▶ 0:15:28Chair Wicker: The committee will come to order. Thank you to our guest for being here. We are here this morning to consider the nomination of stephen feinberg, who has been nominated to be deputy secretary of defense. If confirmed, Mr. feinberg would join the department of defense during the most dangerous security environment since world war ii.
▶ 0:15:57Chair Wicker: He would oversee the operations of the department as it faces emerging acts from aggressors. This dangerous coalition characterized by military cooperation between china, russia, iran, and north korea, presents a far-reaching and complex set of threats. Make no mistake, our enemies do not want a 21st century defined by peace and prosperity for the american people. Mr.
▶ 0:16:23Chair Wicker: Feinberg would be a part of the team tasked with meeting those threats. Unfortunately, the defense investments we made during the cold war have long since evaporated. Defense spending is near record loads -- record lows in gdp and all aspects of the military forces are now in dire need of repair and replacement. Our navy is now too small and too old to meet the growing demands of combat commanders.
▶ 0:16:55Chair Wicker: Our nuclear forces used to be the most rower -- robust and effective on the planet and are now decades older than the intended service lives. Our air force continues to shrink. We have yet to figure out how to scale innovative weapons into mass production. We have a 200 billion dollar backlog in basic maintenance that leaves our troops living and working in substandard conditions.
▶ 0:17:24Chair Wicker: $200 billion just dealing with living and working conditions. And I could go on. Clearly, many things need fixing at the department of defense. Fortunately, Mr. feinberg has spent his entire career fixing things. I believe he will make a very fine deputy secretary of defense, having run a highly successful large organization for three decades, making him eminently qualified to run the pentagon effectively.
▶ 0:17:53Chair Wicker: He brings extensive experience at the intersection of international economics and national security. Mr. feinberg is remarkably attuned to the scope and scale of the challenges that we face and opportunities we might exploit. His work on national defense is significant and his range between acquisition to spectrum sharing and hypersonic testing.
▶ 0:18:23Chair Wicker: Unlike the secretary of defense, the deputy does not often make high-profile policy speeches or travel around the world to engage with allies and adversaries. I do not expect to see much of Mr.
▶ 0:18:35Chair Wicker: Feinberg in the news, if he is confirmed, but make no mistake, the pentagon cannot function without a capable deputy and in many ways the deputy runs the day to day operations of the department, driving the budget process, managing principal systems, making sure that the secretary of defense is provided with data driven thoughtful options. Trump has been -- Mr.
▶ 0:18:59Chair Wicker: Feinberg has cutting edge skills with a thorough understanding of the department. Today we will hear his views on issues facing the department of defense. I look forward to his thoughts on my proposals. Last year, I released a report entitled 21st-century peace through strength.
▶ 0:19:27Chair Wicker: I hope that this can serve as a blueprint to reinvigorate and rebuild the military. In -- initially I released a plan called restoring the forge of freedom, american innovation unleashed. I hope it brings much needed reforms and fundamentally changes the way the department does business, cutting red tape in getting better weapons to the troops faster while maximizing taxpayer dollars. Thank you to Mr.
▶ 0:19:54Chair Wicker: Feinberg and his family and friends for being here today. I believe that he has a lot to offer as the department of defense changes its focus to lethality, efficiency, speed, and accountability. I now recognize my friend and ranking member read any opening remarks he would like to deliver.
▶ 0:20:13Sen. Reed: Thank you very much, Mr. chairman. Mr. feinberg, congratulations on the hearing. I would also like to welcome and recognize your wife and family who are here today, as well as senator for introducing Mr. feinberg. You have been nominated to be deputy secretary of defense.
▶ 0:20:37Sen. Reed: Traditionally handling the day-to-day operations with a primary focus on managing workforce and budget processes, serving as the main troubleshooter in the department for high priority problems and decisions. In turn this allows the secretary to focus on policy, strategy, and relationships abroad.
▶ 0:21:01Sen. Reed: However, I'm concerned that the primary role of the deputy, workforce and budget management, have been undermined by the chaotic actions of the past week . Last tuesday, secretary hegseth order department leadership to submit plans to cut spending by 8% annually, suggesting that the cuts would be covered largely by canceling d.e.I. Programs. I would note that these programs combine for -- account for barely .1% of the annual budget.
▶ 0:21:34Sen. Reed: The cuts will go much, much deeper, to systems, and you will be a part of that process. In addition, after pressure from doge, Mr. hegseth announced a plan to fire probationary employees this week and eventually 5% to 80% of the entire workforce, as many as 75,000 workers.
▶ 0:21:59Sen. Reed: Let me make one point clear, the greatest national security assets in the U.S. is not ships or technology, the greatest security asset is our people. We have the most professional and dedicated defense workforce in the world to complement the greatest and most lethal fighting force in the world. The men and women who serve our military in uniform and as civilians are among the most skilled and valuable professionals in the country and they serve in the department not because it is lucrative or easy.
▶ 0:22:32Sen. Reed: They do so because they care about the mission and protecting their fellow citizens. In a word, they are patriots. That's why I am disturbed over the administration's apparent animosity towards them, arbitrarily cutting tens of thousands from the budget will not create efficiency, it will cripple the military.
▶ 0:22:55Sen. Reed: We've always advocated for cutting west -- wasteful spending at the department of defense and tough budget decisions should be based on facts and analysis, not reckless layoffs. It will be felt in every state, not just inside the pentagon. Civilian companies around the country, military bases, depots, manufacturing sites, schools, research.
▶ 0:23:22Sen. Reed: If confirmed, you will be responsible for managing the fallout from these budget cuts at a time when we face unprecedented threats from china, russia, and other adversaries. You will need to find a way to balance the reductions while making sure that the department has the resources needed.
▶ 0:23:44Sen. Reed: You will need the expertise of these civilians now in fear of losing their jobs or have to rely on contractors and military personnel to fill the cover order, which in the past has proven only to drive up costs. I hope you will explain to the committee how you intend to resolve these contradictory demands while making sure that the department of defense accomplishes its mission.
▶ 0:24:08Sen. Reed: I feel compelled to take a moment to address the firing of senior military leaders this weekend. I'm deeply troubled that they appear to be a part of a broader campaign by the president and secretary hegseth to politicize the military. Isom general brown, general think eddie, general life, and general sports for their outstanding service.
▶ 0:24:34Sen. Reed: Each have had brilliant careers and lead with courage, honor, and distinction, and we thank them all for their courage and sacrifice. However, the lack of explanation for the dismissals sends a chilling message to the risks and sends a message to the ranks that political loyalty to trump supersedes loyalty to the constitution.
▶ 0:24:57Sen. Reed: These actions could cause issues for you if confirmed, the deputy secretary works closely with the vice chiefs of staff and services, most of whom are either relieved of duty or covering two jobs, making it difficult for you to get the focus and time needed from these offices to address the difficult problems facing the department.
▶ 0:25:20Sen. Reed: The dismissal of the judge advocate general of the armed forces, they are among some of the most senior military lawyers , strictly apolitical with a fundamental role to make sure that balance in lawful counsel is part of every military policy discussion, providing legal oversight that spans operational law, administrative compliance, and U.S. compliance with the law. Always applying their best military advice regardless of problem -- politics.
▶ 0:25:52Sen. Reed: These firings, along with the firings of the -- inspector generals, should make everyone aware of the president's commitment to the rule of law. If adherence becomes optional, the job of the deputy secretary becomes infinitely more difficult. If confirmed, you may be one of the most important advocates for our midriff -- military service members and civilians.
▶ 0:26:23Sen. Reed: I hope you stand the responsibilities that come with the position and are committed to speaking truth to power and I hope that you will also give us your assurances that you will communicate regularly and be transparent with the community -- committee. Bipartisanship has always been the hallmark of the department of defense. Thank you for stepping forward into this lead at a critical time for the nation. Thank you, Mr. chairman.
▶ 0:26:49Chair Wicker: We are now joined by our distinguished colleague and friend, senator hagerty of tennessee, who will make introductory remarks for the nominee. Senator hagerty?
▶ 0:27:05Senator Hagerty: I appreciate you holding this important nomination here today. It's a real privilege for me to introduce my good friend, steve feinberg, the trump nominee to be the deputy secretary of defense. During the first trump administration, 2018-2021, he chaired the intelligence advisory board, giving expert advice on a range of challenges confronting U.S. national security.
▶ 0:27:34Senator Hagerty: Before the nomination he was the cozy though and chief investment officer of cerberus capital management, and investment firm that he founded in 1992 and today it manages some 68 billion in capital. He spent 34 years investing in, fixing, and operating a variety of businesses, including those related to national defense and the U.S. intelligence committee -- community. He's a patriot with a great heart.
▶ 0:28:02Senator Hagerty: One of the many things that sets him apart is his strategic vision, willingness, and desire to invest in ways that create value for investors and advance national security interests. Here I want to quickly share a powerful story based on my own personal experience with his leadership. When I served as the U.S.
▶ 0:28:23Senator Hagerty: Ambassador to japan, I discovered two chinese firms were attempting to acquire a bankrupt shipyard in the philippines that had previously served as a naval base with a deep water shipyard strategically located in the south china sea. For various reasons, parts of the U.S. government were not in a position to engage or help solve the problem.
▶ 0:28:50Senator Hagerty: I engaged with top trump officials, japan, the philippines, and top actors in the private sector, specifically steve feinberg. Working together we assembled an ad hoc public-private solution to the problem and thwarted the chinese effort to acquire this strategic port. Thanks to leadership from steve feinberg and his team, we succeeded.
▶ 0:29:17Senator Hagerty: Today, the shipyard is now renamed and owned by american investors. As a result, U.S. and allied firms have a joint presence there. For example, hd hyundai will work to maintain the vessels. Sub come is invaded -- advancing projects in the region from that location. The U.S. military and armed forces in the philippines have a significant presence there.
▶ 0:29:45Senator Hagerty: Steve and his team, if they hadn't stepped up to solve the problem, the chinese communist party today would likely possess a vital piece of strategic infrastructure in the south china sea. The threats to our partners would be enormous as a result. I dealt with it first hand as the U.S. ambassador to japan, helping the U.S.
▶ 0:30:07Senator Hagerty: Counter the threat of 5g intelligence communications against huawei and other chinese telecom companies. Here again, steve recognized the strategic challenge to the U.S. and sought to counter and minimize the influence and access that china could gain from control over spectrum telecommunications infrastructure.
▶ 0:30:30Senator Hagerty: On that note, I want to commend the committee for their strong support to accelerate the adoption of 5g technologies to provide strategic advantages to the war fighter, including directing the pentagon to establish a secretary of defense cross functional team to accomplish the objective. We couldn't have done this without steve feinberg, outsider with a fresh perspective who knows how to work on the inside, bringing ingenuity and innovation to the table.
▶ 0:31:00Senator Hagerty: If confirmed, steve will do an outstanding job as the second highest ranking pentagon civilian official. He understands the mission and will leverage his leadership, strategic thinking, deep knowledge, decades of experience, and his willingness to listen, learn, and decisiveness around improving the defense department, working his heart out every day at the dod, making sure that the building, management, operations
▶ 0:31:33Senator Hagerty: And programs run better, more efficiently, focusing on the goal of decisive strategic operational and tactical advantages to the war fighter. Steve feinberg is the right man for this job. I look forward to his testimony and to my colleagues for advancing his nomination as quickly as possible.
▶ 0:31:53Chair Wicker: Thank you very much. We would love to have you with us all morning, but perhaps you have other engagements. Feel free to go, you have our thanks. Mr. feinberg, welcome. You are now recognized testimony.
▶ 0:32:13Mr. Feinberg: Thank you, senator hagerty. Your words are kind and are much appreciated. I would like to thank chairman wicker, ranking member of ways and means, and other distinguished senators on the committee for these opportunities to speak in front of you today. It's a real honor.
▶ 0:32:35Mr. Feinberg: I would like to thank the president of the united states for his nomination, giving me this great opportunity to serve our great nation. While the united states has all types of threats today, north korea to russia and iran, by far our biggest and most challenging threat is china.
▶ 0:33:04Mr. Feinberg: China is the first nation we have ever competed with that has both a great economy and a great military. Their entire private sector is fully committed to supporting that military development. As such, they effectively have unlimited funding.
▶ 0:33:23Mr. Feinberg: China is determined and feels a great sense of urgency and are fully dedicated to becoming the strongest nation in the world in the world and having dominance over the united states. This is coming at a time when the united states has significant shortages in both the national security -- many areas, weaknesses, shortages, and problems.
