Thank you, Mr. Chairman.  I want to join you in welcoming Mr. Shanahan this morning.  Thank you for your willingness to serve your country.  I also want to recognize your family members for their support and willingness to let you serve in the Department of Defense.

If confirmed as the Deputy Secretary of Defense, you will serve as the number two official in the Department of Defense and the Chief Management Officer of the Department.  You will be responsible for ensuring the military personnel and civilians of the Department of Defense have what they need while also managing finite taxpayer dollars in the face of many who will be looking for additional resources.

Your distinguished record of more than thirty years at Boeing culminated in your current position as Senior Vice President for Supply Chain and Operations.  During your tenure at Boeing, you developed a reputation as “Mr. Fix-It” due to your successful record of taking on challenging programs, fixing their problems, and turning them into successes.  In our meeting, you emphasized your belief in getting more out of the private sector to achieve cost-efficient results while ensuring our warfighters have the best equipment at their disposal.  It is that kind of dynamic leadership that the Defense Department needs as our nation faces as diverse an array of threats and challenges to our national security as at any point in our history.

For the past sixteen years, our military has been consumed by two prolonged wars against violent extremist groups like ISIS.  This generational fight has sapped readiness and precluded our military personnel from training for full spectrum operations.  In addition, we now face the rise of near peer competitors, with a resurgent Russia, which is disrupting Europe and our own nation, and a saber-rattling China, which is unnerving our allies in Asia.  Compounding these threats are a destabilizing North Korea and the long shadow of Iran.  All of these challenges will inevitably show up on your desk as the Pentagon seeks decisions on policy and resources.  Every day you will have to prioritize and make hard decisions. 

None of these decisions will be harder than budgetary choices.  While in an ideal world, strategy would drive budget, the reality is that the Budget Control Act spending caps drive most defense decisions.  Unfortunately, while the President’s budget request adds much-needed funding to defense, it does not address the issue that the budget caps are law, but instead increases defense at the expense of non-defense accounts.  Furthermore, if enacted, the President’s budget request would trigger sequestration, effectively wiping out those increases with across-the-board cuts. 

We face many challenges that will require strong leadership and the ability to make tough decisions.  I look forward to hearing our nominee’s views on these issues.

Thank you very much, Mr. Chairman.