combined capability and physically displaying our commitment to U.S. allies and partners;

3 ● Five ballistic missile submarines patrolled the oceans (the latest in over 4,000 patrols since 1960), providing 100 percent readiness in providing strategic deterrence;

● USS Fort Worth, a Littoral Combat Ship, swapped crews in Singapore after participating in a Cooperation Afloat Readiness And Training (CARAT) exercise with the Bangladesh Navy, developing cooperative maritime security capabilities that support security and stability in South and Southeast Asia.

● Sailors from a Coastal Riverine Squadron and an Explosive Ordnance Disposal unit participated in an exercise in Cambodia, increasing maritime security cooperation and interoperability between the two navies;

● Navy SEALS trained and advised Iraqi forces in the fight against ISIL extremists, facilitating, mentoring, and enhancing their ability to secure their territory;

● Members of the Navy Expeditionary Combat Command provided tactical intelligence training to Ghanaian Maritime Law Enforcement and Naval service members at Sekondi Naval Base, increasing our partners’ capacity and capability to secure their territorial waters;

● The aircraft carrier USS Ronald Reagan launched four F/A-18 fighters to intercept and escort two approaching Russian TU-142 Bear aircraft that approached as the carrier was operating in the Sea of Japan, operating forward to preserve freedom of action; and ● The fast-attack submarine USS City of Corpus Christi operated in the Western Pacific, after participating with the Indian and Japanese Navies in Exercise Malabar 2015, increasing our level of engagement with our partners across the Indo-Asia Pacific.

All of these events occurred on a single day: October 27, 2015. But none were in the headlines. That is because on that day the guided missile destroyer USS Lassen conducted a freedom of navigation operation in the South China Sea, one of the many visible demonstrations of our international leadership and national commitment to preserving a rules-based international order that the Navy conducts routinely around the world.

4 Your Navy’s ability to execute these responsibilities -- our mission -- is becoming more difficult as three interrelated forces act on the global economic and security environments, and as new actors rise to challenge us. I have already described the first force - the force exerted by the expanding use of the maritime domain, on, over, and under the seas. This global system is becoming more used, stressed, and contested than perhaps ever before, and these trends show no signs of reversing.

The second force is the rise of the global information system. Newer than the maritime system, the information system is more pervasive, enabling an even greater multitude of connections between people and at a much lower cost of entry. Information, now passed in near-real time across links that continue to multiply, is in turn driving an accelerating rate of change.

The third interrelated force is the rising tempo at which new technologies are being introduced. This is not just information technologies, but also those that incorporate advances in material science, increasingly sophisticated robotics, energy storage, 3-D printing, and networks of low-cost sensors, to name just a few examples. The potential of genetic science and artificial intelligence is just starting to be realized, and could fundamentally reshape every aspect of our lives. And as technology is developed at ever-increasing speeds, it is being adopted by society more quickly as well – people are using these new tools as quickly as they are produced, in new and novel ways.

Our competitors and adversaries are moving quickly to use these forces to their advantage, and they too are shifting. For the first time in decades, the United States is facing a return to great power competition. Russia and China demonstrate both the advanced capabilities and the desire to act as global powers. This past fall, the Russian Navy operated at a pace and in areas not seen since the mid-1990’s, and the Chinese PLA(N) continued to extend its reach around the world. Their national aspirations are backed by a growing arsenal of high-end warfighting capabilities, many of which are focused specifically on our vulnerabilities. Both nations continue to develop informationenabled weapons with increasing range, precision and destructive capacity, and to sell those weapons to partners like Iran, Syria, and North Korea.

5 From a strategic perspective, both China and Russia are also becoming increasingly adept in coercion and competition below the thresholds of outright conflict, finding ways to exploit weaknesses in the system of broadly accepted global rules and standards.

For example, Russia has continued its occupation and attempted annexation of another nation's territory. And, as perhaps the most startling example, China’s land reclamation and militarization of outposts amidst the busiest sea lanes on the planet casts doubt on the future accessibility of our maritime domain. China is literally redrawing the map in the South China Sea by creating artificial islands, to which they then claim sovereign territorial rights, now complete with surface to air missiles and high performance radars.

Their activity creates great uncertainty about the intentions and credibility of their leadership.

Russia and China are not the only actors seeking to contest U.S. and global interests in the emerging security environment. Others are also pursuing advanced technology, including military technologies that were once the exclusive province of great powers;

this trend will persist. Coupled with an ongoing dedication to furthering its nuclear weapons and missile programs, North Korea’s provocative actions continue to threaten security in Northeast Asia and beyond. Iran’s advanced missiles, proxy forces and other conventional capabilities pose threats to which the Navy must remain prepared to respond. Finally, international terrorist groups such as ISIL and Al Qaeda have proven their resilience and adaptability and pose a long-term threat to stability and security around the world.

In summary, these new forces have changed what it means for the Navy and Marine Corps to provide maritime security; the problems are more complex, demanding, and numerous than ever before. But our responsibility remains the same. Naval forces must provide our leaders credible options that allow them to advance the nation’s prosperity, defend its security, further its strategic interests, assure its allies and partners, and deter its adversaries -- which rests on the ability of the Navy and our sister services to decisively win if conflict breaks out. The breadth of challenges we face demands a range of options, and they must be credible. Only then can the United States effectively 6 advocate as a maritime power for the system of global rules and standards that underpin shared prosperity now and in the future.

It is becoming increasingly difficult for the Navy to present a sufficient number of credible options for leadership. While the predictability provided by the 2015 Bipartisan Budget Act is greatly appreciated, the Navy’s Fiscal Year (FY) 2017 budget submission comes on the heels of four prior years’ budgets that collectively provided $30 billion less than requested levels to the Department of the Navy. It represents yet another reduction of almost $5 billion from 2016 funding levels. And we have started the last six years with a continuing resolution, with an average duration of 120 days. In response, we have had to modify our behaviors with a host of inefficient practices, the use of short-term contracts offering less than best value to the government, and the associated increased workload on our shrinking headquarters staffs. Continuing Resolutions can also delay critical programs, including those with little to no margin for delay, such as the Ohio Replacement Program. And it’s worse than that: the fiscal uncertainty sends ripples through the entire system - the industrial base is hesitant to invest, and our people remain concerned about the next furlough or hiring freeze or overtime cap. This unpredictability adds to the burden on our Navy team and drives prices up.

So the challenges are increasing and funding is decreasing. America remains the primary leader of the free world, with the most capable military force on the planet. And we remain a maritime nation whose future is inextricably tied to the seas. Our Navy has tremendous responsibilities to ensure that future is secure and prosperous. Within those constraints, our FY 2017 budget proposal reflects the best portfolio of credible options to achieve our mission. Budget constraints are forcing choices that limit our naval capability in the face of growing and rising threats. The Navy’s budget addresses our gaps on a prioritized basis, and starts to accelerate our capabilities so that we can maintain overmatch relative to our adversaries.

Strengthen Our Navy Team for the Future Without question, the most important part of our budget is our investment in our Navy Team - our Active and Reserve Sailors, our Navy Civilians, and their families. I am

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