▶ 0:33:52Mr. Feinberg: The chairman outlined to so many in his opening remarks. Ship building, nuclear modernization, aircraft development, cyber defense, hypersonic's, counterspace defending our satellites, counter drones, drone attacks and so forth, there are so many more. Our workforce is challenged. Verification, batteries two major areas of the industry. We are china.
▶ 0:34:25Mr. Feinberg: A lot of big challenges that we have to face. It's all coming at a time when our budget is challenged. When all the services do not have enough money to meet current and future needs. There is some good news here. Dod, pentagon, there is great opportunity to improve class structure, efficiency, operations, really save a lot of money.
▶ 0:34:57Mr. Feinberg: We do not have a great financial accountability or financial metrics for systems. It all up a lot of low hanging fruit there, we could improve that structure. This is in my wheelhouse, hopefully. I spent a career helping organizations improve. After doing it for so many years, I've certainly made some mistakes, but I understand and hope to add some value there.
▶ 0:35:30Mr. Feinberg: There's great people in the pentagon. Any time you're trying to improve operational efficiency and to better, there will be changes. The changes can be initially difficult. With the right leadership and focus, there are so many at the pentagon who want to do better. At the department of defense.
▶ 0:35:59Mr. Feinberg: We will find the top people, giving them autonomy and flexibility to do thing. As chairman of the advisory board under trump in the first administration, it was clear that we had some of these deficiencies. Things have only gotten worse.
▶ 0:36:30Mr. Feinberg: In the dod companies that we bought over the years, certainly we were insiders, but I also have an outside perspective to bring. It's a good combination. Not meaning to be too negative, but we really need to plug these shortages and focus on the priorities and get rid of legacy programs, be disciplined.
▶ 0:37:01Mr. Feinberg: At the same time, focusing on the economics. Giving americans the great capability of entrepreneurship, we can defeat china. If we don't, national security is at risk. I was wondering if I could introduce my family, if that's ok.
▶ 0:37:22Chair Wicker: Please, do. We would love to get to know them better.
▶ 0:37:26Mr. Feinberg: I'm fortunate to have behind me my nephew, joe diaz, currently a major in special forces green beret, serving multiple tours in iraq and afghanistan. His brother, eric, retired former officer. Served multiple tours in a racket, central america.
▶ 0:37:54Mr. Feinberg: My brother-in-law, joe swallow, former marine. My godson, here today, franco, former marine and seo. Of course, my brother-in-law, fred sanchez. Not the military, but sort of, 27 years in the new york police. My dad, who was too ill to be here today, going to be 99, served in the south pacific.
▶ 0:38:26Mr. Feinberg: I hope and believe he's watching. All of my uncles, may they rest in peace, all served in world war ii. None of this would be possible without my wife, gizella, and my three daughters.
▶ 0:38:45Chair Wicker: Glad you finally got around to them.
▶ 0:38:48Mr. Feinberg: Sorry?
▶ 0:38:50Chair Wicker: Just equip. [laughter]
▶ 0:38:52Mr. Feinberg: And my son-in-law. Thank you, Mr. chairman.
▶ 0:39:01Chair Wicker: Thank you we now have some standard questions that are required of civilian nominees. I ask you simply to answer with yes or no. Applicable to the laws of conflict of interest?
▶ 0:39:24Mr. Feinberg: Yes.
▶ 0:39:26Chair Wicker: Have you taken actions it would appear to presume the outcome of the process of confirmation?
▶ 0:39:32Mr. Feinberg: No.
▶ 0:39:33Chair Wicker: It's important that this committee, subcommittees, and other important committees of congress receive other information from the executive branch on a timely basis. Do you agree that if confirmed, that you appear to -- that you will testify before the committee is requested?
▶ 0:39:55Mr. Feinberg: Yes.
▶ 0:39:57Chair Wicker: Do you commit to providing documents in a timely manner when requested by this committee, subcommittees, or other appropriate committees of congress, consulting with the requester regarding the basis for good faith delay or denial in providing such records?
▶ 0:40:16Mr. Feinberg: Yes.
▶ 0:40:19Chair Wicker: I assume there will be no bad faith delay. Will you make sure that your staff adheres to deadlines established by this committee, including timely, responding to hearing questions for the record? There will undoubtedly be questions for the record. Will you cooperate in providing witnesses and refers to response for congressional requests?
▶ 0:40:45Mr. Feinberg: Yes.
▶ 0:40:47Chair Wicker: Will they be protected from reprisal for their testimony and briefings?
▶ 0:40:52Mr. Feinberg: Yes.
▶ 0:40:54Chair Wicker: Thank you very much for those, those answers. Now, you have answered something we are all interested in. We are not where we need to be and we are facing two nuclear adversaries.
▶ 0:41:25Chair Wicker: For example, our shipbuilding, according to your testimony, is nowhere near where it should be. There are people who say that we don't have the industrial capacity. So, what's the answer to that?
▶ 0:41:42Mr. Feinberg: Senator, it's a tough problem. Our supply chain is definitely weak. Our workforce needs to be improved. But a big piece of that supply chain is working more closely with private sector. We have companies who can get it from where our needs are, where our shortages are.
▶ 0:42:12Mr. Feinberg: We need to work more closely with them and we need people inside of government that understand the issues. Understanding what drives the pressure they get from shareholders. That kind of knowledge will enable us to try and find and work with more private sector companies.
▶ 0:42:41Mr. Feinberg: We have the capability to meet the shortages. We need to inch encourage those companies -- we need to encourage those companies.
▶ 0:42:49Chair Wicker: We will probably want you to enlarge on that on the record. Is a percentage of gdp the accurate measure? Why do people talk about percentage of gdp?
▶ 0:43:15Mr. Feinberg: It's at a higher percentage in gdp, and in my humble opinion my job as deputy, should I be fortunate enough to be confirmed, would be to work with funding within the senate and I will do my best with that.
▶ 0:43:38Chair Wicker: I think we took a good step thursday into the early morning hours. In terms of doing the sorts of things in terms of freedom forged, you mentioned low hanging fruit. There is discussion about the 8% request that went out from the new administration.
▶ 0:44:10Chair Wicker: I can tell you're going to be thoughtful about this. The extent of this low hanging fruit, to what extent do you think we can get started on that?
▶ 0:44:28Mr. Feinberg: In our program requirements, they are very rigid. Goldplated. Expensive. We can get the job done with simplification of those requirements. Often as the program starts, things get changed in the industry has to make changes, which drives costs up.
▶ 0:44:57Mr. Feinberg: There are all kinds of things we can talk about regarding that. I will say, on the cut, and obviously I haven't been involved in any of those conversations, but I do believe that part of the plan should be that a lot of that money they are talking about saving will be reallocated inside of dod.
▶ 0:45:23Chair Wicker: Of course. This committee has been supportive of the office of strategic cutting and leveraging product capital. Do you support the osc and do you believe that we need to significantly grow the office of strategic capital?
▶ 0:45:42Mr. Feinberg: I would agree but I think they need to move faster. Right now, it's a great concept and it could really help, but the funding has to come quicker. Faster, less bureaucratic process. It's key for us to address that, or else the office will not be accessible. If we move at the speed of urgency given the threats, they can be a great asset for us.
▶ 0:46:09Chair Wicker: Thank you for the commitment. Senator reed?
▶ 0:46:13Sen. Reed: Thank you very much, Mr. chairman, Mr. feinberg, for your testimony. You have already highlighted major issues around the budget, managing resources where we still have appraisals and commitments we must make. With the 8%, it's very deep.
▶ 0:46:40Sen. Reed: Going after that low hanging fruit, can you tell us how you are going to approach this?
▶ 0:46:50Mr. Feinberg: When you look at dod today, we don't have good systems or a good understanding of the costs structure or financial metrics. So much is possible if you put in those types of capabilities into the department.
▶ 0:47:10Mr. Feinberg: I think that in most cases I have seen, in businesses where there is a need to do better, we are always able to find more cuts then we would have expected without hurting the mission. Of course, these cuts can be reappropriated to the things that we really need to. It's not just a cut, it's to reallocate from things that we don't need.
▶ 0:47:40Mr. Feinberg: For example, legacy systems.
▶ 0:47:45Sen. Reed: Reallocation, does that get you an 8% reduction? If you take some money from one place and put it someplace else?
▶ 0:47:54Mr. Feinberg: Sorry?
▶ 0:47:56Sen. Reed: Reallocation, how do you cut 8% moving money?
▶ 0:48:03Mr. Feinberg: My understanding of what I thought the cuts were is that we would have an ability to, to put it into the mission in ways that we can't today. But if that's not available, if confirmed as deputy secretary, I think that there is so much there that we can get at without cutting it to the bone.
▶ 0:48:30Mr. Feinberg: A lot of it is systems capabilities, reporting transparency. There's so much you can do when you do that.
▶ 0:48:40Sen. Reed: Over the weekend, the secretary announced employees that would be dismissed. It was apparently not done with any analysis, it was preempted. Companies walked in, thousands fired without any analysis of cost-benefit.
▶ 0:49:04Mr. Feinberg: I believe that every person is significant. These cuts are always hard. I believe that most of the cuts that we will see will be from people that want to retire, people who would like to resign early.
▶ 0:49:39Mr. Feinberg: Obviously, 900,000 civilians are in dod. While you can never not take one person seriously, there is always turnover and without some, you cannot become an official organization -- efficient organization.
▶ 0:50:05Sen. Reed: Secretary hegseth essentially fired all of the jags from military services, with his rationale being to remove the blockade of what's going to happen. In usual terms the blockades are called laws. I believe he has again shown his contempt for law. Do you commit to following the rule of law in your job?
▶ 0:50:32Mr. Feinberg: Absolutely.
▶ 0:50:34Sen. Reed: Federal law states that no dod employee may interfere with jag officer in commanders. You commit to respecting that independence?
▶ 0:50:49Mr. Feinberg: Yes.
▶ 0:50:51Sen. Reed: And instructing others to do so?
▶ 0:50:54Mr. Feinberg: Absolutely.
▶ 0:50:55Sen. Reed: Do you commit to the agency with the inspector general's?
▶ 0:51:01Mr. Feinberg: Yes.
▶ 0:51:02Sen. Reed: Thank you.
▶ 0:51:04Chair Wicker: Senator cotton?
▶ 0:51:07Senator Cotton: You mentioned in your opening remarks in your exchange with senator wicker the importance of revitalizing the defense industry. One important tool that the department has going back decades, unfortunately they have struggled to use that defense act. To noncritical needs like green energy.
▶ 0:51:32Senator Cotton: What are your thoughts on how to reform the defense production act and to more effectively jumpstart the defense industry?
▶ 0:51:42Mr. Feinberg: It's a great tool for us. We have to combine our top people at the pentagon with private sector capability. Looking at the kinds of things we really need. Emergency, speed. Of course, a lot of due diligence. The due diligence that often happens in those programs.
▶ 0:52:14Mr. Feinberg: We've got to realize the threat and put in the right people can go faster.
▶ 0:52:21Sen. Cotton: I agree that in the subcomponent industry there is a lot of challenge in supply. The defense industry simply has to come first when it comes to critical components or supply change challenges. You identified china as our most serious long-term threat that we face.
▶ 0:52:55Sen. Cotton: What are the key acquisition programs underway right now that might soon be underway that we might need if china decided to go for the jugular in taiwan.
▶ 0:53:09Mr. Feinberg: Clearly, we need to develop autonomy. Autonomy in significant numbers. With effective command. We have to make the right decisions on whether we need to build next-generation aircraft or rely on autonomy. And we have to improve our shipbuilding. China is very strong there.
▶ 0:53:41Mr. Feinberg: Our nuclear capabilities, we have to develop hypersonic's. We can't allow the chinese to be faster than us. And so many more.
▶ 0:53:55Sen. Cotton: Do we have a man to six generation fighter? I know you haven't been on the job yet, but do you have preliminary thoughts on the need for manned fighters?
▶ 0:54:07Mr. Feinberg: That's a controversial issue, there are views on both sides. Look at the decisions being made at the secretary or the present, see if I can add value to it.
▶ 0:54:26Sen. Cotton: As discussed, hopefully you can get that same information as it's a decision that needs to be made soon. Before the decision needs to be made. What about the thoughts on munitions? There is still not a stealth bomber. We need to increase basic rates, making more of the same stuff.
▶ 0:54:56Sen. Cotton: In terms of accelerating production rates in private industry.
▶ 0:54:59Mr. Feinberg: A lot of times with ammunition, you need ammunition machines effectively to help build it. Those are in short supply. My hope is that if I am confirmed, that for each of these shortages to get in there and look at these specific facts in detail and understand the witnesses to come up with a detailed operating plan.
▶ 0:55:25Mr. Feinberg: My humble opinion in the past, often, was about civilian leadership in the pentagon. Maybe not as deep into the detail of these. It's all the detail you have to get into. There are a lot of companies that we can attract and there isn't an ability expand.
▶ 0:55:53Sen. Cotton: Thank you to your family, your large extended family for their service in the military and law enforcement. Thank you to your father, who is watching today.
▶ 0:56:07Mr. Feinberg: Thank you for your service, senator. Appreciate it.
▶ 0:56:12Chair Wicker: Senator shaheen?
▶ 0:56:15Senator Shaheen: Congratulations on your nomination, welcome to your family, thank you for your willingness to serve. Chairman wicker and you yourself and your opening statement made the point that we have been under investing in defense in order to ensure the national security of this country. So, I'm a little confused about the strategy.
▶ 0:56:40Senator Shaheen: On the one hand, we have the administration talking about cutting 8% across the board. There are 17 areas of exempt from those cuts. They don't include any minute -- any manned aircraft. Only military construction for the indo pacific area. On the one hand, we are talking about cutting 8% for five years.
▶ 0:57:10Senator Shaheen: On the other hand, we have upped the budget based on what the senate voted to do. How do we understand that strategy? As you pointed out, you are correct. How we become more efficient is important.
▶ 0:57:37Senator Shaheen: Across-the-board cuts don't do that. How is this making us more secure based on upping the budget on the one hand and cutting it on the other?
▶ 0:57:50Mr. Feinberg: Obviously, I don't have the detail on where these cuts are going to go. There are always significant opportunities of things, we don't need to get into the detail.
▶ 0:58:12Mr. Feinberg: In my humble opinion, talking about confirmation, adding value to that discussion we have to make sure we do the right cuts and trust the judgment of the secretary. There's a real opportunity to make the right cuts. I don't think that the exact nature of these cuts have yet been determined.
▶ 0:58:40Sen. Shaheen: Perhaps the nature of the cuts have not yet been determined, but the layoffs have already started. One of the places where layoffs have been proposed is with our public shipyards. We have the port may be shipyards in new hampshire, maine, the oldest continuously operating shipyard in the country.
▶ 0:59:05Sen. Shaheen: In terms of maintenance, I would raise real concerns about whether it makes sense to cut the workforce when those attack submarines are one of the real advantages we have over china. Would you agree that we need to look long and hard before we start talking about the workforce that maintains our nuclear attack submarines that get some on time and budget?
▶ 0:59:33Mr. Feinberg: Again, I haven't seen the detail, but if I'm able to get in the job, we would try to ensure that we make the right cuts.
▶ 0:59:49Sen. Shaheen: Senator reed talked about his concerns over the top challenges at the pentagon. Doing this so quickly seems to me to be shortsighted, but the question I have for you is, if you are confirmed as deputy area's equity of defense, would
▶ 1:00:20Sen. Shaheen: You support military officers providing the committee their best military advice on issues even if it differs from the trump administration or the president's views?
▶ 1:00:31Mr. Feinberg: As deputy, I believe I'm an execution person. I don't think it is my place to, to, to make decisions on what, on what, what are top military officers communicate. But I would support honest, transparent conversations at all times.
▶ 1:01:04Mr. Feinberg: I'm confident in the trump strategy and I think that the military will work well within and it's -- and support the administrative goals.
▶ 1:01:15Sen. Shaheen: Certainly, honest and transparent conversations are important for having the best military advice based on military capability and not politics. Thank you.
▶ 1:01:26Chair Wicker: Thank you. Senator fischer?
▶ 1:01:30Senator Fischer: Welcome to you and your family and thank you for putting yourself forward in these times to serve your country. Historically, nuclear deterrence has been highest priority mission of the department of defense. Our triad protects the united states every single day from the only true existential threat that we face. Nuclear weapons guarantee our sovereignty.
▶ 1:01:59Senator Fischer: Do you believe that nuclear deterrence should be the department's highest priority mission?
▶ 1:02:05Mr. Feinberg: Yes, it's one of our very top priorities.
▶ 1:02:09Sen. Fischer: Is at the highest priority, sir?
▶ 1:02:13Mr. Feinberg: It might be. I'd like to be able to get in there and look at all of the classified data and all of our problems. I could certainly answer more directly. Nothing could be clearer than nuclear modernization.
▶ 1:02:29Sen. Fischer: Today for the first time in history we face two competitors as peers when it comes to our nuclear posture that we have. We have a current force posture that was designed in 2010, when the threat environment looked different, before russia and china modernized, before they expanded their own arsenals.
▶ 1:02:57Sen. Fischer: So, I look forward to being able to have conversations with you in the future on the importance of making that, continuing to make that the department and our nation's highest priority.
▶ 1:03:10Mr. Feinberg: I was thinking one reason I hesitated on most important is clearly, modernization is key, but also hypersonic's. Because of our enemy, if they can carry nuclear capability on things faster than ours, it's a big problem. I think it's coordinated effort.
▶ 1:03:34Mr. Feinberg: It's all part of the problem that we have when we have these p or adversaries threatening this p --eer adversaries threatening the country of a single day. If confirmed, would you work to make sure these modernization programs continue as best they can on schedule and if opportunities present themselves to accelerate those programs, would you be supportive of that as well?
▶ 1:04:02Mr. Feinberg: And work with the secretary on that?
▶ 1:04:04Mr. Feinberg: Yes.
▶ 1:04:06Sen. Fischer: Thank you. Given your experience in the private sector, if confirmed, how would you foster greater innovation within the department ? What can the department do to make itself more attractive to private sector companies in developing that innovation?
▶ 1:04:29Mr. Feinberg: Right now with the way that our programs work, it's very rigid, goldplated, endless rules. The big defense contractors have an advantage just based on how contracts work, based on the bids, proposals, and often some way and just because they are better at it.
▶ 1:04:52Mr. Feinberg: If you can simplify the process, make it fairer, not be as inflexible, it will promote competition, so competing companies can worry more and more about capabilities than the process.
▶ 1:05:10Mr. Feinberg: I also think that the costs of the tough, rigid requirements is sometimes take that risk that is necessary in development. In terms of the appropriate detail that goes line by line and are not handed off.
▶ 1:05:39Sen. Fischer: There are currently efforts underway to force the department of defense to vacate critical bands of spectrum, including the lower three and 7.8 gigahertz, meaning that the department wouldn't be allowed to operate radar systems or satellite systems that allow war fighters to detect, discriminate, track, and shoot incoming missiles and enemy targets.
▶ 1:06:07Sen. Fischer: I adamantly believe that forcing national security systems to vacate the bands would be detrimental to national security, degrading missile defense capabilities when we should be aggressively pursuing iron domes for america. That would be off the table if these were vacated. However, I also understand that sharing these bans with commercial entities may be possible.
▶ 1:06:35Sen. Fischer: This would potentially allow dod systems to operate and coexist with commercial systems in the same exact bands without forcing us to lose these capabilities. Do you believe that the department of defense must have meaningful co-leadership roles in interagency co-discrimination determining the future of federal spending? Should dod be at the table to be involved in those decisions?
▶ 1:07:02Mr. Feinberg: We need spectrum to defend the country and we need commercial use of it. The best solution is sharing. We have to get it right and make sure that sharing risk. It needs to get tested so that it's clear it can be done without risk to protect the dod special position.
▶ 1:07:24Sen. Fischer: Must be clear that I can be done without risk, correct?
▶ 1:07:29Mr. Feinberg: Yes.
▶ 1:07:31Sen. Fischer: Thank you.
▶ 1:07:32Chair Wicker: Senator hirono?
▶ 1:07:37Senator Hirono: Thank you, welcome to you and your family. I asked the following questions before any nominee to address fitness to serve at any committee. Since you became a legal adult, have you ever made unwanted requests for sexual favors or committed verbal or physical harassment or assault of a sexual nature?
▶ 1:07:57Mr. Feinberg: No.
▶ 1:07:58Sen. Hirono: Have you ever faced discipline or entered into a settlement related to this kind of conduct?
▶ 1:08:05Mr. Feinberg: No.
▶ 1:08:07Sen. Hirono: The dod will need to cut some 8% off its budget. Again, we wonder how that happens, when at the same time other parts of the budget are being increased. A lot of those cuts will I think come from the workforce, which I think we acknowledge is a critical part of our readiness.
▶ 1:08:30Sen. Hirono: So, here we see that some 5500, 5400 people will soon be let go from dod and these are people who were on probationary status, not those getting ready to retire. In fact, across the many departments, people on probation are being let go. 1000 and doj. 250 and sba.
▶ 1:08:56Sen. Hirono: These are cuts that are happening across the board, not based on any analysis of impact. There are 50 5000 people in probation within the dod and the expectation is, I think, that many of them will be also let go.
▶ 1:09:15Sen. Hirono: There are some 250, 350 people on probationary status within the shipyard, these are critical people within the shipyards as mentioned by my colleague, senator shaheen. Since these cuts are being made without any kind of analysis, don't you have a concern about our ability, that these cuts will have an impact on readiness?
▶ 1:09:41Mr. Feinberg: Well, um, most of the substantial cuts they are talking about are yet to happen.
▶ 1:09:52Sen. Hirono: Yes, as I mentioned, though, they are happening to those in probationary status, people being hired and trained to serve.
▶ 1:10:02Mr. Feinberg: Yeah, so, I had a career in restructuring companies in dealing with workforce issues. If I can get through confirmation, I do think that we can find value in working with the secretary. In the process to do that properly, fairly, with the right people.
▶ 1:10:27Mr. Feinberg: Every organization goes through some turnover when they have needs to improve initially. It's initially difficult, but the top people will step up.
▶ 1:10:39Sen. Hirono: As I mentioned, these are not based on analysis that you would normally do in the civilian sector that you are familiar with. I hardly think that in your business you would just start getting rid of people across the board, especially new hires who presumably went through the process of vetting. Regarding the concerns about approaching senior military offices, let me just ask you a series of questions.
▶ 1:11:07Sen. Hirono: I would expect either yes or no answers. Do you believe it's important for senior military officers be able to provide their best military advice regardless of politics and without fear of reprisal?
▶ 1:11:18Mr. Feinberg: Yes.
▶ 1:11:20Sen. Hirono: Is it important that uniform jag officers feel free to provide their best legal advice on the fair administration of military justice in compliance with the law of armed conflict?
▶ 1:11:34Mr. Feinberg: Yes.
▶ 1:11:37Sen. Hirono: Do you believe in the independence of the inspector general to root out fraud, waste, and abuse?
▶ 1:11:49Chair Wicker: Yes.
▶ 1:11:55Sen. Hirono: We are talking about thousands of people providing services it's important to our own country and to our allies. Do you agree that cutting usaid funding and personnel endangers our interests around the grope -- around the globe, especially in the indo pacific?
▶ 1:12:22Mr. Feinberg: I don't know. I don't have all the facts and knowledge around usaid and what the considerations were in making those decisions. I do trust the judgment.
▶ 1:12:35Sen. Hirono: If you were a country, an island nation receiving usaid, that these kinds of cuts would be shocking and would have a negative impact on the economy and the people?
▶ 1:12:47Chair Wicker: Thank you very much.
▶ 1:12:50Sen. Hirono: Thank you.
▶ 1:12:52Chair Wicker: Thank you, senator hirono.
▶ 1:12:59Senator: Mr. feinberg, thank you for the opportunity to visit before hand in my office. I enjoyed that discussion. Thank you to your family for their service to our country and thank you for taking the time to leave the private sector and come in and offer expertise.
▶ 1:13:17Senator: The time that you spent at cerberus capital and the defense related decisions to make a difference in the changes we make at the pentagon level. When we talk about prioritizing the bottom 8% that they think they want leaders within the pentagon to identify as perhaps being able to be apportioned to others, is that your understanding as well?
▶ 1:13:46Mr. Feinberg: It is.
▶ 1:13:48Sen. Rounds: Thank you. Your background has given you some insight even before the classified briefings with regards to spectrum and I want to spend time on that once again. I think that this is one of the most important issues facing the department of defense right now, spectrum sharing, which you are familiar with. One of the companies you looked at looked at spectrum sharing and the need for it. That is why I want to go through this a little bit.
▶ 1:14:17Sen. Rounds: Senator fischer did an excellent job of laying out the real serious threat to our national security, should we lose the radar which is located in the gigahertz part of the spectrum. I do not want to get deep technically but that is the most advanced we have. You indicated that hypersonic's was an important part of the discussion right now. Those weapons systems, you are aware that we detect them using this portion of the spectrum?
▶ 1:14:50Mr. Feinberg: Yes. >> so either the department of defense was forced to either give it up or have a less likely chance of identifying that, it would make those systems less reliable. Would you agree?
▶ 1:15:08Mr. Feinberg: Yes. >> hawaii is defended by destroyers that provide the radar defenses. The secretary of the navy has indicated in multiple testimonies before this committee that there is a cost should they have to either make significant changes or lose that part of the spectrum and place it elsewhere at 250 billion dollars for the navy alone to replace it over a period of 20
▶ 1:15:41Mr. Feinberg: Years. Are you familiar with that?
▶ 1:15:44Mr. Feinberg: Yes.
▶ 1:15:47Sen. Rounds: We need a solution that allows for further development of spectrum by our commercial sectors but at the same time we cannot lose -- use or force the department of defense to give this portion up or our nation is at risk. Would you agree with that?
▶ 1:16:08Mr. Feinberg: I agree.
▶ 1:16:11Sen. Rounds: Today if we look at the president's new idea and I really support him in this. President trump has issued a game changing executive order to develop and build an iron dome missile defense shield for america. Some people have called it the golden dome.
▶ 1:16:35Sen. Rounds: It would not be possible if the department of defense has to vacate some or all of the lower three band and other crucial portions of the spectrum. Iron dome for america will need even more radars than we currently have and those systems cannot function properly if there is too much noise which includes development of 5g by the commercial sectors.
▶ 1:17:01Sen. Rounds: If confirmed, will you protect the department of defense spectrum so that iron dome for mayor can be built and function optimally?
▶ 1:17:14Mr. Feinberg: Yes.
▶ 1:17:19Sen. Rounds: You are a finance guy. You invested in a company that looks at spectrum sharing. Can you share the expertise that you picked up with regard to spectrum sharing and availability? If we allow the time to prove it to be functional?
▶ 1:17:38Mr. Feinberg: Two ways. One is meta-spectrum share which we have to improve significantly to ensure it can be done safely and still protect our country. We can do that over time. The other is simultaneous share. That is what d.o.d. Really would love. That it's early -- that is early but does provide great promise in terms of solving this.
▶ 1:18:08Mr. Feinberg: We have to test it and make sure it works.
▶ 1:18:11Sen. Rounds: It is a path forward but has to be tested?
▶ 1:18:16Mr. Feinberg: Yes.
▶ 1:18:18Sen. Rounds: Thank you.
▶ 1:18:20Chair Wicker: Senator ernst.
▶ 1:18:24Sen. Ernst: Thank you Mr. chair and thank you Mr. feinberg for being here today. Let's start with the defense budget. I have been committed to cutting unnecessary spending in washington, D.C. and the pentagon is no exception. The d.o.d. Which controls the largest discretionary budget in the federal government has never passed a full financial audit.
▶ 1:18:57Sen. Ernst: This failure continues to erode our public trust and prevents the efficient use of taxpayer dollars for critical defense priorities. Mr. feinberg, what measures will you implement to ensure the d.o.d. Finally passes an audit as the law requires?
▶ 1:19:16Mr. Feinberg: Yes, super important. We have to have financial accountability. I was told we have 480 systems at d.o.d.. I am not sure the exact number. We have to consolidate systems.
▶ 1:19:36Mr. Feinberg: We have to bring in the right help to work closely with the pentagon to have -- to be able to clarify and make simpler our financial process. If confirmed, I can look at the details. We have done this at so many companies. When a company has a problem, they often have financial issues.
▶ 1:20:06Mr. Feinberg: I cannot say exactly but it is all achievable. Financial audits are achievable. We will get it done.
▶ 1:20:14Sen. Ernst: I'm trusting that your background and expertise can make this possible. There are many private organizations and businesses that are of a similar scale to the pentagon. Maybe not quite as large. But they successfully undergo rigorous audits all the time. This is possible.
▶ 1:20:39Sen. Ernst: I believe you are hitting on the right thing when you talk about structural changes, the siloing of information within the department that needs to change. Are there also cultural changes that will be necessary at the pentagon to make sure there is financial accountability?
▶ 1:21:01Mr. Feinberg: For sure, there has to be a priority. They have to recognize the importance of it. It is not only about getting an audit done. It is about understanding our finances, understanding our cost structure. I don't believe in the department of defense any of our leaders fully understand our cost structure.
▶ 1:21:27Mr. Feinberg: Like most of our ceos, this is what this costs. That specificity is simple, but it's key. It has to be a priority. Not that easy to do quickly, to change all the different systems in a way that does not make things worse. It has to be done carefully.
▶ 1:21:51Mr. Feinberg: We need a great controller at d.o.d., one that has very -- great private sector experience. We need a great deputy who understands the issues.
▶ 1:22:07Sen. Ernst: Thank you. Another issue is making sure we are streamlining the acquisition process. Procurement is a mess at the d.o.d. And anyone familiar with the pentagon understands that the current acquisition process is very sluggish. It is burdened by a lot of bureaucracy. Obviously it is prone to cost overruns. Mr.
▶ 1:22:34Sen. Ernst: Feinberg, what steps will you take to accelerate the transition of ai and other emerging technologies from research and development to actual operational deployment?
▶ 1:22:46Mr. Feinberg: Ai is an overused word. Most of us -- most of it is high-end data analytics. There is some use of ai but it is developing. The key to success is having operators partner with technologists. And they have to work together. Often the technologists are, we know it all.
▶ 1:23:17Mr. Feinberg: Often times the operators are, don't bother me with this, I'm busy. They have to understand that it is essential at developing better analytics and I and the technologists have to work closely and the operators have to understand the value and benefit. Every company that is successful at that integration has that partnership.
▶ 1:23:42Sen. Ernst: Thank you so much.
▶ 1:23:45Chair Wicker: Senator kaine has slipped in under the wire.
▶ 1:23:50Sen. Kaine: Thank you, Mr. chair. Congratulations to the nominee. I am still huffing and puffing from another meeting but I appreciate the meeting we had in my office. You have a nontraditional skill set to bring. For reasons I may get into and my questions we discussed, some nontraditional skills are necessary right now and some of the matters you discussed in your opening statement.
▶ 1:24:18Sen. Kaine: I just want to tell my colleagues I had a whirlwind weekend. We were on the floor until 5:00 a.m. Friday on the reconciliation bill. Then I flew to finland and I just spent the weekend with the virginia army guard and one of the three brigades of the finnish army doing a joint training exercise in snow-covered birch forest in southern finland. It was a fascinating 48 hours on the ground with a great nato ally.
▶ 1:24:46Sen. Kaine: I met with the president, the foreign minister the permanent defense secretary of the shipbuilding industry. Finland is a great ally and a great friend. It is important to hear what your friends say. I came back with some thoughts. We have to remember 1938. A desire on behalf of the prime minister of england to declare peace in our time.
▶ 1:25:10Sen. Kaine: He was able to achieve it and declare peace, but it was a disaster because the piece of appeasing a bully was a catastrophe. In 1975, in helsinki, we went into the helsinki accords to create stability in europe and pledged to protect the sovereign integrity of other nations.
▶ 1:25:40Sen. Kaine: Revitalized and in 1995 we created the osce to do the same thing. Five years ago this week president trump negotiated a deal with the taliban leaving the government of afghanistan out of the deal and we were able to declare peace in our time but the decision to remit afghan participation in the peace deal turned into a catastrophe and the inspector did the assessment which indicated that cutting the
▶ 1:26:10Sen. Kaine: Afghans out left such a feeling of abandonment that that was one of the critical factors in that going wrong. Even if you forget the history, remember what your parents tell you when you were going to school the first time you complained about a bully. They said you had to stand up to a bully or a bully will keep bullying you and others. Yesterday in the meetings it was the third anniversary of the invasion of ukraine by russia. A resolution was offered at the u.n.
▶ 1:26:39Sen. Kaine: General assembly containing this phrase, the full-scale invasion of ukraine by the russian federation has persisted for three years. That phrase saying that it was an invasion by the russian federation when the united states of america to vote no. The resolution failed. The U.S. voted no along with russia, nicaragua, north korea.
▶ 1:27:10Sen. Kaine: It was sobering to be in helsinki with this new nato ally who joined nato and is exercising with virginia troops and had the U.S. unwilling to vote for something because it said place the blame for the invasion of the russian federation. We have too many people who don't speak the truth.
▶ 1:27:36Sen. Kaine: This was a russian invasion of ukraine and at the highest levels of our government we have folks who will not speak the truth and will now stand with russia, nicaragua and south korea rather than standing with allies. We must not let these things pass by unremarked upon. This is the first services here in we have had since the anniversary. I want to put it on the record. Mr. feinberg, you talked about the competition with china.
▶ 1:28:05Sen. Kaine: Would you agree with me that in that competition a robust network of allies is one of the great assets that the united states has and we should work to maintain it?
▶ 1:28:14Mr. Feinberg: I think our allies are very important, yes. Our relationships we need to be fair to america.
▶ 1:28:22Sen. Kaine: I would never suggest otherwise.
▶ 1:28:25Mr. Feinberg: Of course, senator. Also as deputy, execution would be my job in making diplomatic policy and relationship decisions would be more of the job of the secretary and of course the president.
▶ 1:28:43Sen. Kaine: I really want your help and we talked about shipbuilding. We are putting more money in year after year. It is not getting us the result we need. You have a skill set that is nontraditional. We will not solve our production woes by this committee voting for greater appropriations. If we don't have changemakers, we will not get to where we need to get. I would like to ask that the u.n.
▶ 1:29:12Sen. Kaine: General assembly resolution that I referred to that the U.S. voted against and caused it to fail, I would like to ask that it be entered into the record.
▶ 1:29:21Chair Wicker: Reserving the right to object. I was told the resolution was adopted by the general assembly.
▶ 1:29:30Sen. Kaine: There was a resolution adopted. The one that I read that put the onus on russia was defeated. The one that removed it, the security council did approve it although the U.S. abstained.
▶ 1:29:46Chair Wicker: If it's alright, let's put both on the record for clarity.
▶ 1:29:51Sen. Kaine: No worries.
▶ 1:29:53Chair Wicker: Thank you very much. Take a deep breath. Perhaps senator scott would like to pass. Senator mullin.
▶ 1:30:14Sen. Mullin: That's a gentleman there. Thank you.
▶ 1:30:18Chair Wicker: Who are you speaking of?
▶ 1:30:21Sen. Mullin: Both. I cannot let my colleagues on the other side to spew mistruths constantly and play into the fear of the american people. I will start with national security issues. National security issue one is the national debt. It is now costing us more to just pay interest than we spend on our military.
▶ 1:30:51Sen. Mullin: That is a huge national security risk. At what point do we start making cuts? People start talking about cutting 5400 jobs out of the d.o.d. As a whole when they have 950,000 employees, 5% of the workforce, where do we start cutting?
▶ 1:31:12Sen. Mullin: We are spending trillions with agencies that are not unfunded and you are going to tell me we don't have the ability to cut some employees when underneath the biden administration it was bloated and there is not room to cut? When a company is going under water, you have to look at the workforce. I don't want to suggest the country is going under water but if we continue this path, we will. I commend president trump and those he has put in place to make hard cuts.
▶ 1:31:43Sen. Mullin: Making cuts is difficult. It is tough. But when do we start if we don't start now? The previous administration was not going to do that. Then we are going to bring up the afghanistan withdraw? That is very close to me. That hits home and you will lay the withdrawal on president trump and say it was his fault?
▶ 1:32:12Sen. Mullin: The disaster with withdrawal -- disasters withdraw became from the biden administration and american lives were lost during the withdrawal and you will sit there with a straight face and try to say that it was president trump's fault when the biden administration and all of us know this and we were briefed on this, that the biden administration throughout the entire withdrawal plan that the
▶ 1:32:43Sen. Mullin: Trump administration had and decided to go their own way? It wasn't that great. Then we are going to start talking about president trump not calling a bully out like putin?
▶ 1:32:59Sen. Mullin: Did we forget about 2017 when trump told russia to stay out of syria, not to be involved especially with the bombing of the saudi's own people and then president trump took back the airspace and we had the airspace in syria all the way up until biden took office? Oh or up to a bully?
▶ 1:33:30Sen. Mullin: -- stand up to a bully? Do we want to go back to israel and hamas and discuss the way the biden administration handled that? And you will sit there with a straight face and actually say that about president trump? Are you joking me? Are we serious?
▶ 1:33:52Sen. Mullin: Saying that president trump is not willing to stand up to a bully when underneath his administration it was the only time that russia did not advance into ukraine because underneath obama when they took crimea and they did it under biden because they did not respect him because of the disastrous withdraw from afghanistan and every expert will tell you that.
▶ 1:34:19Sen. Mullin: Where is it that we are coming up with this other than plain fear? All I want to do is stoke fear and find a way to divide us against the president? He gave back the hostages that biden left behind and he did not give one thing to russia including a guy who was highly considered a threat to the world. What was his name? What was his nickname? Not soleimani.
▶ 1:34:50Sen. Mullin: Dr. death, that we decided to trade for? I am sure you guys thought that was a good trade. Guys, give me a break. We are trying to advance america agenda and do what's best for this country and americans agree with the direction we are going. Sorry about going on a rant because I did want to get in your business and the direction you can take the defense industry but that could not go unanswered.
▶ 1:35:19Sen. Mullin: We have already had a conversation. I look forward to working with you.
▶ 1:35:22Chair Wicker: Thank you. Senator warren.
▶ 1:35:28Sen. Warren: Mr. feinberg, you have been nominated to the secretary of defense, in charge of the $50 billion budget. You have built one of the world's largest private equity companies. You have spent your entire career honing the private equity tools that used to hollow out our businesses from department stores to veterinary practices and presumably those are the skills that you would bring to the department of defense.
▶ 1:35:58Sen. Warren: I want to look at how that works. Let's start with how you treat people. In massachusetts in 2010 your private equity firm bought six nonprofit hospitals, turned them into four hospitals. Having made a profit a little shy of $1 billion will leaving behind a hospital system that was staggered under a load of debt will be four years later collapsed into bankruptcy.
▶ 1:36:28Sen. Warren: When we met in my office you told me that your private equity outfit made an average 20% annual return. If they have gotten the same salary increases that your investors collectively got every year, do you know how much they would be paid at the time you sold your hospitals?
▶ 1:36:51Mr. Feinberg: I do know that in 2010 the hospitals were going under.
▶ 1:36:58Sen. Warren: We have limited time and I want to spend it on the qualifications you have to do this job and it is about how you treat people. Your average investors made 85,000 dollars. How much money but to be making right now?
▶ 1:37:19Mr. Feinberg: I will not do the math.
▶ 1:37:22Sen. Warren: I will do the math for you. $829,828. The nurses did not do that will -- that well. One of the hospitals you bought in massachusetts brought in 1.5% per year, the best increase across the hospitals you were running.
▶ 1:37:47Sen. Warren: When it is time to reorganize a business, that equity should get about 15 times as much return on their investment as the people who actually do the work. Let's take a look at the second issue and that is maintaining critical functions. We all see to make the same under national security.
▶ 1:38:15Sen. Warren: Did you cut fact or did you cut vital functions? The town of queensy used to have a full medical system with an urgent care department and a v.a. Clinic. That was its basic function. After your private equity company finished with it, what was left?
▶ 1:38:41Mr. Feinberg: When we exited the investment in 2020 the company was doing well.
▶ 1:38:49Sen. Warren: I am asking what was left of the hospital?
▶ 1:38:55Chair Wicker: He is trying to answer your question. You finally stopped for a breath. You are entitled to make a speech but you stopped with a? Question mark.
▶ 1:39:14Sen. Warren: What is the answer to the question?
▶ 1:39:19Mr. Feinberg: A lot happened after we exited. There has been mismanagement.
▶ 1:39:25Sen. Warren: What was left when you exited?
▶ 1:39:30Mr. Feinberg: I am not certain.
▶ 1:39:33Sen. Warren: It was an emergency room and nothing more.
▶ 1:39:36Mr. Feinberg: But we took those hospitals from collapse in 2010. We were going to shut it down as the 10th largest employer in massachusetts. We turn them around. We had a tremendous amount of success. We worked with the governor. The problems happened after we exited the investment.
▶ 1:39:55Sen. Warren: I am asking about as you exited and during the period of time you ran it. A hospital is supposed to provide quality care and that takes qualified nurses and staffers. Mr. feinberg for the hospitals that did not close down during the time you ran it, do you know how many unsafe staffing complaints were filed?
▶ 1:40:17Mr. Feinberg: I do know the vast majority of problems happened after we left. Our nurses were among the highest paid in the country.
▶ 1:40:25Sen. Warren: Is that a no, that you don't know how much? Let me tell you. There were over 1000 filed, five times the normal rate in massachusetts.
▶ 1:40:37Mr. Feinberg: What year was that?
▶ 1:40:39Sen. Warren: This is the years you were in control.
▶ 1:40:43Chair Wicker: Perhaps you would like to take another round?
▶ 1:40:47Sen. Warren: I would like to finish.
▶ 1:40:49Chair Wicker: Your time is expired, senator.
▶ 1:40:54Sen. Warren: You gave a great deal of time to the chairman.
▶ 1:40:58Chair Wicker: The senator's time is expired. Senator sullivan.
▶ 1:41:06Sen. Warren: I would just like to say why I care about this issue.
▶ 1:41:10Chair Wicker: The senator's time has expired. She can have another round.
▶ 1:41:18Sen. Sullivan: Mr. feinberg, thank you for your service. I appreciated our meetings over the past several months. The ranking member mentioned the apolitical military, secretary hegseth in his confirmation hearing said that the professional uniform military must remain patriotically apolitical and stridently
▶ 1:41:51Sen. Sullivan: Constitutional. Do you agree with that?
▶ 1:41:53Mr. Feinberg: Yes.
▶ 1:41:57Sen. Sullivan: This makes our country very strong and our military very strong. Do you agree?
▶ 1:42:06Mr. Feinberg: . Yes. .
▶ 1:42:09Sen. Warren: Let me ask another question. He got the question I asked him right, what about when billy mitchell testified in front of this committee in the mid-1930's, calling alaska the most strategic place in the world. Do you agree with that?
▶ 1:42:26Mr. Feinberg: I agree, it is one of the most strategic in the world.
▶ 1:42:33Sen. Sullivan: Maybe I will not support you. It is not greenland. In all seriousness, we have a lot going on in alaska. We have had russian, chinese, russian incursions, naval incursions. We have had two incursions just last week by russian bombers. Will you commit to come to alexa with me -- alaska with me to see our great military and how strategic it is?
▶ 1:43:04Mr. Feinberg: I will. Putin
▶ 1:43:10Pusen. Sullivan: Let me ask on shipbuilding. When we were in a crisis, the biden administration focused more on climate change than shipbuilding. A congressional research service which is our research service in the congress, their experts said we are in the worst crisis in shipbuilding in over 40 years. The chinese are building a giant navy that is already bigger than ours.
▶ 1:43:35Pusen. Sullivan: By 2030 it will be over 420 ships, 130 times bigger than our navy. We could spend two hearings on shipbuilding. Could you give me a sense you have done this kind of thing where you have turned around a real big problem in the private sector? This is a huge private sector and government challenge. Give me a couple of big ideas.
▶ 1:44:02Pusen. Sullivan: My team and I put together a big shipbuilding plan. So has the chairman. This is a bipartisan issue, by the way. Senator kelly is very focused on this. Our national security advisor now mike walter is focused on this. Give me a couple of key elements of how we turn this around. Let me mention this to president trump. Republicans have a history of this.
▶ 1:44:31Pusen. Sullivan: Theodore roosevelt's great white fleet. President reagan's 600 ship navy. This should be a priority. I think it is. We will need your experience to do this. What are some ideas you have on this?
▶ 1:44:46Mr. Feinberg: Talent is everything, people. Hr is hard. Trying to get the right people. Even the best leaders will have failures.
▶ 1:45:02Mr. Feinberg: I think we need to work very closely with the ppo and the administration and find really strong manufacturing private leaders who understand process workforce, who have done this before and really drive talent into the struggling shipyards.
▶ 1:45:29Mr. Feinberg: They could partner with a lot of the great people at the pentagon and d.o.d.. This is an operational turn around. It is about people, it is about talent. There are plenty of leaders in america who have done this. We just have to get them on the home team there.
▶ 1:45:45Sen. Sullivan: 's committee wants to work with you on this. It is a critical issue. Let me ask one final question, Mr. feinberg. The president has declared a national energy emergency. Unfortunately the last administration did not recognize the strategic assets of our country, especially my state. The biden administration issued 70 executive orders to shut down alaska.
▶ 1:46:13Sen. Sullivan: President trump on day one issued this executive order on unleashing alaska's extraordinary resource potential. I talked with secretary hegseth about this over the weekend. Can you commit to me to work with me and this committee in unleashing our critical mineral potential, natural gas potential, military bases buying gas in alaska, a key component of the president strategy that will make our country stronger
▶ 1:46:45Sen. Sullivan: And it is a far cry from what we just experienced under the biden administration.
▶ 1:46:48Mr. Feinberg: Yes I will.
▶ 1:46:51Chair Wicker: Thank you. Senator blumenthal.
▶ 1:46:59Sen. Blumenthal: Thank you and thank you for your willingness to serve, Mr. feinberg. Welcome to the committee. As you know 5000 probationary employees have been fired. The plan is to cover up -- cut another 75,000. Civilian employees. You would agree with me that civilian employees often perform a critical role for the department of defense.
▶ 1:47:24Mr. Feinberg: Yes I do.
▶ 1:47:28Sen. Blumenthal: Many of these layoffs will undercut our national security. I have just come from a hearing of the veterans affairs committee, a joint house-senate hearing. I am the ranking member on the veterans affairs committee. Many of them are deeply concerned about their jobs in the v.a. And the department of defense.
▶ 1:47:54Sen. Blumenthal: The position you have been nominated overseas the entirety of the workforce and the civilian workforce of the d.o.d. . What do you have to say to the veterans at the department of defense home elon musk is firing? -- whom elon musk is firing?
▶ 1:48:22Mr. Feinberg: We certainly have a cost problem. Sometimes we have to make change to help an organization do better in the future. It has to be done thoughtfully. I would say to those veterans we have to make the department of defense stronger. The majority of the cuts are coming.
▶ 1:48:39Sen. Blumenthal: What I hear you saying is essentially, we don't need you. You are expendable. Your life of service is meaningless. And the job you're doing now is going to be road kill. That's the message that is being sent to these veterans.
▶ 1:49:05Sen. Blumenthal: I would simply urge you to take into account that these department of defense civilian employees were once wearing a uniform.
▶ 1:49:15Mr. Feinberg: Totally understand. It is something that has to be done the right way. All of these people are super important. But if you cant, every organization has turnover, has to make change. If you don't make change, you could end up in a much worse position. We cannot endlessly expand the forest. We have to sometimes make change.
▶ 1:49:44Sen. Blumenthal: I apologize for interrupting. Our time is limited. From all of your experience in the private sector, you just cannot take a meat axe. You have to use a scalpel in determining who is necessary and not. Eliminating waste does not mean lay waste to the [no audio] -- to the department of defense.
▶ 1:50:14Sen. Blumenthal: United states military is the most effective fighting force the world has ever seen. We depend on the armed forces to protect us from hostile foreign powers. Unlike in countries where autocratic leaders deploy their military against their own people, the united states military is not a weapon to be used against americans.
▶ 1:50:40Sen. Blumenthal: Domestic deployment of federal armed forces is illegally authorized under very narrow circumstances and only in the most extreme emergency scenarios. Would you agree with me that any use of the american military against american people should be an absolute last resort?
▶ 1:51:00Mr. Feinberg: Yes.
▶ 1:51:04Sen. Blumenthal: I welcome that statement because the administration has implied and explicitly said that it may use the american military for mass deportations, suppressing protests, responding to crimes in cities and urban areas. I hope those statements prove to be untrue and exaggeration. I welcome your statement.
▶ 1:51:29Mr. Feinberg: I have faith that president trump will follow the law and do that appropriately.
▶ 1:51:35Sen. Blumenthal: More than faith will be required. You need to stand up and speak out and if necessary, resign if you are asked to do something that you feel is illegal or immoral.
▶ 1:51:49Mr. Feinberg: I don't believe president trump will ever ask me.
▶ 1:51:53Sen. Blumenthal: That is what we have heard again and again and again. History I think is a fair warning to us about what we can expect.
▶ 1:52:05Thank You Chair Wicker: Thank you. Senator scott, you have been most patient.
▶ 1:52:12Sen. Scott: Thank you. You are going to do a great job. You have a great background. You believe in accountability. You will bring a breath of fresh air. In the private sector you have to give them specific task to get done and you will do a great job.
▶ 1:52:33Sen. Scott: You passed a significant amount of litigation, whether it is we do not buy chinese drones in our military government. We stop buying chinese garlic that is made in commissaries.
▶ 1:52:53Sen. Scott: How important it is to our fighting men and women that we do not rely on communist china who has decided to be our adversary for anything in the time of war? How important it is -- is it to the couple from china -- de- couple will couple wilth china?
▶ 1:53:25Mr. Feinberg: It is important.
▶ 1:53:28Sen. Scott: Should we be buying chinese medicines for military?
▶ 1:53:32Mr. Feinberg: No.
▶ 1:53:34Sen. Scott: What about chinese chips? Chinese telephones?
▶ 1:53:39Mr. Feinberg: No.
▶ 1:53:40Sen. Scott: Can you name anything from china that we should be buying for the military?
▶ 1:53:47Mr. Feinberg: There are some basic products that will put our security in jeopardy but it is a difficult problem.
▶ 1:54:02Sen. Scott: The audits. You have invested in a lot of companies. Did you ever do an audit? Are your company's audited?
▶ 1:54:12Mr. Feinberg: All of them are.
▶ 1:54:15Sen. Scott: If the auditor gave you some points to fix, did you do it?
▶ 1:54:20Mr. Feinberg: We better fix it by that audit. .
▶ 1:54:24Sen. Scott: What would you do? Would you keep the cfo? .
▶ 1:54:29Mr. Feinberg: No.
▶ 1:54:31Sen. Scott: What do you think should happen to change the attitude with regard to audits at the department of defense?
▶ 1:54:41Mr. Feinberg: We have to make it a priority. It will also help us in understanding financial metrics, our cost structure, capabilities. One thing I have observed is that while we've had some great civilian leadership at the pentagon, my humble opinion at times some of the people in the operational execution jobs are not involved in detail.
▶ 1:55:12Mr. Feinberg: We will set up a war room and we will go over every program, every cost, line by line with an army of people until it is done 24/7 and we will understand what our costs are, why we don't have our audit, where the financial problems are and have a plan to fix it. It is a big task. I think the pentagon will support it. The people will be excited to see it as well.
▶ 1:55:41Sen. Scott: As you made investments, did you have to make tough decisions of the people would not make? Was it as simple as that? To not make the decision to look at how things are being spent?
▶ 1:55:58Sen. Scott: We had to make cuffs decisions all the time. Not everyone is right. If you are free to work, the problem is worse? .
▶ 1:56:12Sen. Scott: Are you prepared to get the military into the most lethal fighting force out there?
▶ 1:56:18Mr. Feinberg: I think we can make great strides toward that.
▶ 1:56:23Sen. Scott: What would you like to say you accomplished at the end of those four years?
▶ 1:56:32Mr. Feinberg: Basically I helped the secretary and the president improve d.o.d. Preferably in total anonymity and I will fade off into the sunset with some better performance that hopefully I had a small role in.
▶ 1:56:47Sen. Scott: Thank you.
▶ 1:56:49Chair Wicker: Thank you, senator scott. Senator king.
▶ 1:56:55Sen. King: Thank you. Total anonymity is something that all of us achieve. I understand your impulse. I am sorry for not being here. I know there has been a great deal of discussion about potential cuts in the workforce. I am interested in the discussion of 8%. What I'm interested in a view as a manager, how do you intend to go about that?
▶ 1:57:23Sen. King: The cuts that have been occurring throughout the federal government so far have not been very thoughtful for all probationary people. That is not a terribly rational way to make these decisions. There may be great people who are probationary. What with the process to whereby you reduce the department of defense workforce by 70,000 people?
▶ 1:57:44Mr. Feinberg: Yeah. Most of the cuts that are potentially, have not yet been made. Hopefully if I am fortunate enough to get through, I can be helpful in the analysis, study, the considerations.
▶ 1:58:09Sen. King: You are the chief operating officer. You are in charge of this process. I would like to know the process you intend to follow.
▶ 1:58:18Mr. Feinberg: I don't know what role the secretary would want me to play but assuming I'm in charge of that, we would look at the exact detail of people, who was doing what, what jobs should get what, what do we need, what don't we need. Study it carefully and really come up with a concrete plan before we would have --
▶ 1:58:45Sen. King: Firing all probationary employees would not be how you would go about it, is that correct?
▶ 1:58:54Mr. Feinberg: I was not involved in that detail so not fair for me to say.
▶ 1:58:59Sen. King: But you can comment on the rationality of firing all probationary employees, some of whom may be in the department for 10 years and just got promoted. Others may be the best person the department is ever hired but they have only been there for a year. Do you think it is a rational process to simply arbitrarily fire all probationary employees?
▶ 1:59:21Mr. Feinberg: I don't know how it was done. I don't know the considerations.
▶ 1:59:26Sen. King: I am not asking you how it was done. I am asking you if that is a rational way to reduce a workforce. Fire everyone who has been hired in the last couple of years. Is that a good management practice? Is that what you would have done ?
▶ 1:59:41Mr. Feinberg: I will say we have over 900,000 civilian employees. While every person counts and it is important, there will be some change.
▶ 1:59:59Sen. King: That is not my question. There has been a goal of reducing the workforce by 8%, 70,000 people. You are the chief operating officer. Presumably you will be in charge of the process of reducing the workforce by 70,000 people. I want to know how you will do it and are you going to use the arbitrary yardstick of probationary employees, yes or no?
▶ 2:00:24Mr. Feinberg: I don't know the considerations for the detail before that cut. If I am in there, we will carefully look at the cuts, balance what we need and what we don't, and do it in a granular way.
▶ 2:00:49Sen. King: Does that mean you will not cut all probationary employees arbitrarily? Is that a no? It sounded like it. It is a straightforward question. Are you going to fire all probationary employees first to get to the 70,000, yes or no?
▶ 2:01:12Mr. Feinberg: I have to look at the detail. I don't know yet. I don't know the considerations that were thought through before the that cut.
▶ 2:01:23Sen. King: You are a smart guy. I don't understand why you cannot tell me yes or no whether this will be one of the tools you use to reduce the workforce. Let me change the subject. There is a lot of discussion around the industrial base. I have heard that 1000 times. They've never heard anyone say how we go about it.
▶ 2:01:47Mr. Feinberg: I think we need to bring in new companies. We have great manufacturing capabilities in the united states. For example, if we called general motors or ford and said we need you in our defense base, find ways where we can give new companies, especially the ones at scale and can operate. So much is talked about venture.
▶ 2:02:17Mr. Feinberg: It is far more important scale and operations, are larger businesses. They are at a disadvantage competing with big defense companies for proposals. A lot of restrictions. A lot of tough things. We have to make it easier for them. Maybe not the most competitive answer on the surface but will lead to much more competitive in the future.
▶ 2:02:45Mr. Feinberg: I would go to big manufacturing companies, give them a shot on new programs if we think they can meet it and let them figure out a way to give them a shot without a widescale competition with our big defense companies.
▶ 2:02:58Chair Wicker: Thank you. Senator king and Mr. feinberg, general mills actually used to be in the defense manufacturing business. Good point there. Senator schmitt.
▶ 2:03:15Sen. Schmitt: Thank you. Good to see you again, Mr. feinberg. I think about the confirmation hearings, some that get more publicity than this one. I don't know if this one is on c-span or somewhere else. I am sure you are hoping it is not on any channel. I think this is one of the most important jobs in the entirety of the federal government.
▶ 2:03:45Sen. Schmitt: I sit here in bipartisan unison. We talk about procurement reform and it is a huge waste to be wailing away on this temper tantrum about doge when they can but asking -- can be asking the questions top of mind. My friend from maine asked about how you get this reform. I would like to drill down on that.
▶ 2:04:14Sen. Schmitt: We have talked about introducing more competition. That is a big part. One thing that I have heard from a lot of missouri based suppliers are these requirements and having the certified cost and pricing data for these small or medium-sized businesses is a barrier for entry to work.
▶ 2:04:45Sen. Schmitt: We are trying to figure out how we can do better there so you have the requirements and you can have new entrants.
▶ 2:04:52Mr. Feinberg: I am not familiar with that piece but I understand the cuts. I will look at it and act on it.
▶ 2:05:00Sen. Schmitt: Part of the reason why your job is so important is that so much of this will be a cultural shift. That is difficult in an organization the size of the department of defense. This mindset of spending what is allocated, how do you get to a place where we are actually maximized the benefit of every dollar?
▶ 2:05:25Mr. Feinberg: If we can prioritize it on the most important missions, which is hard and takes time. Legacy spending and really do it with discipline on what we really need and focus on how to be efficient and cut costs in our program management and under operations.
▶ 2:05:48Sen. Schmitt: There have been a lot of advancements. I am sure you have seen this in the private sector. I want to thank you. You have gotten criticism for being successful in the private sector. I want to thank you for your divesting a lot to take this position and share your expertise on behalf of the american people to make our defense structure and the pentagon and are weapon systems the best they can be to protect americans. Thank you for that.
▶ 2:06:17Sen. Schmitt: There have been a lot of changes and innovation with ai and real-time data analytics that have not found their way to the pentagon. How do you go about improving that culture within d.o.d.? What have you done before that you think you can bring to the pentagon?
▶ 2:06:39Mr. Feinberg: I remember when our supermarket company albertsons, we went to the ceo and we said we got amazon in the grocery business. We have all of these guys using technology. The ceo said to me, I don't need any of that stuff. I have been doing this my whole life. Leave me alone. Unfortunately, change is so.
▶ 2:07:10Mr. Feinberg: We have to be ahead of it. It is a challenge going into departments that have done things a long time a certain way. They try to make change. They are being forceful about it. There needs to be a partnership with technology people to understand the operational people on the ground.
▶ 2:07:34Mr. Feinberg: You will find the best people who want this change will embrace it and let it give them autonomy and let them drive it.
▶ 2:07:45Sen. Schmitt: One of the things I agree with is moving toward high-tech weapons systems that can be mass-produced like drones that are able to swarm. I think they have to be able to do both which is one of the reasons why the next generation air defense program is really important. I think those advancements are good and they may be the future. We have talked about this a little bit in my office.
▶ 2:08:12Sen. Schmitt: The two places where we have absolute advantage over the ccp 's our nuclear subs and are bar marine fighter fleets. The air superiority and in the air superiority we have, you agree to not abandon the superiority we have in the skies.
▶ 2:08:39Mr. Feinberg: Yes.
▶ 2:08:41Sen. Schmitt: Thank you.
▶ 2:08:42Chair Wicker: Senator kelly.
▶ 2:08:45Sen. Kelly: Thank you. Mr. feinberg, thank you for your willingness to serve in this important role. I want to follow up on the comments that senator mullin made earlier in response to senator kaine calling out putin as a bully and this administration's unwillingness to state the obvious.
▶ 2:09:13Sen. Kelly: Senator mullin said that senator kaine was spewing mistruths constantly, calling him a liar. He was referring specifically to the russian president vladimir putin. In response senator mullin mentioned israel, hamas, and Dr. death.
▶ 2:09:41Sen. Kelly: I'm sure he did not mention putin by name. The appropriate response would be to say that putin was a bully but he did not say that. It is instructive that he would not even mention vladimir putin by name. Putin is a big bully. I am not hearing that from this administration. I do hear it from some people on the other side of the aisle and I appreciate that. More people need to get off the sidelines on this issue.
▶ 2:10:08Sen. Kelly: It is clear to many of us that donald trump blew up the western alliance this past week. 80 years of an alliance, gone. It is disturbing. Mr. feinberg, earlier you said execution would be your job and it is part of the job. But I don't think it is all of the job. You will often find yourself not in the room.
▶ 2:10:39Sen. Kelly: For example when asked whether or not russia invaded ukraine, general hegseth said it is complicated. It is not complicated. Russia did invade our ally, ukraine. Mr. feinberg, would you agree that you have a role beyond just execution in offering some advice when you hear things like -- that are just fundamentally inaccurate?
▶ 2:11:09Mr. Feinberg: I do think the deputy should at times give his view on policy. Sure. I think it should be behind closed doors, not in public. I think it is important for the deputy to understand that he, regardless of his opinion, that the secretary of the president will decide what the policies are and it is important to execute it.
▶ 2:11:40Sen. Kelly: Good to hear. Mr. feinberg, did russia invaded ukraine?
▶ 2:11:48Mr. Feinberg: Going to my behind closed doors statement a second ago, I will just say this.
▶ 2:11:59Sen. Kelly: They moved to tanks and troops and armored personnel carriers across the ukrainian border. It is a simple question. If you would ask the chairman of this committee if russia invaded ukraine, I am pretty sure I would know the answer.
▶ 2:12:19Mr. Feinberg: I got you. There is a tension guest negation -- a tense negotiation going on right now.
▶ 2:12:29Sen. Kelly: We have to live in the real world here. When things happen, it is obvious to the rest of the world. I think it is obvious to europe right now that we just blew up an alliance. And for us to not say an obvious fact, it does not help a negotiation.
▶ 2:12:45Mr. Feinberg: What I was trying to say is I don't think some person who is not informed on this, not involved in discussions should make statements public that could undermine what the president and the secretary's intent is. I have confidence that president trump is very strong at negotiation, has a plan and he will find a good outcome for america.
▶ 2:13:13Sen. Kelly: People who are good at negotiations do not give up their two strongest negotiating points before the negotiation starts, which was membership in nato and land that was taken away from the ukrainians. So I do not agree that he is a good negotiator. This week he has been a pretty bad negotiator.
▶ 2:13:37Mr. Feinberg: Actually president trump, his policy has always been peace through strength. He is very cunning on how he precedes and how he approaches these. He is the first person to ever bring russia to the table when we are close potentially to a settlement. I would like to see how it works out. I have confidence it will work out favorable to america.
▶ 2:14:02Sen. Kelly: I do not care your optimism.
▶ 2:14:04Mr. Feinberg: I understand.
▶ 2:14:07Sen. Kelly: We went into a negotiation giving up the two biggest points and that is troubling. In the same week we blew up an 80 year alliance. Some of our republican colleagues have a hard time even stating the obvious, that russia did in fact invade ukraine three years ago. I know you pay attention to the news.
▶ 2:14:34Sen. Kelly: If I asked you this question three years ago, I am sure I know what the answer would be. Thank you.
▶ 2:14:41Sen. Budd: I would like to recognize myself. Mr. feinberg, thank you for being here. Thank you for your family. For your family's years of service, I appreciate them. Some of my colleagues characterize your background in the private sector as negative. That is disappointing. I have a different, positive perspective.
▶ 2:15:09Sen. Budd: There was a time where business leaders were applauded for their patriotism and their contribution to our country's efforts to win world war ii. If your father is tuned in at this point in the hearing, I want to thank him personally. They also helped us in the cold war.
▶ 2:15:28Sen. Budd: To reform the d.o.d., we need someone to work alongside the secretary. Not only do you have extensive background in investing in sectors critical to national security, but you also served on the president's intelligence advisor reports. Thank you. We have a front row seat to the threats our country faces.
▶ 2:15:59Sen. Budd: Can we discuss how your business background and service on the intelligence advisory board makes you well-suited to serve as the deputy secretary of defense?
▶ 2:16:11Mr. Feinberg: It was an interesting job. Do a tremendous amount of analytics. Most of the areas of the d.o.d., all the intelligence agencies, homeland, fbi, even treasury and commerce when they affected national security, we got briefings with all of them. I took over 3000 briefings.
▶ 2:16:42Mr. Feinberg: Fortunate to have on that board, my katie and johnny allen who is an intelligence legend. We have a broken group of people I was fortunate to learn from. All of these issues were laid out for us so it was incredibly educational, very frightening. That laid the groundwork.
▶ 2:17:10Mr. Feinberg: As an intelligence contractor, we have had a lot of classified contracts. But this was so much broader. In some ways, as broad as education as you can get.
▶ 2:17:24Sen. Budd: Thank you for your service on that board. How can the military better harness american ingenuity to get emerging technology into the hands of the war fighter faster?
▶ 2:17:36Mr. Feinberg: The government does not truly understand the private sector and the private sector does not understand the government. Are companies, I wish there were more patriotic. They should be always helping us but they are not. I wish they could understand that there are certain rules in government that are not made by the existing sitting people in government but are just there.
▶ 2:18:06Mr. Feinberg: I would love to get our private sector to be more flexible but I think it is people who really understand the private sector, that understand how the boards think, how the general counsel thinks, with the regulatory impediments. We need to bring them into d.o.d., have them lead in these conversations with our private sector. The competition has done great things for america. It can do a lot more.
▶ 2:18:34Mr. Feinberg: We have to understand what drives them and go to them with those thoughts. I hope they will be more flexible. There is a world of opportunity.
▶ 2:18:43Sen. Budd: Thanks for that. You know that theppbe -- the pp be process, will you commit to those endorsed by those departments?
▶ 2:19:01Mr. Feinberg: Yes.
▶ 2:19:03Sen. Budd: Do you commit to frequently beating congress on your plan for the replicator initiative at large?
▶ 2:19:09Mr. Feinberg: I do.
▶ 2:19:11Sen. Budd: That is important. Senator schmitt mentioned that earlier in regard to this emerging technology. A very important program. I hope you will pay significant attention to that. Thank you.
▶ 2:19:26Chair Wicker: Senator slotkin. Set both slotkin thank you. --s -- Sen. slotkin: there are a lot of things we can agree on. Acquisition reform. Getting china out of our supply chains for national security reasons. I think there are a lot of things where I appreciated your views.
▶ 2:19:56Chair Wicker: My questions as I previewed in our conversation are just about you managing the pentagon and managing this huge enterprise. Basically you serving as the chief operating officer of one of the biggest institutions in the world and allowing others outside the pentagon to access sensitive information.
▶ 2:20:26Chair Wicker: I am a cia officer so I am putting the pieces together in what we have seen. I just have to say we know that doge is collecting data. We know they are using ai supported software, access to the microsoft cloud to amalgamate that data.
▶ 2:20:50Chair Wicker: We know they are feeding sensitive information into that system where they go and that information can be manipulated, swept up in cyber attacks, leaked. It is sensitive information about our national security architecture. We know that doge has brought in their own servers in order to handle this data. Mr.
▶ 2:21:16Chair Wicker: Hegseth welcomes doge into the pentagon. They are looking at the cia because they sent an email with hiring names. You just blew the cover of someone who was going to risk their life are brought to protect our country. My question to you is what are you going to do when they come to you and they asked for that data?
▶ 2:21:47Chair Wicker: Will you give doge access to sensitive, classified and personal data of uniformed military bases and locations across the world?
▶ 2:21:56Mr. Feinberg: Yeah, I mean, as deputy we have to follow the laws. We cannot classified data that is not legal. We will look at the laws closely . We will make sure that transfer is done by the appropriate ways.
▶ 2:22:28Mr. Feinberg: The president can decide what is classified and what is not. He can de-classify. It is our job to make sure this is done properly.
▶ 2:22:47Sen. Slotkin: You stated that the president can just de- classify things. Will you give access to sensitive personal information about our families living abroad ?
▶ 2:23:05Mr. Feinberg: Make sure all the necessary laws and regulations are met.
▶ 2:23:11Sen. Slotkin: I come from the national security world. Do you know how appetizing it is for our adversaries to have this data. You know appetizing it is to get at an uniformed officer living in a dangerous place? It is not a political issue. It is an issue of safety and security.
▶ 2:23:39Sen. Slotkin: As someone who has served abroad, this is an issue of major vulnerability.
▶ 2:23:45Mr. Feinberg: To your point, in my past I had compartmentalized programs and access for a long time. I understand your concerns. I will look at it closely.
▶ 2:24:05Sen. Slotkin: I don't doubt your interest but these are the conversations that will happen at the dead of night. You will get a call that a bunch of 25-year-olds who have never seen classified data in their life, who do not understand what personnel data could do in the hands of our adversaries are going to get a hold of that and they are going to come to you and you will have to press the button.
▶ 2:24:32Sen. Slotkin: All I have to say is we are counting on you and our national security is counting on you to push back and say no.
▶ 2:24:39Mr. Feinberg: I understand the I understand the issue. >> senator cheer -- senator peterson.
▶ 2:24:51Sen. Peters: And thank you to serve as a deputy ares secretary and I am happy that we had a chance to meet my office and talk about a variety of issues including some of my computer desk concerns and focus areas I enjoyed learning about your priorities for the dod moving forward as well.
▶ 2:25:13Sen. Peters: And during our meeting you mentioned ai modernization and strengthening signals intelligence in particular as some of your top priorities. So, we certainly both share our same concerns about china's technological ability is and the surge of cyber actors that are really engaging against us on an ongoing regulatory -- ongoing basis.
▶ 2:25:41Sen. Peters: The question is if confirmed, what policies or initiatives would you change or initiate to ensure that the dod stays at the tip of the spear for signals intelligence and two, I will you include -- ensure the continued focus on adversaries like the trc?
▶ 2:25:58Mr. Feinberg: Signal intelligence is an interesting point. I think there is significant risk in our ability to continue being successful in that collection and that is probably a better conversation for us to have in a skid, but it is incredibly important and it has to be addressed. On the p.r.c. Side, what was your question?
▶ 2:26:24Sen. Peters: How do we stay focused on them especially with signals intelligence?
▶ 2:26:30Mr. Feinberg: Key collection tool, our methods and means and capabilities are good. But, there is risk both from technology point of view as well as how we approach it, tough to talk about it in a public forum. It is something that I have a fair amount of knowledge and I would like to talk to you in a different setting.
▶ 2:26:56Sen. Peters: I would love to follow up because I believe it is critical and I know it is a priority. I want to make sure we have the resources and knowledge necessary to deploy effectively.
▶ 2:27:08Mr. Feinberg: Collection for us especially on foreign technologies it is super important -- important to know where we want to spend. If we do not have that we just spend everywhere.
▶ 2:27:19Sen. Peters: Specifically artificial intelligences at the top of the list. What policies or initiatives do you believe would lead us to ensure that our war fighting -- war fighting capabilities are developed not only for lethality, but also does floyd responsibly, lawfully and with appropriate safeguards for monitoring the procedures being used by these weapon systems?
▶ 2:27:44Mr. Feinberg: How you use ai is a tough problem. Because on one hand, if you do not have the effective authorities to use it, we will not be as lethal. But then, using them at times creates those kinds of problems. That is a tough one. We have to look at it in detail. For example, we are very strong on offensive cyber and not as good as defense.
▶ 2:28:14Mr. Feinberg: Which of those capabilities because there is a great asset of the, and I look forward to working with you and other senators on that correct balance and I think those are best.
▶ 2:28:27Sen. Peters: Very good. Another topic for us in the future if confirmed. Currently the air force is programmed to lose about 1000 planes without replacement further exacerbating the current state of being the oldest, smallest and least ready perhaps in its history.
▶ 2:28:48Sen. Peters: Aviation leaders are characterizing the move as "a death spiral" and commented that no enemy has done so much to harm the air force they on the impact of arbitrary spending reductions and yet crude aircraft were not exempt from the directive to scrub 8% from nonlethal programs. Likely core readiness and the defense industrial base were protected areas and that cut, but it sends a conflicting message on the future of air force fighter planes and missions.
▶ 2:29:17Sen. Peters: If confirmed, you will be charged with exercise -- exercising secretary hegseth's priorities and helping along towards national security directives. Can you help give those committees some reassurance that those leaders understand the need to continue investment in next-generation tactical fighters so that we can improve readiness and in the process surpass our adversaries?
▶ 2:29:41Mr. Feinberg: It is a tough question. Some believe that we can go straight to the full atomic systems and we do not need a next-generation fighter and we could use the f-35 updated to meet o meet as a strategy. Others feel that we really need the next generation despite its expense.
▶ 2:30:07Mr. Feinberg: I am not -- I am not subject nor do I have the classified briefings on that or the chinese j 20 in that, but I pledge to you that if confirmed, I will get right in the middle of the facts. Ultimately that might be the secretary or president's decision.
▶ 2:30:27Sen. Peters: But you plan to dive in and offer concrete suggestions?
▶ 2:30:32Mr. Feinberg: Absolutely in my opinion.
▶ 2:30:35Sen. Peters: Thank you. Thank you Mr. chairman. >> I got a promotion. I have the gavel now. Thank you for serving the country and doing this and it is an incredibly important role. And for your family I know it is a big sacrifice. Would you run your business like they run the dod right now?
▶ 2:30:57Mr. Feinberg: No, but I have had my bad days too. >> first off, our nuclear triad was designed and built in the 1950's and 60's and it is suffering from what I would call antique equipment. What are your thoughts on how we can upgrade and make sure it is ready for a 20 adversary?
▶ 2:31:18Mr. Feinberg: It is super important and a tough one. We are way behind, over cost and late. I think we have to bring the best manufacturing and operational people in america on-site. I have worked with some of the great people in the pentagon who understood it and really have an enormous detailed problem -- programmatic focus line by line, what are we going to do? In detail.
▶ 2:31:47Mr. Feinberg: I do not have an immediate answer other than let us get the right people on the ground and go at it with incredible urgency and put a plan together and start getting added.
▶ 2:31:56Sen. Sheehy: I think one of the most important aspects will be the overhaul of the acquisition system. I know it has been talked about ad nauseam. There are products and capabilities that exist on the shelf that can be brought -- bought commercially that have been developed by private companies.
▶ 2:32:14Sen. Sheehy: One of the biggest errors that we have made in the last half-century in the process is the government is paying to develop technologies based on specifications that are based on past conflicts and those specifications lag battlefield need. By the time it is fielded it is obsolete or does not work. I would be curious, how do you intend to reform the system and are you going to be able to heavily focus on commercially acquiring capabilities that already exist?
▶ 2:32:45Sen. Sheehy: And technology that is on the shelf already?
▶ 2:32:48Mr. Feinberg: There is a lot of opportunity with different commercial capabilities. Some of the program restrictions and requirements make it impossible for companies to compete with larger defense companies who do not have that capability. The end up being a sub, and they get stopped.
▶ 2:33:12Mr. Feinberg: I think the dod has to look past the prime contactor and see what the subs are doing to take an active role in that relationship and not rely on the big contractors because, to run these programs, simply because when the overall general contracting bid, we have to get into the programs in the detail, what are the most important programs, what are we missing,
▶ 2:33:43Mr. Feinberg: And where we behind costs? What technology should be promoted and move forward. As a contractor I got caught in the valley of death all the time. Better technology and no interest to use it because it does not help them and it is not profitable. Dod could get into the middle of that to some degree, not everything, but there is a lot of opportunity to spread the observation to different companies and we have to do it.
▶ 2:34:08Sen. Sheehy: It looks like I've been demoted again. So, our defense acquisition paradigm is focused on engineering the highest quality technology and building it in a vacuum to the highest engineering specifications. That has led to a lot of high quality stuff but not a lot of quantity. Our navy is a smallest it has ever been and/or air force is short on aircraft. There is a quality all of its own in quantity.
▶ 2:34:39Sen. Sheehy: The ability to produce vast quantities to sustain a conflict and supplying war fighters has a quality all its own. I have -- that concept creates quality by iteration and constant fielding and close customer feedback loop. The customer is not the procurement officer but the lance corporal with the sergeant or captain on the frontline.
▶ 2:35:02Sen. Sheehy: And we have to reorient the dod back to the fact that the customer is not the contract officer or procurement executive or the peo, but the customer is the war fighter. And I would love to hear your thoughts on how do we return our ability to produce quantity quickly and how to ensure that what we are producing is what the war fighter actually needs?
▶ 2:35:23Mr. Feinberg: I agree and we need to do this urgently. To develop autonomous capabilities we would need mass quantities of drones. If we do not achieve that our national security is at risk. So, you have seen it from the private sector, the requirements I keep saying and I apologize for repeating it. The requirements are goldplated and inflexible.
▶ 2:35:48Mr. Feinberg: If a great technology or capability is out there and the company does not put in a perfectly compliant bid, they will throw it out versus a compliant bid that does not meet the technical needs. Let some of the program officers, let them run up -- run with it and make decisions on what is best. Loosen up the requirements and make it based on mission and technical. Quicker, more nimble, let us look at what requirements we need upfront.
▶ 2:36:19Mr. Feinberg: The deputy better get into those requirements and the big programs in detail and not delegate that to everyone else. It all starts with requirements.
▶ 2:36:28Sen. Sheehy: Thank you.
▶ 2:36:29Chair Wicker: Thank you very much, senator. Senator duckworth.
▶ 2:36:35Sen. Duckworth: I am looking at a fox news article dated february 24, 2022 featuring the fox news commentator pete hegseth in the headline is " russia invades ukraine in the largest european attack since world war ii." can you tell me of russia invaded ukraine? I mean Mr. hegseth said it.
▶ 2:37:00Mr. Feinberg: I understand.
▶ 2:37:02Sen. Duckworth: Is easy. Yes or no?
▶ 2:37:05Mr. Feinberg: I do not feel that I should publicly comment in the middle of a tense negotiation when I am not privy to the facts.
▶ 2:37:12Sen. Duckworth: You are not privy to the fact whether or not russia started a war that lasted three years?
▶ 2:37:18Mr. Feinberg: I am not privy to the details on what is going on in the negotiation and what the sensitivities are and what the president is trying to accomplish. I would be afraid to speak out of turn and undermine that. I have confident that the president is skillful and will find a way to write -- the right way to find the united states. He has a first guy who brought russia to the table to begin a conversation.
▶ 2:37:42Sen. Duckworth: The president is leaning down to let amir putin. I cannot believe that the commander-in-chief of the greatest military in the earth in my lifetime is bowing down to russia. First I would like to echo my colleagues and reinforcing my gratitude for the outstanding service of general brown and other dedicated -- dedicated leaders who have been unfairly relieved in the politically motivated purge of senior dod leadership. This is not normal.
▶ 2:38:12Sen. Duckworth: The president does not typically replace nonpartisan generals and flag officers with his preferred choices. A president seeking to install loyalists among those trying to give him the best military advice is dangerous to the good order and discipline of the uniformed services and country as a whole. We had a productive conversation the last time we met and I enjoyed it. And I appreciate your frankness during the conversation.
▶ 2:38:40Sen. Duckworth: I would like to reiterate my cot -- my expectation should you be confirmed. Given the lack of qualifications of secretary hegseth and who admitted he was going to hire people smarter than himself to run the department, you will be the brains behind his leadership and lack of experience.
▶ 2:38:57Sen. Duckworth: You will be responsible for managing the budget and day-to-day operations of the dod so it is imperative that you demonstrate to the committee and the american people your ability to provide the stability, expertise and leadership necessary to ensure that secretary hegseth does not run the department to the ground with budget cuts and deeply damaging purges of qualified senior leadership. I have asked this of every nominee before this committee including yourself in my offices.
▶ 2:39:28Sen. Duckworth: If president trump or the secretary ask you to do something illegal, will you refuse to obey?
▶ 2:39:33Mr. Feinberg: I will not obey an illegal order and I do not believe that they will ask me to do that.
▶ 2:39:40Sen. Duckworth: You have observed misconduct on -- unbecoming or unlawful will you report it?
▶ 2:39:45Mr. Feinberg: Yes.
▶ 2:39:46Sen. Duckworth: You are second in command and the responsibility of an executive officer -- officer in the military is not only to execute the vision to be a voice for his staff and managed his command. Mr. hegseth will not managed by my new show, you will. I would like to know what are you going to do with the secretary of defense orders the pausing of a program critical to the readiness of the services?
▶ 2:40:12Mr. Feinberg: I am sorry?
▶ 2:40:14Sen. Duckworth: A pausing of a program to the readiness of our military services?
▶ 2:40:20Mr. Feinberg: I work for the secretary of defense. If he does something that I think is a real problem, I will tell him and I will give him my view. Ultimately, I will follow the chain of command and execute what he wants as long as it is lawful. I do think that he will make good decisions.
▶ 2:40:42Mr. Feinberg: By the way, senator, I also hold -- hope that we can hire, if confirmed a ton of people heck of a lot smarter than yours truly. It is great to bring in talent.
▶ 2:40:52Sen. Duckworth: It does not take a lot to be smarter than our secretary of defense and be more qualified. It is a low bar. Many recent nominees have talked about hypotheticals but you are talking about the decisions being made. Star hegseth has shown a -- has shown to make bad decisions.
▶ 2:41:16Sen. Duckworth: He ordered 8% of budget cuts to the budget while exempting non-mission exception places like the south border. It is not the place where we can afford to make mistakes. Are you going to allow an experienced company of software interns to make decisions that may impact our national security? Who is going to be at the wheel? Are you going to let doge and to start making cuts?
▶ 2:41:41Mr. Feinberg: So, at dod and the secretary said this, we are responsible for our own people and our actions and policies. Dod is in charge of itself. So no, doge is not in charge. We are looking forward to working with elon musk who has great expertise and talent with his great understanding of so many different things. He will provide advice.
▶ 2:42:11Mr. Feinberg: We are looking forward to hearing that. But in the end the dod is accountable to itself and must make its own decisions unless the president says I want you to do this and that and then of course we do it.
▶ 2:42:22Sen. Duckworth: Unless it is illegal.
▶ 2:42:23Mr. Feinberg: Yes ma'am.
▶ 2:42:25Chair Wicker: Thank you. Senator banks.
▶ 2:42:28Sen. Vance: Thank you for your -- Sen. banks: thank you for your incredible sacrifice. There is good news. President trump asked secretary hegseth and yourself and others to go to the pentagon and shake it up.
▶ 2:42:45Sen. Vance: Make the pentagon focused on the war fighter and preparing to fight and win wars instead of focusing on itself as a large bureaucratic blob that feeds itself rather than the mission of at the pentagon should be doing.
▶ 2:43:00Sen. Vance: The good news is that after four years of a historic recruitment crisis, the worst recruitment crisis in over 50 years of an all volunteer force, the army has reported that since donald trump was elected president those recruitment numbers have shot through the roof. What do you make of that?
▶ 2:43:21Mr. Feinberg: Well, I guess it does show there is a spirit. There is morale, and it might be improving.
▶ 2:43:33Mr. Feinberg: And that, based on the president's leadership and what he said to the american people, and hopefully, if we can pursue sound policies and in execution making changes to dod, that will increase morale more. That is what I have seen in the private sector. And we will have an even greater recruitment drive in the future.
▶ 2:43:59Sen. Banks: That is well put. A lot of good signs of early signs of us succeeding in a big way on recruitment. One of the areas I am concerned about and we talked about this in my office, china is beating us in a lot of areas and one is hypersonics. Years ago they launched a hypersonic ballistic missile that orbited the full or earth, enter the atmosphere and narrowly missed its target. We did not know about it until it reentered the atmosphere.
▶ 2:44:31Sen. Banks: We still have yet to launch a hypersonic missile of our own. As we talked about in my office, purdue university, notre dame and naval service warfare center on the front lines of hypersonic research and development, how important is more investment in hypersonic's to the united states?
▶ 2:44:50Mr. Feinberg: A huge problem and we are under invested and it is essential to our national security. I do not understand the thought process. And it did not have it in high importance. Again, I am not the one to be setting and making policies, but my job is to execute faster development with reasonable cost and quickly.
▶ 2:45:19Mr. Feinberg: But at the same time, I mean, if you are totally reliant on your nuclear capabilities because tactically you're slower, that is a diplomatic nightmare. From a nuclear perspective if the enemy is faster than you that is a problem so we need to get on it.
▶ 2:45:40Sen. Banks: You will be tasked with shaking up the acquisition system at the pentagon. Have you put thought into that. Your background is so perfect to go there and change the way acquisitions are done. Will you give us some early thoughts on what you will do to change it?
▶ 2:46:00Mr. Feinberg: A lot of thoughts. We have a decent knowledge of the companies who have worked with the pentagon and how to improve it.
▶ 2:46:08Sen. Banks: You are incredibly qualified for the role and I look forward for -- with looking -- working with you and secretary hegseth and others to make the military as strong as it could be. Your background is for -- is perfect for the role and I yelled back.
▶ 2:46:23Chair Wicker: I appreciate it. Are there further questions? If not, let me just say, I think we have seen a display of super competence and intelligence, and capability today. And I feel very good about the role that you will fill. Today's hearing is concluded.
▶ 2:46:52Chair Wicker: I want to thank our witnesses for their testimony, and for the information of the members, the questions for the record will be due to the committee within two business days of the conclusion of the hearing. We are now adjourned.
▶ 2:47:07Mr. Feinberg: Thank you Mr. chairman and thank you senator reed. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]